The accompanying notes form an integral part of the interim consolidated financial statements.

The accompanying notes form an integral part of the interim consolidated financial statements.

NOTE 1:-   GENERAL INFORMATION

a.       Firering Strategic Minerals PLC (formerly "Firering Holdings Limited") ("The Company") is a holding company for a group of exploration and development companies set up to focus on developing assets towards the ethical production of critical metals. The Company was incorporated on 8 May 2019 in Cyprus. The address of its registered office is Ioanni Stylianou 6, 2^nd Floor, Office 202, 2003, Nicosia, Cyprus.

The Company owns 75% of the issued share capital of Bri Coltan SARL ("Bri Coltan") a company incorporated in Cote d'Ivoire. The principal activity of the subsidiary is the exploration and development of mineral projects (in particular, columbite- tantalite).

On 1 March 2021, the Company purchased 51% of the issued share capital of Atex Mining Resources SARL ("Atex") a company incorporated in Cote d'Ivoire. The principal activity of Atex is the exploration and development of mineral projects (in particular, lithium and columbite-tantalite).  

On 22 November 2021, the Company purchased 80% of the issued share capital of Alliance Minerals Corporation SARL ("Alliance"), a company incorporated in Cote d'Ivoire. Alliance holds an exploration license request at an area bordering Atex.

On 12 November 2021, the Company completed its Initial Public Offering ("IPO") and admission to trading on the AIM, a market operated by the London Stock Exchange ("the AIM"), by issuing 30,769,230 Ordinary shares at a price of £ 0.13 per share for a total cash consideration of € 4.68 million (£ 4 million). The net proceeds after expenses were €4.25 million (£ 3.63 million).

On 14 March 2022 the Company purchased a 100% interest in its wholly-owned Seychellois subsidiary, Altar Resources Limited ("Altar"). Altar is the 100% owner of Apalex SARL, an Ivorian incorporated company which holds the submitted the Toura nickel-cobalt licence application located in western Côte d'Ivoire. The consideration for the Project was €15,000 in cash and a Gross Revenue Royalty of up to 1.0% on nickel and cobalt sales from the Project (see also note 4).

b.      Going concern:

The Group's operations are at an early stage of development and the continuing success of the Group will depend on the Group's ability to manage its mineral projects. Presently, the Group has no projects producing positive cash flow and the Group is likely to remain cash flow negative in the near future. The Group's ultimate success will depend on its ability to generate positive cash flow from active mining operations in the future and its ability to secure external funding for its development requirements. However, there is no assurance that the Group will achieve profitability or positive cash flow from its operating activities.

The Board of Directors and Group management have assessed the ability of the Group to continue as a going concern. Based on a review of the Group's budget and forecast cash flows, there is a reasonable expectation that the Group will have adequate resources to continue in operational existence and meet its obligations as they become due for at least a period of twelve months from the date of approval of the financial statements. Thus, the going concern basis of accounting has continued to be applied in preparing these financial statements.

NOTE 1:-   GENERAL INFORMATION (Cont.)

c.       The recent outbreak of COVID-19 had no significant impact on the Company's operations during 2021. The outbreak of COVID-19 may resume its negative effect on economic conditions regionally as well as globally, disrupt operations situated in countries particularly exposed to the contagion, affect the Company's suppliers or business practices previously applied by those entities, or otherwise impact the Company's activities. Governments in affected countries have imposed travel bans, quarantines and other emergency public safety measures. Those measures, though apparently temporary in nature, may continue and increase depending on developments in the COVID-19 pandemic. The ultimate severity of the COVID-19 outbreak is uncertain at this time and therefore the Company cannot reasonably estimate the impact it may have on its end markets and its future revenues, profitability, liquidity and financial position.

d.      These financial statements have been prepared in a condensed format as of 30 June 2022 and for the six months then ended ("interim consolidated financial statements"). These financial statements should be read in conjunction with the Company's annual financial statements as of 31 December 2021 and for the year then ended and accompanying notes ("annual consolidated financial statements").

NOTE 2:-   SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the interim consolidated financial statements:

The interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting".

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements, except as described below.

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NOTE 3:-   DISCLOSURE OF NEW STANDARDS IN THE PERIOD PRIOR TO THEIR ADOPTION

1.   Amendment to IAS 37, "Provisions, Contingent Liabilities and Contingent Assets":

In May 2020, the IASB issued an amendment to IAS 37, regarding which costs a company should include when assessing whether a contract is onerous ("the Amendment").

According to the Amendment, costs of fulfilling a contract include both the incremental costs (for example, raw materials and direct labor) and an allocation of other costs that relate directly to fulfilling a contract (for example, depreciation of an item of property, plant and equipment used in fulfilling the contract).

The Amendment is effective for annual periods beginning on or after 1 January  2022 and applies to contracts for which all obligations in respect thereof have not yet been fulfilled as of 1 January 2022. The application of the Amendment does not require the restatement of comparative data. Instead the opening balance of retained earnings on the date of initial application date is adjusted for the cumulative effect of the Amendment.

The application of the Amendment did not have a material impact on the Company's

interim financial statements.

2.       Amendment to IAS 16, "Property, Plant and Equipment":

In May 2020, the IASB issued an amendment to IAS 16, "Property, Plant and Equipment" ("the Amendment"). The Amendment prohibits a company from deducting from the cost of property, plant and equipment ("PP&E") consideration received from the sales of items produced while the company is preparing the asset for its intended use. Instead, the company should recognize such consideration and related costs in profit or loss.

The Amendment is effective for annual reporting periods beginning on or after January 1, 2022. The Amendment is to be applied retrospectively, but only to items of PP&E made available for use on or after the beginning of the earliest period presented in the financial statements in which the company first applies the Amendment.

The cumulative effect of initially applying the Amendment is recognized as an adjustment to the opening balance of retained earnings at the beginning of the earliest period presented.

The application of the Amendment did not have a material impact on the Company's interim financial statements.

NOTE 4: -  ACQUISITION OF SUBSIDIARIES

Acquisition of Altar Resources Limited ("Altar")

On 14 March 2022 the Company purchased 100% interest in Altar Resources Limited ("Altar"), a company incorporated in Seychelle. Altar is the 100% owner of Apalex SARL, an Ivorian incorporated company which has an application for a nickel-cobalt mineral prospecting license with an area of approximately 168 sq km, in western Côte d'Ivoire.

The GRR will be calculated as a percentage of the gross proceeds received from sales from the Project less transportation costs. The GRR will be subject to a separate agreement, which will be entered into between the Company and Altus, within six months of the grant of the Application.

Firering will pay to Altus a GRR from the Project, linked to the United States dollar nickel price (as quoted per ton by the London Metal Exchange) at the time of the metal sales as follows:

- When the nickel price is less than or equal to US$12,000/t: no royalties will be payable;

- when the nickel price is between US$12,000/t and US$18,000/t Firering will pay to Altus a 0.5% GRR; and

- when the nickel price is higher than US$18,000/t Firering will pay to Altus a 1.0% GRR.

The financial impact of the acquisition is a €15k increase in Company's intangible assets

NOTE 5:-   SIGNIFICANT EVENTS

On 4 July 2022 the Company purchased an additional 26% of the issued shares in Atex (to increase its holding to 77%) as follows:

·    10% of the issued shares in Atex in exchange for 1,158,200 shares in the Company (with a value of £76,441 at the closing share price on 1 July 2022 of 6.6p per share; €88,672 based on £1 = €1.16).

·    16% of the issued shares in Atex by way of exercising the first option under the agreement between Firering and Atex dated 31 March 2021 for a total consideration of  c.€320,000.

·    As of 30 June 2022, the Company has paid an advance of €61,000 on account of the above acquisition of shares of the non-controlling interests.