COMPANY STATEMENT OF CHANGES IN EQUITY

 

FOR THE YEAR ENDED 31 DECEMBER 2021

 

	Share	Share	Share based	Retained	Total
	capital	premium	payment	losses
			reserve
	£	£	£	£	£
At 1 January 2020	672,335	160,992	69,038	(1,211,522)	(309,157)
Loss for the year	-	-	-	(878,753)	(878,753)
Comprehensive loss for the year	-	-	-	(878,753)	(878,753)
Shares issued	2,157,231	1,537,142	-	-	3,694,373
Share based payment expired	-	-	(3,833)	3,833	-
Exercise of options & warrants	-	-	(17,967)	17,967	-
Cost of share issue	-	(1,133,961)	-	-	(1,133,961)
Share warrant charge	-	-	947,000	-	947,000
Share option charge	-	-	12,000	-	12,000
At 31 December 2020	2,829,566	564,173	1,006,238	(2,068,475)	2,331,502
Loss for the year	-	-	-	(1,485,507)	(1,485,507)
Comprehensive loss for the year	-	-	-	(1,485,507)	(1,485,507)
Shares issued	771,538	814,388	-	-	1,585,926
Lapsed warrants	-	-	(69,037)	69,037	-
Cost of share issue	-	-	-	-	-
Share warrant charge	-	-	-	-	-
Share option charge	-	-	25,000	-	25,000
At 31 December 2021	3,601,104	1,378,561	962,201	(3,484,945)	2,456,921

 

The following describes the nature and purpose of each reserve within equity:

 

Share capital: Nominal value of shares issued

Share premium: Amount subscribed for share capital in excess of nominal value, less share issue costs

Share based payment reserve: Cumulative fair value of warrants and options granted

Retained losses: Cumulative net gains and losses, recognised in the statement of comprehensive income

 

The accompanying notes are an integral part of these financial statements.

 

CONSOLIDATED CASH FLOW STATEMENT

 

FOR THE YEAR ENDED 31 DECEMBER 2021

 

	Notes	31 December	31 December
		2021	2020
		£	£
Cash flows from operating activities
Loss before tax		(1,677,511)	(1,006,750)
Equity settled share based payments		45,000	265,189
Loss on derecognition of financial liability		1,077,607	-
Depreciation	10	719	1,028
Foreign exchange		(78,137)	66,916
Change in estimate of contingent consideration	14	-	161,346
Increase / (decrease) in trade and other receivables	11	32,517	(31,975)
(Decrease) in trade and other payables	13	(118,978)	(482,725)
Shares issued in lieu of cash		33,251	-
Net cash used in operating activities		(685,532)	(1,026,971)
Cash flows from investing activities
Payments for exploration and evaluation activities	9	(516,886)	(883,277)
Net cash used in investing activities		(516,886)	(883,277)
Cash flows from financing activities
Proceeds from the issue of shares		128,044	3,428,384
Cost of shares issued		-	(186,961)
Net cash generated from financing activities		128,044	3,241,423
Net (decrease) / increase in cash and cash equivalents		(1,074,371)	1,331,176
Cash and cash equivalents at beginning of year		1,338,851	7,675
Cash and cash equivalents at end of year	12	264,480	1,338,851

 

·    During the year, Shares worth £33,251 were issued to Suppliers in Lieu of cash.

The accompanying notes are an integral part of these financial statements

 

COMPANY CASH FLOW STATEMENT

 

FOR THE YEAR ENDED 31 DECEMBER 2021

 

	Notes	31 December	31 December
		2021	2020
		£	£
Cash flows from operating activities
Loss before tax		(1,485,505)	(878,753)
Equity settled share based payments		45,000	265,189
Loss on derecognition of financial liability		1,077,607
Depreciation	10	719	1,028
Foreign exchange loss/gain		3,110	12,801
Change in estimate of contingent consideration	14	-	161,346
(Increase) in trade and other receivables	11	(9,897)	(1,394,958)
(Decrease) in trade and other payables	13	(63,676)	(542,410)
Shares issued in lieu of cash		33,251	-
Net cash used in operating activities		(399,391)	(2,375,757)
Cash flows from investing activities
Payments for Intangible fixed assets		-	(33,251)
Loan to Subsidiary	11	(362,729)	-
Net cash used in investing activities		(362,729)	(33,251)
Cash flows from financing activities
Proceeds from the issue of shares		128,044	3,428,384
Cost of shares issued		-	(186,961)
Net cash (used in)/generated from financing activities		128,044	3,241,423
Net (decrease) / increase in cash and cash equivalents		(634,076)	832,415
Cash and cash equivalents at beginning of year		834,164	1,749
Cash and cash equivalents at end of year	12	200,088	834,164

 

·    During the year, Shares worth £33,251 were issued to Suppliers in Lieu of cash.

 

NOTES TO THE FINANCIAL STATEMENTS

1.         ACCOUNTING POLICIES AND BASIS OF PREPARATION

 

General information

The Company is a public company limited by shares which is incorporated in England. The registered office of the Company is 9^th Floor, 107 Cheapside, London, EC2V 6DN, United Kingdom. The registered number of the Company is 11170056.

The principal activity of the Group is to objective is to explore, develop and mine precious and base metal projects.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these Financial Statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.

Accounting policies

Basis of preparation of Financial Statements

The Group and Company Financial Statements have been prepared in accordance with UK-adopted international accounting standards. The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the United Kingdom applicable to companies under IFRS. The Group and Company Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on an asset acquisition.

The Financial Statements are presented in pounds sterling, which is the functional currency of the Parent Company. The functional currency of Lady Alice Mines Pty Ltd is Australian Dollars.

The preparation of the Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 1.

Changes in accounting policies

i)             New and amended standards adopted by the Group and Company

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.

 

Of the other IFRS and IFRIC amendments, none are expected to have a material effect on the future Group or Company Financial Statements.

 

ii)            New 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 16 (Amendments)	Property, plant and equipment	1 January 2022
IAS 1 (Amendments)	Classification of Liabilities as Current or Non-Current	1 January 2022
Annual Improvements	2018 - 2020 Cycle	1 January 2022
IAS 37 (Amendments)	Provisions, contingent liabilities and contingent assets	1 January 2022
IAS 8 (Amendments)	Accounting estimates	1 January 2022

 

None are expected to have a material effect on the Group or Company Financial Statements.

Going concern

The Financial Statements have been prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Group and Company, including the current level of resources and the required level of spending on exploration and evaluation activities. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments.

The Group meets its working capital requirements from its cash and cash equivalents. The Company is pre-revenue, and to date the Company has raised finance for its activities through the issue of equity and debt.

The Group has £264,480 of cash and cash equivalents at 31 December 2021, and post year end raised £945,000 before costs through the issue of new Ordinary shares.  The Group's and Company's ability to meet operational objectives and general overheads is reliant on raising further capital in the near future.

The Directors are confident that further funds can be raised and it is appropriate to prepare the financial statements on a going concern basis, however there can be no certainty that any fundraise will complete.  These conditions indicate existence of a material uncertainty related to events or conditions that may cast significant doubt about the Group's and Company's ability to continue as a going concern, and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.  These financial statements do not include the adjustments that would be required if the Group and Company could not continue as a going concern.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Parent Company and companies controlled by the Parent Company, the Subsidiary Companies, drawn up to 31 December each year.

Control is recognised where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities, and is exposed to, or has rights to, variable returns from its involvement in the subsidiary. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, where appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Investments in subsidiaries are accounted for at cost less impairment.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, 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.

 The Group's operations are located Australia with the head office located in the United Kingdom. The main tangible assets of the Group, cash and cash equivalents, are held in the United Kingdom and Australia. The Board ensures that adequate amounts are transferred internally to allow all companies to carry out their operational on a timely basis.

 The Directors are of the opinion that the Group is engaged in a single segment of business being the exploration of gold in Australia. The Group currently has two geographical reportable segments - United Kingdom and Australia.

Foreign currencies

For the purposes of the consolidated financial statements, the results and financial position of each Group entity are expressed in pounds sterling, which is the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the reporting date. Exchange differences arising are included in the profit or loss for the period.

For the purposes of preparing consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period. Gains and losses from exchange differences so arising are shown through the Consolidated Statement of Changes in Equity.

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:  33.33% per annum

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. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Statement of Comprehensive Income.

Impairment of tangible fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Intangible assets

Exploration and evaluation assets

Exploration and evaluation assets comprises all costs which are directly attributable to the exploration of a project area. 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 recorded at fair-value on acquisition

Exploration assets which are acquired are recognised at fair value. When an 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.

Impairment of intangible assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in profit or loss 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 of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Early stage exploration projects are assessed for impairment using the methods specified in IFRS 6.

Financial Assets

Loans and Receivables

(a) Classification and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an instrument level.

The Group's and Company's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

•     financial assets at amortised cost (debt instruments);

•     financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);

•     financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments); and

•     financial assets at fair value through profit or loss.

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group and Company. The Group and Company measure financial assets at amortised cost if both of the following conditions are met:

•     the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

•     the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate ("EIR") method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's and Company's financial assets at amortised cost include trade and other receivables (not subject to provisional pricing) and cash and cash equivalents.

Derecognition

A financial asset is primarily derecognised when:

•     the rights to receive cash flows from the asset have expired; or

•     the Group and Company have transferred their rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group and Company have transferred substantially all the risks and rewards of the asset, or (b) the Group and Company have neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

The Group and Company recognise 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 and Company expect 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.

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.

Subsequent measurement

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.

Derecognition

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

Cash and cash equivalents

The Company considers any cash on short-term deposits and other short-term investments to be cash and cash equivalents.

Share capital

The Company's Ordinary shares of nominal value £0.01 each ("Ordinary Shares") are recorded at such nominal value and proceeds received in excess of the nominal value of Ordinary Shares issued, if any, are accounted for as share premium. Both share capital and share premium are classified as equity. Costs incurred directly to the issue of Ordinary Shares are accounted for as a deduction from share premium, otherwise they are charged to the income statement.

Current and deferred income tax

Tax represents income tax and deferred tax. Income tax is based on profit or loss for the year. Taxable profit or loss differs from the loss for the year as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items of income or expense that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Statement of Financial Position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the intention is to settle current tax assets and liabilities on a net basis.

Share based payments

The fair value of services received in exchange for the grant of share warrants is recognised as an expense in share premium or profit or loss, in accordance with the nature of the service provided. A corresponding increase is recognised in equity.

Judgements and key sources of estimation uncertainty

The preparation of the Financial Statements in conformity with IFRS requires the directors to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, may not accurately reflect the related actual outcome. Share options and warrants are measured at fair value at the date of grant. The fair value is calculated using the Black Scholes method for both options and warrants as the management views the Black Scholes method as providing the most reliable measure of valuation.

Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. The determination of fair value is based on key assumptions involving estimation of the probability of meeting each performance target and the timing thereof. As part of the acquisition of Lady Alice Mines Pty Ltd, contingent consideration with an estimated fair value of £296,536 was recognised at the acquisition date. See note 17 for further details. The Group is required to remeasure the contingent liability at fair value at each reporting date with changes in fair value recognised in accordance with IFRS 9. Therefore, as at 31 December 2021, the contingent consideration reflects an estimated fair value of £187,500.

2.         EXPENSES BY NATURE

 

		31 December	31 December
		2021	2020
		£	£
Administrative expense		73,819	93,170
Corporate expense		191,230	488,450
Professional fees		960	2,833
Wages & Salaries expense		301,204	271,476
		567,213	855,929

 

3.         FINANCE COSTS

		31 December	31 December
		2021	2020
		£	£
Loss on settlement of settlement of financial liability		1,077,607	-
Other finance costs		32,691	39,755
		1,110,298	39,755

 

4.         SEGMENT INFORMATION

The Group's prime business segment is mineral exploration. 

The Group operates within two geographical segments, the United Kingdom and Australia. The UK sector consists of the parent company which provides administrative and management services to the subsidiary undertaking based in Australia.

The following tables present expenditure and certain asset information regarding the Group's geographical segments for the years ended 31 December 2021 and 2020:

4.         SEGMENT INFORMATION (continued)

Operational Results		31 December 2021 £		31 December 2020 £
Revenue		-		-
Loss after taxation
- United Kingdom		(1,485,507)		(878,753)
- Australia		(192,004)		(127,997)
Total		(1,677,511)		(1,006,750)

 

2021		Australia £		United Kingdom £		Total £
Non-current assets		1,797,043		1,680		1,798,723
Current assets		92,244		209,127		301,371
Total liabilities		(18,376)		(219,460)		(237,836)
2020
Non-current assets		1,495,519		2,400		1,497,919
Current assets		574,953		833,306		1,408,259
Total liabilities		(73,678)		(607,048)		(680,726)

 

5.         DIRECTORS' EMOLUMENTS

There were no employees during the period apart from the directors, who are the key management personnel. No directors had benefits accruing under money purchase pension schemes.

 

Year ended 31 December 2021	Remuneration £	Fees £	Bonus £	Share Based payment £	Total £
C Moulton	92,178	-	-	20,000	112,178
G Hancock	-	38,422	-	8,143	46,565
D Maling	24,000	227	-	8,714	32,941
D Clarke	-	31,066	-	8,143	39,209
	116,178	69,715	-	45,000	230,893

 

·   During the year £112,178 (2020: £179,727) was paid to Craig Moulton in respect of Wages & Salaries and Share based payments. The share based payments include £20,000 for 1,333,333 shares per his employment contract.

·   During the year £38,422 (2020: £22,167) was paid to Hancock Corporate Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect of Directors fees and consultancy services.

·   During the year £24,227 (2020: £13,584) was paid to Dan Maling, in respect of Wages & Salaries and Directors fees.

·   During the year £31,066 (2020: £13,667) was paid to The Springton Trust & Queens Road Mines, in which David Clarke is a Trustee, in respect of Directors fees and consultancy services.

 

 

Year ended 31 December 2020	Remuneration £	Fees £	Bonus £	Share Based payment £	Total £
C Moulton	128,539	-	-	51,188	179,727
R Gerritsen	-	6,121	-	12,000	18,121
G Hancock	-	22,167	-	-	22,167
D Maling	10,584	3,000	-	-	13,584
D Clarke	-	13,667	-	-	13,667
	139,123	44,955	-	63,188	247,266

 

·   During the year £179,727 (2019: £118,500) was paid to Craig Moulton in respect of Wages & Salaries and Share based payments. The share based payments include £21,188 for 2,118,750 shares in lieu of director fees and £30,000 for 2,000,000 shares per his employment contract.

·   During the year £18,121 (2019: £160,300) was paid to RCA Associates Ltd, a company of which Rolf Gerritsen is a director, in respect of Directors fees, consultancy services & share based payments. The share based payments include £12,000 for 1,200,000 shares in lieu of director fees.

·   During the year £22,167 (2019: £26,167) was paid to Hancock Corporate Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect of Directors fees and consultancy services.

·   During the year £13,584 (2019: £nil) was paid to Dan Maling, in respect of Wages & Salaries and Directors fees.

·   During the year £13,667 (2019: £nil) was paid to The Springton Trust, a trust in which David Clarke is a Trustee, in respect of Directors fees and consultancy services.

 

6.         INCOME TAXES

 

a) Analysis of tax in the period

 

	31 December		31 December
	2021		2020
		£	£
Current tax		-	-
Deferred taxation		-	-
		-	-

 

b) Factors affecting tax charge or credit for the period

 

The tax assessed on the loss on ordinary activities for the period differs from the standard rate of corporation tax in the UK of 19% (2020: 19%) and Australia of 25% (2020: 26%). The differences are explained below:

	31 December	31 December
	2021	2020
	£	£
Loss on ordinary activities before tax	(1,677,511)	(1,006,750)
Loss multiplied by weighted average applicable rate of tax	(332,167)	(234,069)
Effects of:
Expenses not deductible for tax	225,471	108,708
Losses carried forward not recognised as deferred tax assets	106,696	125,361
	-	-

 

The weighted average applicable tax rate of 19.8% (2020: 23.25%) used is a combination of the standard rate of corporation tax rate for entities in the United Kingdom of 19% (2020: 19%), and 25% (2020: 26%)in Australia.

7.         EARNINGS PER SHARE

 

Basic and diluted loss per share is calculated by dividing the loss attributed to ordinary shareholders of £1,677,511 (2020: £1,006,750 loss) by the weighted average number of shares of 360,110,510 (2020: 282,956,585) in issue during the year.

The basic and dilutive loss per share are the same as the effect of the exercise of share warrants and options would be anti-dilutive.

8.           INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

	Investments	Loans	Total
Company	£	£	£
At 1 January 2021	432,260	-	432,260
At 31 December 2021	432,260	-	432,260

 

Investments in Group undertakings are stated at cost less impairment. In 2019 the Company acquired 100% of the issued share capital of Lady Alice Mines Pty Ltd and in turn, 100% of the units in the Lady Alice Trust which is wholly owned by Lady Alice Mines Pty Ltd.  

At 31 December 2021 the Company held the following interests in subsidiary undertakings, which are included in the consolidated financial statements and are unlisted.

 

Name of company	Registered office address	Proportion held	Business
Lady Alice Mines Pty Ltd	Level 2, 40 Kings Park Road, West Perth, WA, Australia	100%	Mining
Lady Alice Mines Unit Trust1	Level 2, 40 Kings Park Road, West Perth, WA, Australia	100%	Mining

 

¹Lady Alice Mines Unite Trust is a wholly owned entity of Lady Alice Mines Pty Ltd.

9.           INTANGIBLE FIXED ASSETS

Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated except for those acquired at fair value as part of a business combination.

				Total
Group				£
At 1 January 2020				612,242
Additions				883,277
At 1 January 2021				1,495,519
Additions				516,886
At 31 December 2021				2,012,406

 

				Total
Company				£
At 1 January 2020				-
Additions				33,251
At 1 January 2021				33,251
Additions				-
At 31 December 2021				33,251

 

 

 

9.           INTANGIBLE FIXED ASSETS (continued)

The Directors 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 necessary for the year ended 31 December 2021.

10.      PROPERTY, PLANT AND EQUIPMENT - Group and Company
2021	Office Equipment	Total
Cost	£	£
At 31 December 2020	4,407	4,407
Additions during the year	-	-
At 31 December 2021	4,407	4,407
Depreciation
At 31 December 2020	(2,007)	(2,007)
Charge for the year	(720)	(720)
At 31 December 2021	(2,727)	(2,727)
Net book value
At 31 December 2021	1,680	1,680

 

 

2020	Office Equipment	Total
Cost	£	£
At 31 December 2019	4,407	4,407
Additions during the year	-	-
At 31 December 2020	4,407	4,407
Depreciation
At 31 December 2019	(979)	(979)
Charge for the year	(1,028)	(1,028)
At 31 December 2020	(2,007)	(2,007)
Net book value
At 31 December 2020	2,400	2,400

 

11.      TRADE AND OTHER RECEIVABLES

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
Current	£	£	£	£
Prepayments	-	-	-	-
Intercompany debtors	-	-	2,000,064	1,637,335
Goods & Services Tax	27,852	70,266	-	-
Other debtors	9,039	(858)	9,039	(858)
	36,891	69,408	2,009,103	1,636,477

 

The fair value of trade and other receivables approximates to their book value. Other classes of financial assets included within trade and other receivables do not contain impaired assets.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
	£	£	£	£
UK pounds	9,039	(858)	2,009,103	1,636,477
Australian dollars	27,852	70,266	-	-
	36,891	69,408	2,009,103	1,636,477

 

 

12.         CASH AND CASH EQUIVALENTS  

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
	£	£	£	£
Cash at bank and in hand	264,480	1,338,851	200,088	834,164
	264,480	1,338,851	200,088	834,164

 

The fair value of cash at bank is the same as its carrying value.

The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:

 

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
	£	£	£	£
UK pounds	200,088	834,164	200,088	834,164
Australian dollars	64,392	504,687	-	-
	264,480	1,338,851	200,088	834,164

 

13.        TRADE AND OTHER PAYABLES             

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
Current	£	£	£	£
Trade creditors	20,642	94,985	9,360	35,960
GST collected	-	4,437	-	-
Accruals and deferred income	22,600	59,676	22,600	59,676
Other payables	7,094	10,215	-	-
	50,336	169,314	31,960	95,636

 

The fair value of trade and other payables approximates to their book value.

The carrying amounts of the Group and Company's trade and other payables are denominated in the following currencies:

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
	£	£	£	£
UK pounds	31,960	95,636	31,960	95,636
Australian dollars	18,376	73,677	-	-
	50,336	169,314	31,960	95,636

 

 

 

14.         CONTINGENT CONSIDERATION

2020					Total
Group and Company					£
Amounts payable under business combination
At 31 December 2020					511,412
Categorised as:
Current liabilities					188,721
Non-current liabilities					322,691

 

Refer to note 18 for further detail.

 

2021				Total
Group and Company				£
Amounts payable under business combination
At 31 December 2021				187,500
Categorised as:
Current liabilities				187,500
Non-current liabilities				-

 

During the year 2021, there has been a movement in the Contingent Consideration of £323,912 arising from the issue of a total of 68,440,078 ordinary shares issued to previous Lady Alice Mines unit holders upon achievement of stages 1 and 2 earn-in in the Wudinna Gold Project. The contingent consideration was initially measured at the time of acquisition, and subsequently at each reporting date the value of contingent consideration updated based on a revision to the underlying assumptions used in determining estimated value. The Contingent Consideration as at 31 December 2021 of £187,500, reflects the amount still outstanding.

Movements for the year		Total £
At 31 December 2020		511,412
Additional consideration		1,077,607
Consideration paid  during the year		(1,401,519)
At 31 December 2021		187,500

 

 

Refer to note 18 for further detail.

 

15.         SHARE CAPITAL 

	Dec 2021	Dec 2021	Dec 2020	Dec 2020
	Number		Number
	of shares	£	of shares	£
Issued, called up and fully paid
Ordinary shares of £0.01
As at the start of the year	282,956,585	2,829,566	67,233,532	672,335
Issued in the year	77,153,925	771,538	215,723,053	2,157,231
Total	360,110,510	3,601,104	282,956,585	2,829,566

 

On 11 January 2021, 31,049,819 Ordinary shares were issued to former LAM owners at 2.4p each, and 1,333,333 Ordinary shares were issued to CEO Craig Moulton at 1.5p each, upon reaching stage-1 earn-in at the Wudinna Gold Project.

On 28 January 2021, 934,000 Ordinary shares were issued at 3p each, and 1,000,000 Ordinary shares issued at 2p each, pursuant to the exercise of warrants.

On 18 February 2021, 2,333,334 Ordinary shares were issued at 2p each pursuant to the exercise of warrants.

On 21 February 2021, 1,666,667 Ordinary shares were issued at 2p each pursuant to the exercise of warrants.

On 14 April 2021, 1,445,713 Ordinary shares were issued at a price of 2.3p each to a third party supplier for drilling services undertaken.

On 14 April 2021, and 4 May 2021, a total of 5,664,340 Ordinary shares were issued to former LAM owners at 1p each, in settlement of 12 month payment obligations in accordance with the SPA for the LAM Unit Trust.

On 5 May 2021,

On 11 November 2021, 31,725,919 Ordinary shares were issued to former LAM owners at 1.9p each, upon reaching stage-2 earn-in at the Wudinna Gold Project.

As at 31 December 2021 the Company had 67,543,461 warrants outstanding (2020: 127,796,891).

Each Ordinary share is entitled to one vote in any circumstances. Each Ordinary share is entitled pari passu to dividend payments or any other distribution and to participate in a distribution arising from a winding up of the Company.

16.                  SHARE BASED PAYMENTS

2021

Warrants

			Warrants Number	Weighted average exercise price
Warrants at 31 December 2020			127,796,891	0.02p
Granted during year			-	-
Exercised during year			(5,934,801)	0.02p
Lapsed during year			(54,318,629)	0.02p
Warrants at 31 December 2021			67,543,461	0.03p
Exercisable at year end			67,543,461	0.03p

 

At 31 December 2021 the weighted average remaining contractual life of the warrants outstanding was 0.82 years.

 

2020

Warrants

			Warrants Number	Weighted average exercise price
Warrants at 31 December 2019			63,351,916	0.02p
Granted during year			109,374,168	0.03p
Exercised during year			(29,812,693)	0.02p
Lapsed during year			(15,116,500)	0.02p
Warrants at 31 December 2020			127,796,891	0.02p
Exercisable at year end			127,796,891	0.02p

 

At 31 December 2020 the weighted average remaining contractual life of the warrants outstanding was 1.39 years.

 

2021

Options

			Options Number	Weighted average exercise price
Options at 31 December 2020			15,672,336	0.033p
Issued during the period			-	-
Exercised during the year			-	-
Options at 31 December 2021			15,672,336	0.033p
Exercisable at year end			672,336	0.015p

 

At 31 December 2021 the weighted average remaining contractual life of the options outstanding was 3.43 years.

 

2020

Options

			Options Number	Weighted average exercise price
Options at 31 December 2019			1,344,672	0.015p
Issued during the period			15,000,000	0.033p
Exercised during the year			(672,336)	0.015p
Options at 31 December 2020			15,672,336	0.033p
Exercisable at year end			672,336	0.015p

 

At 31 December 2020 the weighted average remaining contractual life of the options outstanding was 4.43 years.

The fair value of equity settled share options and warrants granted is estimated at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted.  The following table lists the inputs to the model:

		Options	Warrants	Warrants
Date of grant Expected volatility Expected life Risk-free interest rate Expected dividend yield Fair value per option/warrant		14 July 2020  94.59% 5 0.10% 0.00%   £0.008	16 January 2020  23.39% 2 0.75% 0.00%   £0.0003	29 October 2020  108.75% 2 0.10% 0.00%   £0.014

 

17.          FINANCIAL INSTRUMENTS

	Group 31 Dec 2021	Group 31 Dec 2020	Company 31 Dec 2021	Company 31 Dec 2020
	£	£	£	£
Financial assets at amortised cost
Trade and other receivables excluding prepayments	36,891	69,408	2,009,103	1,636,477
Cash and cash equivalents	264,480	1,338,851	200,088	834,164
	301,371	1,408,259	2,209,191	2,470,641
Financial liabilities
Trade and other payables (at amortised cost)	(27,736)	(109,638)	(9,360)	(35,960)
Deferred consideration (at FVPL)	(187,500)	(511,412)	(187,500)	(511,412)
	(215,236)	(621,050)	(196,860)	(547,372)

 

18.      BUSINESS COMBINATION

Lady Alice Mines Pty Ltd

On 7 March 2019, the Company acquired 100% of the share capital of Lady Alice Mines Pty Ltd ('LAM') and its wholly owned subsidiary The Lady Alice Trust (the 'Trust'), for total consideration of £432,260 which is to be satisfied via a mix of cash and share consideration which is shown below. In addition, the Company agreed to settle existing liabilities due to unitholders of the Trust of up to A$250,000. The share based payment consideration was settled on 16 January 2020 upon the successful re-admission to the London's Stock Exchange Main Market. 10,815,297 shares were issued at a close price of 1.25p.

The Trust has an entitlement to earn a 75% equity interest in tenements near Wudinna in South Australia for gold exploration (the 'Wudinna Agreement'), and is also the sole owner of the right, title and interest in the Prince Alfred Licence, a formerly producing copper mine.

The principal terms of the Wudinna Agreement are as follows:

·    Stage 1: the Trust will fund A$2.1 million within three years to earn a 50% equity position

·    Stage 2: at the completion of Stage 1, a joint venture vehicle can be formed, or alternatively the Trust can spend a further A$1.65 million over an additional two years to earn a 65% equity interest

·    Stage 3: at the completion of Stage 2, a joint venture vehicle can be formed, or alternatively the Trust can spend a further A$1.25 million within one year to earn a 75% equity interest

The contingent consideration is due to the unitholders on satisfying the following project milestones:

·    First Option - 14% of the total issued share capital on completion of Stage 1

·    Second Option - 21% of the total issued share capital on completion of Stage 2

·    Third Option - 30,000,000 ordinary shares on announcement of a JORC-compliant Indicated Mineral Resource for the Wudinna Project of not less than 750,000 ounces of gold

The Directors have calculated the consideration payable on a probability basis of satisfying the project milestones in accordance with IFRS 3 Business Combinations.  The Directors have also estimated the number of shares to be issued at each milestone and the share price. This has been fixed at the number of consideration shares issued at the time of the RTO and the share price at that time. Management believe this is a best estimate.

19.      RELATED PARTY TRANSACTIONS

Save as disclosed below there were no related party transactions during the year other than remuneration to Directors disclosed in note 5.

During the year, the Group paid £54,497 to Rupert Verco, Chief Executive Officer of the Company Mr Verco was appointed as CEO with effect from 12 July 2021.

During the year, the Group paid £3,407 in respect of rent to AusQuest, a company in which Gregory Hancock is a Director.

As at 31 December 2021, included in the other receivables is £2,000,064 due from Lady Alice Mines Pty Ltd, a subsidiary company. The loan is interest free and repayable on demand.

20.      FINANCIAL RISK MANAGEMENT

20.1       Financial risk factors

The Group's activities expose it to a variety of financial risks: market 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.

Risk management is carried out by executive management.

a)    Market risk

The Group is exposed to market risk, primarily relating to foreign exchange and commodity prices. The Group does not hedge against market risks as the exposure is not deemed sufficient to enter into forward contracts. The Company has not sensitised the figures for fluctuations in foreign exchange or commodity prices as the Directors are of the opinion that these fluctuations would not have a significant impact on the Financial Statements at the present time. The Directors will continue to assess the effect of movements in market risks on the Group's financial operations and initiate suitable risk management measures where necessary.

b)    Credit risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. To manage this risk, the Group periodically assesses the financial reliability of customers and counterparties.

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. The Company will only keep its holdings of cash with institutions which have a minimum credit rating of 'A'.

c)    Liquidity risk

The Company'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.

The following table summarizes the Group's significant remaining contractual maturities for financial liabilities at 31 December 2021.

 

Contractual maturity analysis as at 31 December 2021
			Less than 12 Months £	1 - 5 Year £	Total £
Accounts payable			20,642	-	20,642
Accrued liabilities			22,600	-	22,600
			43,242	-	43,242

 

20.2       Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue to explore, develop and mine precious and base metal projects. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.

The Group defines capital based on the total equity and reserves of the Group. The Group monitors its level of cash resources available against future planned operational activities and may issue new shares in order to raise further funds from time to time.

21.      CAPITAL COMMITMENTS & CONTINGENT LIABILITIES

As at 31 December 2021 the Group had AU$95,000 of capital commitments in relation to operating activities at the Wudinna Gold Project.

There were no contingent liabilities as at 31 December 2021.

22.      POST YEAR END EVENTS

On 16 February 2022, the Company completed a private share placement issuing 63,000,000 Ordinary shares at a price of 1.5 pence each, raising £945,000 before costs.

On 13 April 2022, the Company announced that it had been granted an additional 536 km² exploration tenement directly east of, and contiguous with, the Wudinna Project.

23           ULTIMATE CONTROLLING PARTY

There is no ultimate controlling party.