The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulations

 

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

 

19 July 2022

Kodal Minerals plc

("Kodal" or the "Company" and together with its subsidiaries, the "Group")

 

Final Results

 

Kodal Minerals, the mineral exploration, and development company focused on lithium and gold assets in West Africa, announces its final results for the year ended 31 March 2022.

 

The Company's Annual Report and Accounts will be made available on the Company's website www.kodalminerals.com shortly. The Company will confirm in due course when the Annual Report has been posted to shareholders and will provide information about the date and location of the Annual General Meeting.

 

Financial and Corporate Highlights

·    Group loss before other comprehensive income for the year of £903,000 (2021: £623,000)

·    370% increase in exploration and evaluation expenditure of £2,547,000 (2021: £542,000)

·    63% increase in the value of the gold projects in Mail and Mali and Cote d'Ivoire to £2,411,000 (2021: £1,476,000)

·    20% increase in value of the Bougouni lithium project in Mali to £9,031.000 (2021: £7,488,000)

·    Cash balance of £1,046,000 as at 31 March 2022 (2021: £2,433,000)

·    Post period end, the Company successfully raised £3 million (before expenses)

·    Cash balance of £3,333,000 as at 8 July 2022

 

Operational Highlights

 

Bougouni Lithium Project, Mali ("Bougouni" or the Project")

·    Mining Licence granted - the Project is now fully permitted for development and construction

·    Achieved 100% ownership of all concessions following the acquisition of minority interests held by the original vendors (prior to formation of the new mining company in which the Mali Government will have an interest of between 10% and 20%)

·    Initiated a six-month work programme focussed on updating the original Feasibility Study

·    Ongoing community engagement, consultation, and evaluation of the impact of the proposed mining sites

·    Robust economics confirmed by the updated Project Feasibility Study announced post period end

o  NPV7% of US$760 million (US$567 million post-tax) compared to US$293 million (US$201 million post tax) in the original Feasibility Study.

o  Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on an average sell price of US$1,060 per tonne (FOB basis).

o  C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate ("SC6"), and costs of US$474 per tonne including transportation and other selling costs.

o  Total SC6 production of 2,024,000 tonnes with an annual average production of 238,000 tonnes.

o  Development based on unchanged operating assumptions of open cut truck and shovel contractor mining operation, feeding 2Mtpa of lithium ore to the flotation processing plant, utilising a conventional flotation circuit to maximise spodumene recovery.

o  Capital cost of the Project increased approximately 20% to US$154 million reflecting increased raw material and fuel costs

 

Fatou and Nielle and Dabakala Gold projects

 

·      Significant exploration programmes at Fatou and Nielle gold projects yielded positive results and identified wide gold intersections and high-grade gold mineralised areas

·      Infill geochemical sampling at Dakabala returned high-grade surface samples at new discovery zones

 

Commenting on the results, Bernard Aylward, CEO of Kodal Minerals said:

 

"We are in the enviable position of owning 100% of the concessions of what I believe will become one of the most significant lithium spodumene producing projects in West Africa, and the first in Mali. The prices of lithium spodumene have risen exponentially as global demand for this critical mineral shows no sign of abating driven by the green agenda and the EV (electric vehicle) revolution.

 

"The work carried out by our team on the ground resulted in the successful receipt of our Mining Licence at Bougouni and initiated a six-month work programme to update the original feasibility study carried out in 2020. The results have further enhanced the Project's already robust economic fundamentals with an IRR of 91%, a payback period of eight months and a life of mine revenue of approximately US$2.14 billion, nearly a 50% increase on our original feasibility study estimate. 

 

"Looking ahead, we will continue to invest in exploration at our gold projects following the excellent results from our reverse core drilling campaign.  However, our priority is to de-risk the Bougouni Project, by further reducing expected operating costs whilst advancing discussions with potential partners on funding for construction with the view of bringing the Project into production."

 

*  C1 cash cost includes all mining, processing and all general and administration costs per tonne sold, and additional to that the costs of transport to port and associated selling costs.

 

Chairman's Statement  

 

I am pleased to present the Annual Report of Kodal Minerals plc for the year ended 31 March 2022.

 

Kodal continues to make excellent progress towards achieving its overarching objective of bringing its flagship lithium project in Bougouni, Mali, ("Bougouni Lithium Project" or "the Project") to fruition.  During this financial year, and continuing in subsequent months, Kodal has taken the necessary steps to lay the technical and commercial foundations of the Project, together with the mandatory permitting obligations, and we are now tantalisingly close to pushing forward into financing and construction.

 

Indeed, the backdrop of the lithium market over recent months has provided a significant tailwind, supporting our commercial and financing discussions.  The Company is continuing to review and discuss potential opportunities for collaboration with third parties, including major mining groups, to support the development of the Project providing Kodal with multiple routes through which to capitalise on the inherent value of Bougouni.

 

Lithium prices continue to make headlines, with major producers such as ASX listed Pilbara Minerals Limited achieving record sales prices for 5.5% Li2O spodumene concentrate of US$6,350/t FOB.   When compared with our initial selling price input of US$680/t SC6 reported in the original feasibility study in 2020, it is apparent just how far the industry has moved on over the past 24 months. 

 

This pricing environment has been driven by the global appetite and awareness for electric vehicles and efficient battery storage, together with concerns from key decision makers about the security of lithium supply, along with other critical minerals, from stable jurisdictions.  Whilst some commentators have recently asserted that these price rises are unsustainable in the long-term, it remains widely accepted that demand is going to continue to increase rapidly over the next decade, and new sources of supply may not materialise within this critical timeframe.  While a market like copper typically grows by 2%-4% a year, providing producers and developers with a degree of confidence as to the demand fundamentals, lithium analysts are anticipating annual demand growth of more than 20% between 2021 and 2025.  This presents late-stage developers and pre-production companies such as Kodal with a unique advantage, with the ability and agility to rapidly move projects through the construction phase and into production in order to fulfil this potential supply deficit. 

 

With this in mind, the Board of Kodal is resolute in its objective to assemble the requisite components to support Bougouni's successful transition into production, including technical delivery, permitting approvals, environmental, social and governance frameworks and commercial commitments. 

 

Following the grant of the Mining Licence for Bougouni in November 2021, the Company initiated a six-month work programme focussed on updating the Feasibility Study.  This was completed in June 2022 and demonstrated to the market that the shift in market conditions have further enhanced the Project's already robust economic fundamentals.  Indeed, the updated feasibility study highlighted an IRR of 91% and a payback period of only eight months.  With life of mine revenue anticipated to be in excess of US$2.14 billion, nearly 50% more than our original feasibility study estimate, our conversations with potential partners have intensified with a view to reaching the optimum route for delivery in as short timeframe as practicable.  Further details of this Feasibility Study update are included in the Operating Review.

 

Whilst simultaneously pushing closer to development at Bougouni, our exploration team has also made solid progress across our gold portfolio.  Work has centred primarily on the Fatou Gold project in Mali, and the Nielle Gold project in Cote d'Ivoire, both discoveries which we believe have significant resource potential.  Earlier stage but no less exciting is the Dabakala Gold project in Cote d'Ivoire where geochemical sampling has confirmed the continuity of high-grade gold anomalism extending for over 11km and surface width up to 3km.  I am confident that our gold portfolio has the potential to yield new large gold deposits, and I look forward to reporting on what the next field season delivers.

 

The next 12 months will be a pivotal time for Kodal as we seek to advance both our gold portfolio and, more importantly, our flagship Bougouni Lithium Project, supported by strategic investors and within a market environment which remains very buoyant for quality near-term lithium assets.  I look forward to updating shareholders on a regular basis with updates on our operational and corporate advancements.

 

Robert Wooldridge

Non-executive Chairman

18 July 2022 

 

OPERATIONAL REVIEW

 

Kodal has maintained its sizeable tenure in Mali and Cote d'Ivoire, whilst completing the acquisition of minority interests to become the 100% holder of the flagship Bougouni Lithium Project located in Western Mali. Kodal's management has continued to ensure that all government compliance, reporting and fees are kept up to date and all concessions are retained in good standing.

 

Mining Licence and Exploration Concession Review

Kodal's Bougouni and Bougouni West lithium exploration projects are located in southern Mali, with the rights and concessions held by subsidiary company Future Minerals SARL ("Future Minerals"), a Malian registered company owned 100% by the Group. In November 2021, Kodal acquired the minority shareholdings of Bougouni from the original vendors of the Project and as a result, Kodal through Future Minerals, now holds 100% interest in all concessions of the Bougouni Lithium Project.

 

Bougouni Lithium Project - Mining Licence details:

 

Tenements	Country	Kodal Economic Ownership	Project / Joint Venture	Validity
Foulaboula	Mali	100% ownership (80 to 90% upon Mali State's participation) / 10% free carried + up to 10% contributing interest	Bougouni Lithium Project	Mining Licence N°2021-0774/PM-RM of November 5 2021.  Permit is valid 12 years renewable for 10 years period each until depletion of the resources

 

Following the Company agreed-upon modifications to the Foulaboula, Sogola Nord and Fariedele concessions which were changed to ensure all areas of mineralisation, mining infrastructure and processing plant are included within the one licence area, Kodal was granted the Foulaboula Permis d'Exploitation number No2021-0774/PM-RM ("Mining Licence") in November 2021.  This covered the proposed open-pit mining and processing operation at Bougouni, making the Project fully permitted for development and construction.

 

The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are mined.  The Mining Licence is granted under the 2019 Mining Code and extends over a 97.2 square km area that will be a focus for Kodal's exploration programme to ensure further resources are delineated to prolong the Bougouni Lithium Project mine life.

 

Table of Concessions - Kodal lithium Concessions in Mali:

 

Tenements	Country	Kodal Economic Ownership	Project / Joint Venture	Validity
Dogobala	Mali	100% economic interest via direct ownership following completion of option payments	Bougouni Lithium Project	Licence valid and in good standing.  Arrêté No. 2018-1115 granted on 13 April 2018 for initial 3-year period, with option for 2 extensions of 2 years validity each Application for first renewal has been lodged and all fees paid.  Renewal approval pending
Sogola Nord	Mali	100% economic interest.  Concession replaces part of the original Madina concession which had reached its time limit	Bougouni Lithium Project	Licence valid and in good standing.  Arrêté number 2020-0072 granted 22 January 2020 for an initial 3-year period, with option for 2 extensions of 2 years validity each. Licence area modified during 2020 to account for the future Foulaboula Mining Licence.
Fariedele	Mali	100% economic interest.  Concession replaces part of the original Madina concession which had reached its time limit	Bougouni Lithium Project	Licence valid and in good standing.  Arrêté number 2020-0073 granted 22 January 2020 for an initial 3-year period, with option for 2 extensions of 2 years validity each Licence area modified during 2020 to account for the future Foulaboula Mining Licence.
Mafele Ouest	Mali	Kodal completed all obligations of the Option to Purchase agreement and now is the beneficial holder of 80% economic interest	Bougouni West Lithium	Licence valid and in good standing.  Arrêté No. 2018-4537 granted on 31 December 2018 for initial 3-year period, with option for 2 extensions of 2 years validity each. All taxes and renewal fees have been paid. Renewal approval pending
NKemene Ouest	Mali	Kodal completed all obligations of the Option to Purchase agreement and now is the beneficial holder of 80% economic interest	Bougouni West Lithium	Licence valid and in good standing.  Arrêté No. 2018-4486 granted on 28 December 2018 for initial 3-year period, with option for 2 extensions of 2 years validity each. All taxes and renewal fees have been paid. Renewal approval pending

 

The Bougouni Lithium Project concessions surround the Foulaboula mining licence and will be explored for additional pegmatite hosted resources that can be added to the mining area through agreement with the Mali Government as required.  The concessions are all in good standing, and exploration completed to date by Kodal has indicated priority sites for additional exploration within the concessions.

 

The Bougouni West concessions remain in good standing with Kodal having completed all obligations under the Option to Purchase agreement and now are the beneficial holders of 80% of the licences.  Kodal intends to undertake future exploration in the concession areas.

 

Table of Concessions - Kodal Gold Concessions in West Africa:

 

Tenements	Country	Kodal Economic Ownership	Project / Joint Venture	Validity
Boundiali	Côte d'Ivoire	100% direct ownership (under application)	Gold Exploration	Licence application submitted and in process.  Application updated during 2020 and application remains in good standing.
Korhogo	Côte d'Ivoire	100% direct ownership	Gold Exploration	Licence valid and in good standing.  Renewal granted on 31 March 2020 for a 3 year-term.
Dabakala	Côte d'Ivoire	100% direct ownership	Gold Exploration	Licence valid and in good standing.  Renewal granted on 31 March 2020 for a 3 year-term.
Niéllé	Côte d'Ivoire	100% direct ownership	Gold Exploration	Licence valid and in good standing.  Initial licence expired on 7 January 2017, and Renewal decree received on the 28 February 2018 for a 3 year- period.  Second Renewal decree received 18 December 2020 for a 3 year-period.
Tiebissou	Côte d'Ivoire	100% direct ownership	Gold Exploration	Licence valid and in good standing.  Initial term expired 30 September 2018.  An application for renewal has been lodged, fees paid and approved.  Renewal decree is pending signature.
M'Bahiakro	Côte d'Ivoire	100% direct ownership (under application)	Gold Exploration	Licence application submitted and in process.  Application updated during 2020 and application remains in good standing.
Djelibani Sud	Mali	100% direct ownership	Gold Exploration	Licence valid and in good standing.  Arrêté N° 2021-5133/MMEE-SG granted on 28 December 2021 for an initial 3 year-period, with option for 2 extensions of 3 years validity each. All taxes have been paid.
Nangalasso	Mali	100% direct ownership following completion of option payments	Nangalasso Project Gold Exploration	Nangalasso arrêté completed second renewal on 4 February 2021.  A new Convention application covering the same permit has been lodged with the DNGM and is awaiting approval.
Sotian	Mali	Completed Option agreement and is 100% beneficial owner of concession.	Nangalasso Project Gold Exploration	Arrêté No. 2018-1925 granted on 12 June 2018 for initial 3 years period, with option for 2 extensions of 3 years validity each First renewal has been approved
Tiedougoubougou	Mali	Kodal completed Option agreement and is 100% beneficial owner of concession	Nangalasso Project Gold Exploration	Arrêté No. 2018-3319 granted on 4 September 2018 for initial 3 years period, with option for 2 extensions of 3 years validity each.  Application for first renewal has been lodged and all fees paid.  Renewal approval pending
Fininko	Mali	Held through Option Agreement giving right to acquire 100% ownership	Fatou Project Gold Exploration	Licence in good standing. First renewal granted by Arrêté No. 2021-2876/MMEE-SG of August 6th 2021 for a period of 3 years.
Foutiere	Mali	Held through Option Agreement giving right to acquire 100% ownership	Fatou Project Gold Exploration	Licence in good standing. Arrêté N°2017-0170/MM-SG of February 2nd 2017. Application for first renewal has been lodged and all fees and taxes have been paid. Renewal approval pending

 

Bougouni Lithium Project Status

Kodal Minerals was granted an Environmental Permit over the Project in November 2019. The original Feasibility Study ("FS") was completed by Kodal Minerals in January 2020, culminating in the granting of a large-scale Mining Licence in November 2021 to the Company's Mali subsidiary company, Future Minerals.  The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are mined.  The Mining Licence is granted under the 2019 Mining Code and extends over 97.2 square kilometres covering the proposed open-pit mining and processing operation at Bougouni (refer to announcement of 8 November 2021).

 

The original Bougouni Lithium Project Feasibility study was completed in January 2020 and following the grant of the mining licence, Kodal commenced work on updating the study focussing on the engineering, process recovery and capital cost for the Project as these key areas had undergone substantial change over the previous 2 years.  The results of the updated study were announced on 15 June 2022.

 

The June 2022 Bougouni Project Feasibility Study update confirms a very robust project with key metric highlights including:

 

·    NPV7% of US$760M (US$567M post-tax) compared to US$293M (US$201M post tax) in the original Feasibility Study.

·    Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on an average sell price of US$1,060 per tonne (FOB basis).

·    C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate ("SC6"), and costs of US$474 per tonne including transportation and other selling costs.

·    Total SC6** production of 2,024,000 tonnes with an annual average production of 238,000 tonnes.

·    Bougouni Lithium Project development based on unchanged operating assumptions of open cut truck and shovel contractor mining operation, feeding 2Mtpa of lithium ore to the flotation processing plant, utilising a conventional flotation circuit to maximise spodumene recovery.

·    Capital cost of the Project increased approximately 20% to US$154M reflecting increased raw material and fuel costs.

 

*   C1 cash cost includes all mining, processing and all general and administration costs per tonne sold, and additional to that the costs of transport to port and associated selling costs

Kodal completed a technical site visit to Bougouni in January 2022 to continue the development programme.  A detailed LIDAR survey has been completed for the Project area and is being used to provide detailed topographical information to assist in the final planning of the processing plant and associated infrastructure. 

 

In addition, community engagement, consultation, and evaluation of the impact of the proposed mining sites is continuing with our Environmental Consultants, Digby Wells.  This is a key component of Kodal's continuing engagement with the Bougouni community and is fundamental to the Company achieving the development of its mining operation and ensuring that it enjoys the support of and returns benefits to these communities.

 

Kodal has continued its engineering work programme to optimise the capital cost estimate for the development of the Project and complete a detailed assessment to confirm the operating costs of the Project, including the review of the proposed transport costs (details of which were previously announced on 27 January 2020), ahead of securing funding for mine development and construction.  This engineering work programme is continuing with a focus on the process plant design and capital cost estimate, improvements in metallurgical recovery and an update of the open pit optimisation of the defined minerals resources.

 

Suay Chin and Off-take arrangement Update

Kodal has been informed that there has been a restructuring of the ownership of Suay Chin International Pte Ltd ('Suay Chin').  Suay Chin is the Company's major shareholder with 14.18% of the issued share capital.

 

Suay Chin is now indirectly controlled by Zhejiang Kanglongda Special Protection Technology Co., Ltd ("Kanglongda") which is listed on the Shanghai Stock Exchange. Kanglongda's previous business focus was in the area of functional labour protection gloves, but it has recently developed a new strategy of investment in the lithium industry.

 

Kodal confirms that the binding term sheet (the "Off-take Term Sheet") entered into between Kodal and Suay Chin in March 2017 remains in place.  The Off-take Term Sheet contemplates that the parties will negotiate an extended off-take agreement for between 80% and 100% of the spodumene product produced at the Project for a period of three years. The Off-take Term Sheet sets out certain agreed off-take principles that are to be included in the off-take agreement including the parties agreeing to buy and sell the contract quantity as well as the formal agreement including a right to match any third party off-take terms agreed for a period of three years following the expiry of the formal agreement. Whilst a formal agreement has not been entered into, Suay Chin retains the first right of refusal for a period of three years from first production of product from the Project whereby Kodal may not enter into any agreement with a third party to sell more than 20% of future production from the Project without having first offered to sell the production to Suay Chin on the terms offered by the third party. There can be no guarantee on the timing of completion of a formal off-take agreement or if any such agreement will ultimately be agreed.

 

Gold Exploration Projects and Exploration Programme

In addition to the progress made at the Bougouni Lithium Project, the Company has also made strong progress at its various gold projects situated across West Africa.

 

At the Nielle project in northern Cote d'Ivoire, Kodal has completed a 1,000m reverse core ("RC") drilling programme which has returned wide intersections of gold mineralisation and includes zones of high-grade gold mineralisation including results such as 13m at 5.7g/t from 12m. The Company has also completed the 5,000m aircore drill programme which has confirmed a 4.5km gold mineralised trench with an extension of up to 1.5km south and over 1km north.

At the Dabakala project also in Cote d'Ivoire, infill geochemical sampling has continued to return high-grade surface samples at new discovery zone with the new assay results confirming up to 1.97g/t gold with further results confirming continuity of high-grade gold anomalism extending for over 11km and surface width up to 3km.

 

At the Fatou project in Mali, Kodal has completed the initial RC drilling programme of 1,242m and has returned results including 23m at 1.63 g/t gold from 82m. The completion of the campaign has confirmed multiple mineralised zones and highlights extensions to the north and south requiring additional drilling to test the Fatou prospect.

 

Future Activity

Kodal is focussed on the advancement and development of its Bougouni Lithium Project.  The Company is continuing to undertake engineering studies to investigate opportunities to decrease capital costs and future operating costs.  These studies will be pursued in more detail during the coming year as the Company advances the Project to development stage.

 

Key areas that have the potential to enhance the Bougouni Lithium Project include:

 

·    Resource growth and increase of head grade from further exploration in the highly prospective areas contained within existing exploration leases;

·    Reduction in capital cost through further optimisation of the flowsheet and engaging with experienced Chinese and other manufacturers;

·    Investigate more favourable power supply solutions to reduce operating costs, which is currently under way on the basis of connecting to the future high-voltage grid approximately 15km from the site (the new Bougouni substation is being constructed presently under the 225 kV Sikasso-Bougouni-Sanankoroba-Bamako Transmission line project by the Mali power authority - Energies de Mali);

·    Optimisation of mine scheduling and drill and blast strategy; and

·    Cost savings relating to the construction of the tailings storage facility ("TSF").  Currently the design of Stage 1 is based on 24 months of capacity to combat potential for adverse climatic conditions.  Potentially this could be reduced to about 18 months' capacity if the sequencing of construction is favourable with respect to maximising construction in the dry season.

 

As Kodal focusses on the technical planning, engineering and optimisation of the proposed development, the Company will be seeking to finalise financial options for the construction of the Bougouni mining and processing operation.  It is looking to move to production as quickly as possible to take advantage of the current high prices of its Lithium Spodumene product in a rising demand cycle.

 

I look forward to reporting on our advances during the year.

 

Bernard Aylward

Chief Executive Officer

               

18 July 2022

 

 

FINANCE REVIEW

Results of operations

For the year ended 31 March 2022, the Group reported a loss before other comprehensive income for the year of £903,000, including share based payment costs of £343,000 (2021: £78,000), compared to a loss of £623,000 in the previous year.  Administrative expenses have remained broadly in line with last year as the Group has continued to review the development opportunity presented by the Bougouni Project and run the offices in Mali and Côte d'Ivoire, but significant additional exploration activity for both gold and lithium was undertaken during the year.  Further information is provided in the Operational Review above.

 

During the year, the Group invested £2,547,000 (2021: £542,000) in exploration and evaluation expenditure on its various projects. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from £8,964,000 to £11,442,000 after taking account of the effects of foreign exchange rates.  At 31 March 2022, after taking account of the effects of foreign exchange rates, the carrying value of the gold projects in Mali and Cote d'Ivoire was £2,411,000 (2021: £1,476,000) and of the lithium projects in Mali was £9,031.000 (2021: £7,488,000).

Cash balances as at 31 March 2022 were £1,046,000, a decrease of £1,387,000 on the previous year's level of £2,433,000.  Net assets of the Group at the year-end were £12,091,000 (2021: £12,636,000).

 

Financing

The Group did not undertake any fundraisings in the year although £1.8m of proceeds were received in April 2021 relating to a fundraising which took place in late March 2021.

 

Subsequent to the year end, on 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses) via a subscription for 130,142,857 shares and an oversubscribed placing of 941,285,712 shares at a price of 0.28 pence per Placing Share (the 'Placing').  The funds raised will support Kodal in the continuing development and preparation for financing and construction of its flagship Bougouni Lithium Project in Mali.

 

Going concern and funding

The Group has not earned revenue during the year to 31 March 2022 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new ordinary shares and other equity linked instruments.

 

The Directors have prepared cash flow forecasts for the period ending 30 September 2023. The forecasts include payments for the ongoing review of the development opportunity presented by the Bougouni mining licence, additional exploration activity for both gold and lithium as well as covering ongoing overheads.

 

On 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses). Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been prepared on a going concern basis.

 

Utilising key performance indicators ("KPIs")

The following KPIs are used by the Group to assist it in monitoring its cash position and assessing costs and exploration and development activities:

 

KPI	31 March 2022	31 March 2021
Cash and cash equivalents (a)	£1,046,000	£2,433,000
Administrative expense (b)	£541,000	£513,000
Exploration and evaluation expenditure (c)	£2,547,000	£542,000

The directors have provided more information on the state of the Group's financing and operational activity above.

 

a.    'Cash and cash equivalents' is used to measure the Group's financial liquidity.  Cash and cash equivalents have decreased by of £1.4 million in the year.

b.   'Administrative expenses' is used to measure the Group's administrative costs and operating results.  Administrative expenses for the year were £541,000, broadly in line with £513,000 in the previous year as the Group has continued to review the development opportunity presented by the Bougouni Project and run the offices in Mali and Côte d'Ivoire

c.     'Exploration and evaluation expenditure' is used to measure expenditure on the Group's gold and lithium projects.  Exploration and evaluation expenditure in the year was £2.5 million higher than prior year as significant additional exploration activity for both gold and lithium was undertaken during the year following the lifting of Covid-19 restriction.

 

Financial risk management objectives and policies

The Group's principal financial instruments comprise cash and trade and other payables.  It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

 

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's exploration and operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures that the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches to provide sufficient cash resources to manage the activities through to revenue generation.

 

Price risk

The Group is exposed to fluctuating prices of commodities, including gold and lithium, and the existence and quality of these commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as development of the projects continues and will consider how this risk can be mitigated closer to the commencement of mining.

 

Foreign exchange risk

The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling, CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to keep this under review.  The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2021

	Note		Year ended 31 March 2022		Year ended 31 March 2021
			£		£
Continuing operations
Administrative expenses			(540,655)		(512,885)
Share based payments	5		(342,876)		(77,979)
OPERATING LOSS			(883,531)		(590,864)
Finance charge			(19,556)		(32,506)
LOSS BEFORE TAX	2		(903,087)		(623,370)
Taxation	6		-		-
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS			(903,087)		(623,370)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss
Currency translation loss			(108,167)		(223,635)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR			(1,011,254)		(847,005)
Loss per share
Basic and diluted (pence)	4		(0.0057)		(0.0054)

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2022

			Group 31 March 2022		Group 31 March 2021		Company 31 March 2022		Company 31 March 2021
	Note		£		£		£		£
NON-CURRENT ASSETS
Intangible assets	7		11,442,403		8,964,089		-		-
Property, plant and equipment	8		3,309		8,677		-		-
Amounts due from subsidiary undertakings	9		-		-		10,785,230		7,916,150
Investments in subsidiary undertakings	9		-		-		512,373		512,373
			11,445,712		8,972,766		11,297,603		8,428,523
CURRENT ASSETS
Other receivables	10		5,769		1,854,908		5,769		1,854,908
Cash and cash equivalents			1,045,515		2,432,807		949,844		2,376,329
			1,051,284		4,287,715		955,613		4,231,237
TOTAL ASSETS			12,496,996		13,260,481		12,253,216		12,659,760
CURRENT LIABILITIES
Trade and other payables	11		(406,341)		(624,616)		(100,959)		(321,851)
TOTAL LIABILITIES			(406,341)		(624,616)		(100,959)		(321,851)
NET ASSETS			12,090,655		12,635,865		12,152,257		12,337,909
EQUITY
Attributable to owners of the parent:
Share capital	12		4,947,595		4,916,364		4,947,595		4,916,364
Share premium account	12		15,933,071		15,841,134		15,933,071		15,841,134
Share based payment reserve			1,150,678		807,802		1,150,678		807,802
Translation reserve			(318,627)		(210,460)		-		-
Retained deficit			(9,622,062)		(8,718,975)		(9,879,087)		(9,227,391)
TOTAL EQUITY			12,090,655		12,635,865		12,152,257		12,337,909

 

 

The Company's loss for the year ended 31 March 2022 was £651,696 (2021:  £518,711).

 

The financial statements were approved and authorised for issue by the board of directors on 18 July 2022 and signed on its behalf by

 

Charles Joseland

Director

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022

 

	Share capital		Share premium account		Share based payment reserve		Translation reserve		Retained deficit		Total equity
Group	£		£		£		£		£		£
At 31 March 2020	2,889,606		12,514,604		729,823		13,175		(8,095,605)		8,051,603
Comprehensive income
Loss for the year	-		-		-		-		(623,370)		(623,370)
Other comprehensive income
Currency translation loss	-		-		-		(223,635)		-		(223,635)
Total comprehensive income for the year	-		-		-		(223,635)		(623,370)		(847,005)
Transactions with owners
Share based payment	-		-		77,979		-		-		77,979
Proceeds from shares issued	2,026,758		3,548,315		-		-		-		5,575,073
Share issue expenses	-		(221,785)		-		-		-		(221,785)
At 31 March 2021	4,916,364		15,841,134		807,802		(210,460)		(8,718,975)		12,635,865
Comprehensive income
Loss for the year	-		-		-		-		(903,087)		(903,087)
Other comprehensive income
Currency translation loss	-		-		-		(108,167)		-		(108,167)
Total comprehensive income for the year	-		-		-		(108,167)		(903,087)		(1,011,254)
Transactions with owners
Share based payment	-		-		342,876		-		-		342,876
Proceeds from shares issued	31,231		91,937		-		-		-		123,168
Share issue expenses
At 31 March 2022	4,947,595		15,933,071		1,150,678		(318,627)		(9,622,062)		12,090,655

 

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2021

 

		Share Capital		Share premium account		Share based payment reserve		Retained deficit		Total equity
Company		£		£		£		£		£
At 31 March 2020		2,889,606		12,514,604		729,823		(8.708,680)		7,425,353
Comprehensive income
Loss for the year		-		-		-		(518,711)		(518,711)
Total comprehensive income for the year		-		-		-		(518,711)		(518,711)
Transactions with owners
Share based payment		-		-		77,979		-		77,979
Proceeds from shares issued		2,026,758		3,548,315		-		-		5,575,073
Share issue expenses		-		(221,785)		-		-		(221,785)
At 31 March 2021		4,916,364		15,841,134		807,802		(9,227,391)		12,337,909
Comprehensive income		-		-		-		(651,696)		(651,696)
Loss for the year
Total comprehensive income for the year		-		-		-		(651,696)		(651,696)
Transactions with owners
Share based payment
Proceeds from shares issued		-		-		342,876		-		342,876
Share issue expenses		31,231		91,937		-		-		123,168
At 31 March 2022
		4,947,595		15,933,071		1,150,678		(9,879,087)		12,152,257

 

 

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS   FOR THE YEAR ENDED 31 MARCH 2021

 

			Group Year ended		Group Year ended		Company Year ended		Company Year ended
			31 March 2022		31 March 2021		31 March 2022		31 March 2021
	Note		£		£		£		£
Cash flows from operating activities
Loss before tax			(903,087)		(623,370)		(651,698)		(518,711)
Adjustments for non-cash items:
Write back of impairment of intercompany balances			-		-		(196,000)		-
Share based payments			342,876		77,979		342,876		77,979
Operating cash flow before movements in working capital			(560,211)		(545,391)		(504,822)		(440,732)
Movement in working capital
Decrease in receivables			10,244		3,965		10,244		3,965
(Decrease) / increase in payables			(218,275)		(34,097)		(220,892)		82,621
Net movements in working capital			(208,031)		(30,132)		(210,648)		86,586
Net cash outflow from operating activities			(768,242)		(575,523)		(715,470)		(354,146)
Cash flows from investing activities
Purchase of tangible assets	8		(1,600)		-		-		-
Purchase of intangible assets	7		(2,474,768)		(535,947)		-		-
Loans to subsidiary undertakings			-		-		(2,673,079)		(812,065)
Net cash outflow from investing activities			(2,476,368)		(535,947)		(2,673,079)		(812,065)
Cash flow from financing activities
Net proceeds from share issues	12		1,962,064		2,419,241		1,962,064		2,419,241
Net proceeds from convertible loan notes			-		1,095,152		-		1,095,152
Net cash inflow from financing activities			1,962,064		3,514,393		1,962,064		3,514,393
Increase / (decrease) in cash and cash equivalents			(1,282,546)		2,402,923		(1,426,485)		2,348,182
Cash and cash equivalents at beginning of the year			2,432,807		33,221		2,376,329		28,147
Exchange (loss) / gain on cash			(104,746)		(3,337)		-		-
Cash and cash equivalents at end of the year			1,045,515		2,432,807		949,844		2,376,329

Cash and cash equivalents comprise cash on hand and bank balances.

 

PRINCIPAL ACCCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2022

 

The Group has adopted the accounting policies set out below in the preparation of the financial statements. All of these policies have been applied consistently throughout the period unless otherwise stated.

 

The Company is incorporated in England and Wales with registered number 07220790.  The Company's registered office is at Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.

 

Financial Information

 

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2022 or 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

 

Annual Report and Accounts and Annual General Meeting

The 2022 Annual Report and Accounts will be published on the Group's website at www.kodalminerals.com shortly. The Company will confirm in due course when the Annual Report has been posted to shareholders and will provide information about the date and location of the Annual General Meeting.

 

Basis of preparation

 

The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in accordance with UK-adopted International Accounting Standards.  The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.

 

In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income.

 

Going concern

 

The Group has not earned revenue during the year to 31 March 2022 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new shares and other equity linked instruments.

 

At 31 March 2022, the Group held cash balances of £1,046,000 (2021: £2,433,000). The Group's cash balances at 8 July 2022 were £3,333,000.

 

The Directors have prepared cash flow forecasts for the period ending 30 September 2023.  The forecasts include payments for the ongoing review of the development opportunity presented by the Bougouni mining licence, additional exploration activity for both gold and lithium as well as covering ongoing overheads.

 

On 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses).  Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been prepared on a going concern basis.

 

Basis of consolidation

 

The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to the statement of financial position date. Subsidiary undertakings are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. The Group obtains and exercises control through voting rights.

 

Unrealised gains on transactions between the Company and its subsidiaries are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

 

Foreign currency translation

 

Items included in the Group's consolidated financial statements are measured using 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 and presentational currency of the Parent Company and the presentational currency of the Group.  End of year balances in the Group's West African subsidiary undertakings were converted using an end of year rate of XOF 1 : £0.00129 (2021:  XOF 1 : £0.00130).

 

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the reporting date and the gains or losses on translation are included in profit and loss.  Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the original transactions.  Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

 

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation, which is included in administrative expenses, is charged so as to write off the costs of assets down to their residual value, over their estimated useful lives, using the straight-line method, on the following basis:

 

Plant and machinery                                     4 years

Motor vehicles                                               4 years

Fixtures, fittings and equipment                4 years

 

Where property, plant and equipment are used in exploration and evaluation activities, the depreciation of the assets is capitalised as part of the cost of exploration and evaluation assets.  The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

 

Investments in subsidiaries

 

Investments in subsidiaries are stated at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, an impairment is recognised.

 

Exploration and evaluation expenditure

 

In accordance with IFRS 6 (Exploration for and Evaluation of Mineral Resources), exploration and evaluation costs incurred before the Group obtains legal rights to explore in a specific area (a "project area") are taken to profit or loss.

Upon obtaining legal rights to explore in a project area, the fair value of the consideration paid for acquiring those rights and subsequent exploration and evaluation costs are capitalised as exploration and evaluation assets. The costs of exploring for and evaluating mineral resources are accumulated with reference to appropriate cost centres being project areas or groups of project areas.

 

Upon the technical feasibility and commercial viability of extracting the relevant mineral resources becoming demonstrable, the Group ceases further capitalisation of costs under IFRS 6.

 

Exploration and evaluation assets are not amortised prior to the conclusion of appraisal activities, but are carried at cost less impairment, where the impairment tests are detailed below.

 

Exploration and evaluation assets are carried forward until the existence (or otherwise) of commercial reserves is determined:

·    where commercial reserves have been discovered, the carrying value of the exploration and evaluation assets are reclassified as development and production assets and amortised on an expected unit of production basis; or

·    where a project area is abandoned, or a decision is made to perform no further work, the exploration and evaluation assets are written off in full to profit or loss.

 

Exploration and evaluation assets - impairment

 

Project areas, or groups of project areas, are determined to be cash generating units for the purposes of assessment of impairment.

 

With reference to a project area or group of project areas, the exploration and evaluation assets (along with associated production and development assets) are assessed for impairment when such facts and circumstances suggest that the carrying amount of the assets may exceed the recoverable amount.

 

Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 and include the point at which a determination is made as to whether or not commercial reserves exist.

 

The aggregate carrying value is compared against the expected recoverable amount, generally by reference to the present value of the future net cash flows expected to be derived from production of the commercial reserves.  Where the carrying amount exceeds the recoverable amount, an impairment is recognised in profit or loss.

 

Intangible assets and impairment

 

Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives.  Amortisation, which is included in administrative expenses, is charged so as to write off the costs of intangible assets, over their estimated useful lives, using the straight-line method, on the following basis:

 

Software                                             3 years

 

Deferred taxation

 

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax is realised, or the deferred liability is settled.

 

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilised.

 

Financial instruments

 

Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

 

IFRS 7 (Financial Instruments: Disclosures) requires information to be disclosed about the impact of financial instruments on the Group's risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are being managed.  The required disclosures have been made in Note 14 to the financial statements.

 

The Group's policies include that no trading in derivative financial instruments shall be undertaken.

 

Cash and cash equivalents

 

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand.

 

Other receivables

 

Other receivables are carried at amortised cost less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is an expected credit loss on amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in profit or loss.

 

Trade and other payables

 

Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. These amounts are carried at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition.

 

Provisions

 

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

 

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in profit or loss.

 

Share capital

 

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

 

Equity settled transactions (Share based payments)

 

The Group has issued shares as consideration for services received. Equity settled share-based payments are measured at fair value at the date of issue.

 

The Group has also granted equity settled options and warrants.  The cost of equity settled transactions is measured by reference to the fair value at the date on which they were granted and is recognised as an expense over the vesting period, which ends on the date the recipient becomes fully entitled to the award.  Fair value is determined by using the Black-Scholes option pricing model.

 

In valuing equity settled transactions, no account is taken of any service and performance conditions (vesting conditions), other than performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are required to be met in order for the recipients to become fully entitled to an award are considered to be non-vesting conditions. Market performance conditions and non-vesting conditions are taken into account in determining the grant value.

 

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance or service conditions are satisfied.

 

At each reporting date before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in the cumulative expense since the previous reporting date is recognised in profit and loss, with a corresponding entry in equity.

 

Where the terms of the equity-settled award are modified, or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if the difference is negative.

 

Where an equity-based award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if it had vested on the date of the cancellation, and the cost not yet recognised in profit and loss for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense.

 

Segmental reporting

 

Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors, which has been identified as the Chief Operating Decision Maker. The Board of Directors is responsible for allocating resources and assessing performance of the operating segments in line with the strategic direction of the Company.

 

Critical accounting judgements and estimates

 

The preparation of these consolidated financial statements in accordance with UK-adopted International Accounting Standards ("IFRS") requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates.  IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.

 

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year are addressed below.

 

Exploration and evaluation expenditure

 

In accordance with the Group's accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation assets.

 

The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that the carrying value of the assets may exceed the recoverable amount.

 

The directors have assessed the Group's gold Projects in Mali and Côte d'Ivoire that are not part of the joint venture agreements and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been conducted on these assets.

 

The directors have assessed the Group's Bougouni Lithium Project in Mali, taking into account the Preliminary Feasibility Study and the recently announced Study Update.  This project continues to be evaluated and has not yet entered into development; there is no indication of impairment.  Accordingly, no impairment review has been conducted on these assets.

 

The Group's exploration activities and future development opportunities are dependent upon maintaining the necessary licences and permits to operate, which typically require periodic renewal or extension. In Mali and Côte d'Ivoire, the process of renewal or extension of a licence can only be initiated on expiry of the previous term and takes time to be processed by the relevant government authority. Until formal notification is received there is a risk that renewal or extension will not be granted.

 

As detailed in the Operational Review, at the date of these financial statements, the Group's key exploration licences are current.  As detailed in note 7, the total carrying value of the exploration and evaluation assets at 31 March 2022 was £11.4 million (2021:  £9.0 million). The Group complies with the prevailing laws and regulations relating to these licences and ensures that the regulatory reporting and government compliance requirements for each licence are met.

 

Valuation of warrants and share options

 

In accordance with the Group's accounting policy for equity settled transactions, all equity settled share-based payments are measured at fair value at the date of issue.  Fair value is determined by using the Black-Scholes option pricing model based on the terms of the options and warrants, the Company's share price at the time and assumptions for volatility and exercise date.  The assumptions used to value the options and warrants are detailed in note 5.

 

For options awarded to the directors, the award has been considered to be in relation to their overall contribution to the Group and, accordingly, the charge has been included within operating costs in the Consolidated Statement of Comprehensive Income rather than treated as an exploration and evaluation cost and capitalised against specific projects.  For the award of warrants associated with the raising of funds through the issue of new shares, the charge has been treated as a share issue expense and offset against the share premium account.

 

Recoverability of Intercompany Balances to Subsidiary Undertakings

The Company has outstanding intercompany balances from its directly held subsidiaries resulting from the primary method of financing the activity of those subsidiaries. The balances are shown in the Company Statement of Financial Position. However, there is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including the project being put into operation, the project being sold and the project collapsing. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, the reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets and the reduced risk of project collapse following the granting of the mining license.  At 31 March 2022 a credit loss provision of £681,000 is held against amounts due from subsidiaries (2021: £877,000).

 

Adoption of New and Revised Standards

 

The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the International Accounting Standards Board ("IASB") that are mandatory and relevant to the Group's activities for the current reporting period.

 

New standards and interpretations not applied

 

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Group. These are listed below.  The Board anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. The amendments to the standards noted below are not expected to have a material impact on the Group's consolidated financial statements.

 

 

Standard	Details of amendment / New Standards and Interpretations	Annual periods beginning on or after
IAS 1 Presentation of Financial Statements	Amendments to IAS 1 Presentation of Financial Statements to specify the requirements for classifying liabilities as current or non-current.	Deferred until no earlier than 1 January 2024
IAS 1 Presentation of Financial Statements	Amendments to IAS 1 Presentation of Financial Statements to specify the requirements for disclosure of accounting policies.	1 January 2023

There are other standards and amendments in issue but not yet effective, which are not likely to be relevant to the Group which have therefore not been listed.

 

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

 

1.    SEGMENTAL REPORTING

The operations and assets of the Group in the year ended 31 March 2022 are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had three operating segments being the West African Gold projects, the West African Lithium projects and the UK administration operations. The Parent Company acts as a holding company. At 31 March 2022, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.

 

Year ended 31 March 2022	UK	West Africa	West Africa	Total
		Gold	Lithium
	£	£	£	£
Administrative expenses	538,625	866	1,164	540,655
Share based payments	342,876	-	-	342,876
Finance charge	19,556	-	-	19,556
Loss for the year	901,057	866	1,164	903,087
At 31 March 2022
Other receivables	5,769	-	-	5,769
Cash and cash equivalents	949,850	38,481	57,184	1,045,515
Trade and other payables	(100,959)	-	(305,382)	(406,341)
Intangible assets - exploration and evaluation expenditure	-	2,410,787	9,031,616	11,442,403
Property, plant and equipment	-	-	3,309	3,309
Net assets at 31 March 2022	854,660	2,449,268	8,786,727	12,090,655

 

 

2.    LOSS BEFORE TAX

                The loss before tax from continuing activities is stated after charging:

	Group Year ended 31 March 2022			Group Year ended 31 March 2021
	£			£
Fees payable to the Company's auditor	40,000			35,000
Share based payments (note 5)	342,876			77,979
Directors' salaries and fees	167,980			115,014
Employer's National Insurance	5,980			5,672

 

Amounts payable to RSM UK Audit LLP and its associates in respect of audit services are as follows:

 

		Group Year ended 31 March 2022		Group Year ended 31 March 2021
		£		£
Audit services
- statutory audit of parent and consolidated accounts		40,000		35,000

 

3.    EMPLOYEES' AND DIRECTORS' REMUNERATION

 

The average number of people employed in the Company and the Group is as follows:

		Group 31 March 2022		Group 31 March 2021		Company 31 March 2022		Company 31 March 2021
		Number		Number		Number		Number
Average number of employees (including directors):		19		18		4		4

 

The remuneration expense for directors of the Company is as follows:

	Year ended 31 March 2022		Year ended 31 March 2021
	£		£
Directors' remuneration	167,980		115,014
Directors' social security costs	5,980		5,673
Total	173,960		120,687

 

In addition to the amounts included above, £79,469 (2021: £62,496) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure.

 

 

		Directors' salary and fees year ended 31 March 2022		Share based payments year ended  31 March  2022 (see note 5)		Total year ended 31 March 2022
		£		£		£
Bernard Aylward (a)		132,449		222,793		355,242
Charles Joseland		45,000		1,164		46,164
Robert Wooldridge		45,000		44,798		89,798
Qingtao Zeng (b)		25,000		2,549		27,549
		247,449		271,304		518,753
		Directors' salary and fees year ended 31 March 2021		Share based payments year ended  31 March  2021 (see note 5)		Total year ended 31 March 2021
		£		£		£
Bernard Aylward (a)		96,510		-		96,510
Charles Joseland		35,000		-		35,000
Robert Wooldridge		27,250		-		27,250
Qingtao Zeng (b)		18,750		-		18,750
		177,510		-		177,510

 

 

a	Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, provided consultancy services to the Group during the year ended 31 March 2022 and received fees of £97,449 (2021: £76,094).  These fees are included within the remuneration figure shown for Bernard Aylward.
b	In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned by Qingtao Zeng, provided consultancy services to the Group during the year ended 31 March 2022 and received fees of £27,136 (2021: £10,595).

4.    LOSS PER SHARE

 

Basic loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

 

The following reflects the result and share data used in the computations:

 

	Loss		Weighted average number of shares		Basic loss per share (pence)
	£
Year ended 31 March 2022	(903,087)		15,809,383,877		0.0057
Year ended 31 March 2021	(623,370)		11,529,513,459		0.0054

 

 

Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.  Options in issue are not considered diluting to the loss per share as the Group is currently loss making.   Diluted loss per share is therefore the same as the basic loss per share.

 

5.    SHARE BASED PAYMENTS

 

The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

 

		Year ended 31 March 2022		Year ended 31 March 2021
Share options outstanding		Number		Number
Opening balance		205,000,000		205,000,000
Issued in the year		45,000,000		-
Closing balance		250,000,000		205,000,000

 

 

		Year ended 31 March 2022		Year ended 31 March 2021
Performance share rights outstanding		Number		Number
Opening balance		-		-
Issued in the year		175,000,000		-
Closing balance		175,000,000		-

 

		Year ended 31 March 2022		Year ended 31 March 2021
Warrants outstanding		Number		Number
Opening balance		285,355,663		205,000,000
Issued in the year		-		389,282,755
Exercised in the year		(80,355,663)		(308,927,092)
Closing balance		205,000,000		285,355,663

 

Options and performance share rights outstanding for each of the directors at the year-end are outlined below:

 

Exercisable between		Bernard Aylward		Robert Wooldridge		Qingtao Zeng		Charles Joseland
8 May 2017 - 8 May 2022		25,000,000		12,500,000		-		-
8 May 2018 - 8 May 2023		12,500,000		6,250,000		-		-
8 May 2019 - 8 May 2024		12,500,000		6,250,000		-		-
20 Nov 2017 - 20 Nov 2022		-		-		5,000,000		-
20 Nov 2018 - 20 Nov 2023		-		-		2,500,000		-
20 Nov 2019 - 20 Nov 2024		-		-		2,500,000		-
18 April 2019 - 18 April 2024		-		-		-		3,333,334
18 April 2020 - 18 April 2025		-		-		-		3,333,333
18 April 2021 - 18 April 2026		-		-		-		3,333,333
6 November 2021		30,000,000		-		-		-
To be determined (Note 1)		40,000,000		-		-		-
To be determined (Note 2)		75,000,000		-		-		-
27 Aug 2021 - 27 Aug 2026		-		15,000,000		7,500,000		-
27 Aug 2022 - 27 Aug 2027		-		7,500,000		3,750,000		-
27 Aug 2023 - 27 Aug 2028		-		7,500,000		3,750,000		-
Closing balance		195,000,000		55,000,000		25,000,000		10,000,000

 

1.    Exercisable from date of securing the finance for construction of the Bougouni mine

2.    Exercisable from date of date for first commercial production from the Bougouni Lithium Project

 

Included within operating losses is a charge for issuing share options and making share-based payments of £342,876 (2021: £77,979). 

 

Details of share options outstanding at 31 March 2022:

 

Date of grant                     Number of options          Option price                       Exercisable between

20 December 2013           13,333,333                           0.7 pence                            30 Dec 2014 - 30 Dec 2024

20 December 2013           13,333,333                           0.7 pence                            30 Dec 2015 - 30 Dec 2025

20 December 2013           13,333,333                           0.7 pence                            30 Dec 2016 - 30 Dec 2026

8 May 2017                         72,500,000                           0.38 pence                          8 May 2017 - 8 May 2022

8 May 2017                         36,250,000                           0.38 pence                          8 May 2018 - 8 May 2023

8 May 2017                         36,250,000                           0.38 pence                          8 May 2019 - 8 May 2024

20 November 2017            5,000,000                             0.38 pence                          20 Nov 2017 - 20 Nov 2022

20 November 2017            2,500,000                             0.38 pence                          20 Nov 2018 - 20 Nov 2023

20 November 2017            2,500,000                             0.38 pence                          20 Nov 2019 - 20 Nov 2024

18 April 2019                      3,333,334                             0.14-0.25 pence                18 April 2020 - 18 April 2025

18 April 2019                      3,333,333                             0.14-0.25 pence                18 April 2021 - 18 April 2026

18 April 2019                      3,333,333                             0.14-0.25 pence                18 April 2022 - 18 April 2027

27 August 2021                  22,500,000                           0.36 pence                          27 Aug 2021 - 27 Aug 2026

27 August 2021                  11,250,000                           0.36 pence                          27 Aug 2022 - 27 Aug 2027

27 August 2021                  11,250,000                           0.36 pence                          27 Aug 2023 - 27 Aug 2028

 

Details of performance share rights outstanding at 31 March 2022:

 

Date of grant                     Number of performance               Option price       Exercisable between

                                                share rights

27 August 2021                  40,000,000                           nil                                           6 November 2021

27 August 2021                  50,000,000                           nil                                           To be determined

27 August 2021                  85,000,000                           nil                                           To be determined

 

Details of warrants outstanding at 31 March 2022:

 

Date of grant                     Number of warrants      Option price                       Exercisable between

22 May 2017                       12,500,000                           0.38 pence                          22 May 2017 - 22 May 2022

22 May 2017                       6,250,000                             0.38 pence                          22 May 2018 - 22 May 2023

22 May 2017                       6,250,000                             0.38 pence                          22 May 2019 - 22 May 2024

23 November 2018          39,999,999                           0.14-0.38 pence                1 March 2019 - 1 March 2024

23 November 2018          50,000,001                           0.14-0.38 pence                To be determined

23 November 2018          90,000,000                           0.14-0.38 pence                To be determined

 

Additional disclosure information:

 

Weighted average exercise price of share options and warrants:

 

·    outstanding at the beginning of the period                                           0.35 pence

·    granted during the period                                                                            0.07 pence

·    outstanding at the end of the period                                                       0.25 pence

·    exercisable at the end of the period                                                        0.34 pence

 

Weighted average remaining contractual life of

share options outstanding at the end of the period                                         6.0 years

 

Options and Performance Share Rights issued in the year to 31 March 2022

 

On 27 August 2021 the Company granted Performance Share Rights of up to 175,000,000 ordinary shares to Bernard Aylward and Mohamed Niare (Country Manager, Mali).

 

The Performance Share Rights carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Lithium Project as follows:

·    Award of mining licence;

·    Securing the finance for construction of the Bougouni mine; and

·    First commercial production from the Bougouni Lithium Project

 

Subject to the vesting conditions being satisfied, the holders of the Performance Share Rights may call for Ordinary Shares, as set out in the table below, to be issued to them at any time within five years of the vesting condition being met and upon payment by them of the nominal value for the Ordinary Shares

 

 

	Performance Share Rights over New Ordinary Shares
Vesting criteria	Bernard Aylward	Mohamed Niare
Award of mining licence	Up to 30 million New Ordinary Shares (capped at value on vesting of £300,000)	Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
Securing the finance for construction of the Bougouni mine	Up to 40 million New Ordinary Shares (capped at value on vesting of £400,000)	Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
First commercial production from the Bougouni Lithium Project	Up to 75 million New Ordinary Shares (capped at value on vesting of £750,000)	Up to 10 million New Ordinary Shares (capped at value on vesting of £100,000)
Total	Up to 145 million New Ordinary Shares (capped at value on vesting of £1.45m)	Up to 30 million New Ordinary Shares (capped at value on vesting of £300,000)

 

In the event of a change of control of the Company, 50 per cent. of any unvested Performance Share Rights will vest immediately, provided that the Company's share price at the time of the change of control exceeds 0.34 pence, being the share price when the awards were made.

 

On 27 August 2021, options over Ordinary Shares were granted to Robert Wooldridge and Qingtao Zeng as set out in the table below. The Options are exercisable at 0.36 pence per share, with 50 per cent of the Options vesting immediately and the remaining 50 per cent. vesting in two equal tranches on the first and second anniversaries of the grant. All unvested options will vest immediately on a change of control of the Company.

 

Director	Number of Options granted
Robert Wooldridge	30,000,000
Qingtao Zeng	15,000,000

 

Warrants issued in the year to 31 March 2021

 

The Company entered into option agreements dated 7 April 2020, 15 July 2020 and 27 October 2020 with Riverfort Global Opportunities PCC Limited and YA II PN Ltd under which the following warrants were issued:

 

 

Date	Warrants issued	Exercise price
7 April 2020	228,571,428	0.04375 pence
15 July 2020	97,580,016	0.061 pence
27 October 2020	63,131,311	0.09 pence

 

All of the warrants had been exercised prior to the year end.

 

6.    Taxation

		Group Year ended 31 March 2022		Group Year ended 31 March 2021
		£		£
Taxation charge for the year		-		-
Factors affecting the tax charge for the year
Loss from continuing operations before income tax		(903,087)		(623,370)
Tax at 19% (2021: 19%)		(171,587)		(118,440)
Losses carried forward not deductible		106,440		103,624
Deferred tax differences		65,147		14,816
Income tax expense		-		-

 

The Group has tax losses and other potential deferred tax assets totalling £2,978,000 (2021: £2,425,000) which will be able to be offset against future income. No deferred tax asset has been recognised in respect of these losses as the timing of their utilisation is uncertain at this stage.

 

7.    Intangible Assets

			Exploration and evaluation
GROUP			£
COST
At 1 April 2020			8,642,568
Additions in the year			541,772
Effects of foreign exchange			(220,251)
At 1 April 2021			8,964,089
Additions in the year			2,546,686
Effects of foreign exchange			(68,372)
At 31 March 2022			11,442,403
AMORTISATION
At 1 April 2020 and 1 April 2021 and 31 March 2022			-
NET BOOK VALUES
At 31 March 2022			11,442,403
At 31 March 2021			8,964,089
At 31 March 2020			8,642,568

 

The Company did not have any Intangible Assets as at 31 March 2020, 2021 and 2022.

 

8.    PROPERTY, PLANT AND EQUIPMENT

				Plant and machinery
GROUP				£
COST
1 April 2020				27,024
Additions in the year				526
Effects of foreign exchange				(1,471)
At 1 April 2021				26,079
Additions in the year			1,600
Effects of foreign exchange			(47)
At 31 March 2022			27,633
DEPRECIATION
At 1 April 2020				12,475
Depreciation charge				5,825
Effects of foreign exchange				(898)
At 1 April 2021				17,402
Depreciation charge				6,922
Effects of foreign exchange
At 31 March 2022				24,324
NET BOOK VALUES
At 31 March 2022				3,309
At 31 March 2021				8,677
At 31 March 2020				14,549

 

All tangible assets are wholly associated with exploration and development projects and therefore the amounts charged in respect of depreciation are capitalised as evaluation and exploration assets within intangible assets. 

 

The Company did not have any Property, Plant and Equipment as at 31 March 2020, 2021 and 2022.

 

9.    SUBSIDIARY UNDERTAKINGS

a.    AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS

 

			Company 31 March 2022		Company 31 March 2021
			£		£
Amounts due from subsidiary undertakings			10,785,230		7,916,150
			10,785,230		7,916,150

 

Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including the Project being put into operation, the Project being sold and the Project collapsing.  Management has updated its calculations reflecting:

a)    additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year;

b)    the reduced risk of credit loss given improvements since last year in the financial, lithium and gold markets; and

c)    the reduced risk of project collapse following the grant of the mining license, assessed at 5% compared to 10% in prior year. 

The review has concluded that at 31 March 2022 a credit loss provision of £681,000 should be held against amounts due from subsidiaries (2021: £877,000).

 

b.    INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

 

The consolidated financial statements include the following subsidiary companies:

 

Company	Subsidiary of	Country of incorporation	Registered office	Equity holding	Nature of business
Kodal Norway (UK) Ltd	Kodal Minerals Plc	United Kingdom	Prince Frederick House, 35-39 Maddox Street, London W1S 2PP	100%	Operating company
International Goldfields (Bermuda) Limited	Kodal Minerals Plc	Bermuda	MQ Services Ltd Victoria Place, 31 Victoria Street, Hamilton HM 10 Bermuda	100%	Holding company
International Goldfields Côte d'Ivoire SARL	International Goldfields (Bermuda) Limited	Côte d'Ivoire	Abidjan Cocody Les Deux Plateaux 7eme Tranche BP    Abidjan Côte d'Ivoire	100%	Mining exploration
International Goldfields Mali SARL	International Goldfields (Bermuda) Limited	Mali	Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 Mali	100%	Mining exploration
Jigsaw Resources CIV Ltd	International Goldfields (Bermuda) Limited	Bermuda	MQ Services Ltd Victoria Place, 31 Victoria Street, Hamilton HM 10 Bermuda	100%	Holding company
Corvette CIV SARL	Jigsaw Resources CIV Ltd	Côte d'Ivoire	Abidjan Cocody Les Deux Plateaux 7eme Tranche BP    Abidjan Côte d'Ivoire	100%	Mining exploration
Future Minerals SARL	International Goldfields (Bermuda) Limited	Mali	Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 Mali	100%	Mining exploration

 

Kodal Minerals plc has issued a guarantee under section 479C to its subsidiary, Kodal Norway (UK) Ltd ("Kodal Norway", company number 08491224) in respect of its activities for the year ended 31 March 2022 to allow Kodal Norway to take advantage of the exemption under s479A of the Companies Act 2006 from the requirements of the Act relating to audit of its individual accounts for the year ended 31 March 2022.

 

Carrying value of investment in subsidiaries	Year ended 31 March 2022		Year ended 31 March 2021
	£		£
Opening balance	512,373		512,373
Impairment in the year	-		-
Closing balance	512,373		512,373

 

 

10.  OTHER RECEIVABLES

		Group 31 March 2022		Group 31 March 2021		Company 31 March 2022		Company 31 March 2021
		£		£		£		£
Share issue proceeds receivable		-		1,838,895		-		1,838,895
Other receivables		5,769		16,013		5,769		16,013
		5,769		1,854,908		5,769		1,854,908

 

All receivables at each reporting date are current. No receivables are past due.  The Directors consider that the carrying amount of the other receivables approximates their fair value and there are no expected credit losses.

 

11.  TRADE AND OTHER PAYABLES

		Group 31 March 2022		Group 31 March 2021		Company 31 March 2022		Company 31 March 2021
		£		£		£		£
Trade payables		348,505		357,514		44,359		55,401
Other payables		57,836		267,102		56,600		266,451
		406,341		624,616		100,959		321,852

 

All trade and other payables at each reporting date are current.  The Directors consider that the carrying amount of the trade and other payables approximates their fair value.

 

 

12.  SHARE CAPITAL

GROUP AND COMPANY

Allotted, issued and fully paid

	Note	Nominal Value	Number of Ordinary Shares	Share Capital £	Share Premium £
At 31 March 2020			9,246,741,119	2,889,606	12,514,604
April 2020	a	£0.0003125	1,428,571,429	446,429	202,102
April 2020	b	£0.0003125	378,323,379	118,226	14,187
June 2020	c	£0.0003125	56,987,211	17,809	2,137
September 2020	d	£0.0003125	228,571,428	71,429	28,571
October 2020	e	£0.0003125	125,034,486	39,073	40,199
November 2020	f	£0.0003125	85,063,264	26,582	27,348
December 2020	g	£0.0003125	118,600,205	37,063	38,130
January 2021	h	£0.0003125	176,190,315	55,059	56,645
January 2021	i	£0.0003125	347,078,879	108,462	111,586
February 2021	j	£0.0003125	153,379,428	47,931	74,314
March 2021	k	£0.0003125	128,080,136	40,025	68,131
March 2021	l	£0.0003125	210,896,619	65,905	114,538
March 2021	m	£0.0003125	168,489,949	52,653	91,507
March 2021	n	£0.0003125	2,800,000,000	875,000	2,424,075
March 2021	o	£0.0003125	48,790,008	15,247	14,515
March 2021	p	£0.0003125	31,565,656	9,864	18,545
At 31 March 2021			15,732,363,511	4,916,364	15,841,134
May 2021	q	£0.0003125	48,790,008	15,247	14,515
May 2021	r	£0.0003125	31,565,656	9,864	18,545
November 2021	s	£0.0003125	19,583,212	6,120	58,877
At 31 March 2022			15,832,302,387	4,947,595	15,933,071

 

a)            On 7 April 2020, a total of 1,428,571,429 shares were issued to Riverfort Global Opportunities PCC Limited and YA II PN Ltd (the "Investors") in connection with the Equity Sharing Agreement ("ESA").  The shares issued under the ESA were issued at an average price of 0.04686 pence per share.  Share issue expenses of £20,860 were offset against the share premium account.

 

b)            On 7 April 2020, a total of 378,323,379 shares were issued at an issue price of 0.035 pence per share to a number of Directors and senior management as payment for salaries or fees owed.

 

 

c)            On 29 May 2020, a total of 56,987,211 shares were issued at a price of 0.035 pence per share to satisfy payment of certain third party professional fees.

 

d)            On 7 September 2020, a total of 228,571,428 shares were issued to the Investors at a price of 0.04375 pence per share in connection with the exercise of warrants issued in connection with the ESA.

 

 

e)            On 15 October 2020, the Investors elected to convert a total amount of $102,352.31 (equivalent to £79,271.86), made up of a principal amount of US$100,004.40 and accrued interest of $2,347.91, into 125,034,486 ordinary shares at a price of 0.06340 pence per share.

 

f)             On 2 November 2020, the Investors elected to convert a total amount of $70,358.92 (equivalent to £53,930.11), made up of a principal amount of $70,000.00 and accrued interest of $358.92, into 85,063,264 ordinary shares at a price of 0.06340 pence per share.

 

 

g)            On 15 December 2020, the Investors elected to convert a total amount of $101,160.41 (equivalent to £75,192.53), made up of a principal amount of $100,000.00 and accrued interest of $1,160.41, into 118,600,205 ordinary shares at a price of 0.06340 pence per share.

 

h)            On 5 January 2021, the Investors elected to convert a total amount of $150,809.59 (equivalent to £111,704.66), made up of a principal amount of $150,000.00 and accrued interest of $809.59, into 176,190,315 ordinary shares at a price of 0.06340 pence per share.

 

 

i)             On 8 January 2021, the Investors elected to convert a total amount of $300,242.88 (equivalent to £220,048.01), made up of a principal amount of $300,000.00 and accrued interest of $242.88, into 347,078,879 ordinary shares at a price of 0.06340 pence per share.

 

j)             On 19 February 2021, the Investors elected to convert a total amount of $169,384.70 (equivalent to £122,244.94), made up of a principal amount of $150,000.00 and accrued interest of $19,384.70, into 153,379,428 ordinary shares at a price of 0.079701 pence per share.

 

 

k)            On 17 March 2021, the Investors elected to convert a total amount of $150,971.51 (equivalent to £108,155.99), made up of a principal amount of $150,000 and accrued interest of $971.51, into 128,080,136 ordinary shares at a price of 0.084444 pence per share.

 

l)             On 22 March 2021, the Investors elected to convert a total amount of $250,337.33 (equivalent to £180,443.15), made up of a principal amount of $250,000 and accrued interest of $337.33, into 210,896,619 ordinary shares at a price of 0.08556 pence per share.

 

 

m)          On 22 March 2021, the Investors elected to convert a total amount of US$200,000 (equivalent to £144,160), made up of a principal amount of US$200,000 and no accrued interest, into 168,489,949 ordinary shares at a price of 0.08556 pence per share.

 

n)            On 25 March 2021, a total of 2,800,000,000 shares were issued in a placing at a price of 0.125 pence per share.  Share issue expenses of £200,925 were offset against the share premium account.  £1,838,895 of the proceeds of this share issue were received in April 2022.

 

 

o)            On 25 March 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.

 

p)            On 25 March 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.

 

 

q)            On 18 May 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in connection with the exercise of warrants.

 

r)             On 18 May 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in connection with the exercise of warrants.

 

 

s)            On 5 November 2021, a total of 19,583,212 shares were issued pursuant to the Company's agreement with Bambara Resources SARL at 0.3319p per share

 

 

13.  RESERVES

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Share based payment reserve	Cumulative fair value of options and share rights recognised as an expense. Upon exercise of options or share rights, any proceeds received are credited to share capital. The share-based payment reserve remains as a separate component of equity.
Translation reserve	Gains/losses arising on re-translating the net assets of overseas operations into sterling.
Retained earnings	Cumulative net gains and losses recognised in the consolidated statement of financial position.

14.  FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The Group's principal financial instruments comprise cash and cash equivalents, other receivables and trade and other payables.

 

The main purpose of cash and cash equivalents is to finance the Group's operations.  The Group's other financial assets and liabilities such as other receivables and trade and other payables, arise directly from its operations.

 

It has been the Group's policy, throughout the periods presented in the consolidated financial statements, that no trading in financial instruments was to be undertaken, and no such instruments were entered in to.

 

The main risk arising from the Group's financial instruments is market risk. The Directors consider other risks to be more minor, and these are summarised below. The Board reviews and agrees policies for managing each of these risks.

 

Market risk

Market risk is the risk that changes in market prices, and market factors such as foreign exchange rates and interest rates will affect the Group's results or the value of its assets and liabilities.

 

The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

 

Interest rate risk

The Group does not have any borrowings and does not pay interest.

 

The Group's exposure to the risks of changes in market interest rates relates primarily to the Group's cash and cash equivalents with a floating interest rate. These financial assets with variable rates expose the Group to interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing.

 

In regard to its interest rate risk, the Group periodically analyses its exposure. Within this analysis consideration is given to alternative investments and the mix of fixed and variable interest rates. The Group does not engage in any hedging or derivative transactions to manage interest rate risk.

 

The Group in the year to 31 March 2022 earned interest of £nil (2021: £nil).  Due to the Group's relatively low level of interest-bearing assets and the very low interest rates available in the market the Group is not exposed to any significant interest rate risk.

 

Credit risk

Credit risk refers to the risk that a counterparty could default on its contractual obligations resulting in financial loss to the Group. The Group's principal financial assets are cash balances and other receivables.

 

The Group has adopted a policy of only dealing with what it believes to be creditworthy counterparties and would consider obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group's exposure to and the credit ratings of its counterparties are continuously monitored. An allowance for impairment is made where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables concerned.

 

Other receivables consist primarily of prepayments and other sundry receivables and none of the amounts included therein are past due or impaired.

 

Financial instruments by category - Group

		Financial assets at amortised cost			Other financial liabilities at amortised cost		Total
31 March 2022
Assets
Other receivables		5,769			-		5,769
Cash and cash equivalents		1,045,515			-		1,045,515
Total		1,051,284			-		1,051,284
Liabilities
Trade and other payables		-			(406,341)		(406,341)
Total		-			(406,341)		(406,341)

Foreign exchange risk

Throughout the periods presented in the consolidated financial statements, the functional currency for the Group's West African subsidiaries has been the CFA Franc.

 

The Group incurs certain exploration costs in the CFA Franc, US Dollars and Australian Dollars and has exposure to foreign exchange rates prevailing at the dates when Sterling funds are translated into other currencies. The CFA Franc has a fixed exchange rate to the Euro and the Group therefore has exposure to movements in the Sterling : Euro exchange rate.  The Group has not hedged against this foreign exchange risk as the Directors do not consider that the level of exposure poses a significant risk.

 

The Group continues to keep the matter under review as further exploration and evaluation work is performed in West Africa and other countries and will develop currency risk mitigation procedures if the significance of this risk materially increases.

 

The Group's consolidated financial statements have a low sensitivity to changes in exchange due to the low value of assets and liabilities (principally cash balances) maintained in foreign currencies.  Once any project moves into the development phase a greater proportion of expenditure is expected to be denominated in foreign currencies which may increase the foreign exchange risk.

 

Financial instruments by currency - Group

 

		GBP		USD		NOK		AUD		XOF		Total
31 March 2022
Assets
Other receivables		5,769		-		-		-		-		5,769
Cash and cash equivalents		949,850		-		-		-		95,665		1,045,515
Total		955,619		-		-		-		95,665		1,051,284
Liabilities
Trade and other payables		(64,671)		(304,145)		-		(36,289)		(1,236)		(406,341)

Liquidity risk

Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.

 

The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.

 

The Group has established policies and processes to manage liquidity risk. These include:

·    Monitoring the maturity profiles of financial assets and liabilities in order to match inflows and outflows;

·    Monitoring liquidity ratios (working capital); and

·    Capital management procedures, as defined below.

 

Capital management

The Group's objective when managing capital is to ensure that adequate funding and resources are obtained to enable it to develop its projects through to profitable production, whilst in the meantime safeguarding the Group's ability to continue as a going concern. This is to enable the Group, once projects become commercially and technically viable, to provide appropriate returns for shareholders and benefits for other stakeholders.

 

The Group has historically relied on equity to finance its growth and exploration activity, raised through the issue of shares. In the future, the Board will utilise financing sources, be that debt or equity, that best suits the Group's working capital requirements and taking into account the prevailing market conditions.

 

Fair value

The fair value of the financial assets and financial liabilities of the Group, at each reporting date, approximates to their carrying amount as disclosed in the Statement of Financial Position and in the related notes.

 

The fair values of the financial assets and liabilities are included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

 

The cash and cash equivalents, other receivables, trade payables and other current liabilities approximate their carrying value amounts largely due to the short-term maturities of these instruments.

 

Disclosure of financial instruments and financial risk management for the Company has not been performed as they are not significantly different from the Group's position described above.

 

15.  RELATED PARTY TRANSACTIONS

 

The Directors represent the key management personnel of the Group and details of their remuneration are provided in note 3.

 

Robert Wooldridge, a director, is a member of SP Angel Corporate Finance LLP ("SP Angel") which acts as financial adviser and broker to the Company. During the year ended 31 March 2022, the Company paid fees to SP Angel of £30,000 (2021: £240,381).  The balance due to SP Angel at 31 March 2022 was £nil (2021:  £nil).

 

Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, a director, provided consultancy services to the Group during the year ended 31 March 2022 and received fees of £97,450 (2021: £76,094).  These fees are included within the remuneration figure shown for Bernard Aylward in note 3.  The balance due to Matlock at 31 March 2022 was £nil (2021:  £nil).

 

Geosmart Consulting Pty Ltd ("Geosmart"), a company wholly owned by Qingtao Zeng, a director, provided consultancy services to the Group during the year ended 31 March 2022 and received fees of £27,136 (2021: £10,595).  The balance due to Geosmart at 31 March 2022 was £14,528 (2021:  £nil).

 

16.  CONTROL

 

                No one party is identified as controlling the Group.

 

17.  CAPITAL COMMITMENTS

 

                The Group had capital commitments to exploration and evaluation expenditure of £nil (2021: £nil).

 

 

18.  EVENTS AFTER THE REPORTING PERIOD

 

On 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses) via a subscription for 130,142,857 shares and an oversubscribed placing of 941,285,712 shares at a price of 0.28 pence per Placing Share (the 'Placing').  The funds raised will support Kodal in the continuing development and preparation for financing and construction of its flagship Bougouni Lithium Project in Mali.