Final Results ended 31 December 2021
Bluejay Mining plc / EPIC: JAY / Market: AIM / Sector: Mining
19 May 2022
Bluejay Mining plc ('Bluejay' or the 'Company')
Final Results for the Period ended 31 December 2021
Bluejay Mining plc, the AIM and FSE listed exploration company with projects in Greenland and Finland, is pleased to announce its Final Results for the year ended 31 December 2021 (the 'Period'). The Company also gives notice that its Annual General Meeting ('AGM') will be held on 23 June 2022 at 10:00 at The Washington Mayfair Hotel, 5 Curzon Street, London, W1J 5HE. Copies of the Notice of AGM, together with the Form of Proxy and Annual Report will be posted to shareholders tomorrow and available to view on the Company's website shortly.
Highlights in 2021:
· Final Permits in place to start production at the Dundas Ilmenite Project ('Dundas'), Greenland
· Joint Venture ('JV') signed at the Disko- Nuussuaq Project, Greenland with KoBold Metals
· JV agreed with Rio Tinto at the Enonkoski Project, Finland, and commencement of up-to $20 million exploration campaign
· First field season completed for the Thunderstone Project, Greenland
· Leading global investment bank appointed as Lead Arranger for Dundas
· Letters of Interest received from four Export Credit Agencies for Dundas
· Conditional divestment of the Black Shales Assets, Finland, for £4 million
· Repayment of the successfully litigated VAT refund received
· Appointment of Mr Johannus Egholm Hansen to the Board as Non-Executive Director and Mr Peter Davis as Project Manager at Dundas
· Bulk sample pilot plant processing completed for Dundas
Post Period:
· First phase exploration programme completed at the Enonkoski project, Finland, with 2022 phase imminent
· Electronic Nautical Charts published for Dundas
· Appointment of Mr Eric Sondergaard as Executive Director to the Board
· Incorporation of the Disko-Nuussuaq JV company - Nikkeli Greenland A/S
· European Raw Material Alliance ('ERMA') announced official support for the Dundas Ilmenite Project
· Capital increase supported by existing institutional shareholders raising $7 million (£5.4 million) for completion of Dundas Ilmenite feasibility for Project Finance sign-off
· Comprehensive field season announced for summer 2022 at Disko- Nuussuaq Project
Chairman's Statement
2021 marked another year that saw disruptions and difficult conditions relating to COVID-19 regulations and restrictions. However, the Company was still able to deliver on several key milestones and make significant progress across all its projects and business areas. D uring the year the Company signed a $20 million Joint Venture ('JV') and earn-in agreement on one of its nickel projects in Finland with one of the world's largest mining companies. We also strengthened our Board with the appointments of Johannus Egholm Hansen as Non-Executive Director and post year-end, Eric Sondergaard as Executive Director. In addition, Peter Davis was appointed as Project Manager for the Dundas Ilmenite Project. Peter has extensive experience in mineral sands and titanium dioxide pigment operations. These additions undoubtedly leave us in a strong position going forward with the Board and management team well equipped with the experience and knowhow to drive the Company forward and deliver on its stated objectives.
One of the most significant developments during the Period was the signing of a JV agreement at the Disko-Nuussuaq magmatic massive sulphide nickel-copper-platinum-cobalt project ('Disko') in Greenland with KoBold Metals ('KoBold'), whereby KoBold will fund exploration on the project. KoBold's principal investor is Breakthrough Energy Ventures, which is overseen by Bill Gates, and is committed to identifying sustainable supplies of critical and battery metals using their proprietary AI Technology. KoBold recently completed a $192.5 million fundraise, which will fund its work on Disko as well as their other exploration assets. Over the Period, Bluejay also reached agreement to spin out its Finnish Black Shales Assets to Metals One for circa £4 million in cash and shares.
During 2022 the Company will focus on the continued development of its various assets specifically advancing Dundas to production, supported by early site development and geotechnical work for infrastructure as well as progressing project financing.
Greenland
Most notably, during the Period, we entered a strategic partnership with KoBold on the Disko project. KoBold may earn up to 51% of the project through significant expenditure over a three-year period. It is of particular significance that KoBold is aligned with our goals to develop critical materials needed for the green transition sourced in an ethical and sustainable manner.
In the post period the Company and KoBold released the 2022 work programme plan for Disko. This is the first major exploration campaign to be undertaken by the JV, and will incorporate KoBold's cutting-edge technology and Bluejay's operational and local expertise with the objective of targeting massive nickel, copper, cobalt and platinum group metals bearing sulphides. The 2022-programme will include 9,500-line kilometres ('km') of fixed-wing/helicopter/drone supported geophysical surveys, and 4,000 geochemical sample locations covering 200-line km of soil sampling. Work is expected to commence in early June.
KoBold's cutting-edge technology will provide a higher degree of confidence in targeting which, alongside Bluejay's operational expertise in Greenland, increases confidence of a major discovery and the recognition of a new mineral province in West Greenland. The geopolitical turmoil experienced this year has exposed supply risks, and the need to identify and develop new deposits in stable jurisdictions, such as Greenland, has never been greater.
Last year Bluejay received approval for the Exploration and Closure Plan for Dundas from the Government of Greenland, the final Government approval. This follows the awarding of the project's Exploration Licence that was announced in December 2020. On a technical front we continue to progress the engineering optimisation and cost saving studies for Dundas. The £5.2 million of net proceeds received from the placing in March 2022 will be utilised to complete the feasibility study at Dundas to the level required for financial sign-off by a project finance lending syndicate. The Company will commence works this forthcoming field season, completing the necessary engineering, geo-technical and planning activities, including an optimised mine schedule for production. Additionally, the Company has received Letters of Interest from four International Export Credit Agencies, which could form part of the lending syndicate along with commercial banks, and industrial entities that Bluejay has been engaged in communication with over the last 12 months. The syndicate will be led by our Lead Arranger, a leading global investment bank, all within a backdrop of robust ilmenite prices.
The pilot processing plant in Canada was successfully restarted in 2021 following its closure in 2020 due to COVID restrictions. This enabled the remaining material shipped from Greenland to be processed to produce concentrate suitable for larger scale testing by key customers. The test work also provided additional valuable data for the detailed design of the industrial scale plant. The pilot plant was decommissioned and closed in December 2021. The output from the pilot plant was shipped for potential customers of the Company's distribution partner. Feedback in 2022 will enable negotiations to consolidate and extend the existing distribution agreement.
Post period, the Danish Geodata Agency, Geodatastyrelsen, published the Electronic Nautical Charts which cover the key seaward approach and coastal waters for shipping to and from Dundas. The charts provide important navigational and bathymetric data which will be utilised during the construction period and the production phase of the project to ensure future safe shipping operation. This enables us to advance discussions with potential bulk-carrier companies regarding the transport of our products from the mine area.
Turning to Thunderstone, we received, in late January, initial exploration results from our maiden field programme. These initial results justify continued work to further assess the newly identified gold-silver anomalies as well as other high tenor base-metal results (Cu-Au-Ag-Mo-Zn and Cu-Ni-Cr-Co±Pt, Pd anomalies). Future work will focus on these newly identified anomalies.
Additionally, during the year, Greenland held a general election and formed a new coalition Government. Our newly appointed CEO, Bo Stensgaard, met with the newly appointed Minister for Housing, Infrastructure, Mineral Resources and Gender Equality, Ms Naaja Nathanielsen in May 2021. During this meeting the Minister confirmed that the Greenland Government continues to support the Mineral Strategy 2020-2024, which provides the framework for further development of mineral resources in the country.
Finland
In 2021, the Company entered into a JV and earn-in agreement with Rio Tinto Mining and Exploration Ltd ('Rio Tinto') at the Company's Enonkoski nickel-copper-cobalt-PGM project ('Enonkoski'). During the year an initial diamond drill programme of 3,000m was completed. The programme targeted mineralisation in the near-mine areas Tevanjoki and Laukunsuo and included a top of bedrock sampling programme with a total of 99 drill holes and downhole electromagnetic surveys on 22 drill holes. In September, Rio Tinto approved and extended further exploration expenditure which resulted in a further 12 diamond drill holes and one drill hole extension for a total of 4149.45m of drilling. This approval showcased Rio Tinto's confidence in the project and emphasised the potential of Enonkoski to be a profitable project. From the drill programme, intersections of nickel-copper sulphide droplet zones logged in mafic intrusions were identified, which indicates promising results as these were analogous features of the former mine close to the orebody.
Following on from the work carried out in 2021, further confidence in the project was demonstrated when the JV recently announced its planned work programme for 2022. Preliminary plans include 1,500m f ollow-up diamond drilling at targets drilled last year, up to 60 top of bedrock drill holes focused on new targets and infill sampling, as well as geological mapping and sampling.
In July the Company provided an update on its Outokumpu copper-cobalt-gold-silver project ('Outokumpu') where Bluejay's 100% owned subsidiary, FinnAust Mining Finland Oy ('FinnAust') identified five drill targets on the Outokumpu Belt. The first stage of the drill programme is focusing on the Haapovaara target with 1,500m of drilling and the Haaponiemi target, a deep target with 2,500m of drilling. The Company is in early discussions with various parties interested in partnering on the project, adding a further potential asset to the Company's value realisation strategy to monetise its non-flagship assets. The compelling nature of this project's exploration targets are emphasised by the global demand for base metals to be used within the battery industrial ecosystem, the electrification movement and in the green transition. As a result, the five targets identified at Outokumpu provide an exciting outlook for the project that will, and have, drawn interest from potential partners.
Bluejay went on to sign a binding term sheet and entered into a conditional agreement for the sale of its Paltamo and Rautavaara nickel-zinc-copper-cobalt projects (collectively known as The Black Shales Project) to Metals One plc for a combination of cash and shares totalling more than £4 million, further monetising the Company's portfolio of high-quality mineral projects. This agreement operates in line with a key aspect of the Company's strategy to develop its range of assets and attract potential partners.
Financial
Following a period of cash preservation during the peak of the COVID-19 Pandemic, the Company has accelerated activities. The Group's cash balance at year-end was £2.7 million and has been bolstered following the post-period placing in March. The additional $7 million (£5.38 million before fees) fundraise supported by the Company's existing institutional shareholders, will enable the Company to complete the feasibility study that is required for Dundas to continue to progress the project into production. Over the year Bluejay has continued its extensive optimisation process to maximise project economics, identify lower cost options for infrastructure, mine, and processing solutions.
We ended the year with the receival of the VAT refund, of approximately £1.1 million, from our activities in Finland and Greenland. This was a result of Her Majesty's Revenue and Customs ('HMRC') withdrawing its appeal on the First-Tier Tribunal's decision. With the case closed, Bluejay can continue to reclaim VAT on its future activities.
Outlook
The past year saw the Company complete and further develop the portfolio, as well as monetise Company assets with the conditional sale of the Black Shales. The JV agreement with KoBold marked a notable step towards the development of the Disko project with secure funding and world class technology being utilised at the project.
The backing of KoBold supports a key part of Bluejay's strategy to focus on sustainable operations with the highest of Environmental, Social and Governance standards, and developing a supply chain of sustainable battery metals to aid the green transition. The Company's strategy continues to be based around developing and delivering high-grade, high-tonnage, scalable deposits, with simple processing routes in supportive jurisdictions. The Company has followed this strategy throughout the year and is making good progress. In addition, the Company anticipates the receipt of fee income, for its role as field work manager at both Enonkoski and Disko in 2022.
The Company, post period, also replenished its balance sheet with our successful $7 million equity raise that will ensure the completion of the feasibility study at Dundas to the point of Project Finance sign off.
The outlook at Dundas has grown throughout 2021, the developments made have further outlined the importance and potential of our flagship project. The appointment of the Lead Arranger of the project financing will help move the project towards construction and then commercial production. To further support the financing and development of Dundas, the addition of Peter Davies as Project Manager will provide significant experience, specifically, in mineral sands and titanium dioxide pigment operations. His experience in this industry will aid in the completion of the preparatory works and the necessary requirements for the Lead Arranger to financially sign off pre-construction works.
Furthering the credentials of the Dundas project, the ERMA announced its official support for Dundas, this will enable it to help secure Dundas ilmenite for end users within the European Union ('EU'), creating a secure supply chain option for titanium ore and concentrate. The recognition and support of the project from ERMA adds to the support already received from the government of Greenland and the financial support from a leading global investment bank.
Conversations with the Deputy Minister for the Ministry of Mineral Resources and the Minister for Housing, Infrastructure, Minerals Resources and Gender Equality in Greenland in 2021 demonstrates the Greenlandic Government's support for the Company's projects and ambitions in the country. This continued relationship between the Company and Greenland's government opens avenues for Bluejay to develop its projects on schedule and allows the Company to provide economic and social benefits to all its stakeholders, including the local communities.
The conditional partial divestment of the Black Shale assets in Finland continued the Company's focus on maintaining its cash flow by monetising certain assets within its portfolio, maintaining our strategy of partnering projects to optimise the best expenditure and ownership outcome for shareholders. On this note we were delighted that our JV partner Rio Tinto confirmed the planned field activities for 2022 at Enonkoski, expected to recommence imminently. We will continue to look for opportunities to further monetise these types of assets to provide further funds to develop our flagship projects.
Bluejay's operating jurisdictions remain supportive, it has large scale resources, high grades, low costs, strong economics, institutional and industry backers, an experienced team and access to end markets. As a result, the outlook for the Company remains extremely positive for the upcoming year.
I am grateful to all of the communities in which we operate, our strategic partners, stakeholders, advisors and the entire Bluejay team for their continued support and tireless work. Whilst the immediate global outlook continues to be dominated by COVID and the war in Ukraine, we are focused on delivering our key milestones and continuing to progress our portfolio, and look forward to another productive and promising year. In the meantime, we hope everyone continues to stay safe and well and we look forward to providing further updates on Bluejay's successes in 2022.
STATEMENTS OF FINANCIAL POSITION
As at 31 December 2021
|
|
|
Group |
|
Company |
|||
|
|
Note |
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
|
Non-Current Assets |
|
|
|
|
|
|
|
|
Property, plant and equipment |
6 |
1,802,379 |
2,556,911 |
|
30,651 |
91,862 |
|
|
Intangible assets |
7 |
27,922,589 |
26,768,227 |
|
- |
- |
|
|
Investment in subsidiaries |
8 |
- |
- |
|
34,509,322 |
33,168,092 |
|
|
|
|
29,724,968 |
29,325,138 |
|
34,539,973 |
33,259,954 |
|
|
Current Assets |
|
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss |
|
- |
100,000 |
|
- |
100,000 |
|
|
Trade and other receivables |
9 |
228,909 |
1,503,896 |
|
564,181 |
1,248,085 |
|
|
Cash and cash equivalents |
10 |
2,701,792 |
5,942,848 |
|
2,534,964 |
5,649,030 |
|
|
|
|
2,930,701 |
7,546,744 |
|
3,099,145 |
6,997,115 |
|
|
Total Assets |
|
32,655,669 |
36,871,882 |
|
37,639,118 |
40,257,069 |
|
|
Non-Current Liabilities |
|
|
|
|
|
|
|
|
Deferred tax liabilities |
12 |
496,045 |
496,045 |
|
- |
- |
|
|
|
|
496,045 |
496,045 |
|
- |
- |
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Lease liabilities |
|
- |
62,220 |
|
- |
62,220 |
|
|
Trade and other payables |
11 |
630,833 |
1,179,694 |
|
365,175 |
175,928 |
|
|
|
|
630,833 |
1,241,914 |
|
365,175 |
238,148 |
|
|
Total Liabilities |
|
1,126,878 |
1,737,959 |
|
365,175 |
238,148 |
|
|
|
|
|
|
|
|
|
|
|
Net Assets |
|
31,528,791 |
35,133,923 |
|
37,273,943 |
40,018,921 |
|
|
Equity attributable to owners of the Parent |
|
|
|
|
|
|
|
|
Share capital |
14 |
7,484,355 |
7,484,232 |
|
7,484,355 |
7,484,232 |
|
|
Share premium |
14 |
55,705,882 |
55,620,034 |
|
55,705,882 |
55,620,034 |
|
|
Other reserves |
16 |
(7,213,274) |
(6,220,719) |
|
1,292,323 |
644,738 |
|
|
Retained losses |
|
(24,448,172) |
(21,749,624) |
|
(27,208,617) |
(23,730,083) |
|
|
Total Equity |
|
31,528,791 |
35,133,923 |
|
37,273,943 |
40,018,921 |
|
The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the year ended 31 December 2021 was £3,486,819 (profit for year ended 31 December 2020: £773,890).
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2021
|
Continued operations |
Note |
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
||
|
Revenue |
|
- |
- |
||
|
Cost of sales |
23 |
(199,844) |
- |
||
|
Gross profit |
|
(199,844) |
- |
||
|
Administrative expenses |
23 |
(2,662,046) |
(2,510,820) |
||
|
Other (losses)/gains |
20 |
(46,072) |
49,360 |
||
|
Foreign exchange gain/(losses) |
|
18,235 |
(65,019) |
||
|
Operating loss |
|
(2,889,727) |
(2,526,479) |
||
|
Finance (expense)/income |
19 |
(4,251) |
1,968 |
||
|
Other income |
|
187,145 |
36,949 |
||
|
Loss before income tax |
|
(2,706,833) |
(2,487,562) |
||
|
Income tax |
21 |
- |
229,963 |
||
|
Loss for the year attributable to owners of the Parent |
|
(2,706,833) |
(2,257,599) |
||
|
Basic and Diluted Earnings Per Share attributable to owners of the Parent during the period (expressed in pence per share) |
22 |
(0.28)p |
(0.23)p |
||
|
|
|
|
|
||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
|
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Loss for the year |
|
(2,706,833) |
(2,257,599) |
|
Other Comprehensive Income: |
|
|
|
|
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
Currency translation differences |
|
(1,640,140) |
1,399,646 |
|
Other comprehensive income for the year, net of tax |
|
(4,346,973) |
1,399,646 |
|
Total Comprehensive Income attributable to owners of the Parent |
|
(4,346,973) |
(857,953) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
|
|
|
|
|
|
||||
|
|
Note |
Share capital £ |
Share premium £ |
Other reserves £ |
Retained losses £ |
Total £ |
||
|
Balance as at 1 January 2020 |
|
7,484,066 |
55,463,656 |
(7,604,567) |
(19,543,695) |
35,799,460 |
||
|
Loss for the year |
|
- |
- |
- |
(2,257,599) |
(2,257,599) |
||
|
Other comprehensive income for the year |
|
|
|
|
|
|
||
|
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
|
|
||
|
Currency translation differences |
|
- |
- |
1,399,646 |
- |
1,399,646 |
||
|
Total comprehensive income for the year |
|
- |
- |
1,399,646 |
(2,257,599) |
(857,953) |
||
|
Share based payments |
15 |
166 |
156,378 |
- |
- |
156,544 |
||
|
Issued Options |
14 |
|
|
35,872 |
- |
35,872 |
||
|
Expired options |
14 |
- |
- |
(51,670) |
51,670 |
- |
||
|
Total transactions with owners, recognised directly in equity |
|
166 |
156,378 |
(15,798) |
51,670 |
192,416 |
||
|
Balance as at 31 December 2020 |
|
7,484,232 |
55,620,034 |
(6,220,719) |
(21,749,624) |
35,133,923 |
||
|
|
|
|
|
|
|
|
||
|
Balance as at 1 January 2021 |
|
7,484,232 |
55,620,034 |
(6,220,719) |
(21,749,624) |
35,133,923 |
||
|
Loss for the year |
|
- |
- |
- |
(2,706,833) |
(2,706,833) |
||
|
Other comprehensive income for the year |
|
|
|
|
|
|
||
|
Items that may be subsequently reclassified to profit or loss |
|
|
|
|
|
|
||
|
Currency translation differences |
|
- |
- |
(1,640,140) |
- |
(1,640,140) |
||
|
Total comprehensive income for the year |
|
- |
- |
(1,640,140) |
(2,706,833) |
(4,346,973) |
||
|
Share based payments |
15 |
123 |
85,848 |
- |
- |
85,971 |
||
|
Issued Options |
14 |
|
|
655,870 |
- |
655,870 |
||
|
Exercised options |
14 |
- |
- |
(8,285) |
8,285 |
- |
||
|
Total transactions with owners, recognised directly in equity |
|
123 |
85,848 |
647,585 |
8,285 |
741,841 |
||
|
Balance as at 31 December 2021 |
|
7,484,355 |
55,705,882 |
(7,213,274) |
(24,448,172) |
31,528,791 |
||
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
|
|
|
|
||||
|
|
Note |
Share capital £ |
Share premium £ |
Other reserves £ |
Retained losses £ |
Total equity £ |
|
Balance as at 1 January 2020 |
|
7,484,066 |
55,463,656 |
660,536 |
(24,555,643) |
39,052,615 |
|
Profit for the year |
|
- |
- |
- |
773,890 |
773,890 |
|
Total comprehensive income for the year |
|
- |
- |
- |
773,890 |
773,890 |
|
Share based payments |
15 |
166 |
156,378 |
- |
- |
156,544 |
|
Issued Options |
14 |
|
|
35,872 |
- |
35,872 |
|
Expired Options |
14 |
- |
- |
(51,670) |
51,670 |
- |
|
Total transactions with owners, recognised directly in equity |
|
166 |
156,378 |
(15,798) |
51,670 |
192,416 |
|
Balance as at 31 December 2020 |
|
7,484,232 |
55,620,034 |
644,738 |
(23,730,083) |
40,018,921 |
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2021 |
|
7,484,232 |
55,620,034 |
644,738 |
(23,730,083) |
40,018,921 |
|
Loss for the year |
|
- |
- |
- |
(3,486,819) |
(3,486,819) |
|
Total comprehensive income for the year |
|
- |
- |
- |
(3,486,819) |
(3,486,819) |
|
Share based payments |
15 |
123 |
85,848 |
- |
- |
85,971 |
|
Issued Options |
14 |
|
|
655,870 |
- |
655,870 |
|
Exercised options |
14 |
- |
- |
(8,285) |
8,285 |
- |
|
Total transactions with owners, recognised directly in equity |
|
123 |
85,848 |
(647,585) |
8,285 |
741,841 |
|
Balance as at 31 December 2021 |
|
7,484,355 |
55,705,882 |
1,292,323 |
(27,208,617) |
37,273,943 |
STATEMENTS OF CASH FLOWS
For the year ended 31 December 2021
|
|
|
Group |
|
Company |
||
|
|
Note |
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
Profit/(Loss) before income tax |
|
(2,706,833) |
(2,487,563) |
|
(3,486,826) |
773,890 |
|
Adjustments for: |
|
|
|
|
|
|
|
Depreciation |
6 |
460,713 |
606,585 |
|
83,645 |
103,308 |
|
Gain on sale of financial assets at FVTPL |
|
(75,497) |
- |
|
(75,497) |
- |
|
Share options expense |
15 |
655,870 |
35,872 |
|
655,870 |
35,872 |
|
Share based payments |
|
- |
156,544 |
|
- |
156,544 |
|
Intercompany management fees |
|
- |
- |
|
(722,716) |
(574,921) |
|
Net finance (income)/costs |
19 |
4,251 |
(1,968) |
|
(668,198) |
(641,556) |
|
Non cash loss/(gain) |
|
454 |
4,371 |
|
2,329,977 |
(1,648,862) |
|
Impairments |
|
- |
14,299 |
|
- |
- |
|
Income tax received |
21 |
- |
229,963 |
|
- |
- |
|
Changes in working capital: |
|
|
|
|
|
|
|
Decrease in trade and other receivables |
9 |
1,377,664 |
305,100 |
|
1,413,873 |
1,054,892 |
|
Increase/(Decrease) in trade and other payables |
11 |
(321,408) |
(345,257) |
|
171,081 |
(820,248) |
|
Net cash used in operating activities |
|
(604,786) |
(1,482,054) |
|
(298,791) |
(1,561,081) |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Purchase of property plant and equipment |
6 |
(26,037) |
(243,854) |
|
(22,433) |
(17,331) |
|
Sale/(purchase) of financial assets at FVTPL |
|
75,497 |
(100,000) |
|
75,497 |
(100,000) |
|
Sale of property, plant and equipment |
6 |
179,245 |
- |
|
- |
- |
|
Purchase of intangible assets |
7 |
(2,887,110) |
(2,471,136) |
|
- |
- |
|
Interest received |
|
379 |
6,697 |
|
379 |
6,697 |
|
Net cash used in investing activities |
|
(2,658,026) |
(2,808,293) |
|
53,443 |
(110,634) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Proceeds from issue of share capital |
14 |
85,970 |
- |
|
85,970 |
- |
|
Transaction costs of share issue |
14 |
- |
- |
|
- |
- |
|
Net loans granted to subsidiary undertakings |
|
- |
- |
|
(2,892,470) |
(2,795,805) |
|
Repayment of loans |
|
(62,220) |
(80,814) |
|
(62,220) |
(80,814) |
|
Interest paid |
|
(252) |
(1,528) |
|
- |
- |
|
Net cash generated from financing activities |
|
23,498 |
(82,342) |
|
(2,868,720) |
(2,876,619) |
|
Net decrease/(increase) in cash and cash equivalents |
|
(3,239,314) |
(4,372,689) |
|
(3,114,068) |
(4,548,334) |
|
Cash and cash equivalents at beginning of year |
|
5,942,848 |
10,314,701 |
|
5,649,030 |
10,197,337 |
|
Exchange gain on cash and cash equivalents |
|
(1,742) |
836 |
|
2 |
27 |
|
Cash and cash equivalents at end of year |
10 |
2,701,792 |
5,942,848 |
|
2,534,964 |
5,649,030 |
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2021
1. General information
The principal activity of Bluejay Mining plc (the 'Company') and its subsidiaries (together the 'Group') is the exploration and development of precious and base metals. The Company's shares are listed on the AIM of the London Stock Exchange and the open market of the Frankfurt Stock Exchange. The Company is incorporated and domiciled in England.
The address of its registered office is Suite 1, 15 Ingestre Place, London, W1F 0DU.
2. Summary of significant Accounting Policies
The principal Accounting Policies applied in the preparation of these Consolidated Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.
2.1. Basis of preparation of Financial Statements
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) conformity with the Companies Act 2006. The Consolidated Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on business combination.
The Financial Statements are presented in Pound Sterling rounded to the nearest pound.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 4.
2.2. New and amended standards
(a) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2021
The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 31 December 2021 but did not result in any material changes to the financial statements of the Group or Company.
ii) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
|
Standard |
Impact on initial application |
Effective date |
|
IFRS 3 |
Reference to Conceptual Framework |
1 January 2022 |
|
IAS 37 |
Onerous contracts |
1 January 2022 |
|
IAS 16 |
Proceeds before intended use |
1 January 2022 |
|
Annual improvements |
2018-2020 Cycle |
1 January 2022 |
|
IAS 8 |
Accounting estimates |
1 January 2023 |
|
IAS 1 |
Classification of Liabilities as Current or Non-Current. |
1 January 2023 |
The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group's results or shareholders' funds.
2.3. Basis of Consolidation
The Consolidated Financial Statements consolidate the financial statements of the Company and its subsidiaries made up to 31 December. Subsidiaries are entities over which the Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
· The contractual arrangement with the other vote holders of the investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.
2.4. Going concern
The Consolidated Financial Statements have been prepared on a going concern basis. Although the Group's assets are not generating revenues and an operating loss has been reported, the Directors are of the view that the Group has sufficient funds to meet all committed and contractual expenditure within the next 12 months and to maintain good title to the exploration licences. This will ensure they will still be in a strong financial position once they are able to re-commence exploration activity.
The Group's business activities together with the additional factors likely to affect its future development, performance and position are set out in the Chairman's Report on pages 3-5. In addition, Note 3 to the Consolidated Financial Statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to market, credit and liquidity risk.
The Directors have a reasonable expectation that the Group and Company have sufficient resources to continue in the current economic climate and for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the Group and Company Financial Statements.
2.5. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
2.6. Foreign currencies
(a) Functional and presentation currency
Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK parent entity and UK subsidiary is Pound Sterling, the functional currency of the Finnish subsidiaries is Euros and the functional currency of the Greenlandic subsidiaries is Danish Krone. The Financial Statements are presented in Pounds Sterling which is the Company's functional and Group's presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
(c) Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
· assets and liabilities for each period end date presented are translated at the period-end closing rate;
· income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
· all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.
2.7. Intangible assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life, but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using a variety of methods including those specified in IFRS 6.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.
Exploration and evaluation assets recorded at fair-value on business combination
Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.
2.8. Investments in subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.
2.9. Property, plant and equipment
Property, Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight line basis at the following annual rates:
Office Equipment - 5 years
Machinery and Equipment - 5 to 15 years
Software - 2 years
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. If an impairment review is conducted following an indicator of impairment, assets which are not able to be assessed for impairment individually are assessed in combination with other assets within a cash generating unit.
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Income Statement.
2.10. Impairment of non-financial assets
Assets that have an indefinite useful life, for example, intangible assets not ready to use, and goodwill, are not subject to amortisation and are tested annually for impairment. Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
2.11. Financial assets
(a) Classification
The Group classifies its financial assets at amortised cost and at fair value through the profit or loss. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Regular purchases and sales of financial assets are recognised on the trade date at cost - the date on which the Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership .
Fair value through the profit or loss
Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.The Group holds equity instruments that are classified as FVTPL as these were acquired principally for the purpose of selling in the near term.
Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):
- Level 1: Quoted prices in active markets for identical items (unadjusted)
- Level 2: Observable direct or indirect inputs other than Level 1 inputs
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures its investments in quoted shares using the quoted market price.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial asset measured at FVTPL.
2.12. Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables and loans.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income.
Trade and other payables
After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.
Liabilities within the scope of IFRS 9 are classified as financial liabilities at fair value through profit and loss or other liabilities, as appropriate.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised cost.
2.13. Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
· Fixed payments, less any lease incentives receivable;
· Variable lease payment that are based on an index or a rate, initially measured using the index or the rate as at the commencement date;
· The exercise price of a purchase option; and
· Payment of penalties for terminating the lease.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-ofuse asset in a similar economic environment with similar terms, security and conditions. Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Assets obtained under finance leases are depreciated over their useful lives.
Rent payable under operating leases on which the short term exemption has been taken, less any lease incentives received, is charged to the income statement on a straight-line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.
2.14. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.15. Equity
Equity comprises the following:
· "Share capital" represents the nominal value of the Ordinary shares;
· "Share Premium" represents consideration less nominal value of issued shares and costs directly attributable to the issue of new shares;
· "Other reserves" represents the merger reserve, foreign currency translation reserve, redemption reserve and share option reserve where;
o "Merger reserve" represents the difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange;
o "Foreign currency translation reserve" represents the translation differences arising from translating the financial statement items from functional currency to presentational currency;
o "Reverse acquisition reserve" represents a non-distributable reserve arising on the acquisition of Finland Investments Limited;
o "Redemption reserve" represents a non-distributable reserve made up of share capital;
o "Share option reserve" represents share options awarded by the group;
· "Retained earnings" represents retained losses.
2.16. Share capital, share premium and deferred shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient premium not be available placing costs are recognised in the Income Statement.
Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of £100,000 per each share held.
2.17. Share based payments
The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The fair value of the share options and warrants are determined using the Black Scholes valuation model.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.
When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.
2.18. Taxation
No current tax is yet payable in view of the losses to date.
Deferred tax is recognised for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets and liabilities are not discounted.
3. Financial risk management
3.1. Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. None of these risks are hedged.
Risk management is carried out by the London based management team under policies approved by the Board of Directors.
Market risk
(a) Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Danish Krone and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds, Euros, USD or Danish Krone. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts as most of the foreign exchange movements result from the retranslation of inter company loans. The Group has sensitised the figures for fluctuations in foreign exchange rates, as the Directors acknowledge that, at the present time, the foreign exchange retranslations have resulted in rather higher than normal fluctuations which are separately disclosed, and is predominantly due to the exceptional nature of the Euro exchange rate in the last two years in the current economic climate. Further detail is in note 3.3
(b) Price risk
The Group is not exposed to commodity price risk as a result of its operations, which are still in the exploration phase. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.
The Group has exposure to equity securities price risk, as it holds listed equity investments.
Credit risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity risk
In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.
With exception to deferred taxation, financial liabilities are all due within one year.
3.2. Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.
At 31 December 2021 the Group had borrowings of £nil (31 December 2020: £nil) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.
Given the Group's level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial.
3.3. Sensitivity analysis
On the assumption that all other variables were held constant, and in respect of the Group and the Company's expenses the potential impact of a 10% increase/decrease in the UK Sterling:Euro and UK Sterling:DKK Foreign exchange rates on the Group's loss for the period and on equity is as follows:
|
Potential impact on Euro expenses: 2021 |
(Loss)/profit before tax for the year ended 31 December 2021 |
Equity before tax for the year ended 31 December 2021 |
|
||||||
|
|
Group |
Company |
Group |
Company |
|
||||
|
Increase/(decrease) in foreign exchange rate |
£ |
£ |
£ |
£ |
|||||
|
10% |
(2,500,119) |
(3,486,819) |
32,660,976 |
37,273,943 |
|||||
|
-10% |
(2,482,004) |
(3,486,819) |
30,817,450 |
37,273,943 |
|||||
|
|
|
|
|||||||
|
Potential impact on DKK expenses: 2021 |
Loss before tax for the year ended 31 December 2021 |
Equity before tax for the year ended 31 December 2021 |
|||||||
|
|
Group |
Company |
Group |
Company |
|||||
|
Increase/(decrease) in foreign exchange rate |
£ |
£ |
£ |
£ |
|||||
|
10% |
(2,599,449) |
(3,486,819) |
33,704,713 |
37,273,943 |
|||||
|
-10% |
(2,382,675) |
(3,486,819) |
29,773,713 |
37,273,943 |
|||||
4. Critical accounting estimates and judgements
The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the period. Actual results may vary from the estimates used to produce these Financial Statements.
Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Items subject to such estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial years, include but are not limited to:
Impairment of intangible assets - exploration and evaluation costs
Exploration and evaluation costs have a carrying value at 31 December 2021 of £28,111,021 (2020: £26,768,227) Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7 . Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target and results indicate there is no additional upside a decision will be made to discontinue exploration; an impairment charge will then be recognised in the Income Statement.
Useful economic lives of property, plant and equipment
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the seasonality of the licence locations. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets. See note 6 for the carrying amount of the property plant and equipment and note 2.9 for the useful economic lives for each class of assets.
Share based payment transactions
The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received. No share options or warrants were issued in the current year.
The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 16.
5. Segment information
Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in three geographical segments; the United Kingdom, Greenland and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Greenland and Finland relate to exploration and evaluation work.
The Group had no turnover during the period.
|
2021 |
|
Greenland £ |
Finland £ |
UK £ |
Total £ |
|
Revenue |
|
- |
- |
- |
- |
|
Administrative expenses |
|
550,576 |
88,335 |
2,023,135 |
2,662,046 |
|
Foreign exchange |
|
31,404 |
- |
(13,169) |
18,235 |
|
Finance expense |
|
2,055 |
1,795 |
401 |
4,251 |
|
Other income |
|
30,105 |
155,540 |
1,500 |
187,145 |
|
Loss before tax per reportable segment |
|
1,291,644 |
90,575 |
1,324,614 |
2,706,833 |
|
Additions to PP&E |
|
3,604 |
- |
22,433 |
26,037 |
|
Additions to intangible asset |
|
2,668,436 |
218,674 |
- |
2,887,110 |
|
Reportable segment assets |
|
25,257,377 |
4,777,642 |
2,620,650 |
32,655,669 |
|
2020 |
|
Greenland £ |
Finland £ |
UK £ |
Total £ |
|
Revenue |
|
- |
- |
- |
- |
|
Administrative expenses |
|
616,555 |
81,831 |
1,788,719 |
2,487,105 |
|
Foreign exchange |
|
49,380 |
- |
15,638 |
65,018 |
|
Finance income |
|
3,511 |
(17) |
(1,526) |
1,968 |
|
Other income |
|
23,613 |
13,336 |
- |
36,949 |
|
Loss before tax per reportable segment |
|
632,639 |
39,760 |
1,815,164 |
2,487,563 |
|
Tax refund |
|
- |
- |
229,963 |
229,963 |
|
Additions to PP&E |
|
226,523 |
- |
17,331 |
243,854 |
|
Additions to intangible asset |
|
2,049,686 |
421,450 |
- |
2,471,136 |
|
Reportable segment assets |
|
25,088,651 |
4,903,362 |
6,856,661 |
36,848,674 |
6. Property, plant and equipment
|
Group |
|
|
|
||||||
|
|
Right of use assets £ |
Software £ |
Machinery & equipment £ |
Office equipment £ |
Total £ |
||||
|
Cost |
|
|
|
|
|
||||
|
As at 1 January 2020 |
182,542 |
37,093 |
3,255,384 |
52,931 |
3,527,950 |
||||
|
Exchange Differences |
- |
- |
192,414 |
182 |
192,596 |
||||
|
Additions |
- |
9,221 |
226,523 |
8,110 |
243,854 |
||||
|
As at 31 December 2020 |
182,542 |
46,314 |
3,674,321 |
61,223 |
3,964,400 |
||||
|
As at 1 January 2021 |
182,542 |
46,314 |
3,674,321 |
61,223 |
3,964,400 |
||||
|
Exchange Differences |
- |
- |
(224,094) |
2 |
(224,092) |
||||
|
Additions |
- |
7,503 |
3,604 |
14,930 |
26,037 |
||||
|
Disposals |
(182,542) |
- |
(250,093) |
- |
(432,635) |
||||
|
As at 31 December 2021 |
- |
53,817 |
3,203,738 |
76,155 |
3,333,710 |
||||
|
Depreciation |
|
|
|
|
|
||||
|
As at 1 January 2020 |
40,565 |
25,272 |
665,389 |
28,301 |
759,527 |
||||
|
Charge for the year |
81,130 |
11,089 |
502,650 |
11,716 |
606,585 |
||||
|
Exchange differences |
- |
- |
41,232 |
145 |
41,377 |
||||
|
As at 31 December 2020 |
121,695 |
36,361 |
1,209,271 |
40,162 |
1,407,489 |
||||
|
As at 1 January 2021 |
121,695 |
36,361 |
1,209,271 |
40,162 |
1,407,489 |
||||
|
Charge for the year |
60,847 |
9,020 |
377,068 |
13,778 |
460,713 |
||||
|
Disposals |
(182,542) |
- |
(70,848) |
- |
(253,390) |
||||
|
Exchange differences |
- |
- |
(83,481) |
- |
(83,481) |
||||
|
As at 31 December 2021 |
- |
45,381 |
1,432,010 |
53,940 |
1,531,331 |
||||
|
Net book value as at 31 December 2020 |
60,847 |
9,953 |
2,465,050 |
21,061 |
2,556,911 |
||||
|
Net book value as at 31 December 2021 |
- |
8,436 |
1,771,728 |
22,215 |
1,802,379 |
||||
Depreciation expense of £460,713 (31 December 2020: £606,585) for the Group has been charged in administration expenses.
|
Company |
|
|
|
||
|
|
|
Right of use assets £ |
Software £ |
Office equipment £ |
Total £ |
|
Cost |
|
|
|
|
|
|
As at 1 January 2020 |
|
182,542 |
37,093 |
45,832 |
265,467 |
|
Additions |
|
- |
9,221 |
8,110 |
17,331 |
|
As at 31 December 2020 |
|
182,542 |
46,314 |
53,942 |
282,798 |
|
As at 1 January 2021 |
|
182,542 |
46,314 |
53,942 |
282,798 |
|
Additions |
|
- |
7,503 |
14,930 |
22,433 |
|
Disposals |
|
(182,542) |
- |
- |
(182,542) |
|
As at 31 December 2021 |
|
- |
53,817 |
68,873 |
122,689 |
|
Depreciation |
|
|
|
|
|
|
As at 1 January 2020 |
|
40,565 |
25,272 |
21,791 |
87,628 |
|
Charge for the year |
|
81,130 |
11,089 |
11,088 |
103,307 |
|
As at 31 December 2020 |
|
121,695 |
36,361 |
32,879 |
190,935 |
|
As at 1 January 2021 |
|
121,695 |
36,361 |
32,879 |
190,935 |
|
Charge for the year |
|
60,847 |
9,020 |
13,778 |
83,645 |
|
Disposals |
|
(182,542) |
- |
- |
(182,542) |
|
As at 31 December 2021 |
|
- |
45,381 |
46,657 |
92,038 |
|
Net book value as at 31 December 2020 |
|
60,847 |
9,953 |
21,062 |
91,862 |
|
Net book value as at 31 December 2021 |
|
- |
8,436 |
22,215 |
30,651 |
Depreciation expense of £83,645 (31 December 2020: £103,307) for the Company has been charged in administration expenses.
7. Intangible assets
Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated. These are measured at cost and have an indefinite asset life. Once the pre-production phase has been entered into, the exploration and evaluation assets will cease to be capitalised and commence amortisation.
|
|
Group |
|
|
Exploration & Evaluation Assets - Cost and Net Book Value |
31 December 2021 £ |
31 December 2020 £ |
|
Cost |
|
|
|
As at 1 January |
35,641,812 |
32,012,092 |
|
Additions |
2,887,110 |
2,471,136 |
|
Exchange differences |
(1,732,748) |
1,158,584 |
|
As at year end |
36,796,174 |
35,641,812 |
|
Provision for impairment |
|
|
|
As at 1 January |
8,873,585 |
8,873,585 |
|
Impairments |
- |
- |
|
As at year end |
8,873,585 |
8,873,585 |
|
Net book value |
27,922,589 |
26,768,227 |
The Dundas project in Greenland has a current JORC compliant mineral resource of 117 million tonnes at 6.1% ilmenite (in-situ) and has been confirmed as the highest-grade mineral sand ilmenite project globally. Exploration projects in Finland and the Disko project in Greenland are at an early stage of development and there are no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:
• The Group's right to explore in an area has expired, or will expire in the near future without renewal;
• No further exploration or evaluation is planned or budgeted for;
• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or
• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.
Following their assessment, the Directors concluded that no impairment charge was required at 31 December 2021.
8. Investments in subsidiary undertakings
|
|
Company |
|
|
|
31 December 2021 £ |
31 December 2020 £ |
|
Shares in Group Undertakings |
|
|
|
At beginning of period |
558,342 |
558,342 |
|
At end of period |
558,342 |
558,342 |
|
Loans to Group undertakings |
33,950,980 |
32,609,750 |
|
Total |
34,509,322 |
33,168,092 |
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.
Subsidiaries
|
Name of subsidiary |
Registered office address |
Country of incorporation and place of business |
Proportion of ordinary shares held by parent (%) |
Proportion of ordinary shares held by the Group (%) |
Nature of business |
|
Centurion Mining Limited |
Suite 1, 15 Ingestre Place, London, England, W1F 0DU |
United Kingdom |
100% |
100% |
Dormant |
|
Centurion Universal Limited |
Suite 1, 15 Ingestre Place, London, England, W1F 0DU |
United Kingdom |
100% |
100% |
Holding |
|
Finland Investments Limited |
Suite 1, 15 Ingestre Place, London, England, W1F 0DU |
United Kingdom |
100% |
100% |
Holding |
|
FinnAust Mining Finland Oy |
Kummunkatu 23, |
Finland |
Nil |
100% |
Exploration |
|
FinnAust Mining Northern Oy |
Kummunkatu 23, |
Finland |
Nil |
100% |
Exploration |
|
Disko Exploration Limited |
Suite 1, 15 Ingestre Place, London, England, W1F 0DU |
United Kingdom |
100% |
100% |
Exploration |
|
Dundas Titanium A/S |
c/o Nuna Advokater ApS, Qullilerfik 2, 6, Postboks 59, Nuuk 3900, Greenland |
Greenland |
Nil |
100% |
Exploration |
All subsidiary undertakings are included in the consolidation.
The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.
9. Trade and other receivables
|
|
Group |
|
Company |
||
|
Current |
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
Trade receivables |
4,300 |
317,502 |
|
4,306 |
4,620 |
|
Amounts owed by Group undertakings |
- |
- |
|
484,476 |
172,400 |
|
Prepayments |
75,187 |
99,353 |
|
70,239 |
96,040 |
|
VAT receivable |
82,858 |
794,532 |
|
- |
737,059 |
|
Other receivables |
66,564 |
292,509 |
|
5,160 |
237,966 |
|
Total |
228,909 |
1,503,896 |
|
564,181 |
1,248,085 |
The fair value of all receivables is the same as their carrying values stated above.
At 31 December 2021 all trade and other receivables were fully performing. No ageing analysis is considered necessary as the Group has no significant trade receivable receivables which would require such an analysis to be disclosed under the requirements of IFRS 7.
The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:
|
|
Group |
|
Company |
||
|
|
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
UK Pounds |
94,946 |
1,039,017 |
|
564,181 |
1,248,085 |
|
Euros |
106,173 |
71,770 |
|
- |
- |
|
Danish Krone |
27,790 |
393,109 |
|
- |
- |
|
|
228,909 |
1,503,896 |
|
564,181 |
1,248,085 |
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.
10. Cash and cash equivalents
|
|
Group |
|
Company |
||
|
|
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
Cash at bank and in hand |
2,701,792 |
5,942,848 |
|
2,534,964 |
5,649,030 |
All of the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland and Greenland entities cash at bank is held with institutions whose credit rating is unknown.
The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:
|
|
Group |
|
Company |
||
|
|
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
UK Pounds |
2,571,644 |
5,668,404 |
|
2,534,964 |
5,649,030 |
|
Euros |
85,168 |
240,283 |
|
- |
- |
|
Danish Krone |
44,980 |
34,161 |
|
- |
- |
|
|
2,701,792 |
5,942,848 |
|
2,534,964 |
5,649,030 |
11. Trade and other payables
|
|
Group |
|
Company |
|||
|
|
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
|
Trade payables |
409,282 |
377,026 |
|
250,928 |
78,448 |
|
|
Accrued expenses |
131,048 |
350,576 |
|
60,676 |
83,764 |
|
|
Other creditors |
90,503 |
452,092 |
|
53,571 |
13,716 |
|
|
|
630,833 |
1,179,694 |
|
365,175 |
175,928 |
|
Trade payables include amounts due of £225,538 in relation to exploration and evaluation activities.
The carrying amounts of the Group and Company's trade and other payables are denominated in the following currencies:
|
|
Group |
|
Company |
||
|
|
31 December 2021 £ |
31 December 2020 £ |
|
31 December 2021 £ |
31 December 2020 £ |
|
UK Pounds |
351,688 |
231,456 |
|
365,175 |
175,928 |
|
Euros |
173,781 |
529,326 |
|
- |
- |
|
Danish Krone |
105,364 |
418,912 |
|
- |
- |
|
|
630,833 |
1,179,694 |
|
365,175 |
175,928 |
12. Deferred tax
An analysis of deferred tax liabilities is set out below.
|
|
Group |
|
Company |
||
|
|
2021 £ |
2020 £ |
|
2021 £ |
2020 £ |
|
Deferred tax liabilities |
|
|
|
|
|
|
- Deferred tax liability after more than 12 months |
496,045 |
496,045 |
|
- |
- |
|
Deferred tax liabilities |
496,045 |
496,045 |
|
- |
- |
The Group has additional capital losses of approximately £8,704,033 (2020: £8,793,930) and other losses of approximately 7,234,636 (2020: £6,719,484) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.
13. Financial Instruments by Category
|
Group |
|
31 December 2021 |
|
31 December 2020 |
|||||||
|
|
Amortised cost |
FVTPL |
Total |
Amortised cost |
FVTPL |
Total |
|||||
|
Assets per Statement of Financial Performance |
£ |
£ |
£ |
£ |
£ |
£ |
|||||
|
Trade and other receivables (excluding prepayments) |
153,722 |
- |
153,722 |
1,404,543 |
- |
1,404,543 |
|||||
|
Financial assets at fair value through profit or loss |
- |
- |
- |
- |
100,000 |
100,000 |
|||||
|
Cash and cash equivalents |
2,701,792 |
- |
2,701,792 |
5,942,848 |
- |
5,942,848 |
|||||
|
|
2,855,514 |
- |
2,855,514 |
7,347,391 |
100,000 |
7,447,391 |
|||||
|
|
|
|
|
|
|
|
|||||
|
|
31 December 2021 |
31 December 2020 |
|
||||||||
|
|
Amortised cost |
Total |
Amortised cost |
Total |
|
||||||
|
Liabilities per Statement of Financial Performance |
£ |
£ |
£ |
£ |
|
||||||
|
Trade and other payables (excluding non-financial liabilities) |
630,833 |
630,833 |
1,179,690 |
1,179,690 |
|
||||||
|
Finance lease liability |
- |
- |
62,220 |
62,220 |
|
||||||
|
|
630,833 |
630,833 |
1,241,910 |
1,241,910 |
|
||||||
Company
|
|
31 December 2021 |
31 December 2020 |
|||||||
|
|
Amortised cost |
FVTPL |
Total |
Amortised cost |
FVTPL |
Total |
|||
|
Assets per Statement of Financial Performance |
£ |
£ |
£ |
£ |
£ |
£ |
|||
|
Trade and other receivables (excluding prepayments) |
493,492 |
- |
493,492 |
1,152,045 |
- |
1,152,045 |
|||
|
Financial assets at fair value through profit or loss |
- |
- |
- |
- |
100,000 |
100,000 |
|||
|
Cash and cash equivalents |
2,534,964 |
- |
2,534,964 |
5,649,030 |
- |
5,649,030 |
|||
|
|
3,028,456 |
- |
3,028,456 |
6,801,075 |
100,000 |
6,901,075 |
|||
|
|
|
|
|
|
|
|
|||
|
|
31 December 2021 |
31 December 2020 |
|
||||||
|
|
At amortised cost |
Total |
At amortised cost |
Total |
|
||||
|
Liabilities per Statement of Financial Performance |
£ |
£ |
£ |
£ |
|
||||
|
Trade and other payables (excluding non-financial liabilities) |
365,175 |
365,175 |
175,928 |
175,928 |
|
||||
|
Finance lease liability |
- |
- |
62,220 |
62,220 |
|
||||
|
|
365,175 |
365,175 |
238,148 |
238,148 |
|
||||
14. Share capital and premium
|
Group and Company |
Number of shares |
Share capital |
||||
|
|
31 December 2021 |
31 December 2020 |
31 December 2021 |
31 December 2020 |
||
|
Ordinary shares |
972,857,613 |
971,629,460 |
97,285 |
97,162 |
||
|
Deferred shares |
558,104,193 |
558,104,193 |
558,104 |
558,104 |
||
|
Deferred A shares |
68,289,656,190 |
68,289,656,190 |
6,828,966 |
6,828,966 |
||
|
Total |
69,820,617,996 |
69,819,389,843 |
7,484,355 |
7,484,232 |
||
|
Issued at 0.01 pence per share |
Number of Ordinary shares |
Share capital £ |
Share premium £ |
Total £ |
|
As at 1 January 2020 |
969,969,397 |
96,996 |
55,463,656 |
55,560,652 |
|
Issue of new shares - 10 November 2020 |
1,660,063 |
166 |
156,378 |
156,544 |
|
As at 31 December 2020 |
971,629,460 |
97,162 |
55,620,034 |
55,717,196 |
|
As at 1 January 2021 |
971,629,460 |
97,162 |
55,620,034 |
55,717,196 |
|
Exercise of warrants - 23 December 2021 |
1,228,153 |
123 |
85,848 |
85,971 |
|
As at 31 December 2021 |
972,857,613 |
97,285 |
55,705,882 |
55,803,167 |
|
Deferred Shares (nominal value of 0.1 pence per share) |
Number of Deferred shares |
Share capital £ |
|
As at 1 January 2020 |
558,104,193 |
558,104 |
|
As at 31 December 2020 |
558,104,193 |
558,104 |
|
As at 1 January 2021 |
558,104,193 |
558,104 |
|
As at 31 December 2021 |
558,104,193 |
558,104 |
|
Deferred A Shares (nominal value of 0.1 pence per share) |
Number of Deferred A shares |
Share capital £ |
|
As at 1 January 2020 |
68,289,656,190 |
6,828,966 |
|
As at 31 December 2020 |
68,289,656,190 |
6,828,966 |
|
As at 1 January 2021 |
68,289,656,190 |
6,828,966 |
|
As at 31 December 2021 |
68,289,656,190 |
6,828,966 |
On 23 December 2021, the Company issued and allotted 1,228,153 new Ordinary Shares at a price of 7 pence per share as an exercise of warrants.
15. Share based payments
The Company has established a share option scheme for Directors, employees and consultants to the Group. Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise prices:
|
|
|
|
|
Options & Warrants |
|
|
Grant Date |
Expiry Date |
Exercise price in £ per share |
|
31 December 2021 |
31 December 2020 |
|
17 December 2016 |
17 December 2021 |
0.07 |
|
- |
1,228,153 |
|
9 June 2017 |
9 June 2022 |
0.165 |
|
1,025,000 |
1,025,000 |
|
23 July 2019 |
23 July 2023 |
0.10 |
|
5,200,000 |
5,200,000 |
|
23 July 2019 |
23 July 2023 |
0.15 |
|
5,200,000 |
5,200,000 |
|
23 July 2019 |
23 July 2023 |
0.20 |
|
5,600,000 |
5,600,000 |
|
10 July 2020 |
30 July 2025 |
0.10 |
|
5,150,000 |
5,150,000 |
|
10 July 2020 |
30 July 2025 |
0.15 |
|
2,100,000 |
2,100,000 |
|
15 February 2021 |
15 February 2025 |
0.15 |
|
11,000,000 |
- |
|
15 February 2021 |
15 February 2025 |
0.20 |
|
11,000,000 |
- |
|
15 February 2021 |
15 February 2025 |
0.25 |
|
11,000,000 |
- |
|
|
|
|
|
57,275,000 |
25,503,153 |
The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.
The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:
|
|
2017 Options |
2019 Options |
2019 Options |
2019 Options |
|
Granted on: |
9/6/2017 |
23/7/2019 |
23/7/2019 |
23/7/2019 |
|
Life (years) |
5 years |
4 years |
4 years |
4 years |
|
Share price (pence per share) |
15.5p |
7.45p |
7.45p |
7.45p |
|
Risk free rate |
0.56% |
0.5% |
0.5% |
0.5% |
|
Expected volatility |
31.83% |
21.64% |
21.64% |
21.64% |
|
Expected dividend yield |
- |
- |
- |
- |
|
Marketability discount |
20% |
20% |
20% |
20% |
|
Total fair value (£000) |
34 |
31 |
5 |
1 |
|
|
2020 Options |
2020 Options |
2021 Options |
2021 Options |
|
Granted on: |
10/7/2020 |
10/7/2020 |
15/2/2021 |
15/2/2021 |
|
Life (years) |
5 years |
5 years |
4 years |
4 years |
|
Share price (pence per share) |
6.16p |
6.16p |
9.20p |
9.20p |
|
Risk free rate |
0.5% |
0.5% |
0.5% |
0.5% |
|
Expected volatility |
30.24% |
30.24% |
61.47% |
61.47% |
|
Expected dividend yield |
- |
- |
- |
- |
|
Marketability discount |
20% |
20% |
20% |
20% |
|
Total fair value (£000) |
31 |
5 |
270 |
213 |
|
|
2021 Options |
|
|
|
|
Granted on: |
15/2/2021 |
|
|
|
|
Life (years) |
4 years |
|
|
|
|
Share price (pence per share) |
9.20p |
|
|
|
|
Risk free rate |
0.5% |
|
|
|
|
Expected volatility |
30.24% |
|
|
|
|
Expected dividend yield |
- |
|
|
|
|
Marketability discount |
20% |
|
|
|
|
Total fair value (£000) |
173 |
|
|
|
The expected volatility of the options is based on historical volatility for the six months prior to the date of granting.
The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.
A reconciliation of options and warrants granted over the year to 31 December 2021 is shown below:
|
|
2021 |
|
2020 |
||
|
|
Number |
Weighted average exercise price (£) |
|
Number |
Weighted average exercise price (£) |
|
Outstanding at beginning of period |
25,503,153 |
0.1556 |
|
34,303,153 |
0.1898 |
|
Expired |
- |
- |
|
(16,050,000) |
- |
|
Exercised |
(1,228,153) |
0.0700 |
|
- |
- |
|
Granted |
33,000,000 |
0.2000 |
|
7,250,000 |
0.125 |
|
Outstanding as at period end |
57,275,000 |
0.1830 |
|
25,503,153 |
0.1556 |
|
Exercisable at period end |
57,275,000 |
0.1830 |
|
25,503,153 |
0.1556 |
|
|
2021 |
2020 |
||||||
|
Range of exercise prices (£) |
Weighted average exercise price (£) |
Number of shares |
Weighted average remaining life expected (years) |
Weighted average remaining life contracted (years) |
Weighted average exercise price (£) |
Number of shares |
Weighted average remaining life expected (years) |
Weighted average remaining life contracted (years) |
|
0 - 0.05 |
- |
- |
- |
- |
- |
- |
- |
- |
|
0.05 - 2.00 |
0.1830 |
57,275,000 |
3.18 |
3.18 |
0.1574 |
25,503,153 |
3.68 |
3.68 |
During the period there was a charge of £655,870 (2020: £35,872) in respect of share options.
16. Other reserves
|
|
|
Group |
||||||
|
|
Merger reserve £ |
Foreign currency translation reserve £ |
Reverse acquisition reserve £ |
Redemption reserve £ |
Share option reserve £ |
Total £ |
|
|
|
At 31 December 2020 |
166,000 |
1,205,544 |
(8,071,001) |
364,630 |
114,108 |
(6,220,719) |
|
|
|
Currency translation differences |
- |
(1,640,140) |
- |
- |
- |
(1,640,140) |
|
|
|
Expired Options |
- |
- |
- |
- |
(8,285) |
(8,285) |
|
|
|
Issued Options |
- |
- |
- |
- |
655,870 |
655,870 |
|
|
|
At 31 December 2021 |
166,000 |
(434,596) |
(8,071,001) |
364,630 |
761,693 |
(7,213,274) |
|
|
17. Employee benefit expense
|
|
Group |
|
Company |
||
|
Staff costs (excluding Directors) |
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Salaries and wages |
369,708 |
597,146 |
|
360,134 |
317,044 |
|
Social security costs |
99,068 |
69,984 |
|
64,356 |
40,011 |
|
Retirement benefit costs |
2,049 |
6,621 |
|
2,049 |
6,098 |
|
Other employment costs |
27,425 |
523 |
|
2,093 |
523 |
|
|
498,250 |
674,274 |
|
428,632 |
363,676 |
The average monthly number of employees for the Group during the year was 11 (year ended 31 December 2020: 13) and the average monthly number of employees for the Company was 7 (year ended 31 December 2020: 9).
Of the above Group staff costs, £245,743 (year ended 31 December 2020: £455,385) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.
18. Directors' remuneration
|
|
Year ended 31 December 2021 |
|
||||
|
|
Short-term benefits |
Post-employment benefits |
Share based payments |
Total |
||
|
|
£ |
£ |
£ |
£ |
||
|
Executive Directors |
|
|
|
|
||
|
Roderick McIllree |
196,534 |
18,500 |
- |
215,034 |
||
|
Bo Stensgaard |
221,800 |
- |
238,498 |
460,298 |
||
|
Non-executive Directors |
|
|
|
|
||
|
Ian Henderson 1 |
12,879 |
- |
- |
12,879 |
||
|
Johannus Hansen 2 |
23,309 |
- |
- |
23,309 |
||
|
Peter Waugh |
24,000 |
533 |
- |
24,533 |
||
|
Michael Hutchinson |
38,750 |
- |
- |
38,750 |
||
|
|
517,272 |
19,033 |
238,498 |
774,803 |
||
(1) Resigned on 5 January 2021
(2) Appointed on 15 March 2021
Of the above Group directors' remuneration, £338,296 (31 December 2020: £123,683) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year
The above figures do not include employer portion of NIC. These have been included in note 17.
|
|
Year ended 31 December 2020 |
|
||||
|
|
Short-term benefits |
Post-employment benefits |
Share based payments |
Total |
||
|
|
£ |
£ |
£ |
£ |
||
|
Executive Directors |
|
|
|
|
||
|
Roderick McIllree |
53,391 |
2,421 |
- |
55,812 |
||
|
Bo Stensgaard |
106,250 |
- |
- |
106,250 |
||
|
Non-executive Directors |
|
|
|
|
||
|
Ian Henderson |
38,750 |
- |
- |
38,750 |
||
|
Peter Waugh |
18,600 |
867 |
- |
19,467 |
||
|
Michael Hutchinson |
90,375 |
- |
- |
90,375 |
||
|
|
307,366 |
3,288 |
- |
310,654 |
||
Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have been disclosed in Note 25.
The remuneration of Directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
19. Finance income
|
|
Group |
|
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Interest income/(expense) from cash and cash equivalents |
(4,251) |
1,968 |
|
Finance Income/(expense) |
(4,251) |
1,968 |
20. Other gain/(losses)
|
|
Group |
|
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Other gains |
46,072 |
49,360 |
|
Other gain/(losses) |
46,072 |
49,360 |
21. Income tax expense
No charge to taxation arises due to the losses incurred.
The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the losses of the consolidated entities as follows:
|
|
Group |
|
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
Loss before tax |
(2,491,062) |
(2,487,562) |
|
Tax at the applicable rate of 20.68% (2020: 21.62% ) |
(515,152) |
(537,811) |
|
Effects of: |
|
|
|
Expenditure not deductible for tax purposes |
99,228 |
153,133 |
|
Depreciation in excess of/(less than) capital allowances |
89,897 |
79,656 |
|
Net tax effect of losses carried forward |
326,027 |
75,059 |
|
Tax (charge)/refund |
- |
229,963 |
The weighted average applicable tax rate of 20.68 % (2020: 21.62 %) used is a combination of the 19% standard rate of corporation tax in the UK, 20% Finnish corporation tax and 30% Greenlandic corporation tax.
The Group has a potential deferred income tax asset of approximately £1,285,093 (2020: £959,066) due to tax losses available to carry forward against future taxable profits. The Company has tax losses of approximately £7,234,636 (2020: £6,719,484) available to carry forward against future taxable profits. No deferred tax asset has been recognised on accumulated tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.
22. Earnings per share
Group
The calculation of the total basic earnings per share of (0.28) pence (31 December 2020: ( 0.23 ) pence) is based on the loss attributable to equity holders of the parent company of £2,706,833 (31 December 2020: £2,257,600) and on the weighted average number of ordinary shares of 971,659,743 (31 December 2020: 970,205,253) in issue during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical for the Group as the effect of the exercise of share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 15.
23. Expenses by nature
|
|
Group |
|
|
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
|
|
Cost of Sales |
|
|
|
|
Exploitation licence fees |
199,844 |
- |
|
|
Total cost of sales |
199,844 |
- |
|
|
Administrative expenses |
|
|
|
|
Employee expenses |
438,982 |
367,891 |
|
|
Establishment expenses |
89,137 |
72,010 |
|
|
Travel & subsistence |
38,082 |
111,954 |
|
|
Professional & consultancy fees |
692,470 |
970,021 |
|
|
IT & Software |
19,612 |
20,366 |
|
|
Insurance |
75,548 |
73,192 |
|
|
Depreciation |
460,713 |
606,585 |
|
|
Share Option expense |
655,870 |
35,872 |
|
|
Payments to acquire royalties |
- |
200,000 |
|
|
Other expenses |
191,632 |
52,929 |
|
|
Total administrative expenses |
2,662,046 |
2,510,820 |
|
Services provided by the Company's auditor and its associates
During the year, the Group (including overseas subsidiaries) obtained the following services from the Company's auditors and its associates:
|
|
Group |
|||
|
|
Year ended 31 December 2021 £ |
Year ended 31 December 2020 £ |
||
|
Fees payable to the Company's auditor and its associates for the audit of the Parent Company and Consolidated Financial Statements |
58,004 |
69,375 |
||
|
Fees payable to the Company's auditor for other services |
11,385 |
47,540 |
||
|
|
|
|
||
24. Commitments
License commitments
Bluejay now owns 11 mineral exploration licenses and one exploitation licence in Greenland. Licence 2015/08, 2020/114 and 2021/08 is a part of the Dundas project and licences 2011/31, 2012/29, 2017/01, 2018/16, 2019/116, 2020/03, 2020/06, 2020/10 and 2020/22 are part of the Disko projects in Greenland. These licences include commitments to pay annual licence fees and minimum spend requirements.
As at 31 December 2021 these are as follows:
|
|
Group |
||
|
Group |
License fees £ |
Minimum spend requirement £ |
Total £ |
|
Not later than one year |
128,313 |
1,900,420 |
2,028,733 |
|
Later than one year and no later than five years |
299,261 |
24,546,462 |
24,845,723 |
|
Total |
427,574 |
26,446,882 |
26,874,456 |
25. Related party transactions
Loans to Group undertakings
|
Amounts receivable as a result of loans granted to subsidiary undertakings are as follows: |
Company |
|
|
|
31 December 2021 £ |
31 December 2020 £ |
|
Finland Investments Ltd |
- |
- |
|
FinnAust Mining Finland Oy |
7,311,625 |
7,474,317 |
|
Centurion Mining Limited |
345 |
345 |
|
Dundas Titanium A/S |
23,462,907 |
22,719,222 |
|
Disko Exploration Limited |
3,176,103 |
2,415,191 |
|
At 31 December (Note 9 ) |
33,950,980 |
32,609,075 |
Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and foreign exchange gain of £2,190,977, given that no loans were repaid during the year.
These amounts are unsecured and repayable in Euros and Danish Krone on demand from the Company.
All intra Group transactions are eliminated on consolidation.
Other transactions
The Group defines its key management personnel as the Directors of the Company as disclosed in the Directors' Report.
PMW Consultancy Services, operated by Peter Waugh as a sole trader, was paid a fee of £50,000 for the year ended 31 December 2021 (31 December 2020: £40,000) for consulting services to the Company. There was a balance of £nil owing at year end (31 December 2020: £nil).
26. Ultimate controlling party
The Directors believe there is no ultimate controlling party.
27. Events after the reporting date
On 27 January 2022, the Company appointed Eric Sondergaard as a Non-Executive Director to the board.
On 24 March 2022, the Company raised £5,400,000 via the issue and allotment of 76,857,134 new Ordinary Shares at a price of 7 pence per share. As part of this placing, there was director dealings of £120,000.
For further information please visit http://www.bluejaymining.com or contact:
|
Roderick McIllree/ Kevin Sheil |
Bluejay Mining plc |
enquiry@bluejaymining.com |
|
Ewan Leggat/ Adam Cowl |
SP Angel Corporate Finance LLP (Nominated Adviser) |
+44 (0) 20 3470 0470 |
|
Andrew Chubb |
Hannam & Partners (Advisory) LLP |
+44 (0) 20 7907 8500 |
|
Tim Blythe/ Megan Ray |
BlytheRay |
+44 (0) 20 7138 3205 |
Notes
Bluejay is listed on the London AIM market and Frankfurt Stock Exchange and its shares also trade on the OTCQB Market in the US. With multiple projects in Greenland and Finland, Bluejay has now secured three globally respected entities as partner, customer, and co-investor on three of its projects, giving the Company and its shareholders both portfolio and commodity diversification in high quality jurisdictions.
Bluejay has signed a definitive joint venture agreement with KoBold Metals to guide exploration for new deposits rich in the critical materials for electric vehicles (The Disko-Nuussauq Project). Principal investors in KoBold include Breakthrough Energy Ventures, a climate & technology fund, overseen by Bill Gates, and whose investors include Michael Bloomberg, Jeff Bezos, and Ray Dalio. Other investors in KoBold include Andreessen Horowitz, the premier Silicon Valley venture capital fund and Equinor, the Norwegian state-owned multinational energy company.
Bluejay's most advanced project is the Dundas Ilmenite Project in Greenland, which is fully permitted and being developed towards production in the near term, with preparatory activities scheduled to commence in 2022. Dundas has a Mineral Resource reported in accordance with the JORC Code of 117Mt at 6.1% ilmenite and a maiden offshore Exploration Target of between 300Mt and 530Mt of ilmenite at an average expected grade range of 0.4 - 4.8% ilmenite in-situ. The Company has agreed a Master Distribution Agreement with a major Asian conglomerate for up-to 340ktpa of its anticipated 440ktpa annual output. The Company's strategy is focused on securing financing ahead of commencing commercial production at Dundas and has appointed a Global Investment Bank as the lead arranger. This strategy will create a company capable of self-funding exploration on its current and future projects.
Bluejay holds two additional projects in Greenland - the 692sq km Kangerluarsuk zinc-lead- silver project ('Kangerluarsuk'), where historical work has recovered grades of 41% zinc, 9.3% lead and 596 g/t silver and identified four large-scale drill ready targets; and the 2,025 sq km Thunderstone project which has the potential to host large-scale base metal and gold deposits. Bluejay also has a joint-venture agreement with a mining major at Enonkoski in Finland and has recently signed a binding agreement for a partial divestment in a fourth Finnish project.
**ENDS**
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