GROUP STATEMENT OF COMPREHENSIVE INCOME

	Notes	Year to 29 December 2023 £	Year to 29 December 2022 £
Administrative expenses		(580,287)	(418,294)
Share based option charge		(59,758)	-
Listing costs		-	(606,575)
Realised loss on disposal of investments		-	(10,872)
Loss in fair value of investment		(6,376)	(5,314)
Impairment charge on exploration and evaluation assets	12	(448,904)	-
Operating loss	5	(1,095,325)	(1,041,055)
Finance expense	5	(3,837)	(2,411)
Loss before tax		(1,099,162)	(1,043,466)
Taxation	8	-	-
Loss for the period		(1,099,162)	(1,043,466)
Other comprehensive loss:
Foreign currency difference on translation of foreign operations		(27,035)	(3,891)
Total comprehensive loss for the year		(1,126,197)	(1,047,357)

 

The notes on page 51 to 83 form part of these financial statements.

 

All amounts are derived from continuing operations.

 

GROUP STATEMENT OF FINANCIAL POSITION

	Notes	29 December 2023 £	29 December 2022 £
Assets
Non-current assets
Property, plant and equipment	10	-	-
Exploration and evaluation assets	12	4,756,879	3,932,973
		4,756,879	3,932,973
Current assets
Current asset investment	11	1,798	8,174
Trade and other receivables	15	48,040	92,758
Cash and cash equivalents		199,992	1,817,706
		249,830	1,918,638
Total assets		5,006,709	5,851,611
Liabilities
Current liabilities
Trade and other payables	16	428,710	247,673
Deferred Share Consideration	12	-	36,265
Total liabilities		428,710	283,938
Net assets		4,577,999	5,567,673
Equity
Share capital	17	22,999,551	22,998,307
Share premium	17	31,845,128	31,810,107
Share based payment reserve		100,258	-
Merger reserve		1,824,000	1,824,000
Translation reserve		(27,035)	-
Retained earnings		(52,163,903)	(51,064,741)
Total equity		4,577,999	5,567,673

 

 

COMPANY STATEMENT OF FINANCIAL POSITION

As at 29 December 2023
	Notes	29 December 2023 £	29 December 2022 £
Assets
Non-current assets
Property, plant and equipment	10	-	-
Exploration and evaluation assets	12	637,639	704,730
Investment in subsidiaries	14	4,333,226	3,285,999
		4,970,865	3,990,729
Current assets
Current asset investment	11	1,798	8,174
Trade and other receivables	15	36,814	86,880
Cash and cash equivalents		39,953	1,769,719
		78,565	1,864,773
Total assets		5,049,430	5,855,502
Liabilities
Current liabilities
Trade and other payables	16	428,589	247,673
Deferred Share Consideration	12	-	36,265
Total liabilities		428,589	283,938
Net assets		4,620,841	5,571,564
Equity
Share capital	17	22,999,551	22,998,307
Share premium	17	31,845,128	31,810,107
Share based payment reserve		100,258	-
Merger reserve		1,824,000	1,824,000
Accumulated losses		(52,148,096)	(51,060,850)
Total equity		4,620,841	5,571,564

The loss for the year for the Company was £1,087,246 (2022: £1,043,466).

 

GROUP STATEMENT OF CASH FLOW

		Year to 29 December 2023 £	Year to 29 December 2022 £
Cash flows from operating activities
Loss before tax		(1,099,162)	(1,043,466)
Adjustments to reconcile net losses to cash utilised :
Depreciation of property, plant and equipment	10	-	2,050
Impairment charge	12	448,904	-
Share based payment charge		59,758	-
Listing costs paid in previous year	12	-	216,537
Loss on disposal of investment shares		-	10,872
Loss in fair value of investment at reporting date		6,376	5,314
Operating cash outflows before movements in working capital		(584,124)	(808,693)
Changes in:
Trade and other receivables		44,719	(3,270)
Trade and other payables		181,036	(194,286)
Net cash outflow from operating activities		(358,369)	(1,006,249)
Investing activities
Proceeds on disposal of investments	11	-	78,573
Exploration & Evaluation assets	12	(1,232,310)	(648,142)
Net cash outflow from investing activities:		(1,232,310)	(569,569)
Cash flows from financing activities
Proceeds from issue of shares, net of issue costs		-	3,380,544
Net cash inflow from financing activities		-	3,380,544
Net (decrease)/increase in cash and cash equivalents		(1,590,679)	1,804,726
Effect of foreign exchange rate changes		(27,035)	(3,891)
Cash and cash equivalents at beginning of period		1,817,706	16,871
Cash and cash equivalents at end of period		199,992	1,817,706

 

 

COMPANY STATEMENT OF CASH FLOW

		Year to 29 December 2023 £	Year to 29 December 2022 £
Cash flows from operating activities
Loss before tax		(1,087,246)	(1,043,466)
Adjustments to reconcile net losses to cash utilised :
Depreciation of property, plant and equipment	10	-	2,050
Impairment charge	12	448,904	-
Listing costs paid in previous year	12	-	216,537
Share based payment charge		59,758	-
Loss on disposal of investments		-	10,872
Loss in fair value of investment		6,376	5,314
Operating cash outflows before movements in working capital		(572,208)	(808,693)
Changes in:
Trade and other receivables		50,066	2,609
Trade and other payables		180,916	(194,286)
Net cash outflow from operating activities		(341,226)	(1,000,370)
Investing activities
Proceeds of sale of Investment shares		-	78,573
Investment in subsidiaries	14	(1,330,006)	(632,669)
Exploration & Evaluation assets	12	(58,534)	(73,230)
Net cash outflow from investing activities:		(1,388,540)	(627,326)
Cash flows from financing activities
Proceeds from issue of shares, net of issue costs		-	3,380,544
Net cash inflow from financing activities		-	3,380,544
Net (decrease)/increase in cash and cash equivalents		(1,729,766)	1,752,848
Cash and cash equivalents at beginning of period		1,769,719	16,871
Cash and cash equivalents at end of period		39,953	1,769,719

 

 

GROUP STATEMENT OF CHANGES IN EQUITY

 

	Share capital	Share premium	Share based Payment reserve	Merger reserve	Translation reserve	Retained earnings	Total equity
	£	£	£	£	£	£	£
As at 29 December 2021	22,929,743	25,027,278	-	1,824,000	-	(50,017,384)	(236,363)
Total comprehensive loss for the year	-	-	-	-	-	(1,047,357)	(1,047,357)
Total comprehensive loss for the year	-	-	-	-	-	(1,047,357)	(1,047,357)
Net proceeds from shares issued	30,773	3,349,771	-	-	-	-	3,380,544
Acquisition of subsidiaries	23,357	2,201,643	-	-	-	-	2,225,000
Loan notes converted into shares	8,366	671,134	-	-	-	-	679,500
Acquisition of Norwegian projects from EMX Scandinavia AB	6,068	560,281	-	-	-	-	566,349
As at 29 December 2022	22,998,307	31,810,107	-	1,824,000	-	(51,064,741)	5,567,673
Loss for the year	-	-	-	-	-	(1,099,162)	(1,099,162)
Other comprehensive income
Translation reserve	-	-	-		(27,035)	-	(27,035)
Total comprehensive loss for the year	-	-	-	-	(27,035)	(1,099,162)	(1,126,197)
Issue of shares to settle share deferred consideration (note 17)	1,244	35,021	-	-	-	-	36,265
Share based payment charge (note 17)	-	-	100,258	-	-	-	100,258
As at 29 December 2023	22,999,551	31,845,128	100,258	1,824,000	(27,035)	(52,163,903)	4,577,999
			=

 

Reserves Description and purpose

Share capital - amount subscribed for share capital at nominal value

Share premium - amounts subscribed for share capital in excess of nominal value

Merger reserve - amount arising from the issue of shares for non-cash consideration

Translation reserve - amounts arising on re-translating the net assets of overseas operations into the presentational currency

Retained earnings - cumulative net gains and losses recognised in the consolidated income statement

Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the statement of financial position date.

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY

 

	Share capital	Share premium	Share based payment reserve	Merger reserve	Retained earnings	Total equity
	£	£	£	£	£	£
As at 29 December 2021	22,929,743	25,027,278	-	1,824,000	(50,017,384)	(236,363)
Total comprehensive loss for the year	-	-	-	-	(1,043,466)	(1,043,466)
Total comprehensive loss for the year	-	-	-	-	(1,043,466)	(1,043,466)
Net proceeds from shares issued	30,773	3,349,771	-	-	-	3,380,544
Acquisition of subsidiaries	23,357	2,201,643	-	-	-	2,225,000
Loan notes converted into shares	8,366	671,134	-	-	-	679,500
Acquisition of Norwegian projects from EMX Scandinavia AB	6,068	560,281	-	-	-	566,349
As at 29 December 2022	22,998,307	31,810,107	-	1,824,000	(51,060,850)	5,571,564
Total comprehensive loss for the year	-	-	-	-	(1,087,246)	(1,087,246)
Other comprehensive income	-	-	-	-	-	-
Total comprehensive loss for the year	-	-	-	-	(1,087,246)	(1,087,246)
Issue of shares to settle Share deferred consideration (note 17)	1,244	35,021	-	-	-	36,265
Share based payment reserve (note 17)	-	-	100,258	-	-	100,258
As at 29 December 2022	22,999,551	31,845,128	100,258	1,824,000	(52,148,096)	4,620,841

 

Reserves Description and purpose

Share capital - amount subscribed for share capital at nominal value

Share premium - amounts subscribed for share capital in excess of nominal value

Merger reserve - amount arising from the issue of shares for non-cash consideration

Retained earnings - cumulative net gains and losses recognised in the consolidated income statement

Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the statement of financial position date.

 

NOTES TO THE FINANCIAL STATEMENTS

Year ended 29 December 2023

 

1.            GENERAL INFORMATION

 

Kendrick Resources PLC (the 'Company' or "Kendrick") is incorporated and domiciled in the United Kingdom. The address of the registered office is 7/8 Kendrick Mews, London SW7 3HG.

 

The Company's period being reported on in these accounts is for the year to 29 December 2023. The comparative period is for the year to 29 December 2022.

 

The Group's business is the exploration of nickel, vanadium and copper mineral resource projects in Scandinavia and it currently has projects in Norway, Sweden and Finland. The exploration and evaluation assets held in these countries is shown in note 12.

 

2.            ADOPTION OF NEW AND REVISED STANDARDS

 

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective from 1 January 2023, none of which have a material impact on these financial statements.

 

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the group has decided not to apply early.

 

The following amendments are effective for the period beginning 1 January 2024

• IAS 1 Presentation of Financial Statements (Amendment - Classification of Liabilities as Current or Non-Current);

 • IFRS 16 Leases (Amendment - Liability in a sale and leaseback); and

 • IAS 7 and IFRS 7 (Amendment - Supplier Finance Arrangements).

 

It is not expected that the amendments listed above, once adopted, will have a material impact on the financial statements.

 

The financial statements have been prepared in accordance with UK adopted International Accounting Standards ('IFRS') and those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.

 

The principal accounting policies adopted are set out below.

 

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

 

 

3.            SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

 

The financial statements are presented in Pounds Sterling ("£").

 

Going concern

The operational requirements of the Company comprise maintaining a Head Office in the UK with a Board of two executive Directors and three non-executive Directors, and one consultant for, amongst other things, determining and implementing strategy and managing operations.

 

The Group currently has no income and meets its working capital requirements through raising development finance. In common with many businesses engaged in exploration and evaluation activities prior to production and sale of minerals the Group will require additional funds and/or funding facilities in order to fully develop its business plan.

 

Ultimately the viability of the Group is dependent on future liquidity in the exploration period and this, in turn, depends on the company's ability to raise funds to provide additional working capital to finance its ongoing activities. Management has successfully raised money in the past, but there is no guarantee that adequate funds will be available when needed in the future.

 

As at 29 December 2023, the Group had net assets of £4.6m and cash and cash equivalents of £200k. An operating loss is expected in the year subsequent to the date of these financial statements and as a result the Group will need to raise funding to provide additional working capital to finance its ongoing activities.

 

On 22 April 2024 the Company announced it had entered into an unsecured convertible loan funding facility (the "Facility") for £500,000 with Sanderson Capital Partners Ltd (the "Lender"), a long term shareholder in the Company.  The Facility is convertible at 0.75 pence per ordinary share  ("Shares") and can be drawn down in 4 tranches of £125,000 each ("Loan Tranches"). The Facility is a standby facility as a potential additional source of working capital for the Group in a period when the funding market for junior exploration companies is subject to market volatility (see Note 22 for further details).

 

Based on its current reserves and the Board's assessment that the Group will be able to raise additional funds, as and when required, to meet its working capital and capital expenditure requirements, the Board have concluded that they have a reasonable expectation that the Group can continue in operational existence for the foreseeable future and at least for a period of 12 months from the date of approval of these financial statements.

 

For these reasons the financial statements have been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and discharge of liabilities in the normal course of business.

 

As there can be no guarantee that the required future funding can be raised in the necessary timeframe, a material uncertainty exists that may cast significant doubt on the Group's and Company's future ability to continue as a going concern.

 

This financial report does not include any adjustments relating to the recoverability and classification of recorded assets amounts or liabilities that might be necessary should the entity not continue as a going concern.

 

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

 

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet 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. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, 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.

 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

 

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated depreciation and any recognised impairment loss.

 

Depreciation and amortisation is charged so as to write off the cost or valuation of assets, other than land, over their estimated useful lives, using the straight-line method, on the following bases:

 

Office equipment and computers            25%

                               

The gain or loss arising on disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

 

Exploration and evaluation assets

Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves. Accumulated costs in relation to an abandoned area are written off in full in the year in which the decision to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are transferred to development assets and amortised over the life of the area according to the rate of depletion of the economically recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.

 

Investment in subsidiaries

In the Company's financial statements, investment in subsidiaries are stated at cost and reviewed for impairment if there are any indications that the carrying value may not be recoverable.

 

Financial instruments

Recognition of financial assets and financial liabilities

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

 

De-recognition of financial assets and financial liabilities

The Group derecognises a financial asset only when the contractual rights to cash flows from the asset expire; or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for the amount it has to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.  The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or expired.

 

Loans and receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost less any provision for impairment.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash with three months or less remaining to maturity and are subject to an insignificant risk of changes in value.

               

Impairment of financial assets

The Group assesses on a forward-looking basis the expected credit losses associated with its receivables carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade and other receivables, the Group applies the simplified approach permitted by IFRS 9, resulting in trade and other receivables recognised and carried at amortised cost less an allowance for any uncollectible amounts based on expected credit losses.

 

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

 

Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic resource will result, and that outflow can be reliably measured.

 

Share-based payments

The Group applies IFRS 2 Share-based Payment for all grants of equity instruments.

 

The Group issues equity-settled share-based payments to its employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest.

 

Fair value is measured using the Black Scholes model. The expected life used in the model is adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The inputs to the model include: the share price at the date of grant, exercise price expected volatility, risk free rate of interest.

 

Share capital

Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Company's ordinary shares are classified as equity instruments.

 

The Company considers its capital to be total equity. There have been no changes in what the Company considers to be capital since the previous period.

 

The Group is not subject to any externally imposed capital requirements.

 

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all entities, which are controlled by the Group. Control is achieved when the Company:

·    has the power over the investee;

·    is exposed, or has rights to variable return from its involvement with the investee; and

·    has the ability to use its power to affects its returns.   

 

The Company reassesses 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 listed above.

The results of subsidiaries are included in the consolidated financial statements from the effective date of acquisition to the effective date of disposal. Adjustments are made when necessary to the financial statements of subsidiaries to bring their accounting policies in line with those of the Group.

All intra-Group transactions, balances, income and expenses are eliminated in full on consolidation.

When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

·    the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

·    potential voting rights held by the Company, other vote holders or other parties;

·    rights arising from other contractual arrangements; and

·    any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Non-controlling interests in the net assets of consolidated subsidiaries are identified and recognised separately from the Group's interest therein and are recognised within equity. Losses of subsidiaries attributable to non-controlling interests are allocated to the non-controlling interest even if this results in a debit balance being recognised for non-controlling interest.

Transactions which result in changes in ownership, where the Group had control of the subsidiary, both before and after the transaction, are regarded as equity transactions and are recognised directly in the statement of changes in equity. The difference between the fair value of consideration paid or received and the movement in non-controlling interest for such transactions is recognised in equity attributable to the owners of the parent.

Where a subsidiary is disposed of and a non-controlling shareholding is retained, the remaining investment is measured to fair value with the adjustment to fair value recognised in profit or loss as part of the gain or loss on disposal of the controlling interest.

 

Foreign currency transactions and balances

(i) Functional and presentational currency

Items included in the Group's financial statements are measured using Pounds Sterling ("£"), which is the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in Pounds Sterling ("£"), which is the functional currency of the Company and is the Group's presentational currency.

 

The individual financial statements of each Group company are presented in the functional currency of the primary economic environment in which it operates.

 

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

 

Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date. All differences are taken to the income statement.

 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year. Exchange differences arising recognised in other comprehensive income and transferred to the Group's translation reserve within equity as 'Other reserves'. Upon disposal of foreign operations, such translation differences are derecognised as an income or as expenses in the year in which the operation is disposed of in other comprehensive income.

 

Geographical segments

A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment) or in providing products or services within a particular economic environment (geographical segment), which is subject to risk and rewards that are different from those of other segments. The internal management reporting used by the chief operating decision maker consists of one segment. Hence in the opinion of the directors, no separate disclosures are required under IFRS 8. The Group's revenue in the current and prior year is £Nil and consequently no geographical segment information regarding revenue has been disclosed. In respect of non-current assets the only  two geographical areas are Scandinavia and the UK of which the latter is £Nil.

 

 

4.            CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

 

In the application of the Group's accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, on in the period of the revision and future periods if the revision affects both current and future periods.

Critical accounting estimates and judgments are those that have a significant risk of causing material adjustment and are often applied to matters or outcomes that are inherently uncertain and subject to change. As such, management cautions that future events often vary from forecasts and expectations and that estimates routinely require adjustment.

Details of the Group's significant accounting judgements and critical accounting estimates are as follows:

Impairment of Exploration and evaluation assets

The recoverable amounts of individual exploration assets have been determined based on various factors including Independent Expert Reports, the Group's exploration activities, and commodity prices. It is reasonably possible that the assumption may change which may then impact on estimates and may then require a material adjustment to the carrying value of assets including intangible assets. The Group tests annually whether exploration assets have suffered any impairment, in accordance with the accounting policy.

 

Recoverability of Parent company investment in subsidiary undertakings

The carrying value of the Parent company's investment is ultimately dependent on the recoverability of the underlying assets i.e. the exploration and evaluation assets which are reviewed for indicators of impairment on an annual basis as noted above. An impairment in the exploration and evaluation assets may then require an adjustment to the carrying value of the investment in the subsidiary companies.

 

Business Combination

In line with IFRS3, the Directors have applied the concentration test and determined that the fair value of the gross assets of EV Metals AB comprise its exploration licences and that the acquisition of EV Metals AB should be accounted for as an asset acquisition and not a business combination. The Directors have assessed that the acquired company is not a business as it does not generate outputs and does not have a substantive system  to generate outputs or an organised workforce to perform this process.

 

Going Concern

The Directors have considered the going concern basis of preperation and as per note 3 no adjustments have been made in these financial statements which are prepared on a going concern basis.

 

Contingent consideration

The amount of contingent consideration to be paid is based on the occurrence of future events, such as the achievement of expected and estimated project milestones such as a positive feasibility study or a decision to mine. Accordingly, the estimate of fair value contains uncertainties as it involves judgment about the likelihood and timing of achieving these milestones and the period in which they may be achieved as well as the discount rate used. Where a contingent consideration milestone in relation to an exploration project is uncertain and may only occur if at all in several years then the Company will disclose the contingent liability but not provide for it in the financial statements. Changes in fair value of the contingent consideration obligation result from changes to the assumptions used to estimate the probability of success for each milestone, the anticipated timing of achieving the milestones and the discount period and rate to be applied. A change in any of these assumptions could produce a different fair value, which could have a material impact on the results from operations.

 

5.            OPERATING LOSS

The operating loss has been arrived at after charging:

	2023	2022
	£	£
Depreciation of property, plant and equipment (note 10)	-	2,050
Staff costs (note 7)	124,000	97,015
Loss on disposal of investments	-	10,872
Loss in fair value of investment	6,376	5,313
Listing costs	-	606,575
Finance charge	3,837	2,411

6.            AUDITORS' REMUNERATION

 

                The remuneration of the auditors can be analysed as follows:

 

	2023	2022
	£	£
Fees payable to the company's auditor for the audit of the company's financial statements	55,000	37,000
	55,000	37,000

 

7.            STAFF COSTS

 

	2023	2022
	Number	Number
Directors	4	4
Consultants	1	1
The average monthly number of employees	5	5

 

Their aggregate remuneration comprised:-	£	£
Fees	124,000	97,015
	124,000	97,015

 

Included within staff costs £124,000 (2022: £97,015) relates to amounts in respect of Directors. The highest paid director's emoluments was £48,000 (2022: £51,000).

 

8.            TAXATION

 

No liability to corporation tax arose for the year ended 29 December 2023 and year ended 29 December 2022, as a result of underlying losses brought forward.

 

Reconciliation of effective tax rate:

	2023	2022
	£	£
Loss before tax	(1,099,162)	(1,043,466)
Tax credit at the standard rate of tax in the UK	208,841	198,259
Tax effect of non-deductible expenses	(97,216)	(390)
Deferred tax not provided	(111,625)	(197,869)
Tax for the period	-	-

 

 

The standard rate of corporation tax in the UK applied during the year was 19% (2022: 19%).

 

At 29 December 2023, the Company are carrying forward estimated tax losses of £7.2m (2022: £6.6m) in respect of various activities over the years. No deferred tax asset was recognised in respect to these accumulated tax losses as there is insufficient evidence that it is probable that the amount will be recovered in future years.

 

 

 

9.            LOSS PER SHARE

               

	29 December 2023	29 December 2022
(Loss) after tax for the purposes of earnings per share attributable to equity shareholders	£(1,099,162)	£(1,043,466)
Weighted average number of shares	242,565,645	153,882,205
Basic (loss) per ordinary share	(0.45) p	(0.68) p
Diluted (loss) per ordinary share	(0.45) p	(0.68) p

 

The use of the weighted average number of shares in issue in the period recognises the variations in the number of shares throughout the period. IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share or increase the loss per share. There would be no dilutive impact were the share options to be exercised.

 

10.          PROPERTY PLANT AND EQUIPMENT

 

	Group & Company
	Office equipment and computer £	Total   £
COMPANY
Cost
At 29 December 2021	60,587	60,587
Additions	-	-
At 29 December 2022	60,587	60,587
Additions	-	-
At 29 December 2023	60,587	60,587
Accumulated depreciation
At 29 December 2021	(58,537)	(58,537)
Charge for the period	(2,050)	(2,050)
At 29 December 2022	(60,587)	(60,587)
Charge for the period	-	-
At 29 December 2023	(60,587)	(60,587)
Carrying amount
At 29 December 2023	-	-
At 29 December 2022	-	-

11.          CURRENT ASSET INVESTMENT

 

	Group & Company
	2023	2022
	£	£
Balance as at 29 December	8,174	102,932
Disposals	-	(89,445)
Fair value through profit and loss	(6,376)	(5,313)
Balance as at 29 December	1,798	8,174

                The investment represents the holding of 8,174,387 shares in Bezant Resources Plc, which were held at 29 December 2023.

 

12.          EXPLORATION AND EVALUATION ASSETS

Exploration and Evaluation Assets - Group
	Swedish Projects	Finnish Projects	Norwegian Projects	Total
	£	£	£	£
Balance 29 December 2021	-	-	-	-
Transfer from Investment in Nordic Projects & Related Transactions Costs *	165,754	36,169	109,225	311,148
Additions in Year	273,556	50,572	171,481	495,609
Northern X Group Acquisition (Note 13)
Share consideration	1,357,473	703,990	163,537	2,225,000
Cash Consideration (2022 & 2021) *	136,739	70,913	16,473	224,125
Acquisition of Norwegian Projects (note 17) Share consideration	-	-	566,349	566,349
Cash Consideration EMX Option	-	-	68,291	68,291
Cash Consideration Caledonian Minerals	-	-	6,186	6,186
EMX Deferred Share Consideration	-	-	36,265	36,265
Balance 29 December 2022	1,933,522	861,644	1,137,807	3,932,973
Additions in year	635,900	588	590,290	1,226,778
Acquisition of EV Metals (Note 13)	46,032	-	-	46,032
Impairment Provision **	(56,033)	(150,026)	(242,845)	(448,904)
Balance 29 December 2023	2,559,421	712,206	1,485,252	4,756,879

 

*  In 2021 the capitalised Nordic Projects & Related Transaction costs were £673,755. On the acquisition of the Northern X Group in 2022 £457,218 of these costs were transferred to Group Exploration and Evaluation assets (£311,148 as Projects & Related Transaction Costs and £146,070 of cash consideration paid in 2021 included in the Cash Consideration (2022 & 2021) of £224,125) the balance of £216,537 was included in the £606,575 of listing & transaction costs charged in the 2022 Income Statement.

** The impairment provision relates to the Kramsta 100 licence in Sweden, the Karhujupukka North & Karhujupukka North licences in Finland and the Hosanger & Sigdal licences in Norway that it was decided not to renew as part of the Group's ongoing licence management as they were assessed to have relatively low prospectivity compared to the Group's remaining licences.

 

Exploration and Evaluation Assets - Company
	Norwegian Projects	Total
Balance at 29 December 2021	£                               -	£                               -
Transfer from Investment in Nordic Projects	28,886	28,886
Movement in Year	73,230	73,230
EMX Deferred Consideration	36,265	36,265
Share consideration re Acquisition of Norwegian projects (note 17)	566,349	566,349
Balance 29 December 2022	704,730	704,730
Additions	58,534                               58,534	58,534
Impairment Provision *	(125,625)	(125,625)
Balance 29 December 2023	637,639	637,639

 

* The impairment provision relates to the Hosanger and Sigdal licences in Norway where it was decided not to renew as part of the Group's ongoing licence management as they were assessed to have relatively low prospectivity compared to the Group's remaining licences.

The investment in the Nordic Projects represented the amounts paid in taking up and extending the option to acquire various Scandinavian assets described below together with costs incurred in running the projects prior to the proposed acquisition including the costs associated with the proposed listing.

 

The Nordic Projects comprise vanadium projects in Sweden and Finland which were acquired from Pursuit in May 2021 with aggregated Inferred Mineral Resources of vanadium ore, estimated at approximately 160 million tonnes. 

 

Summary of Projects:  The Projects are a portfolio of early to advanced stage exploration projects covering a combined area of 658 km2 in Scandinavia. The most advanced of these Projects are the Airijoki and Koitelainen vanadium projects in Sweden and Finland respectively and the Espedalen nickel copper project in Norway. Other projects include:

 

·    Sweden - the Njuggtraskliden and Mjovattnet exploration ("Swedish Nickel Projects")

·    Sweden - the Kullberget, Simesvallen and Sumåssjön exploration projects in Sweden (collectively the "Central Sweden Project")

The Airijoki vanadium copper project in Sweden comprising seven contiguous exploration permits covering 39.41 km²  and is supported by an Inferred Mineral Resource comprising 44.3 Mt at an in-situ grade of 0.4% V₂O₅, containing 5.9 Mt of magnetite averaging 1.7% V₂O₅ (in magnetite concentrate) for 100,800 t of contained V₂O₅ based on a 13.3% mass recovery of magnetite concentrate and a 0.7% V₂O₅ cut-off grade, on a 100% equity basis (and net attributable basis).

 

The Koitelainen vanadium copper project in Finland comprising a single granted exploration licence covering 13.72 km2 with an Inferred Mineral Resource has been defined at the Koitelainen Vosa Prospect comprising 116.4Mt, containing 5.8 million tonnes of magnetite @ 2.3% V2O5 (in magnetite concentrate), for 131,000 tonnes of V2O5 based on 5.0% Mass Recovery of magnetite concentrate and a cut-off of 0.5% V.  The Inferred Mineral Resource was estimated in accordance with JORC (2012), utilising data from 3,784m of drilling from 27 historical drill holes.

 

The Espedalen nickel copper project in Norway comprising 16 contiguous exploration permits covering a combined area of 139.89 km2 and currently contains the following two nickel deposits with associated Mineral Resource estimates together with other prospects and was the subject of a successful drill programme during 2023:

·    Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co and classified as Inferred in accordance with JORC (2012)

·    Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and classified as Inferred in accordance with JORC (2012)

On 13 May 2022 the Company exercised its option to conditionally acquire the Espedalen, Hosanger, and Sigdal nickel-copper-cobalt exploration projects in Norway (the "Norwegian Projects") (the "Norwegian Projects Acquisition") from EMX Scandinavia AB (previously named Eurasian Minerals Sweden AB) ("EMX") by the issue of 20,226,757 new ordinary shares in the Company to EMX or its nominee, 50% of these shares shall be subject to a three month voluntary escrow and the balance of 50% subject to a six-month voluntary escrow. Kendrick has also made a payment of US$81,949 to EMX. This payment was to meet a shortfall of this amount in the exploration expenditure to be incurred during the option period.

 

Deferred Share consideration due to EMX: On or before 27 April 2023, the Company had to issue to EMX or its nominee the number of shares which is the lower of i) 9.9% of the Company's then issued share capital and ii) the number of shares whose value based on the then 5-day VWAP equals 20,000,000 of the shares issued at closing of the acquisition (the "Established Value") divided by the 5 day VWAP at the date of issue of these shares.  On 24 April 2023 the Company issued 4,144,395 new Ordinary shares at 0.875 pence each to settle this deferred consideration for £36,265, (the "Deferred Share Consideration") . As the liability to pay the Deferred Share Consideration arose during the period a provision of £36,265 was made for this liability with the amount being recognised an exploration and evaluation asset.

 

The Acquisition was conditional upon the Norwegian Directorate for Mineral Administration approving the transfer of the licences to a wholly owned subsidiary of Kendrick and this process was completed and confirmed on 12 August 2022 and the Company applied for the 20,226,757 new ordinary shares to be admitted to trading on the Standard Segment of the London Stock Exchange on 17 August 2022 (see note 17).

 

The Norwegian Projects acquired comprised the Espedalen Project consisting of 16 contiguous exploration permits covering a combined area of 139.89 km2 currently contains two nickel deposits and the Sigdal and Hosanger projects which at the year end the Group decided not to renew in light of the Group's exploration commitment in relation to the Swedish nickel projects and their low prospectivity compared to the Group's remaining projects. This decision did not affect the Group's Espedalen Project, which has always been the Group's principal project in Norway and currently contains the following two nickel deposits:

·    Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co and classified as Inferred in accordance with JORC (2012)

·    Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and classified as Inferred in accordance with JORC (2012).

 

Further commitments under Norwegian Projects Acquisition

·    beginning on 13 May 2025 and ceasing on the date upon which the Group commissions a Pre-Feasibility Study on any one of the Projects: the Group has committed to one thousand meter drilling for the Espedalen Project ("Drilling Commitment"); and

·    upon attainment of each development milestone ((milestone 1) being the completion of a preliminary economic assessment of mineral potential and (milestone 2) the completion of a feasibility study), the Company shall pay EMX the sum of USD$500,000. If milestone 1 is not met but milestone 2 is met then an aggregate of USD$1,000,000, will become due ("Milestone Payments").

 

Royalty Agreement: At the closing of the Norwegian Projects Acquisition the Company entered into a royalty agreement under which a 3% net smelter royalty is payable to EMX on commercial production from any of the three Norwegian Projects ("Production Royalty"). A 1% interest in this royalty may be bought back in stages for a total cash consideration of US$1,000,000 on or before the fifth anniversary of the closing of the Acquisition.

 

No provision has been made in these accounts for the further commitments under the Norwegian Projects Acquisition above in relation to;

 

a)    the Drilling Commitment as the Group's Projects are in the exploration phase and therefore it is in the normal course to on an ongoing basis to review projects and continue work on projects that remain prospective and it can take several years to get to the stage of commissioning a Pre-Feasibility study therefore there is no certainty as to the period over which the Drilling Commitment would have to be met and whether or not it would be met by the Group's ongoing exploration activities on the Norwegian Projects;

 

b)    Milestone Payments as the Norwegian Projects are in the exploration phase and therefore it is not certain that an economic assessment of mineral potential or a feasibility study will be completed in the next few years, or if at all; or

 

c)    Production Royalty as the Norwegian Projects are in the exploration phase and therefore it is not certain that they will become mines producing ore on which a royalty is due in the next several years, or if at all.

 

13.          ACQUISITIONS

 

Acquisition of Northern X Group

On 6 May 2022 the Company completed the acquisition of;

 

(a)  100% of Northern X Finland Oy ("Northern X Finland"), which owns in Finland the Koitelainen vanadium projects which hosts a defined Mineral Resource as defined by the JORC Code (2012) and the Karhujupukka vanadium-magnetite exploration project ("Finnish Projects"); and

 

(b)    100% of Northern X Scandinavia AB ("Northern X Scandinavia") which owns in Sweden the Airijoki and vanadium project (the "Airijoki Project") which hosts a defined Mineral Resource as defined by the JORC Code (2012) and the Kramsta, Kullberget, Simesvallen and Sumåssjön exploration projects in Sweden (collectively known as the "Central Sweden Projects") (the Airijoki Project and the Central Sweden Projects are collectively the "Swedish Projects").

                (Collectively the Northern X Group)

 

The acquisition price was as follows:

 

Consideration		£	£
Equity consideration Ordinary shares issued			2,225,000
Cash consideration			224,126
Total consideration			2,449,126
Fair value of assets acquired
Exploration assets		2,420,245
Receivables		5,879
Cash and cash equivalents		23,002
			2,449,126
			-

 

As part of the purchase agreement with Pursuit there will be additional deferred contingent consideration based on two accretive value milestones being achieved;

 

a)    Milestone One which triggers a A$250,000 (approx. £136,000) payment in cash, is the completion by the Group (or any successor or assignee) of a Feasibility Study, as defined by the JORC Code (2012), on any individual project area in the Nordic Projects, demonstrating an internal rate of return of not less than 25%; and

 

b)    Milestone Two which triggers a A$500,000 (approx. £272,000) payment in cash is a decision to mine being made by the Group (or any successor or assignee) in respect of any project area in the Nordic Projects.

 

No provision has been made in these accounts for the additional deferred contingent consideration referred to above as the Group's Projects are in the exploration phase and therefore it is not certain that a Feasibility Study will be completed or a decision to mine be made in the next few years, or if at all.

 

Acquisition of Caledonian Minerals AS

On 13 May 2022 to facilitate the smooth transfer of the Norwegian Project Licences to the Company after the exercise of the EMX Option the Company acquired Caledonian Minerals AS for £6,186 a Norwegian company established by EMX as a clean special purpose vehicle on 8 November 2021 which at the date of acquisition had not carried out any business and had no assets or liabilities.

               

 

Consideration		£	£
Cash consideration			6,186
Total consideration			6,186
Fair value of assets acquired
Exploration assets		6,186
			6,186
			-

Acquisition of EV Metals AB

On 4 August 2023 the Company signed a Share Sale and Purchase Agreement with EMX Royalty Corporation (EMX) to acquire 100% of EV Metals AB a Swedish company that owns the Njuggtraskliden and Mjovattnet exploration licences (the "Swedish Nickel Projects") hosting drill-defined magmatic nickel-copper-cobalt-platinum group metal mineralisation along the Swedish "Nickel Line". The consideration paid to acquire EV Metals AB was SEK110,780 (approx. £8,200) and the issue of 15 Million 5 year options to EMX to acquire ordinary shares in the Company at 1.3 pence per Kendrick Share.

 

Consideration		£	£
Cash consideration			8,166
Fair value of share options issued			40,500
Total consideration			48,666
Cost of assets acquired
Exploration assets		46,032
Receivables		2,630
Cash and cash equivalents		4
			48,666
			-

 

Further commitments in relation to the Swedish Nickel Projects 

·    On or before 13 January 2024, the Company has to pay an annual advanced royalty of US$30,000 per project to EMX which increases by US$5,000 annually per Project ceasing upon the Commencement of Commercial Production ("Advance Royalty");

 

·    On or before 13 May 2024 the Company has committed to one thousand meter drilling for each of the Swedish Nickel Projects and thereafter annually ceasing for a project on the date upon which the Company commissions a Pre-Feasibility Study on the project ("Drilling Commitment").

 

Royalty Agreement: At the closing of the Swedish Nickel Projects Acquisition the Company entered into a royalty agreement under which a 3% net smelter royalty is payable to EMX on commercial production from any of the Swedish Nickel Projects ("Production Royalty"). A 1% interest in this royalty may be bought back in stages for a total cash consideration of US$1,000,000 on or before the fifth anniversary of the closing of the Acquisition.

 

No liability has been recognised in these financial statements for the further commitments under the Swedish Nickel Projects Acquisition above in relation to;

 

·    the Drilling Commitment as the Group's Projects are in the exploration phase and therefore it is in the normal course to on an ongoing basis to review projects and continue work on projects that remain prospective and it can take several years to get to the stage of commissioning a Pre-Feasibility study therefore there is no certainty as to the period over which the Drilling Commitment would have to be met and whether or not it would be met by the Group's ongoing exploration activities on the Norwegian Projects; and

 

·    Production Royalty as the Swedish Nickel Projects are in the exploration phase and therefore it is not certain that they will become mines producing ore on which a royalty is due in the next several years, or if at all.

 

 

14.          INVESTMENT IN SUBSIDIARIES

		Loans to Subsidiaries
	Company	Northern X	Northern X		Caledonian	EV Metals AB	Total
	Investment	Scandinavia	Finland	Minerals			Investment
	in Subsidiaries	AB	OY	AS			in Subsidiaries
	£	£	£	£		£	£
Balance 29 December 2021	-	-	-	-		-	-
Acquisition of Northern X Group	2,449,126	-	-	-		-	2,449,126
Acquisition of Caledonian Minerals AS	6,186	-	-	-		-	6,186
Loans to Subsidiaries	-	497,064	86,741	246,882		-	830,687
Balance 29 December 2022	2,455,312	497,064	86,741	246,882		-	3,285,999
Acquisition of EV Metals	48,666	-	-	-		-	48,666
Loans to Subsidiaries	-	803,509	1,084	517,008		239	1,321,840
Movement in the Year	48,666	803,509	1,084	517,008		239	1,370,506
Impairment Provision *	(152,145)	-	(72,534)	(98,600)		-	(323,279)
Balance 29 December 2023	2,351,833	1,300,573	15,291	665,290		239	4,333,226

               

* The impairment provision relates to the Kramsta 100 licence in Sweden, the Karhujupukka North & Karhujupukka North licences in Finland and the Hosanger & Sigdal licences in Norway that it was decided not to renew as part of the Company's ongoing licence management as they were assessed to have relatively low prospectivity compared to the Company's remaining licences.

 

In 2021 the capitalised Nordic Projects & Related Transactions costs were £673,755. On the acquisition of the Northern X Group £428,332 of these costs were transferred to the Company's investment in and loans to subsidiaries and on the acquisition of the Norwegian Assets £28,886 was transferred to the Company's exploration and evaluation asset in relation to the Norwegian projects  

 

To facilitate the smooth transfer of the Norwegian Project Licences the Company as per note 13 for £6,186 acquired Caledonian Minerals AS a Norwegian company established by EMX as a clean special purpose vehicle on 13 May 2022 which at that date had not carried out any business and had no assets of liabilities. 

 

Investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid less impairment.

 

The Company conducted an impairment review under IFRS 9 of the loans made to subsidiaries and determined that as their recoverability is supported by the exploration licences owned by the subsidiaries that i) loans made to subsidiaries related to exploration licences that have been relinquished should be assessed as stage 3 loans and ii) that loans made to subsidiaries related to retained exploration licences should be assessed as stage 1 loans with no provision against their carrying value.

 

Accordingly an impairment provision of £323,279 was made against the Company's loans to subsidiaries assessed as stage 3. The Company is satisfied that having made the provision of £323,279 the carrying value of the Company's investment in Subsidiaries of £4,333,226 (2022:£3,285,999) is reasonable and no further impairment is necessary.

 

Principal Subsidiaries (in 2022 and 2023 unless indicated to the contrary)

Name & registered office address	Country of incorporation and residence	Nature of business	Company's Proportion of equity
Northern X Scandinavia AB  Hellstrom Advokatbyra KB, Box 7305, 103 90 Stockholm  Sweden	Sweden	Base Metals Exploration	100%
Northern X Finland Oy C/o Millar Ab, Storgatan 51, 972 31 Luleå Sweden, Finnish business identity code 2892740-6	Finland	Base Metals Exploration	100%
Caledonian Minerals AS c/o IM Ruud Regnskap AS, Smalgangen 3, 0188 Oslo, Norway (acquired 13 May 22)	Norway	Base Metals Exploration	100%
EV Metals AB c/o Nordfors Consulting AB, Box 528, 101 30 Stockholm (acquired 4 August 23)	Sweden	Base Metals Exploration	100%

 

15.          TRADE AND OTHER RECEIVABLES

 

			Group	Group		Company	Company
			2023	2022		2023	2022
			£	£		£	£
Vat receivable			9,099	76,589		8,624	76,590
Prepayments			26,190	8,290		26,190	8,290
Other debtors			12,751	7,879		2,000	2,000
			48,040	92,758		36,814	86,880

The fair value of trade and other receivables is not significantly different from the carrying value and none of the balances are past due.

 

 

16.          TRADE AND OTHER PAYABLES

 

			Group	Group	Company	Company
			2023	2022	2023	2022
			£	£	£	£
Trade and other payables			238,704	169,173	238,704	169,173
Amount owed to directors			77,819	41,500	77,819	41,500
Accruals			108,534	37,000	108,534	37,000
Other payables			3,653	-	3,532	-
			428,710	247,673	428,589	247,673

 

17.          SHARE CAPITAL AND SHARE PREMIUM

 

			2023			2022
Issued and fully paid equity share capital		Number		£	Number		£
Ordinary shares of £0.0003 each		243,882,767		73,165	239,738,373		71,921
Deferred shares of £0.00999 each		335,710,863		3,353,752	335,710,863		3,353,752
Deferred shares of £0.009 each		1,346,853,817		12,121,684	1,346,853,817		12,121,684
Deferred shares of £0.01 each		19,579,925		195,799	19,579,925		195,799
Deferred shares of £0.04 each		181,378,766		7,255,151	181,378,766		7,255,151
				22,999,551			22,998,307

 

Group & Company	Number of Ordinary shares	Share capital	Share Premium
		£	£
As at 1 January 2022	11,190,362	3,357	25,027,278
Shares issued from placing on admission	92,857,143	27,857	3,222,143
Shares issued on acquisition on subsidiaries	77,857,142	23,357	2,201,643
Conversion of loans and share subscriptions	27,885,714	8,366	671,134
Advisers and director's fees settled by shares	9,721,254	2,916	337,327
Shares issued on acquisition of the Norwegian projects	20,226,757	6,068	560,281
Total Shares issued during the year	228,548,010	68,564	6,992,528
Shares issue costs	-	-	(209,699)
As at 29 December 2022	239,738,372	71,921	31,810,107
Shares issued on acquisition of the Norwegian projects	4,144,395	1,244	35,021
As at 29 December 2023	243,882,767	73,165	31,845,128

 

 

On 24 April 2023 the Company issued 4,144,395 ordinary shares to settle the share consideration, which was due to be issued on or before 27 April 2023 in relation to the Company's acquisition of the Espedalen, Hosanger, and Sigdal nickel-copper-cobalt exploration projects in Norway from EMX Scandinavia AB. 50% of these shares are subject to a three-month voluntary escrow and the balance of 50% subject to a six-month voluntary escrow. 3,683,906 of the new ordinary shares will be issued to EMX Scandinavia AB which will increase the combined shareholding of EMX Scandinavia AB and EMX Royalty Corporation to 21,663,284 shares representing 8.9% of the enlarged share capital on the Company.

At the Annual General Meeting held on 4 February 2021, shareholders approved that the 335,710,863 Existing Ordinary Shares in issue be subdivided each into one new ordinary share of £0.00001 ("New Ordinary Share") and one deferred share of £0.00999 ("2020 Deferred Share) in the capital of the Company. The New Ordinary Shares carry the same rights as attached to the Existing Ordinary Shares (save for the reduction in their nominal value). The 2020 Deferred Shares have no voting rights and have no rights as to dividends and only very limited rights on a return of capital. They will not be admitted to trading or listed on any stock exchange and will not be freely transferable. The holders of the 2020 Deferred Shares are not entitled to any further right of participation in the assets of the Company. As such, the 2020 Deferred Shares effectively have no value.

 

At the Annual General Meeting held on 25 October 2021, shareholders approved an ordinary resolution that for every thirty (30) issued and unissued ordinary share of £0.00001 each in the share capital of the Company ("Existing Shares") be consolidated into one (1) ordinary share of £0.0003 each ("New Shares") such New Shares having the same rights and being subject to the same restrictions, save as to nominal value, as the Existing Shares.

 

The deferred shares of £0.01 each and £0.009 each confer no rights to vote at a general meeting of the Company or to a dividend. On a winding-up the holders of the deferred shares are only entitled to the paid-up value of the shares after the repayment of the capital paid on the ordinary shares and £5,000,000 on each ordinary share.

 

The deferred shares of £0.04 each have no rights to vote or to participate in dividends and carry limited rights on return of capital. No shares were issued during the year.

 

At Admission the warrants in the table below over ordinary shares in the issued share capital of the Company were issued and at the period end had not been exercised.

	Number of Warrants	Exercise price (p)	Expiry
Fundraising Warrants	92,857,143	6.0	6 May 2025
Broker Warrants	4,642,856	3.5	6 May 2025
Convertible Note Warrants	17,885,714	3.5	6 Nov 2023
Consultant Warrants	4,375,943	3.5	6 May 2025
	119,761,656

 

A warrant reserve was not created in relation to the warrants as they were all issued in relation to raising funds for the Company's Listing in May 2022.

 

18.          SHARE OPTIONS

 

A new Share Option Scheme for the directors, senior management, consultants and employees was approved at the AGM on 4 February 2021, as outlined in the Directors Report.

 

On 2 February 2023 the Company issued in aggregate, 22,550,000 options over ordinary shares of £0.0003 par value in the capital of the Company ("Ordinary Shares") have been granted fully vested pursuant to the Share Option Scheme (the "Options"). Of the 22,550,000 Options, 13,750,000 have been awarded to directors of the Company, as detailed further below and the balance of 8,800,000 to other eligible participants. The Company has not previously issued any Options pursuant to the Share Option Plan.

 

 

Directors	No. of Options
Colin Bird Executive Chairman	6,000,000
Martyn Churchouse	5,000,000
Alex Borrelli	1,000,000
Evan Kirby	1,000,000
Kjeld Thygesen	750,000
Total Directors	13,750,000

 

All the Options have an exercise price of 3.5 pence per Ordinary Share and vested on issue. To incentivise and retain directors, officers, consultants and employees critical to enhancing the future market value of the Company. The options expire on 3 February 2031 being the date one day prior to the tenth anniversary of the AGM at which the Share Option Plan was approved. The Options can be exercised any time after vesting and prior to their scheduled expiry and must be exercised within 6 months of an option holder leaving the Company or within 12 months of the death of an option holder. The Company's mid-market closing share price on 2 February 2023, being the latest practicable date prior to the issue of the options, was 0.93 pence.

 

As a result of this the fair value of the share options was determined at the date of the grant using the Black Scholes model, using the following inputs:

Share price at the date of issue                                                                 0.93p

Strike price                                                                                                         3.5p

Volatility                                                                                                              50%

Expected life                                                                                                      2,920 days (8 years)

Risk free rate                                                                                                     4%

 

 

The resultant fair value of the share options as at 29 March 2023 was determined to be £59,758. The share-based payment charge for these options was taken in its entirety in the amount of £59,758 in the year to 29 December 2023 and has been taken to the share-based payment reserve.

 

As detailed in note 13 in addition to the consideration paid to acquire EV Metals AB on 7 August 2023, the Company issued 15 million 5 year options to EMX to acquire ordinary shares in the Company at 1.3 pence per Kendrick Share. The Options can be exercised any time after vesting and prior to their scheduled expiry and the Company's mid-market closing share price on 4 August 2023, being the latest practicable date prior to the issue of the options, was 0.775 pence.

 

As a result of this the fair value of the share options was determined at the date of the grant using the Black Scholes model, using the following inputs:

 

Share price at the date of issue                                                 0.775p

Strike price                                                                                                         1.3p

Volatility                                                                                                              50%

Expected life                                                                                                      1,825 days (5 years)

Risk free rate                                                                                                     5%

 

The resultant fair value of the options applicable to the year to 29 December 2023 was determined to be £40,500 and the full option value was taken in the year of issue as all the options are fully vested and this amount was incorporated into the acquisition cost of EV Metals and has been taken to the share-based payment reserve.

 

19.          FINANCIAL INSTRUMENTS

 

Capital risk management

The Company manages its capital to ensure that it will be able to continue as a going concern, while maximising the return to shareholders.

 

The capital resources of the Company comprises issued capital, reserves and retained earnings as disclosed in the Statement of Changes in Equity. The Company's primary objective is to provide a return to its equity shareholders through capital growth. Going forward the Company will seek to maintain a yearly ratio that balances risks and returns of an acceptable level and also to maintain a sufficient funding base to the Company to meet its working capital and strategic investment needs.

 

Categories of financial instruments

	2023	2022
	£	£
Financial assets
Current asset investment	1,798	8,174
Cash and cash equivalents	199,992	1,817,706
Other receivables	48,039	92,758
	249,829	1,918,638
Financial liabilities classified as held at amortised cost
Trade and other payables	238,704	169,173
	238,704	169,173

All financial assets are held at amortised costs except current asset investments as detailed below.

 

Fair value of financial assets and liabilities

Fair value is the amount at which a financial instrument could be exchanged in an arm's length transaction between informed and willing parties, other than a forced or liquidation sale and excludes accrued interest. Where available, market values have been used to determine fair values. The current asset investment is Level 1 in the fair value hierarchy and is held at fair value.

 

Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation technique:

 

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

 

Management assessed that the fair values of current asset investment, cash and short-term deposits, other receivables, trade and other payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

 

Financial risk management objectives

Management provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risks reports which analyse exposures by degree and magnitude of risks. These risks include foreign currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

 

As the Group has no committed borrowings, the Group is not exposed to any risks associated with fluctuations in interest rates on loans. Fluctuation in interest rates applied to cash balances held at the balance sheet date would have minimal impact on the Group.

 

Foreign exchange risk and foreign currency risk management

Foreign currency exposures are monitored on a monthly basis. Funds are transferred between the Sterling and US Dollar accounts in order to minimise foreign exchange risk. The Group holds the majority of its funds in Sterling.

 

The carrying amounts of the Group's foreign currency denominated financial assets and monetary liabilities at the reporting date are as follows:

 

		Financial liabilities		Financial assets
		2023	2022		2023	2022
		£	£		£	£
	US Dollars	16	-		19	389
	Swedish Krona	113,579	133,836		160,050	-
	Euros	-	4,617		-	-
	Norwegian Krona	52,534	-		-	-

 

Credit risk management

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. The Group does not have any significant credit risk exposure on trade receivables. The Group makes allowances for impairment of receivables where there is an identified event which, based on previous experience, is evidence of a reduction in the recoverability of cash flows. The directors consider the foreign exchange risk exposure is limited.

 

The credit risk on liquid funds (cash) is considered to be limited because the counterparties are financial institutions with high credit ratings assigned by international credit-rating agencies.

 

The carrying amount of financial assets recorded in the financial statements represents the Company's maximum exposure to credit risk.

 

Liquidity risk management

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Management monitor forecasts of the Company's liquidity reserve, comprising cash and cash equivalent, on the basis of expected cash flow. At 29 December 2023, the Group held cash and cash equivalent of £199,992 (2022: £1,817,706) and the directors assess the liquidity risk as part of their going concern assessment (see note 3).

 

The maturity of the Company's financial liabilities at the statement of financial position date, based on the contracted undiscounted payments as disclosed in note 14, falls within one year and payable on demand. The Company aim to maintain appropriate cash balances in order to meet its liabilities as they fall due.

 

Maturity analysis

Group 2023		On	In	Between 1 and 6	Between 6 and 12	Between 1 and 3
	Total	demand	1 month	months	months	years
	£	£	£	£	£	£
Trade and other payables	428,710	-	82,971	345,739	-	-
Group
2022		On	In	Between 1 and 6	Between 6 and 12	Between 1 and 3
	Total	demand	1 month	months	months	years
	£	£	£	£	£	£
Trade and other payables	247,673	-	125,836	121,827	-	-

 

 

20.          RELATED PARTY TRANSACTIONS

 

Remuneration of key management personnel

The key management personnel of the Company are considered to be the Directors. Details of their remuneration are covered in note 7.

 

The shareholdings of the Directors in the issued share capital of the Company was as follows:

 

	29 December 2023		29 December 2022
Director	Number of Ordinary Shares	Percentage of issued ordinary share capital	Number of Ordinary Shares	Percentage of issued ordinary share capital
Colin Bird*	45,069,227	18.48%	45,069,227	18.80%
Kjeld Thygesen	2,142,857	0.88%	2,142,857	0.89%
Alex Borrelli	82,777	0.03%	82,777	0.03%
Evan Kirby	-	-	-	-
Martyn Churchouse	-	-	-	-

 

 

* Includes 3,695,238 shares held by Lion Mining Finance Ltd and 33,428,571 shares held by Camden Park Trading Ltd, companies controlled by Colin Bird

 

Colin Bird was non-executive chairman of Jubilee Metals Group Plc (he resigned on 26 May 2022) which at Admission had an interest of 1.48% in the Company. There were no transactions with Jubilee during the year.

 

 

The Company entered into a licence agreement dated 1 February 2022 with Lion Mining Finance Limited (a company controlled by Colin Bird, a director of the Company) which was amended with effect from 1 June 2022.  Pursuant to this agreement, the Company has been granted a licence to use the premises at 7-8 Kendrick Mews, London SW7 for a licence fee of £1,500 per month (ex VAT) which can be terminated on 2 months notice as the initial 12 month term of the agreement has already expired.  In addition, Lion Mining Finance Limited provides basic administrative and support services as required by the Company from time-to-time.

 

                Directors' Letters of Appointment and

Service Agreements as disclosed in the Prospectus.

 

(a)  Pursuant to an agreement dated 29 April 2022 the Company renewed the appointment of Colin Bird as a Director. The appointment continues unless terminated by either party giving to the other three months' notice in writing. Colin Bird is entitled to director's fees of £18,000 per annum for being a director of the Company plus reasonable and properly documented expenses incurred during the performance of his duties. Colin Bird is not entitled to any pension, medical or similar employee benefits. The agreement replaces all previous agreements with Colin Bird in relation to his appointment as a director of the Company.

 

(b)  Pursuant to a consultancy agreement dated 29 April 2022, the Company has, with effect from the date of the IPO, appointed Colin Bird as a consultant to provide technical advisory services in relation to its current and future projects including, but not limited to, assessing existing geological data and studies, existing mine development studies and developing exploration programs and defining the framework of future geological and mine study reports (the "Colin Bird Services"). The appointment continues unless terminated by either party giving to the other three months' notice in writing. Colin Bird is entitled to fees of £2,500 per month for being a consultant to the Company plus reasonable and properly documents expenses incurred during the performance of the Colin Bird Services. 

 

(c)   Pursuant to an agreement dated 29 April 2022, renewed the appointment of Kjeld Thygesen as a non-executive Director. The appointment continues unless terminated by either party giving to the other three months' notice in writing. Kjeld Thygesen is entitled to director's fees of £18,000 per annum for being a director of the Company plus reasonable and properly documented expenses incurred during the performance of his duties. Kjeld Thygesen is not entitled to any pension, medical or similar employee benefits. 

 

(d)  Pursuant to an agreement dated 29 April 2022, Alex Borrelli was appointed as a nonexecutive Director. The appointment continues unless terminated by either party giving to the other three months' notice in writing. Alex Borrelli is entitled to director's fees of £18,000 per annum for being a director of the Company plus reasonable and properly documented expenses incurred during the performance of his duties. Alex Borrelli is not entitled to any pension, medical or similar employee benefits.

 

(e)  Pursuant to an agreement dated 29 April 2022, Evan Kirby was appointed as a non-executive Director. The appointment continues unless terminated by either party giving to the other three months' notice in writing. Evan Kirby is entitled to director's fees of £18,000 per annum for being a director of the Company plus reasonable and properly documented expenses incurred during the performance of his duties. Evan Kirby is not entitled to any pension, medical or similar employee benefits. 

 

Loans to Subsidiaries

	2023 £	2022 £
Loans to Northern X Scandinavia AB	1,300,573	497,064
Loans to Northern X Finland OY	15,291	86,741
Loans to Caledonian Minerals AS	665,290	253,068
Loans to EV Metals	239	-
	1,981,393	836,873

 

All intra-group loans are interest-free and form part of the Company's investment in subsidiaries. The loans are net of the impairments detailed in note 14.

 

21.          NET DEBT

 

	Group	Company	Group	Company
	2023	2023	2022	2022
	£	£	£	£
Cash and cash equivalent	199,992	39,953	1,817,706	1,769,719
Net debt	199,992	39,953	1,817,706	1,769,719
Net debt as at 29 December 2022	1,817,706	1,769,719	16,871	16,871
Cash flow from operations	(317,868)	(300,725)	(620,102)	(610,332)
Proceeds from issue of shares, net of costs	-	-	3,340,318	3,340,318
Investment in Exploration and evaluation costs	(1,272,810)	(1,403,413)	(997,953)	(1,055,710)
Cash flow from sale of Investment shares	-	-	78,572	78,572
Other non-cash movement	(27,036)	(25,628)	-	-
Net debt as at 29 December 2023	199,992	39,953	1,817,706	1,769,719

Net debt is calculated as total borrowings (including "current and non-current borrowings" as shown in the statement of financial position) less cash and cash equivalents.

 

22.          EVENTS AFTER THE REPORTING DATE

 

On 22 April 2024 the Company announced it had entered into an unsecured convertible loan funding facility (the "Facility") for £500,000 with Sanderson Capital Partners Ltd (the "Lender"), a long term shareholder in the Company.  The Facility is convertible at 0.75 pence per ordinary share  ("Shares") and can be drawn down in 4 tranches of £125,000 each ("Loan Tranches"). The Facility is a standby facility as a potential additional source of working capital for the Company in a period when the funding market for junior exploration companies is subject to market volatility.

 

Working Capital Facility Agreement

The Facility is for £500,000 in total, is unsecured, interest free and can be drawn down in four tranches as follows:

·    £125,000 to be drawn down within 6 months of 7 May 2024 ("Tranche One");

·    £125,000 to be drawn down within 6 months of 7 July 2024 ("Tranche Two");

·    £125,000 to be drawn down within 6 months of 7 September 2024 ("Tranche Three"); and

·    £125,000 to be drawn down within 6 months of 7 November 2024 ("Tranche Four").

 

The Company will provide a Loan drawdown notice if and when it requires a drawdown. The Company has the option but not the obligation to drawdown on part or all of the Facility.

 

Repayment and Conversion

Repayment

Unless otherwise converted, the Company must repay each Loan Tranche on the first anniversary of the advance by the Lender of the applicable Loan Tranche ("Maturity Date"). The Company may prepay the whole or part of the Facility on any day prior to the Maturity Date for a Loan Tranche upon giving not less than 14 days' prior written notice to the Lender and paying in cash a prepayment fee of 5% of the amount which the Company prepays in cash before the Maturity Date. The Lender can during the 14 days' notice period make an election for all or part of the Loan subject to a prepayment notice to be repaid in Shares in which case the 5% fee shall not apply to that proportion of the Loan repaid in Shares.

 

Conversion of Loan Tranche by Lender

The Lender may at any time during the Facility Period elect to convert all or part of any drawn down amount into such number of new Shares equal to the amount of the Loan Tranche that is to be repaid at the date of the election, divided by the 0.75 pence ("Conversion Price") (the "Conversion Shares"). The Conversion Price of 0.75 pence per Share represents a 87% premium to the closing share price of 0.4 pence on 19 April 2024, being the latest practicable date prior to this announcement.

Conversion of Loan by the Company

The Company may at any time during the Loan Period elect to convert all or part of Tranche One to Tranche Four if the Share price exceeds 1 pence ("Target Conversion Price") for a period of five or more business days.

 

Conversion Adjustment

If the Company before i) the Maturity Date for a Loan Tranche and before ii) the Loan Tranche has been repaid issues Shares for cash consideration ("Issue Price") at a discount to 0.75 pence per Share (the "Base Issue Price") then the Conversion Price and the Target Conversion Price in respect of that Loan Tranche shall be multiplied by a fraction, the numerator of which will be the Issue Price and the denominator of which will be 0.75 pence.

 

Interest and Fees

The Loan is interest free. The Lender shall be paid an arrangement fee of 10% of the amount of the Facility to be settled by the issue of 11,764,706 new Shares ("Facility Fee Shares") credited as fully paid by at an issue price of 0.425p per Share (being the Five Day VWAP on the date of this announcement) with the Facility Fee Shares to be issued on or before 31 December 2024 or such other date agreed by the parties.

 

 

On the drawdown of any Loan Tranche the Lender shall be paid a further fee of 2% of the amount of the relevant Loan Tranche which is to be settled by the issue of new Shares credited as fully paid at the five-day VWAP on the date of the relevant Loan drawdown notice ("Drawdown Fee Shares") with the Drawdown Fee Shares to be issued on or before 31 December 2024 or such other date agreed by the parties.

 

Option to Extend Facility

If the Company draws down in full or in part against Tranche One, Tranche Two, Tranche Three and Tranche Four then it has the option to elect to be able to drawdown up to an additional GBP250,000 ("Optional Loan Tranche") This must be made in writing within 30 days of the date the Company has made a drawdown in full or in part against Tranche One, Tranche Two, Tranche Three and Tranche Four. 

 

Warrants

On the drawdown of any Loan Tranche, the Lender shall be issued three year warrants over Shares ("Warrants") with a face value equal to 50% of the amount drawn down under the Loan Tranche. The exercise price for the Warrants applicable to each of the tranches are as follows:

 

·    1.5 pence per share for the drawdown of Tranche One to Tranche Four;  and

·    2 pence per share for the drawdown of the Optional Loan Tranche;

 

If there are no drawdowns under two or more of the Loan Tranches then at 7 May 2025 which is 6 months after the Tranche Four Drawdown Date of 7 November 2024, the Company will issue a three year warrant to the Lender for an amount equal to 25% of the Facility that has not been drawn down with an exercise price of 1 pence per share.

 

Other that these matters, no significant events have occurred subsequent to the reporting date that would have a material impact on the consolidated financial statements.