Final Results for the Year Ended 31 May 2026
Summary by AI BETAClose X
4 November 2026
Karelian Diamond Resources plc
(“Karelian” or the “Company”)
FINAL RESULTS FOR THE YEAR ENDED 31 MAY 2026
Karelian Diamond Resources plc (AIM: KDR), the diamond exploration company focused on Finland with nickel, copper and platinum interests in Northern Ireland, announces its final results for the year ended 31 May 2026.
Details of these can be found below and a full copy of the Company’s annual report and audited financial statements (the “Annual Report”) will be available shortly on the Company’s website (www.kareliandiamondresources.com).
Highlights of the period included:
- In June 2025, shortly after the start of the year under review, the Finnish Safety and Chemical Agency (Tukes) registered the mining rights for Lahtojoki and issued the mining concession certificate, after more than eight years of engagement with the relevant authorities.
- The focus of the Company’s efforts on this project throughout the year has been on securing finance to take Lahtojoki through the development stage and on to production. The discussions have continued throughout the year and remain ongoing.
- In the Kuhmo Region the focus was the geophysical target designated Anomaly 5. A three-hole drilling programme totalling approximately 334 metres was completed and beneath an exceptionally thick overburden of some 35 metres, two of the three holes intersected rock material provisionally interpreted as olivine lamproite, a rock type associated with diamond-bearing provinces globally.
- The next steps will include a limited ground electromagnetic survey, which will allow for more accurate drill targeting once conditions permit mobilisation of a rig.
- The Company holds a significant licence package covering over 1,000 km² in Northern Ireland, where it has established first mover advantage and has continued to advance its exploration programme for nickel, copper and platinum group elements. Exploration programmes have been planned which will commence with detailed geological mapping and geochemical sampling.
Brendan McMorrow, Chairman of Karelian, said:
“The Company has entered the new financial year with its mining rights at Lahtojoki secured, a first set of encouraging drill results from Anomaly 5, and a clear work programme for its highly prospective nickel, copper and platinum group element targets in Northern Ireland. The Board remains confident regarding the prospects for the Company.”
Annual Report and Financial Statements for the year ended 31 May 2026
The full audited annual report and financial statements for the year ended 31 May 2026 has been posted to shareholders and will be published on the Company's website (www.kareliandiamondresources.com) shortly. Key elements can also be viewed at the bottom of this announcement.
Further Information:
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|
Dear Shareholder,
I am pleased to present the Company’s Annual Report and Financial Statements for the year ended 31 May 2026. It has been a year of real operational progress: the Company’s mining rights at Lahtojoki were formally registered, the priority Anomaly 5 diamond target in the Kuhmo region was drilled for the first time with encouraging initial results, and the exploration programme for nickel, copper and platinum group elements in Northern Ireland was advanced on several fronts.
The Lahtojoki Diamond Deposit
In June 2025, shortly after the start of the year under review, the Finnish Safety and Chemical Agency (Tukes) registered the mining rights for Lahtojoki and issued the mining concession certificate. The certificate formally entitles the Company to utilise the minerals within the mining concession area. Following more than eight years of engagement with the relevant authorities, this represented the culmination of the permitting process and a critical milestone, allowing the Company to plan and proceed to the next stage of work on the concession area.
The Lahtojoki mining project comprises a mining concession covering 71 hectares (c. 175 acres), including a kimberlite pipe with a surface area of 1.6 hectares (c. 4 acres). In addition to high quality colourless gem diamonds, the deposit contains coloured diamonds and in particular pink diamonds, which are highly sought after and can command prices of a multiple of those achieved by comparable colourless stones. The 2017 Preliminary Economic Assessment on the deposit, which excluded the impact on project revenue of the known potential for coloured diamonds, indicated in excess of 2 million carats recoverable with an in-situ value of US$211 million and recommended an open/vertical pit mining operation, setting the life of mine at over nine years with payback by year two, an IRR of 55 per cent and an NPV (at 8 per cent) of US$39.1 million.
With the permitting process behind us, the focus of the Company’s efforts on this project throughout the year has been on securing appropriate strategic or partnership finance to take Lahtojoki through the development stage and on to production. Those discussions have continued throughout the year and remain ongoing. I do not expect this to be a straightforward process in the current market, but with the presence of fancy diamonds, including pink diamonds, and with the potential for the mine to act as a hub for other developments in the region, I continue to believe that the Company represents an attractive proposition as the first diamond mine in the European Union.
While market sentiment towards the diamond sector has remained challenging from an investment perspective, the Company’s view is that in a global market segment for natural diamonds worth over US$29 billion annually, sustainably produced and fully traceable European diamonds will command a premium. That premium would be further supported by the potential of the Company’s assets to produce coloured diamonds. The Company has therefore concentrated on carefully progressing its exploration work so as to position itself well for a recovery in retail sentiment towards natural stones.
Diamond Exploration in the Kuhmo Region
The Company’s principal exploration focus in Finland during the year was the geophysical target designated Anomaly 5, which lies up-ice of the green diamond discovered by the Company in glacial till and carries a near-source kimberlite indicator mineral signature. The target was identified from a semi-airborne electromagnetic survey carried out by the Company and announced in January 2025.
During the winter weather window a three-hole drilling programme totalling approximately 334 metres was completed at Anomaly 5, in a swampy area accessible only in winter conditions. Beneath an exceptionally thick overburden of some 35 metres, two of the three holes intersected rock material provisionally interpreted as olivine lamproite, a rock type associated with diamond-bearing provinces globally, including the world-class Argyle and Ellendale diamond mines. Hole KD-26-02 intersected an eight metre interval at a depth of approximately 73.40 to 81.40 metres, and hole KD-26-03 a 3.9 metre interval at approximately 42.90 to 46.80 metres, the latter encountering highly weathered olivine lamproite directly from the bedrock surface. All of the olivine lamproite intersected occurs as breccia and is highly altered. The programme concluded earlier than planned owing to the early onset of the spring thaw.
Diagnostic rock types recorded in the core indicate that the drilling to date has been on the periphery of a larger intrusive system, and the discovery of several picroilmenite xenocrysts within the altered lamproite provides strong evidence that this, or a closely related intrusion, may be the source of the Anomaly 5 indicator mineral train. Drill core samples are being prepared for detailed petrographic and geochemical analysis in order to classify the material formally and to assess its diamond-bearing potential.
The next steps will include a limited ground electromagnetic survey, which will allow for more accurate drill targeting once conditions permit mobilisation of a rig. A test hole beneath the lake within the Anomaly 5 target, which lies at the head of the kimberlite indicator mineral train and has yet to be tested, will be a priority. Continued work on this project is warranted by the exceptional compositions of the mantle minerals in the Anomaly 5 indicator mineral train, which are indicative of sampling from a wide diamond window in the mantle, and by the green diamond discovery itself.
The Company also conducted a review during the year of its wider exploration asset base in the Kuhmo area, which includes the diamondiferous Seitaperä kimberlite (olivine lamproite), Finland’s largest known pipe at approximately 6.9 hectares, and the kimberlite (olivine lamproite) discovery at Riihivaara. The exploration permits covering these are held until a minimum of Q1 2027. The various licences in the Kuhmo area interlink and cover an area which has the potential to become a significant diamond province on the Finnish side of the Karelian Craton, using a potential development at Lahtojoki as a production hub.
Nickel, Copper and Platinum Group Elements in Northern Ireland
The Company holds a significant licence package covering over 1,000 km² in Northern Ireland, where it has established first mover advantage and has continued to advance its exploration programme for nickel, copper and platinum group elements throughout the year under review. This work builds on the assessment carried out by Dr. Larry Hulbert, the geological consultant first engaged by the Company in early 2024, whose report confirmed the significant potential of the licence areas for these base and precious metals and recommended a follow-up work programme. Dr. Hulbert’s work included the construction of a comprehensive database incorporating geology, geochemistry, geophysics, remote sensing and base gravity geophysical data.
In June 2025 the Company announced that it had identified the site of the historic Cappagh Copper Mine as a significant new copper target for investigation within its KDR4 licence area. Initial desk-based studies and reconnaissance work highlighted the area as a promising target, and it provides the Company with a tangible copper target in addition to those identified in Dr. Hulbert’s report, further enhancing the Company’s strategic position in Northern Ireland. Exploration programmes have been planned which will commence with detailed geological mapping and geochemical sampling.
In late 2025 the Company entered into an enterprise partnership with Trinity College Dublin in respect of a work programme, jointly funded by Research Ireland, to be carried out on the platinum group element potential of the Company’s licence areas over the coming years. The Board regards this partnership as an efficient means of advancing the technical understanding of the licence package alongside the Company’s own field programmes.
Environmental, Social and Governance Issues
Great emphasis is placed by the Company on these issues, and the Company is committed to high standards of corporate governance and integrity in all its activities and operations, including rigorous health and safety compliance, environmental consciousness and the promotion of a culture of good ethical values and behaviour.
Financial Review
The Company recorded a loss for the financial year ended 31 May 2026 of €529,413 (31 May 2025: loss of €279,357). At 31 May 2026 the Company had total assets of €12,463,641 (31 May 2025: €12,246,037) and net assets at the same date of €9,820,103 (31 May 2025: €10,141,861). Intangible assets, comprising exploration and evaluation assets, carried on the statement of financial position at 31 May 2026 amounted to €12,358,754 (31 May 2025: €12,085,967).
In June 2025 the Company raised €217,239 (£185,000) before share issue costs by way of a placing and subscription of 24,666,666 new ordinary shares at an issue price of 0.75 pence per share. In March 2026 the Company raised a further €336,234 (£290,000) through the issue of unsecured convertible loan notes to a combination of new investors and existing shareholders. The convertible loan notes have a three year term, are unsecured and unlisted, carry interest at 8 per cent per annum and are convertible at a price of 1.5 pence per share, a premium of 300 per cent to the closing mid-market price of 0.375 pence per ordinary share on 19 March 2026. That both new and existing investors were prepared to subscribe at such a premium is, in the Board’s view, a very positive endorsement of the Company.
I would like once again to place on record my appreciation of the continued support shown by both current and former directors in deferring amounts owed to them in respect of salaries and directors’ fees. The Board has been working on a plan to restructure these amounts so as to align their settlement with the future success of the Company.
Directors and Staff
I would like to take this opportunity to sincerely thank my fellow directors, staff and consultants for their work and contribution to the Company and its operations over the past year. Their support and commitment are greatly appreciated and have contributed significantly to the Company’s progress.
Outlook
The Company has entered the new financial year with its mining rights at Lahtojoki secured, a first set of encouraging drill results from Anomaly 5, and a clear work programme for its highly prospective nickel, copper and platinum group element targets in Northern Ireland. The immediate priorities are to complete the analytical work on the Anomaly 5 core and to define the follow-up drill targets, to commence field exploration on the Cappagh copper target and the wider Northern Ireland licence package, and to continue the search for an industry-focused partner to advance Lahtojoki to development. The Board remains confident regarding the prospects for the Company.
Brendan McMorrow
Chairman
4 November 2026
Extract from Independent Auditor’s Report
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
We draw attention to note 1, under the ‘Going Concern’ section, in the financial statements, which indicates that the Company has net current liabilities of €2,540,236 as of 31 May 2026 and there is a requirement to raise funds to carry out the Company’s plans.
As stated in note 1, these events or conditions, along with other matters as set forth in note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included:
- obtaining an understanding of the Company’s relevant controls over the preparation of cash flow forecasts and approval of the projections and assumptions used in cash flow forecasts to support the going concern assumption;
- evaluating the design and determining the implementation of these relevant controls;
- evaluating directors’ plans and their feasibility by reviewing the reasonableness of the inputs used in the cash flow forecasts to expenditure commitments and other supporting documentation;
- challenging the reasonableness of the assumptions applied by the directors in their going concern assessment;
- obtaining confirmations, received by the Company, from the directors and former directors evidencing that they will not seek repayment of amounts owed to them by the Company within 12 months of the date of approval of the financial statements, unless the Company has sufficient funds to repay;
- assessing the mechanical accuracy of the cash flow forecast model; and
- assessing the accuracy and completeness of the relevant disclosures made in the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Statement of profit or loss
For the year ended 31 May 2026
|
|
Note |
2026 |
|
|
2025 |
|
|
|
€ |
|
|
€ |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
Operating expenses |
2 |
(366,813) |
|
|
(364,615) |
|
|
|
|
|
|
|
|
Operating loss |
|
(366,813) |
|
|
(364,615) |
|
|
|
|
|
|
|
|
Fair value movement in warrants in issue |
11 |
(58,972) |
|
|
91,738 |
|
Interest expense |
11,12 |
(12,825) |
|
|
(6,480) |
|
Fair value movement in conversion option |
11 |
(90,803) |
|
|
- |
|
|
|
|
|
|
|
|
Total finance costs |
|
(162,600) |
|
|
85,258 |
|
|
|
|
|
|
|
|
Loss before taxation |
3 |
(529,413) |
|
|
(279,357) |
|
|
|
|
|
|
|
|
Income tax expense |
5 |
- |
|
|
- |
|
|
|
|
|
|
|
|
Loss for the financial year |
|
(529,413) |
|
|
(279,357) |
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
Basic and diluted loss per share |
6 |
(0.0027) |
|
|
(0.0020) |
|
|
|
|
|
|
|
The total loss for the financial year is entirely attributable to equity holders of the Company.
Statement of comprehensive income
For the year ended 31 May 2026
|
|
|
2026 |
|
|
2025 |
|
|
|
€ |
|
|
€ |
|
|
|
|
|
|
|
|
Loss for the financial year |
|
(529,413) |
|
|
(279,357) |
|
|
|
|
|
|
|
|
Income recognised in other comprehensive income |
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Total comprehensive income for the financial year |
|
(529,413) |
|
|
(279,357) |
The total comprehensive income for the financial year is entirely attributable to equity holders of the Company.
Statement of financial position
as at 31 May 2026
|
|
|
31 May |
|
31 May |
|
|
|
Note |
2026 |
|
2025 |
|
|
|
|
€ |
|
€ |
|
|
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Intangible assets |
7 |
12,358,754 |
|
12,085,967 |
|
|
Tangible Assets |
|
1,585 |
|
2,114 |
|
|
Total non-current assets |
|
12,360,339 |
|
12,088,081 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
9 |
47,591 |
|
40,862 |
|
|
Other receivables |
10 |
55,711 |
|
117,094 |
|
|
Total current assets |
|
103,302 |
|
157,956 |
|
|
|
|
|
|
|
|
|
Total assets |
|
12,463,641 |
|
12,246,037 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Share capital presented as equity |
13 |
3,226,368 |
|
3,220,201 |
|
|
Share premium |
13 |
11,601,317 |
|
11,399,829 |
|
|
Share-based payments reserve |
13 |
450,658 |
|
450,658 |
|
|
Other reserve |
11 |
- |
|
- |
|
|
Retained deficit |
|
(5,458,240) |
|
(4,928,827) |
|
|
Total equity |
|
9,820,103 |
|
10,141,861 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Warrant liabilities |
11,16 |
- |
|
32,880 |
|
|
Total non-current liabilities |
|
- |
|
32,880 |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
12 |
1,970,978 |
|
1,928,790 |
|
|
Convertible loan |
12 |
138,682 |
|
132,202 |
|
|
Derivative liability |
12 |
10,304 |
|
10,304 |
|
|
Warrant liabilities |
11,16 |
91,852 |
|
- |
|
|
Convertible loan notes |
11 |
308,648 |
|
- |
|
|
Derivative liability – conversion option |
11 |
123,074 |
|
- |
|
|
Total current liabilities |
|
2,643,538 |
|
2,071,296 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
2,643,538 |
|
2,104,176 |
|
|
|
|
|
|
|
|
|
Total equity and liabilities |
|
12,463,641 |
|
12,246,037 |
|
Statement of changes in equity
for the financial year ended 31 May 2026
|
|
|
Share capital |
Share premium |
Share-based payment reserve |
Other reserve |
Retained deficit |
Total equity |
|
|
|
Note |
€ |
€ |
€ |
€ |
€ |
€ |
|
|
Balance at 1 June 2025 |
|
3,220,201 |
11,399,829 |
450,658 |
- |
(4,928,827) |
10,141,861 |
|
|
Share issue |
13 |
6,167 |
211,072 |
- |
- |
- |
217,239 |
|
|
Share issue costs |
13 |
- |
(9,584) |
- |
- |
- |
(9,584) |
|
|
Loss for the financial year |
|
- |
- |
- |
- |
(529,413) |
(529,413) |
|
|
Balance at 31 May 2026 |
|
3,226,368 |
11,601,317 |
450,658 |
- |
(5,458,240) |
9,820,103 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 1 June 2024 |
|
3,203,532 |
10,736,889 |
450,658 |
- |
(4,649,470) |
9,741,609 |
|
|
Share issue |
13 |
16,669 |
789,422 |
- |
- |
- |
806,091 |
|
|
Share issue costs |
16 |
- |
(126,482) |
- |
- |
- |
(126,482) |
|
|
Loss for the financial year |
|
- |
- |
- |
- |
(279,357) |
(279,357) |
|
|
Balance at 31 May 2025 |
|
3,220,201 |
11,399,829 |
450,658 |
- |
(4,928,827) |
10,141,861 |
|
|
|
|
|
|
|
|
|
|
|
Share capital
The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at the Annual General Meeting held on 9 December 2016. A detailed breakdown of the share capital figure is included in Note 13.
Share premium
The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of shares issued net of any direct share issue costs which are deducted from share premium in line with the Company’s accounting policies. The fair value of warrants issued as part of a fundraise are included in direct share issue costs (see Note 16). There were no warrants issued as part of the funds raised in the current financial year (the fair value of warrants issued in the year ending 31 May 2025 was €94,512).
Share-based payment reserve
The share-based payment reserve comprises the cumulative fair value of equity-settled share options and warrants granted in consideration for goods or services received, recognised over the relevant vesting periods, net of amounts relating to options and warrants forfeited or lapsed, which are transferred to the retained deficit. There was no movement in the reserve during the year or in the preceding year. Warrants issued in connection with equity fundraisings are transactions with investors acting in their capacity as holders of equity instruments and fall outside the scope of IFRS 2; accordingly no amount in respect of such warrants is recognised in this reserve.
Retained deficit
This reserve represents the accumulated losses absorbed by the Company to the statement of financial position date.
Statement of cash flows
for the financial year ended 31 May 2026
|
|
|
2026 |
|
|
2025 |
|
|
|
€ |
|
|
€ |
|
Cash flows from operating activities |
Note |
|
|
|
|
|
Loss for the financial year |
|
(529,413) |
|
|
(279,357) |
|
Adjustments for: |
|
|
|
|
|
|
Depreciation |
|
529 |
|
|
- |
|
Movement in fair value of warrants |
11 |
58,972 |
|
|
(91,738) |
|
Movement in fair value of conversion option |
11 |
90,803 |
|
|
- |
|
Interest expense |
11,12 |
12,825 |
|
|
6,480 |
|
Foreign exchange gain on convertible loan notes
|
11 |
(1,660)
|
|
|
- |
|
|
|
(367,944) |
|
|
(364,615) |
|
|
|
|
|
|
|
|
Increase in trade and other payables |
12 |
42,188 |
|
|
25,189 |
|
Decrease / (increase) in other receivables |
10 |
61,383 |
|
|
(35,543) |
|
Net cash (used in) / from operating activities |
|
(264,373) |
|
|
(374,969) |
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Expenditure on intangible assets |
7 |
(272,787) |
|
|
(395,773) |
|
Purchase of tangible assets |
|
- |
|
|
(2,114) |
|
Net cash used in investing activities |
|
(272,787) |
|
|
(397,887) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Proceeds on issue of share capital |
13 |
217,239 |
|
|
774,121 |
|
Share issue costs |
13 |
(9,584) |
|
|
- |
|
Proceeds from issue of convertible loan notes |
11 |
336,234 |
|
|
- |
|
Net cash provided by financing activities |
|
543,889 |
|
|
774,121 |
|
|
|
|
|
|
|
|
Increase in cash and cash equivalents |
|
6,729 |
|
|
1,265 |
|
Cash and cash equivalents at beginning of financial year |
|
40,862 |
|
|
39,597 |
|
Cash and cash equivalents at end of financial year |
|
47,591 |
|
|
40,862 |
Notes to the financial statements for the financial year ended 31 May 2026
1 Material accounting policies
Reporting entity
Karelian Diamond Resources P.L.C. (the “Company”) is a company domiciled in Ireland. The Company is a public limited company incorporated in Ireland under registration number 382499. The registered office is located at Shannon Airport House, Shannon Free Zone, Shannon, Co. Clare, V14E370, Ireland. The principal activity of the Company during the financial year is mineral exploration and development.
Basis of preparation
The financial statements are presented in euro (“€”). The euro is the functional currency of the Company. The financial statements are prepared under the historical cost basis except for derivative financial instruments which are measured at fair value at each reporting date. The preparation of financial statements requires the Board of Directors and management to use judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Details of significant judgements are disclosed in the accounting policies.
The financial statements were authorised for issue by the Board of Directors on 4 November 2026.
Going concern
In preparing the financial statements, the directors consider it appropriate to use the going concern assumption, which assumes the company will have sufficient resources to enable it to meet its liabilities as they fall due. The Company recorded a loss of €529,413 (31 May 2025: loss of €279,357) for the financial year ended 31 May 2026. The Company had net assets of €9,820,103 (31 May 2025: €10,141,861) at that date. The Company had net current liabilities of €2,540,236 (31 May 2025: €1,913,340) at that date. Net current liabilities include €431,722 (31 May 2025: €Nil) in respect of the convertible loan notes and the related conversion option, which are presented as current because the holders may convert at any time; no cash repayment of the notes falls due before 20 March 2029. The Company had cash and cash equivalents of €47,591 (31 May 2025: €40,862) at 31 May 2026. As set out in the Chairman’s statement, the Company expects to incur capital expenditure in 2026 and 2027, consistent with its strategy as an exploration company.
The Directors have considered carefully the financial position of the Company and in that context, have prepared and reviewed cash flow forecasts for the period to 31 December 2027. In doing so, the Directors are mindful of the risks faced by the business including in particular general industry risks facing companies in the natural resource sector as described in the Directors Report. The Board of Directors are experienced at managing the peaks and troughs of investor sentiment in the natural resources industry and will continue to manage the cashflows of the Company including planning/revising work programmes according to available funds. The Company continues to rely on its ability to raise appropriate finance through either asset level investment or fresh issues of share capital and the support of its Directors in relation to amounts owing to them to meet its liabilities as they fall due. In this context the Board of Directors note that all directors, namely, Brendan McMorrow, Maureen T.A. Jones, Howard Bird and Dr. Sorċa Conroy, and former Directors namely James P. Jones, Seamus P. FitzPatrick and the Estate of Professor Richard Conroy, have confirmed that they will not seek repayment of amounts owed to them by the Company of €1,700,163 (31 May 2025: €1,614,886) for a minimum period of 12 months from the date of approval of the financial statements, unless the Company has sufficient funds to repay.
The Directors recognise that net current liabilities of €2,540,236 (31 May 2025: €1,913,340), of which €1,700,163 due to Directors and former Directors has been deferred for a minimum period of 12 months from the date approval of the financial statements, coupled with the requirement to raise funds to carry out the Company’s plans is a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern and, therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business. The cashflows include plans to raise funds to carry out the activities of the company and the Board of Directors are confident that adequate funds can be raised through strategic partnerships or direct market fundraising to meet their objectives.To mitigate the risk of the timing and scale of investment not being met, the Board and management continue to take actions to monitor and manage the cost base and project implementation plans as appropriate.
In reviewing both the current work programme commitments and proposed work programmes for exploration and evaluation assets (which will be dependent on the quantum of funds raised), the results obtained from past and ongoing exploration programmes, the support noted above from the Board (and past Board members) and the prospects for raising additional funds as required, the Board of Directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include any adjustments to the carrying value and classification of assets and liabilities that would arise if the Company was unable to continue as going concern.
Statement of compliance
The Company’s financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (“the relevant financial reporting framework”) and the requirements of the Companies Act 2014.
Recent accounting pronouncements
(i) New and amended standards adopted by the Company
The Company has adopted the following amendments to standards for the first time for its annual reporting year commencing 1 June 2025:
- Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability – Effective date 1 January 2025.
The adoption of the above amendments to standards had no significant impact on the financial statements of the Group and the Company.
(ii) New standards and interpretations not yet adopted by the Company
Certain new accounting standards and interpretations have been published and endorsed by the EU that are not mandatory for 31 May 2026 reporting periods and have not been early adopted by the Company. The Board of Directors does not consider that those of the below that will be effective for the year ended 31 May 2027 will have a material effect on the financial statements and it is considering whether or not those that become effective in the following financial year will have any impact on the financial statements.
- Amendments to IFRS 9 and IFRS 7 regarding classification and measurement of financial instruments – Effective date 1 January 2026;
- Annual Improvements to IFRS Accounting Standards – Volume 11 – Effective date 1 January 2026;
- Amendments to IFRS 9 and IFRS 7 regarding contracts referencing nature-dependent electricity – Effective date 1 January 2026;
- IFRS 18 Presentation and Disclosure in Financial Statements – Effective date 1 January 2027.
The following new standards and amendments to standards have been issued by the International Accounting Standards Board but have not yet been endorsed by the EU, accordingly, none of these standards have been applied in the current year.
The Board of Directors is currently assessing whether these standards if endorsed by the EU will have any impact on the financial statements of the Company.
- Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency – Effective date 1 January 2027;
- IFRS 19 Subsidiaries without Public Accountability: Disclosures – Effective date 1 January 2027;
- Amendments to the Fair Value Option in IAS 28 Investments in Associates and Joint Ventures – Effective date 1 January 2027;
- IFRS 20 Regulatory Assets and Regulatory Liabilities – Effective date 1 January 2029.
- Amendments to the Fair Value Option in IAS 28 Investments in Associates and Joint Ventures - Effective date 1 January 2027
(a) Intangible assets
The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources.
(i) Capitalisation
All costs related to acquiring the legal rights to explore will be capitalised. All other costs incurred prior to acquiring the rights to explore are charged directly to the statement of profit or loss. Exploration, appraisal and development expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible exploration and evaluation (“E&E”) assets.
E&E capitalised costs include geological and geophysical costs, and other direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities). In addition, E&E capitalised costs include an allocation from operating expenses and wages and salaries where they apply to activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource .
E&E capitalised costs are not amortised prior to the conclusion of appraisal activities.
At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered, then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires, then the costs of such unsuccessful exploration and evaluation are written off to the statement of profit or loss in the period in which the event occurred.
(ii) Impairment
If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E assets:
- The period for which the entity has the right to explore in the specific area has expired or will expire in the near future and is not expected to be renewed.
- Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.
- Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area.
- Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.
For E&E assets, where the above indicators exist on an annual basis, an impairment test is carried out. The E&E assets are categorised into Cash Generating Units (“CGU”) on a country-by-country (where material) basis. The carrying value of the CGU is compared to its recoverable amount and any resulting impairment loss is written off to the statement of profit or loss. The recoverable amount of the CGU is assessed as the higher of its fair value, less costs to sell, and its value in use.
(b) Income taxation expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in other comprehensive loss, in which case it is recognised in the statement of comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
(c) Share-based payments
The Company classifies instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. When the warrants issued (see Note 16 for details) have an exercise price in sterling, they are derivative in nature and are liability classified. They do not qualify for equity classification as any cash settlement on exercise of these warrants will be received in a foreign currency. Where warrants are issued in the functional currency of the Company and meet the other necessary conditions, they are recognised as equity instruments. The warrant liabilities are recognised at their fair value on initial recognition and subsequently are measured at fair value through statement of profit or loss. Any incremental direct costs associated with the issuance of warrants are taken as an immediate charge to finance costs through the statement of profit or loss. See Notes 11 and 16 for further details.
For equity-settled share-based payment transactions (i.e. the granting of share options and share warrants), the Company measures the services and the corresponding increase in equity at fair value at the measurement date (which is the grant date) using a recognised valuation methodology for the pricing of financial instruments (Binomial Lattice Model or Black Scholes Model). See also policy (k).
(d) Trade and other receivables and payables
Trade and other receivables are measured at their transaction price and subsequently measured at amortised cost. Trade and other payables are measured at initial recognition at fair value and subsequently measured at amortised cost.
(e) Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares.
(f) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank held by the Company and short-term bank deposits with a maturity of three months or less. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments.
(g) Pension costs
The Company provides for pensions for certain employees through a defined contribution pension scheme. The amount charged to the statement of profit or loss is the contribution payable in that financial year. Any difference between amounts charged and contributions paid to the pension scheme is included in receivables or payables in the statement of financial position.
(h) Foreign currencies
Transactions denominated in foreign currencies relating to costs and non-monetary assets are translated into euro at the rates of exchange ruling on the dates on which the transactions occurred. Monetary assets and liabilities denominated in foreign currencies are translated into euro at the rate of exchange ruling at the statement of financial position date. The resulting profits or losses are dealt with in the statement of profit or loss .
(i) Directors’ Loans
Directors’ loans are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on the effective interest rate method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.
(j) Convertible loan
The convertible loan notes are denominated in sterling, which is not the Company’s functional currency. Conversion would therefore be for a variable amount of euro and the conversion option does not meet the fixed-for-fixed requirement of IAS 32 for classification as equity. The conversion option is accordingly accounted for as an embedded derivative, separated from the host debt contract in accordance with IFRS 9. At initial recognition, the conversion option is measured at fair value and the host debt is the residual of the proceeds after deducting that fair value. Both the host debt and the derivative are recognised as liabilities in the statement of financial position. The conversion feature is subsequently measured at fair value with changes recognised in profit or loss. The liability is subsequently measured at amortised cost. The Company accounts for the interest expense of the convertible loan note at the effective interest rate. The difference between the effective interest rate and interest rate attached to the convertible loan increases the carrying amount of the liability so that, on maturity, the carrying amount is equal to the cash repayment that the Company may be required to pay.
(k) Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares are recognised as a deduction from share premium, net of any tax effects. Where warrants are issued for the sole purpose of assisting with an issue of equity or to meet broker transaction costs directly attributable to the issue of equity, the amount initially recognised, that is their fair value, is deducted from share premium. Subsequently, where the warrants qualify as equity they are recognised in other reserves and the amount recognised is not changed. If the warrants qualify as a liability the fair value is trued up from one reporting period to the next through profit or loss.
(l) Impairment - financial assets are measured at amortised cost
Financial assets measured at amortised cost are reviewed for impairment loss at each reporting date.
The Company measures the loss allowance at an amount equal to the lifetime expected credit losses (“ECL”) as required under a simplified approach for receivables that do not contain a financing component. The Company’s approach to ECL reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial re-organisation and default in payments are all considered indicators for increases in credit risks. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. Any contractual payment which is more than 90 days past due is considered credit impaired.
(m) Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. The Company considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Subsequent measurement of financial assets
Financial assets held within a different business model to ‘hold to collect’ or ‘hold to collect and sell’ are categorised at FVTPL. Further, irrespective of the business model used, financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply (see below). The category also contains an equity investment. The Company accounts for the investment at FVTPL and did not make the irrevocable election to account for the listed equity securities at FVOCI. The fair value was determined in line with the requirements of IFRS 13 ‘Fair Value Measurement’. Assets in this category are measured at fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.
Classification and measurement of financial liabilities
The Company’s financial liabilities include trade and other payables and derivative financial instruments. Financial liabilities are initially measured at fair value, and, where applicable. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income.
(n) Tangible assets
Tangible assets, comprising plant and office equipment and computer equipment, are stated at historical cost less accumulated depreciation and any provision for impairment. Depreciation is charged to the statement of profit or loss on a straight line basis over the estimated useful life of each asset, with nil residual value. The rate applied to computer equipment is 25% per annum, being an estimated useful life of four years. The useful lives and residual values of tangible assets are reviewed at each reporting date and adjusted where appropriate.
(o) Significant accounting judgements and key sources of estimation uncertainty
Significant judgements in applying the Company’s accounting policies
The preparation of the financial statements requires the Board of Directors to make judgements and estimates and form assumptions that affect the amounts of assets, liabilities, contingent liabilities, revenues and expenses reported in the financial statements. On an ongoing basis, the Board of Directors evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Board of Directors bases its judgements and estimates on historical experience and on other factors it believes to be reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily apparent from elsewhere in the financial statements. Actual results may differ from these estimates where the underlying assumptions and conditions change over time. In the process of applying the Company’s accounting policies above, the Board of Directors have identified the judgemental areas that have the most significant impact on the amounts recognised in the financial statements (apart from those involving estimations), which are dealt with as follows:
Exploration and evaluation assets
The assessment of whether operating costs and salary costs are capitalised to exploration and evaluation costs or expensed involves judgement. The Board of Directors consider the nature of each cost incurred and whether it is deemed appropriate to capitalise it within exploration and evaluation assets. Given that the activity of management and the resultant administration and salary costs are primarily focused on the Company’s diamond prospects, the Board of Directors consider it appropriate to capitalise a portion of such costs. These costs are reviewed on a line-by-line basis with the resultant calculation of the amount to be capitalised being specific to the activities of the Company in any given year.
Cash generating units (“CGUs”)
As outlined in the intangible assets accounting policy, the exploration and evaluation assets should be allocated to CGUs. The determination of what constitutes a CGU requires judgement. The Board of Directors consider its diamond licences in the Kuhmo region of Finland to be one CGU and its copper / nickel / platinum group element licences in Northern Ireland to be a separate CGU.
The carrying value of each CGU is compared to its recoverable amount. The recoverable amount of the CGU is assessed as the higher of its fair value less costs to sell and its value in use. The determination of value in use requires the following judgements:
- Estimation of future cash flows expected to be derived from the asset.
- Expectation about possible variations in the amount or timing of the future cash flows.
- The determination of an appropriate discount rate.
Going concern
The preparation of financial statements requires an assessment on the validity of the going concern assumption. The validity of the going concern assumption is dependent on the successful further development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The Board of Directors have reviewed the proposed programme for exploration and evaluation assets and, on the basis of the results from the exploration programme and the prospects for raising additional funds as required, consider it appropriate to prepare the financial statements on the going concern basis. Refer to page 30 for further details.
Deferred tax
No deferred tax asset has been recognised in respect of unused tax losses as there is insufficient certainty that future taxable profits will be available against which these unused losses can be utilised.
Classification of the convertible loan notes
The convertible loan notes issued on 20 March 2026 are denominated in sterling, whereas the Company’s functional currency is euro. The Board of Directors has concluded that the conversion option therefore fails the IAS 32 fixed-for-fixed test and is classified as a derivative liability measured at fair value through profit or loss, rather than as equity. As the holders may convert at any time, both the host debt and the derivative liability are classified as current liabilities (Note 11). The loan notes are accounted for as a host debt liability and an embedded derivative liability. The host debt liability is subsequently measured at amortised cost and the embedded derivative liability is subsequently measured at fair value through profit or loss.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Exploration and evaluation assets
The carrying value of exploration and evaluation assets in the statement of financial position was €12,358,754 (31 May 2025: €12,085,967) at 31 May 2026 (Note 7). The Board of Directors carried out an assessment, in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources relating to likelihood of licence renewal, likelihood of further expenditure, possible discontinuation of activities over specific claims and available data which may suggest that the recoverable value of an exploration and evaluation asset is less than its carrying amount. This assessment included an assessment of the likelihood of securing a future strategic investment or joint venture partner to assist with the development of the assets. The granting, of a mining permit in Lahtojoki region was received in June 2025, provides the opportunity to progress the development of a central processing hub for its exploration assets in the Kuhmo region. Having considered the prospects for both development of its diamond deposit and further exploration success in its licence area, the Board of Directors is satisfied as to the carrying value of these assets and is satisfied that these are recoverable, acknowledging however that their recoverability is dependent on future successful exploration efforts.
Fair value of the conversion options
The conversion option attaching to the convertible loan notes is measured at fair value using the Black-Scholes model, a Level 3 measurement. The carrying amount at 31 May 2026 was €123,074 (31 May 2025: Nil). The valuation is sensitive to share price volatility and to the Company’s share price; the inputs and sensitivities are set out in Note 11.
Employee benefits – Share-based payment transactions
The Company operates equity-settled share-based payment arrangements with non-market performance conditions which fall within the scope of and are accounted for under the provisions of IFRS 2: Share-based Payment. Accordingly, the grant date fair value of the options under these schemes is recognised as an operating expense with a corresponding increase in the “Share-based payment reserve”, within equity, where the exercise price is granted in euro or recognised as a liability where a different currency is quoted as the exercise price over the vesting period. The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the time of exercise of those options. The model used by the Company is the Black Scholes Model. The fair value of these options is measured using an appropriate option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture is only due to share prices not achieving the threshold for vesting.
2 Operating expenses
|
|
2026 |
|
|
2025 |
|
Analysis of operating expenses |
€ |
|
|
€ |
|
Operating expenses |
505,171 |
|
|
531,151 |
|
Transfer to intangible assets |
(138,358) |
|
|
(166,536) |
|
|
366,813 |
|
|
364,615 |
|
Operating expenses are analysed as follows: |
|
|
|
|
|
Professional fees |
183,963 |
|
|
183,220 |
|
Wages and salaries |
143,370 |
|
|
180,109 |
|
Directors’ Fees |
50,000 |
|
|
60,833 |
|
Other operating expenses |
82,838 |
|
|
65,489 |
|
Auditor’s remuneration |
45,000 |
|
|
41,500 |
|
|
505,171 |
|
|
531,151 |
Other operating expenses consisted mainly of insurance, stock exchange fees, rent and printing and postage costs.
Of the above costs, a total of €138,358 (31 May 2025: €166,536) is capitalised to intangible assets based on a review of the nature and quantum of the underlying costs. Refer to Note 1(a)(i) for further details. The costs capitalised to intangible assets mainly relate to the costs of geological and on-site personnel together with travel and substance costs directly attributable to exploration activities and part of the Managing Director’s salary which meets the criteria’s as per the IFRS. €31,533 (31 May 2025: €38,542) of wages and salaries is charged to the statement of profit or loss, comprising staff wages of €6,533 and 50% of the Managing Directors’ salary of €25,000.
|
|
2026 |
|
|
2025 |
|
|
€ |
|
|
€ |
|
Wages and salaries costs as disclosed above is analysed as follows: |
||||
|
Wages and salaries |
124,930 |
|
|
174,902 |
|
Social insurance costs |
18,440 |
|
|
5,207 |
|
|
143,370 |
|
|
180,109 |
The amount of wages, salaries and related costs incurred during the financial year was recorded as follows:
|
|
2026 |
|
2025 |
|
|
€ |
|
€ |
|
Capitalised to intangible assets |
111,837 |
|
141,567 |
|
Charged to the profit or loss |
31,533 |
|
38,542 |
|
|
143,370 |
|
180,109 |
The average number of persons employed during the year (including executive Directors) by activity was as follows:
|
|
2026 |
|
2025 |
|
|
|
|
|
|
Corporate management and administration |
2 |
|
2 |
|
Exploration and evaluation |
1 |
|
1 |
|
|
3 |
|
3 |
An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts transferred to intangible assets) is as follows:
|
|
Fees € |
Salary € |
Total € |
|
Maureen T.A. Jones |
10,000 |
50,000 |
60,000 |
|
Brendan McMorrow |
20,000 |
- |
20,000 |
|
Dr. Sorċa Conroy |
10,000 |
- |
10,000 |
|
Howard Bird |
10,000 |
- |
10,000 |
|
|
50,000 |
50,000 |
100,000 |
An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts transferred to intangible assets) is as follows:
|
|
Fees € |
Salary € |
Total € |
|
Professor Richard Conroy |
8,333 |
27,083 |
35,416 |
|
Maureen T.A. Jones |
10,000 |
50,000 |
60,000 |
|
Brendan McMorrow |
16,667 |
- |
16,667 |
|
Séamus P. FitzPatrick |
5,833 |
- |
5,833 |
|
Dr. Sorċa Conroy |
10,000 |
- |
10,000 |
|
Howard Bird |
10,000 |
- |
10,000 |
|
|
60,833 |
77,083 |
137,916 |
No share based payments or pension contribution costs have been made or incurred over the past number of years. It is anticipated that the Company will move towards incorporating share based payments as part of overall remuneration in the future. Accrued amounts of salary and pension owing to current and former directors are set out in Note 12.
3 Loss before taxation
The loss before taxation is arrived at after charging the following items:
|
|
2026 |
|
2025 |
|
|
€ |
|
€ |
|
Auditor’s remuneration |
|
|
|
|
The analysis of the auditor’s remuneration is as follows:
|
|
|
|
|
45,000 |
|
41,500 |
No fees were incurred for other assurance, tax advisory or other non-audit services in respect of the current or prior financial years.
4 Directors’ remuneration
|
|
2026 |
|
2025 |
|
|
€ |
|
€ |
|
Aggregate emoluments paid to or receivable by Directors in respect of qualifying services |
100,000 |
|
137,916 |
|
|
|
|
|
Of the aggregate emoluments of €100,000 (31 May 2025: €137,916), an amount of €25,000 was capitalised to exploration and evaluation assets, with €75,000 charged to the statement of profit or loss.
During the year ended 31 May 2026 and 31 May 2025, one Director was a member of a defined contribution scheme but no contributions were due or paid and accordingly none were made, no other disclosures are required by Section 305 of the Companies Act 2014.
No compensation has been paid or is payable for the loss of office or other termination benefit in respect of the loss of office of Director or other offices (31 May 2025: €Nil).
5 Income tax expense
No taxation charge arose in the current or prior financial year due to losses incurred in prior years and this year.
Factors affecting the tax charge for the financial year:
The total tax charge for the financial year is different to the standard rate of Irish corporation tax. This is due to the following:
|
|
2026 |
|
2025 |
|
|
€ |
|
€ |
|
Loss on ordinary activities before taxation |
(529,413) |
|
(279,357) |
|
|
|
|
|
|
Irish standard tax rate |
12.50% |
|
12.50% |
|
Tax credit at the Irish standard rate |
(66,177) |
|
(34,920) |
|
Effects of: |
|
|
|
|
Tax effect of items not taxable or not deductible |
18,789 |
|
- |
|
Tax effect of trading losses carried forward for which no deferred tax asset is recognised |
47,388 |
|
34,920 |
|
Tax charge for the financial year |
- |
|
- |
No deferred tax asset has been recognised on accumulated tax losses as it cannot be considered probable that future taxable profit will be available against which the deferred tax asset can be utilised.
Unutilised losses may be carried forward from the date of the origination of the losses but may only be offset against taxable profits earned from the same trade. Unutilised losses carried forward amounted to €13,463,302 at 31 May 2026 and €13,084,193 at 31 May 2025.
6 Loss per share
|
Basic loss per share |
|
|
31 May |
|
31 May |
|
|
|
|
2026 |
|
2025 |
|
|
|
|
€ |
|
€ |
|
Loss for the year attributable to equity holders of the Company |
|
|
(529,413) |
|
(279,357) |
|
|
|
|
|
|
|
|
Number of ordinary shares at start of the financial year |
|
|
171,769,411 |
|
105,092,749 |
|
Number of ordinary shares issued during the financial year |
|
|
24,666,666 |
|
66,676,662 |
|
Number of ordinary shares at end of the financial year |
|
|
196,436,077 |
|
171,769,411 |
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share |
|
|
195,084,479 |
|
138,490,187 |
|
|
|
|
|
|
|
|
Basic and diluted loss per ordinary share |
|
|
(0.0027) |
|
(0.0020) |
Diluted loss per share
The effect of warrants and the conversion option attaching to the convertible loan notes is anti-dilutive, as the Company is loss making. These instruments, including the 19,333,333 potential ordinary shares issuable on conversion of the convertible loan notes, are therefore excluded from the calculation of diluted loss per share.
7 Intangible assets
|
Exploration and evaluation assets |
|
|
|
|
|
|
|||||
|
|
|
|
31 May |
|
31 May |
|
|||||
|
Cost |
|
|
2026 |
|
2025 |
|
|||||
|
|
|
|
€ |
|
€ |
|
|||||
|
At 1 June |
|
|
12,085,967 |
|
11,690,194 |
|
|||||
|
Expenditure capitalised during the financial year: |
|
|
|
|
|
|
|||||
|
|
|
135,596 |
|
199,937 |
|
|||||
|
|
|
137,191 |
|
195,836 |
|
|||||
|
At 31 May |
|
|
12,358,754 |
|
12,085,967 |
|
|||||
|
|
|
|
|
|
|
||||||
Exploration and evaluation assets relate to expenditure incurred in the development of mineral exploration opportunities. These assets are carried at historical cost and have been assessed for impairment in particular with regard to the requirements of IFRS 6: Exploration for and Evaluation of Mineral Resources relating to remaining licence or claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities as a result of specific claims and available data which may suggest that the recoverable value of an exploration and evaluation asset is less than its carrying amount. The Board of Directors note that the realisation of the intangible assets is dependent on further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. Mineral interests are categorised geographically as follows:
|
Finland |
|
|
|
|
|
|
|
|
|
|
31 May |
|
31 May |
|
|
Cost |
|
|
2026 |
|
2025 |
|
|
|
|
|
€ |
|
€ |
|
|
At 1 June |
|
|
11,777,276 |
|
11,501,738 |
|
|
Expenditure capitalised during the financial year: |
|
|
|
|
|
|
|
|
|
98,699 |
|
125,539 |
|
|
|
|
113,261 |
|
149,999 |
|
|
At 31 May |
|
|
11,989,236 |
|
11,777,276 |
|
|
Northern Ireland |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 May |
|
31 May |
|
|
Cost |
|
|
2026 |
|
2025 |
|
|
|
|
|
€ |
|
€ |
|
|
At 1 June |
|
|
308,691 |
|
188,456 |
|
|
Expenditure capitalised during the financial year: |
|
|
|
|
|
|
|
|
|
36,897 |
|
74,399 |
|
|
|
|
23,930 |
|
45,836 |
|
|
At 31 May |
|
|
369,518 |
|
308,691 |
|
In assessing exploration licences on a licence by licence basis within both the Finland and Northern Ireland CGU’s for impairment the Board of Directors have considered in particular the proposed work programmes for the underlying diamond resources in Finland and copper – nickel – platinum group elements in Northern Ireland and their likelihood of adding to the existing resource and resource potential in their licence areas. They have also assessed the likelihood of securing a future strategic investment or joint venture partner to assist with the development of the assets. The Board of Directors are satisfied that following this review that no indications of impairment exist requiring a reduction in the carrying value of the capitalised exploration expenditure above.
In June 2025, shortly after the start of the year under review, the diamond deposit at Lahtojoki had its mining permit granted by the Finnish Safety and Chemical Agency (Tukes) and the Company is planning to enter its development phase once funding is in place. In assessing this asset in particular, the Board of Directors have also considered the potential recoverability of the carrying value by evaluating a financial model for the development of the deposit at Lahtojoki and are satisfied that no impairment of the carrying value of the related capitalised expenditure is required.
8 Tangible assets
Tangible assets comprise plant and office equipment and computer equipment.
|
Plant and office equipment |
|
|
|
|
|
|
|
|
|
|
31 May |
|
31 May |
|
|
Cost |
|
|
2026 |
|
2025 |
|
|
|
|
|
€ |
|
€ |
|
|
At 1 June |
|
|
3,791 |
|
1,677 |
|
|
Additions |
|
|
- |
|
2,114 |
|
|
At 31 May |
|
|
3,791 |
|
3,791 |
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
At 1 June |
|
|
1,677 |
|
1,677 |
|
|
Charge for the financial year |
|
|
529 |
|
- |
|
|
At 31 May |
|
|
2,206 |
|
1,677 |
|
|
Net book value at 31 May |
|
|
1,585 |
|
2,114 |
|
No depreciation was charged in the prior financial year. The amount involved is not material to either year.
9 Cash and cash equivalents
|
|
|
|
|
31 May 2026 |
|
31 May 2025 |
|
|
|
|
|
€ |
|
€ |
|
Cash held in bank accounts |
|
|
|
47,591 |
|
40,862 |
|
|
|
|
|
47,591 |
|
40,862 |
Certain of the above bank accounts are held for the purpose of holding collateral deposits related to the Finnish licenses. As at 31 May 2026, a total amount of €24,500 (31 May 2025: €24,500) relates to these collateral deposits and is treated as a restricted cash balance.
10 Other receivables
|
|
|
|
|
31 May 2026 |
|
31 May 2025 |
|
|
|
|
|
€ |
|
€ |
|
VAT receivable |
|
|
|
33,940 |
|
76,387 |
|
Prepayments |
|
|
|
19,767 |
|
38,707 |
|
Other receivables |
|
|
|
2,004 |
|
2,000 |
|
|
|
|
|
55,711 |
|
117,094 |
The Directors consider that the carrying values of receivables are approximate to their fair values. Expected credit losses exist in relation to the Company’s receivables as at 31 May 2026 and 31 May 2025 are negligible.
11 Warrant liabilities and convertible loan notes
Warrant liabilities
During the year ended 31 May 2026, no warrants were issued. 54,876,664 warrants with a sterling exercise price and expiry dates of between 12 months and 24 months were issued in the prior year. The fair value amount of these warrants at grant date was valued using the Black Scholes Model and recorded as warrant liabilities.
At 31 May 2026, the warrants in issue were fair valued with a charge of €58,972 in respect of the movement in fair value (31 May 2025: credit of €91,738) being recorded in the statement of profit or loss and a fair value liability of €91,852 (31 May 2025: €32,880) recorded in the statement of financial position.
Warrants issued on 20 February 2025 have a 24-month term and as such were included in non-current liabilities in the prior year and current liabilities in the current year. Warrants issued in July 2024 had a 12 month term, expired unexercised in July 2025 and had negligible value as at 31 May 2025. See Note 16 for further details.
|
|
|
|
|
31 May 2026 |
|
31 May 2025 |
|
|
|
|
|
€ |
|
€ |
|
Opening balance |
|
|
|
32,880 |
|
30,106 |
|
Warrant liability recorded on issue (Note 16) |
|
|
|
- |
|
94,512 |
|
Movement in fair value of warrants |
|
|
|
58,972 |
|
(91,738) |
|
|
|
|
|
91,852 |
|
32,880 |
|
Disclosed as |
|
|
|
|
|
|
|
Non current liability |
|
|
|
- |
|
32,880 |
|
Current liability |
|
|
|
91,852 |
|
- |
Convertible loan notes
On 20 March 2026, the Company drew down unsecured, unlisted convertible loan notes with a principal amount of £290,000, convertible at the holders’ option at £0.015 per share into 19,333,333 ordinary shares. Conversion is automatic if the volume-weighted average price of the ordinary shares exceeds 3p for more than five trading days in any ten-day period, or on a takeover of the Company. Conversion in the first year carries a full year’s interest, giving an effective conversion price of 1.39p. Cash proceeds of €336,234 were received, being the sterling principal translated at the rate ruling on that date, and are presented as an inflow from financing activities in the statement of cash flows. The notes are repayable on 20 March 2029, at which date the principal together with three years’ simple interest at 8% per annum falls due in a single settlement, giving total contractual cash flows of £359,664 (€414,727 translated at the rate of exchange ruling at 31 May 2026). Although no cash repayment falls due within twelve months of the balance sheet date, the holders may convert the notes at any time. As the conversion option is classified as a liability, conversion would constitute settlement under IAS 1.76B and the Company does not have the right to defer settlement for at least twelve months. The host debt and the derivative liability are accordingly classified as current liabilities.
As the notes are denominated in sterling, which is not the Company’s functional currency, the conversion option does not meet the IAS 32 fixed-for-fixed requirement and is accounted for as an embedded derivative liability at fair value through profit or loss, separated from the host debt (accounting policy 1(j)). On initial recognition the conversion option was measured at its fair value of €32,271 (£27,833) and the residual of €303,963 was allocated to the host debt.
The derivative is remeasured to fair value at each reporting date and amounted to €123,074 (£106,734) at 31 May 2026, giving a fair value loss of €90,803 which is presented within finance costs in the statement of profit or loss. The host debt component is carried at amortised cost using an effective interest rate of 11.104% and amounted to €308,648 at 31 May 2026.
Effective interest of €6,345, comprising the contractual coupon of €5,277 and the unwind of the discount arising on separation of the derivative of €1,068, was charged in respect of the notes during the financial year and is included within the interest expense of €12,825 in the statement of profit or loss. A foreign exchange gain of €1,660 arose on retranslation of the notes at the balance sheet date and is included within operating expenses (Note 2); it does not form part of the interest expense.
The fair value of the conversion option is a recurring Level 3 measurement, determined using the Black-Scholes model. The inputs at 31 May 2026, based on market data at 29 May 2026 (the last trading day before the year end), were: share price 0.85p (drawdown: 0.375p at 19 March 2026), conversion price 1.5p, share price volatility of 128.293% based on 12-month historical volatility (drawdown: 103.497%), risk-free rate of 4.026% (drawdown: 4.276%) and remaining term of 2.81 years (drawdown: 3.00 years). Volatility is the significant unobservable input: an increase or decrease of 10 percentage points would change the fair value of the derivative by approximately +€8,350 / −€9,104, and a 10% rise or fall in the share price would change it by approximately +€15,386 / −€15,143. The movement in the derivative liability during the year comprised its recognition on drawdown of €32,271 and the fair value loss of €90,803, giving a closing balance of €123,074 at 31 May 2026.
12 Current liabilities
Trade and other payables
|
|
|
|
|
31 May 2026 |
|
31 May 2025 |
|
|
|
|
|
€ |
|
€ |
|
Accrued Directors’ remuneration |
|
|
|
|
|
|
|
Fees and other emoluments |
|
|
|
1,436,913 |
|
1,351,636 |
|
Pension contributions |
|
|
|
263,250 |
|
263,250 |
|
Amount due to related party (see Note 15 (b)) |
|
|
|
112,537 |
|
75,065 |
|
Directors’ Current Account (Note 15) |
|
|
|
- |
|
6,772 |
|
Other creditors and accruals |
|
|
|
158,278 |
|
232,067 |
|
|
|
|
|
1,970,978 |
|
1,928,790 |
It is the Company’s practice to agree terms of transactions, including payment terms with suppliers. It is the Company’s policy that payment is made according to the agreed terms. The carrying value of the trade and other payables approximates to their fair value.
The Directors, Maureen T.A. Jones, Dr. Sorċa Conroy, Howard Bird and Brendan McMorrow, and former Directors, James P. Jones, Seamus P. FitzPatrick and representatives of the Estate of Professor Richard Conroy have confirmed that they will not seek repayment of amounts owed to them by the Company of €1,700,163 (31 May 2025: €1,614,886) within 12 months of the date of approval of the financial statements, unless the Company has sufficient funds to repay same.
Convertible Loan
On 26 May 2023, the Company entered into a convertible loan note agreement for a total amount of €129,550 (£112,500) with Conroy Gold and Natural Resources P.L.C. (“Conroy Gold”) which is both a shareholder in the company and has a number of other connections as noted in Note 15. The convertible loan note is unsecured, had a term of 18 months and attracts interest at a rate of 5% per annum which is payable on the maturity until the loan is repayable. The conversion price is at a price of 5 pence per ordinary share. Conroy Gold has the right to seek conversion of the principal amount outstanding on the convertible loan note and all interest accrued till the settlement date.
€10,304 was recorded as a derivative liability attached to the total convertible loan note above and the net amount of €119,246 was initially recorded as the value of the convertible loan at 31 May 2023. The loan incurred interest of €6,480 in the current year (31 May 2025: €6,480). The convertible term has passed but the loan continues in place on an informal basis on the same terms and is classified as a current liability for the year ended 31 May 2026. The Company is in discussions with Conroy Gold to extend the term of the loan note.
|
|
|
|
|
31 May 2026 |
|
31 May 2025 |
|
|
|
|
|
€ |
|
€ |
|
Opening balance |
|
|
|
132,202 |
|
125,722 |
|
Interest payable |
|
|
|
6,480 |
|
6,480 |
|
Closing balance |
|
|
|
138,682 |
|
132,202 |
13 Called up share capital and share premium
|
Authorised: |
31 May 2026 |
|
31 May 2025 |
|
|
€ |
|
€ |
|
7,301,310,041 ordinary shares of €0.00025 each |
1,825,328 |
|
1,825,328 |
|
317,785,034 deferred shares of €0.00999 each |
3,174,672 |
|
3,174,672 |
|
|
5,000,000 |
|
5,000,000 |
The deferred shares do not entitle the holder to receive a dividend or other distribution. Furthermore, the deferred shares do not entitle the shareholder to receive notice of or vote at any general meeting of the Company, and do not entitle the shareholder to any proceeds on a return of capital or winding up of the Company.
Issued and fully paid – Current financial year
|
|
Number of ordinary shares |
Called up share capital € |
Called up deferred share capital € |
Share premium € |
|
1 June 2025 – ordinary shares of €0.00025 each |
171,769,411 |
45,529 |
3,174,672 |
11,399,829 |
|
|
|
|
|
|
|
Share issue (a) |
24,666,666 |
6,167 |
- |
211,072 |
|
Share issue costs |
- |
- |
- |
(9,584) |
|
End of financial year |
196,436,077 |
51,696 |
3,174,672 |
11,601,317 |
(a) On 20 June 2025 the Company raised €217,239 (£185,000) before share issue costs through the issue of 24,666,666 ordinary shares of €0.00025 in the capital of the Company at a price of £0.0075 per Subscription Share. The company incurred share issue costs of a total of €9,584 being the broker fees in relation to this issue.
Issued and fully paid – Prior financial year
|
|
Number of ordinary shares |
Called up share capital € |
Called up deferred share capital € |
Share premium € |
|
1 June 2024 – ordinary shares of €0.00025 each |
105,092,749 |
28,860 |
3,174,672 |
10,736,889 |
|
|
|
|
|
|
|
Share issue (b) |
23,599,995 |
5,900 |
- |
411,232 |
|
Share issue (c) |
43,076,667 |
10,769 |
- |
378,189 |
|
Share issue costs |
- |
- |
- |
(126,482) |
|
End of financial year |
171,769,411 |
45,529 |
3,174,672 |
11,399,828 |
(b) On 1 July 2024 the Company raised €417,132 (£354,000) before share issue costs through the issue of 23,599,995 ordinary shares of €0.00025 in the capital of the Company at a price of £0.015 per Subscription Share. The company incurred share issue costs of a total of €35,901 with €20,919 being the fair value as at date of grant of warrants issued as part of the terms attaching to the share issue (see Note 16) and the remainder being broker costs of €14,982.
(c) On 20 February 2025 the Company raised €388,958 (£323,075) before share issue costs through the issue of 43,076,667 ordinary shares of €0.00025 in the capital of the Company at a price of £0.0075 per Subscription Share. The company incurred share issue costs of €90,581 with €73,592 being the fair value as at date of grant of warrants issued as part of the terms attaching to the share issue (see Note 16) and the remainder being broker costs of €16,989.
Warrants: At 31 May 2026, warrants over 43,076,667 shares exercisable at £0.015 at any time up to 20 February 2027 were outstanding. No warrants were issued during the financial year and 11,799,997 warrants exercisable at £0.03 expired on 1 July 2025. (31 May 2025: warrants over 54,876,664 shares exercisable at prices varying from £0.015 to £0.03 at any time up to 20 February 2027 were in issue, all of which had been issued during that financial year).
Share price: The closing price on 29 May 2026, the last trading day before the year end, was £0.0085 (31 May 2025: £0.00585). The share price ranged from £0.0125 to £0.00375 (31 May 2025: £0.0274 to £0.00585) during the year under review.
14 Commitments and contingencies
At 31 May 2026, there were no capital commitments or contingent liabilities (31 May 2025: €Nil) recognised at the balance sheet date. Should the Company decide to further develop the Lahtojoki project, an amount of €40,000 is payable by the Company to the vendors of the Lahtojoki mining concession.
15 Related party transactions
(a) The Company shares office accommodation with Conroy Gold and Natural Resources P.L.C. (“Conroy Gold”) which has certain common Directors and shareholders. For the financial year ended 31 May 2026, Conroy Gold incurred costs totalling €35,178 (31 May 2025: €83,136) on behalf of the Company, and the Company incurred costs totalling €37,730 (31 May 2025: €20,628) on behalf of Conroy Gold The amounts recharged are shown net of recharges in the opposite direction, giving a net charge by the Company to Conroy Gold of €2,552 for the financial year ended 31 May 2026 (31 May 2025: net charge by Conroy Gold to the Company of €62,508).
These costs are analysed as follows:
|
|
|
|
2026 |
|
2025 |
|
|
|
|
€ |
|
€ |
|
Charged by Conroy Gold to the Company |
|
|
|
|
|
|
Office salaries |
|
|
24,346 |
|
52,811 |
|
Rent and rates |
|
|
1,675 |
|
- |
|
Other operating expenses |
|
|
9,157 |
|
30,325 |
|
Total charged by Conroy Gold to the Company |
|
|
35,178 |
|
83,136 |
|
Charged by the Company to Conroy Gold |
|
|
|
|
|
|
Shared exploration facilities and consultancy costs |
|
|
(24,480) |
|
(20,628) |
|
Other operating expenses |
|
|
(13,250) |
|
- |
|
Total charged by the Company to Conroy Gold |
|
|
(37,730) |
|
(20,628) |
|
Net amount charged (by the Company to Conroy Gold)/by Conroy Gold to the Company |
|
|
(2,552) |
|
62,508 |
(b) At 31 May 2026, the Company owed €112,537 to Conroy Gold and Natural Resources P.L.C. (31 May 2025: €75,065 owed to). Amounts owed to Conroy Gold and Natural Resources P.L.C. were included within trade and other payables during the current year. During the financial year ended 31 May 2026, the Company both paid cash to and received cash from Conroy Gold and Natural Resources P.L.C., the net movement being €21,969 received from Conroy Gold and Natural Resources P.L.C. (31 May 2025: €129,495 paid to Conroy Gold and Natural Resources P.L.C.) as part of the cost sharing arrangement. The movement on the account arose from €15,503 of net allocated costs, being the balance on the cost allocation account after amounts charged in each direction are offset, and net cash movements of €21,969. During the financial year ended 31 May 2026, the Company was charged €35,178 (31 May 2025: €83,136) by Conroy Gold and Natural Resources P.L.C. in respect of the allocation of certain costs as detailed in Note 15(a). On 26 May 2023, the Company entered into a convertible loan note agreement with Conroy Gold and Natural Resources P.L.C. for a total amount of €129,550 (£112,500). The convertible term has passed but the loan continues in place on an informal basis on the same terms, and the carrying amount of the convertible loan, including accrued interest, was €138,682 at 31 May 2026 (31 May 2025: €132,202), as detailed in Note 12. Further, accrued Director’s remuneration amounting to €1,700,163 (31 May 2025: €1,614,886) is disclosed in note 12.
(c) Key management personnel are considered to be the Directors and other key management. The compensation of all key management personnel during the year was €115,000 (31 May 2025: €162,083) including an amount of €15,000 (31 May 2025: €25,000) payable to the Company Secretary Cathal Jones in respect of services provided. An amount of €37,500 was accrued and unpaid to him at 31 May 2026 and is included within trade and other payables (Note 12). Further analysis of remuneration for each Director of the Company is set out in Note 4.
(d) Details of share capital transactions with the Directors are disclosed in the Directors’ Report under the topic of Substantial shareholdings.
16 Share-based payments
Warrants granted by the company generally have a vesting period ranging from one to two years. Details of the warrants outstanding during the financial year are as follows:
|
|
2026 |
2026 |
|
2025 |
2025 |
|
|
No. of Share Warrants |
Weighted Average Exercise Price € |
|
No. of Share Warrants |
Weighted Average Exercise Price € |
|
At 1 June |
54,876,664 |
0.02217 |
|
27,900,000 |
0.04871 |
|
Granted during the financial year |
nil |
- |
|
54,876,664 |
0.02217 |
|
Lapsed during the financial year |
(11,799,997) |
0.03459 |
|
(27,900,000) |
0.04871 |
|
Exercised during the financial year |
- |
- |
|
- |
- |
|
At 31 May |
43,076,667 |
0.01730 |
|
54,876,664 |
0.02217 |
The warrant exercise prices are fixed in sterling at £0.03 and £0.015, giving a weighted average exercise price of £0.018225 at 1 June 2025 and £0.015000 at 31 May 2026. The euro amounts above are translated at the closing rate at 31 May 2026 of £0.86723 to €1.
The company issued 11,799,997 sterling based warrants on 1 July 2024, with an estimated fair value at date of grant of €20,919. The company also issued 43,076,667 sterling based warrants on 20 February 2025, with an estimated fair value at date of grant of €73,593. Both of these issues were in conjunction with the issue of ordinary shares as part of a financing. No warrants were issued during the financial year ended 31 May 2026 (2025: 54,876,664 warrants issued) and accordingly no share-based payment charge arose in the year. The 11,799,997 warrants exercisable at £0.03, which were issued on 1 July 2024 with a one year life, expired on 1 July 2025. The remaining 43,076,667 warrants are exercisable at £0.015 and expire on 20 February 2027. The fair value of the warrants at the date of grant were deducted from share premium as a direct share issue cost (see Note 13) as they are a market requirement when raising funds. As a result of the valuation performed by the Company at year end, the fair value of the sterling based warrants was €91,852 at 31 May 2026 (31 May 2025: €32,880) and accordingly a charge of €58,972 (31 May 2025: credit of €91,738) was recognised in the Statement of profit or loss as a movement in the fair value of warrants.
The Company valued the warrants internally, in both the current and prior financial years, using the Black Scholes Model. The determination of the fair value of share-based payment awards on the date of grant and on revaluation at each year end using the Black Scholes Model is affected by the Company’s stock price, share price volatility as well as assumptions regarding a number of subjective variables. These variables include the expected term of the awards, the stock price volatility, the risk-free interest rate and the expected dividends.
The following key input assumptions were used to calculate the fair value of the sterling based warrants at the balance sheet dates and, in the prior year, at the date of issue:
|
|
31 May 2026 |
|
Date of issue |
|
31 May 2025 |
|
|
Warrants |
|
Warrants |
|
Warrants |
|
Dividend yield |
0% |
|
0% |
|
0% |
|
Share price volatility |
128.293% |
|
66.395% |
|
85.106% |
|
Risk free interest rate |
3.8995% |
|
4.183% |
|
3.88101% |
|
Expected life (in years) |
0.726 |
|
1.0 / 2.0 |
|
0.0833 / 1.75 |
During the prior year, the company issued 54,876,664 sterling based warrants in conjunction with the issue of ordinary shares as part of a financing and an amount of €94,512, being the warrant liability recognised on issue, was deducted from share premium as a direct issue cost. That amount formed part of total share issue costs of €126,482 recognised in the prior year, the balance of €31,970 representing cash costs.
17 Financial instruments
Financial risk management objectives, policies and processes
The Company has exposure to the following risks from its use of financial instruments:
(a) Inflation;
(b) Interest rate risk;
(c) Foreign currency risk;
(d) Liquidity risk; and
(e) Credit risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.
The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and framework in relation to the risks faced.
(a) Inflation
The Company is exposed to the risk associated with inflation such as the impact of increased operating expenses including rent, light and heat and wages and salaries. The Chairman and Managing Director monitor costs on an ongoing basis.
(b) Interest rate risk
The Company currently finances its operations through shareholders’ funds and loan finance. The loan finance at 31 May 2026 and 31 May 2025 relates to convertible loans therefore any fluctuations in interest rates will not have an impact on the results of the Company and no sensitivity analysis has been performed. The Company did not enter into any hedging transactions with respect to interest rate risk.
(c) Foreign currency risk
The Company is exposed to currency risk on purchases, loans and bank deposits that are denominated in a currency other than the functional currency of the Company. The Company is further exposed to foreign currency risk through the warrants, the convertible loan notes and the related conversion option, all of which are denominated in sterling, which is not the Company’s functional currency.
It is the Company’s policy to ensure that foreign currency risk is managed wherever possible by matching foreign currency income and expenditure. During the years ended 31 May 2026 and 31 May 2025, the Company did not utilise foreign currency forward contracts or other derivatives to manage foreign currency risk.
The Company’s foreign currency risk exposure in respect of the principal foreign currency in which the Company operates was as follows at 31 May 2026:
|
|
Sterling exposure |
euro exposure |
Total |
|
|
denominated in € |
€ |
€ |
|
Amount due to Conroy Gold and Natural Resources P.L.C. |
- |
(112,537) |
(112,537) |
|
Other debtors |
- |
21,767 |
21,767 |
|
Cash and cash equivalents |
22,105 |
25,486 |
47,591 |
|
Derivative liability |
(10,304) |
- |
(10,304) |
|
Trade and other payables |
- |
(1,858,441) |
(1,858,441) |
|
VAT receivable |
- |
33,940 |
33,940 |
|
Convertible loan (2023) |
(138,682) |
- |
(138,682) |
|
Warrant liabilities |
(91,852) |
- |
(91,852) |
|
Convertible loan (2026) |
(308,648) |
- |
(308,648) |
|
Derivative liability – conversion option (2026) |
(123,074) |
- |
(123,074) |
|
Total exposure |
(650,455) |
(1,889,785) |
(2,540,240) |
|
|
|
|
|
The Company’s foreign currency risk exposure in respect of the principal foreign currency in which the Company operates was as follows at 31 May 2025:
|
|
Sterling exposure |
euro exposure |
Total |
|
|
denominated in € |
€ |
€ |
|
Amount due to Conroy Gold and Natural Resources P.L.C. |
- |
(75,065) |
(75,065) |
|
Other debtors |
- |
40,707 |
40,707 |
|
Cash and cash equivalents |
(9) |
40,871 |
40,862 |
|
Derivative liability |
(10,304) |
- |
(10,304) |
|
Trade and other payables |
- |
(1,853,725) |
(1,853,725) |
|
VAT receivable |
- |
52,282 |
52,282 |
|
Convertible loan (2023) |
(132,202) |
- |
(132,202) |
|
Warrant liabilities |
(32,880) |
- |
(32,880) |
|
Total exposure |
(175,395) |
(1,794,930) |
(1,970,325) |
The following are the significant exchange rates that applied against €1 during the financial year:
|
|
Average Rate 2026 |
Average Rate 2025 |
Spot Rate 31 May 2026 |
Spot Rate 31 May 2025
|
|
GBP |
0.868 |
0.840 |
0.867 |
0.841 |
Sensitivity analysis
A 10% strengthening of the euro against Sterling, based on outstanding financial assets and liabilities at 31 May 2026 would have decreased the reported loss by €65,046 (31 May 2025: €17,539) as a consequence of the retranslation of foreign currency denominated financial assets and liabilities at those dates. A weakening of 10% of the euro against Sterling would have had an equal and opposite effect. It is assumed that all other variables, especially interest rates, remain constant in the analysis.
(d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and adverse conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company manages liquidity risk by regularly monitoring cash flow projections. The nature of the Company’s exploration and appraisal activities can result in significant differences between expected and actual cash flows. The Company had cash and cash equivalents of €47,591 at 31 May 2026 (31 May 2025: €40,862) further the €24,500 is restricted and hence unable to meet the below liabilities and general funding of the activities as stated in Note 9. Contractual maturities of financial liabilities as at 31 May 2026 were as follows:
|
|
Carrying amount € |
Contractual cash flows € |
|
6 months or less € |
6-12 months € |
1-2 years € |
2-5 years € |
|
Trade and other payables |
1,970,978 |
1,970,978 |
|
270,815 * |
- |
1,700,163 ** |
- |
|
Convertible loan (2023) *** |
138,682 |
148,986 |
|
148,986 |
- |
- |
- |
|
Warrant liabilities |
91,852 |
91,852 |
|
- |
91,852 |
- |
- |
|
Convertible loan (2026)**** |
308,648 |
414,727 |
|
- |
- |
- |
414,727 |
|
|
2,510,160 |
2,626,543 |
|
419,801 |
91,852 |
1,700,163 |
414,727 |
Contractual maturities of financial liabilities as at 31 May 2025 were as follows:
|
|
Carrying amount € |
Contractual cash flows € |
|
6 months or less € |
6-12 months € |
1-2 years € |
2-5 years € |
|
Trade and other payables |
1,928,790 |
1,928,790 |
|
307,130 * |
- |
1,621,660 ** |
- |
|
Convertible loan (2023) *** |
132,202 |
142,506 |
|
142,506 |
- |
- |
- |
|
|
2,060,992 |
2,071,296 |
|
449,636 |
- |
1,621,660 |
- |
* The amount of €270,815 (31 May 2025: €307,130) relates to other payables including amounts owed to Conroy Gold and Natural Resources P.L.C.).
** The Directors, Maureen T.A. Jones, Dr. Sorċa Conroy, Howard Bird and Brendan McMorrow, and former Directors, James P. Jones, Seamus P. FitzPatrick and the Estate of Professor Richard Conroy, have confirmed that they will not seek repayment of amounts owed to them by the Company of €1,700,163 (31 May 2025: €1,614,886) within 12 months of the date of approval of the financial statements, unless the Company has sufficient funds to repay. There were no related party loans in existence at 31 May 2026 relating to monies owed to any of the Directors.
*** On 26 May 2023, the Company has entered into a convertible loan note agreement for a total amount of €129,550 (£112,500) with one of its shareholders. See Note 12 for further details. The contractual cash amount owing at 31 May 2026 of €148,986 (31 May 2025: €142,506) is reflected in the balance sheet of the Company split between a loan and an embedded derivative liability of €10,304 leaving the carrying value at 31 May 2026 at €138,682 (31 May 2025: €132,202).
**** On 20 March 2026, the Company has entered into a three year convertible loan note agreement with a number of investors for a total amount of €336,234 (£290,000). See Note 11 for further details. The full contractual amount that will be owing at 20 March 2029 will be €414,727 (£359,664), being the principal together with three years’ simple interest at 8% per annum, translated at the closing rate. The conversion option of €123,074 is settled in shares, gives rise to no cash outflow and is therefore excluded from the table above.
(e) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge its obligation.
Credit risk is the risk of financial loss to the Company if a cash deposit is not recovered. Company deposits are placed only with banks with appropriate credit ratings. The carrying amount of financial assets represents the maximum credit exposure. Other receivables above comprise prepayments of €19,767 (31 May 2025: €33,152), an insurance prepayment of €nil (31 May 2025: €5,555) and a permit deposit of €2,000 (31 May 2025: €2,000).
The Company’s cash and cash equivalents are held with two banking counterparties. At 31 May 2026, €23,032 was held with Allied Irish Banks, p.l.c. (Moody's Aa3, S&P A+) and €24,559 with Nordea Bank Abp (Moody's Aa2, S&P AA-, Fitch AA) (31 May 2025: €16,380 and €24,482). The Nordea balances include the €24,500 of collateral deposits referred to in Note 9.
Expected credit loss
The Company measures credit risk and expected credit losses on financial assets measured at amortised cost using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward-looking information in determining any expected credit loss. At 31 May 2026 and 31 May 2025, €23,091 of cash was accessible on demand and €24,500 was held as pledged collateral (31 May 2025: €16,362 and €24,500), and all cash was held with counterparties with a credit rating of BBB or higher. Having considered the credit rating of the counterparties and the outstanding balances, management have determined that for both financial years presented, the amount of ECL is immaterial.
(f) Fair values versus carrying amounts
Due to the short-term nature of the majority of the Company’s financial assets and liabilities held at amortised cost at 31 May 2026 and 31 May 2025, the fair value is a reasonable approximation of the carrying amount in each case. The conversion option attaching to the 2026 convertible loan notes is carried at fair value, a Level 3 measurement (see Note 11).
(g) Capital management
The principal activities of the Company are concentrating particularly on diamond exploration and evaluation. The Company has historically funded its activities through share issues and placings and loans. The Company’s capital structure is kept under review by the Board of Directors and it is committed to capital discipline and continues to maintain flexibility for future growth. The capital structure of the Company consists of equity of the Company (refer to the statement of changes in equity and Note 13). The Company is not subject to any externally imposed capital requirements.
18 Post balance sheet events
The following are non-adjusting events after the reporting period.
Since 31 May 2026 the Company has continued to pursue a number of financing and funding options which, if successfully concluded, would provide the Company with capital to advance the work programmes on its projects in Finland and Northern Ireland and to meet general working capital requirements. No such financing had been concluded at the date of approval of these financial statements. The Directors’ assessment of going concern, set out in Note 1, reflects this position.
The Board has continued to progress a plan to restructure the amounts owed to current and former directors in respect of salaries and directors’ fees, amounting to €1,700,163 at 31 May 2026 (Note 12), with the objective of aligning settlement of those amounts with the future success of the Company. Those amounts continue to be deferred, the current and former directors concerned having renewed annually their commitment not to seek payment unless the Company is in a position to discharge them. No agreement had been reached, and no amounts had been settled or converted, at the date of approval of these financial statements.
Discussions with Conroy Gold and Natural Resources plc regarding a formal extension of the term of the convertible loan note of £112,500 (Note 12), and an amendment to its conversion price, remained ongoing at the date of approval of these financial statements. Any variation remains subject, inter alia, to finalisation of a variation agreement and to any approvals required under the AIM Rules for Companies.
There were no other material events subsequent to the reporting date which necessitate revision of the figures or disclosures included in these financial statements.
19 Approval of the financial statements
The financial statements were approved by the Board of Directors on 4 November 2026 and authorised for issue on 4 November 2026. A copy of the audited financial statements will be available on the Company’s website www.kareliandiamondresources.com and will be available from the Company’s registered office at Shannon Airport House, Shannon Free Zone, Shannon, Co. Clare, V14E370 Ireland.
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