THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

3 July 2023

MetalNRG plc

(the "Company" or "MetalNRG")

Financial Results for the year ended 31 December 2022

MetalNRG plc (LON:MNRG), the natural resources and energy investment company, announces  the Company's Financial Results for the year ended 31 December 2022.

STRATEGIC REPORT

The Directors present the strategic report for MetalNRG plc (the "Company" or "MetalNRG", and collectively with its subsidiary companies, the "Group") for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The Group's principal activity during the year was that of a natural resources and energy investing company listed on the Main Market for listed securities of the London Stock Exchange.

BUSINESS REVIEW

2022 has been a year which saw the Company address a number of legal issues which are summarised below and have been time consuming and a drain on the Group's finances. However, during this difficult time, the Group did progress with additional exploration work and geosampling on its GoldRidge Project in Arizona producing further positive results. Under its business development partnership with EQTEC plc, the Group also continued its re-commissioning of the waste to energy plant in Italy, which is now commissioned and producing electricity.

The Company's claim for (i) the return of £1.02million it paid and (ii) damages from the former Director, Mr Rocco, for breach of director's duties has already been successful by way of summary judgement on the first point, with judgement given for the £1.02 million.  The corporate defendants have paid the Company c.£450,000, and the remainder has been paid into Court.  Now that the appeal process has run its full course and the defendants have lost their request to appeal, the Court has now released funds it held to the Company. The defendants have also been given a Court order to pay costs and interests which we are awaiting agreement and settlement on. As at 30 April 2023 total legal costs incurred to date are £1,631,566 of which £448,893 has been settled with £55,173 of this amount recovered from the defendants. The Company expects to recover the majority of these costs once an agreement has been reached. However, as a result of this uncertainty no receivable has been recognised in the financial statements at 31 December 2022.

The case proceeds on the director's duties claim in which the Company seeks damages from Mr. Rocco.  A case management and cost hearing was held on 8 February 2023 to set a timetable for the remainder of the claims but this was adjourned on the Defendant's application on a technical matter, and whilst a new date is now set for this case on 6 July 2023, the Company is trying to secure an earlier date, the Court schedule permitting.

As to the s994 Prejudice Petition brought by Mr. Rocco against the Company and the current Directors personally, Mr. Rocco withdrew the claim in December 2022, accepting to pay the Company and the Directors their legal costs incurred to date. 

Mr. Rocco filed a claim in Scotland under his employment agreement to be indemnified for his legal costs by the Company.  The defendant lost the claim at first instance and was ordered to pay legal costs to the Company.  The defendant appealed, the appeal was heard in December 2022, and the Sheriff in Scotland has now rejected the appeal and given order to the defendant to pay cost to the Company and the Directors agreement is being sought on the costs to be covered by the Defendant.

Mr Rocco has also taken the Company to the Employment Tribunal in Scotland.  The case is on hold until the resolution of the proceedings in the English High Court, for damages from Mr Rocco for breach of director's duties. The process is lengthy, however the Company is convinced that it has taken the best route for its shareholders and continues to work towards a successful outcome on all cases which we hope will conclude soon.

Following a review carried out by the Board in connection with the carrying value of some of its investments, the Directors have determined that the fair value of the Group's investment in IMC and BritNRG Limited should be fully impaired by £440,582 (2021: £nil) to £nil. The Board is however confident that once the relevant legal processes have been concluded the Directors will be in a position to re-evaluate these investments and re-establish a reasonable fair value. See 'Review of Investments and Operations' in the Strategic Report for further information relating to these investments.

REVIEW OF INVESTMENTS AND OPERATIONS:

Gold Ridge - Gold in Arizona.

MetalNRG's wholly owned subsidiary investment in Gold Ridge Holdings Limited ("GHL") is £536,975 (2021: £536,975). In addition, MetalNRG has made cash advances to GHL for the purpose of carrying out and maintaining its exploration license commitments. To date, a total of £315,584 has been advanced to GHL. The amount advanced to GHL is accruing interest at 5% per annum on the outstanding balance and at the year end, interest of £30,309 (2021: 16,689) has accrued and is payable on demand.

The Competent Person's Report by SRK Exploration Services Ltd ("SRK") in 2021 recommended that MetalNRG develop a full and detailed understanding of the areas' geology and mineralisation as they suggested the area offers a better economic prospect that could be compromised if the waste dumps and pillars were to be exploited upfront. As a result, the Company proceeded in 2022 with detailed desktop research and the amalgamation of all previous records and results of various campaigns to develop a new database for Gold Ridge.

Following the completion of this work, the Board followed SRK's advice and completed an on-site geochemical sampling program which delivered positive results. Soil Geochemistry has provided evidence for multiple geologic events. The main implication of our findings is that historically mined gold mineralisation was transposed northwards where no previous exploration drilling has occurred. Having now found gold anomalies in these previously unexplored areas a new linear gold anomaly has been defined as a result of the work completed.

A new significant multi-element geochemical anomaly also occurs 1km west of the Dives Mine. Copper anomalies in volcanic rocks show strong evidence for radial fracturing, a common feature of porphyry deposits. The findings of the geochemical program encourages the Board to conclude that the area may host a larger mineralising system controlling all the surface mines and showings.

MetalNRG has completed just under 600 (Phase I) of the 1,000 geochemical samples planned. The laboratory analysis was conducted for Gold, Silver and 49 other elements by ALS Chemex. The largest gold anomalies were found in historical areas mined for gold; however, gold anomalies were found in areas previously unexplored and in particular on the new linear zone of gold mineralization in the Southern Precambrian block.

All sample results to date show: Gold above 25ppb = 14%, silver above 0.3ppm = 38%, Lead above 35ppm = 47%, Copper above 35 ppm = 40% and Zinc above 115 ppm = 33%.

Bart Stryhas, Senior Geologist on the project, commented: "These results confirm our previous beliefs, that there is indeed a real possibility of a larger un-discovered gold/base metal system at Gold Ridge."

As a result of these encouraging findings, Bart and the Board have defined the next steps to be taken and are now working towards implementing these in 2023. The next steps include completing the Geo-sampling program of another 400 samples in the areas of interest. Upon analysis, the Company will define a drilling program to be completed as funds become available from the legal processes.

EQTEC Italia - Waste to Energy Project in Italy

In May 2021, the Company announced, in partnership with EQTEC plc, its participation in the acquisition and planned recommissioning of a 1MWe waste-to-energy plant in Italy. Originally commissioned in 2015, the plant was built around EQTEC's proprietary and patented Advanced Gasification Technology. MetalNRG invested a total of €700,000 (£605,280) into the project via its wholly owned subsidiary, MetalNRG Eco Ltd. At the year end the carrying value of MetalNRG's investment in the EQTEC Italia project is £605,280 (2021: £605,280).

MetalNRG joined a consortium led by EQTEC to repower, own and operate the biomass-to-energy plant (the "Plant") in Castiglione d'Orcia, Tuscany, Italy. It was planned that, once operational, the plant would transform straw and forestry wood waste from local farms and forests into green electricity and heat for use in the local community.

In 2022, EQTEC Italia MDC in Italy worked at recommissioning the plant and during that process additional operational improvements were identified and implemented, including the installation of a dryer. While this increased the Capex of the project, it did improve the flexibility of wood chip inputs and will reduce the cost of the wood chips once the plant is operational. The recommissioning of the plant is now complete and is producing not only electricity as per plan but also Biochar (an organic fertiliser) which will be sold for Euro 500 to 800 per tonne depending on the level of quality produced.

Certification is currently being processed to determine the quality of this by-product. Additional revenue streams are also being explored and could lead to an improved financial performance of the plant.

EQTEC Italia MDC is also in the process of refinancing the plant and this will enable the Company to recover a portion of its original investment with a dilution of its equity position which currently stands at 12%.

BritNRG Limited - UK Conventional Onshore Oil & Gas

With the ongoing legal process (as detailed on page 3) and the lack of meaningful financial information provided by BritNRG Limited, the Board has determined that its 14.9% investment in BritNRG Limited should be fully impaired by £175,000 (2021: £nil) to £nil.

We have not received any operational or financial updates from the company due to the legal processes we have been involved with. BritNRG Limited did seek our support for a recent funding round as per the outline below;

BritNRG Limited - Proposed Allotment of Shares and Invitation to Participate

Further to an email of 28 November 2022, the company has been required to make some adjustments

BritNRG is electing to issue the following shares (including shares to settle convertible loan obligations):

·      Number of Shares to be Issued: 304  

·      Class of Shares to be Issued: Ordinary

·      Par Value per Share: £0.001  

·      Price Per Share: £1,900 (*)

(*) Shares are being offered to you at a preferential rate, taking into account the lowest realisable share price.

As a registered holder of 194 Ordinary Shares, you are entitled to pre-emption rights in accordance with the Companies Act 2006 in respect of 46 (rounded up) Ordinary Shares for a consideration of £87,400, representing 14.9% of the amount proposed to be issued. 

The Company elected not to participate in this funding round as no information was supplied on the proposed investment, on the use of funds and no appropriate information was provided on the current financial and operational status of BritNRG.

IMC - Uranium Project in Kyrgyzstan

Project operations are currently on hold due to the Government in Kyrgyzstan banning the exploitation of Uranium. IMC, the owner of the licence, has now moved towards an arbitration process.

With the ongoing ban on the exploitation of Uranium in Kyrgyzstan together with the uncertainty of the outcome of the arbitration process, the Board has determined that its investment in IMC should be fully impaired by £265,582 (2021: £nil) to £nil.

Lake Victoria Gold - Gold in Tanzania

MetalNRG holds a minority equity position in Lake Victoria Gold ("LVG") as a result of cash advances to LVG converting into shares after the Company terminated its investment in this gold project in Tanzania. The current owners are seeking to bring the project into production.  The current exploration licence expires in 2025 and the terms for agreeing the renewal of this licence and the commencement of production within the next two years are ongoing but are expected to be agreed later this year. MetalNRG will not be increasing its equity position and has received regular updates from LVG, who is looking to find a suitable partner to progress the project into production.

The total amount advanced to LVG was US$ 332,150 (£255,565) which was converted into the equivalent of AUD 434,439 on 29 January 2021 or 4,344,389 AUD 0.10 shares which is a 3.84% equity share in LVG. MetalNRG's carrying value of its investment in LVG is £255,565 (2021: £255,565) at the year end.

RESULTS AND DIVIDENDS

The loss of the Group for the year ended 31 December 2022, after taxation, attributable to equity holders of MetalNRG, the Parent Company, amounted to £2,218,437 (2021: £1,864,279).

The Directors do not recommend the payment of dividends but are working towards establishing a suitable dividend policy that can be considered in the future (2021: £nil).

EVENTS AFTER THE REPORTING PERIOD

There are no significant post period events to disclose for the year ended 31 December 2022, other than those set out in Note 24 to the Financial Statements.

MAIN TRENDS AND FACTORS LIKELY TO IMPACT FUTURE BUSINESS PERFORMANCE

The Board considers the following to be the key trends and factors that are likely to impact future business performance:

·    General commodity cycle - Commodity prices, base and precious metals and gold specifically, have seen a marked improvement over the last year. The Board maintains a positive outlook for commodity prices, and the gold price in particular.

·    Project development - the Company's partnership with EQTEC Plc on its EQTEC Italia MDC waste-to-energy project is expected to start generating revenues in the near term and the success of this project could lead to the Company investing in other similar projects in the future.

·    Exploration results - the Management's ability to successfully execute MetalNRG's exploration strategy is a key factor in the future business performance of the Company. Specific business principles designed to maximize the Company's chances of long-term success in this regard are highlighted in the following section headed "Principal Risks and Uncertainties".

PRINCIPAL RISKS AND UNCERTAINTIES

Management of the business and the execution of the Board's strategy are subject to a number of key risks and uncertainties:

Mineral exploration

Inherent with mineral exploration is that there are no guarantees that the Company can identify a mineral resource that can be extracted economically. In order to minimise this risk and to maximise the Company's chance of long-term success, we are committed to the following strategic business principles:

·    The Board regularly reviews the Company's exploration and development programmes and allocates capital in a manner that it believes will maximise risk-adjusted return on capital.

·    The Board applies advanced exploration techniques to areas and regions that it believes are relatively under-explored historically.

·    Exploration work is conducted on a systematic basis. More specifically, exploration work is carried out in a phased, results-based fashion and leverages a wide range of exploration methods including modern geochemical and geophysical techniques and various drilling methods.

·    The Board focuses the Company's activities on jurisdictions that the Board believes represent low political and operational risk. Moreover, the Board strongly prefers to operate in jurisdictions where the Company's exploration teams have considerable 'on the ground' experience. At the present time, all of the Company's active exploration related projects are in Arizona, USA, a country with established mining codes, stable government, skilled labour force, excellent infrastructure and a well-established mining industry.

Commodity price risk

The principal commodities that are the focus of the Company's exploration and development efforts (precious metals and base metals specifically gold and copper) are subject to highly cyclical patterns in global demand and supply, and consequently, the price of those commodities can be highly volatile.

Recruiting and retaining highly skilled directors and employees

The Company's ability to execute its strategy is highly dependent on the skills and abilities of its people. The Board undertakes ongoing initiatives to foster good staff engagement and ensure that remuneration packages are competitive in the market.

Occupational health and safety

Every Director and employee of the Company is committed to promoting and maintaining a safe workplace environment, including adopting COVID safe work practices. The Company regularly reviews occupational health and safety policies and compliance with those policies. The Company also engages with external occupational health and safety expert consultants to ensure that policies and procedures are appropriate as the Company expands its activity levels.

Financing risk

Raising sufficient debt and equity to fund the Company's corporate and investments activities is crucial to enable the Group to maintain its investment strategy. The Board is confident that sufficient funding can be raised to progress its investment activities.

Interest rate risk

The Company's interest rate exposure arises mainly from the interest-bearing borrowings as disclosed in Note 15. All of the Company's facilities are at fixed interest rates and a provision for interest has been made in the accounts at the year end.

FINANCIAL INSTRUMENTS

The Group's financial instruments comprise investments, cash at bank and various items such as available for sale assets, other debtors, loans and creditors. The Group has not entered into derivative transactions and nor does it trade financial instruments as a matter of policy.

Credit Risk

The Group's credit risk arises primarily from cash at bank, other debtors and the risk that a counterparty fails to discharge its obligations. At 31 December 2022, (2021: £nil) no shares in the Company were un-paid for. The Board determined that the Company's investments of £175,000 in BritNRG Limited and £265,582 in IMC should be impaired in full. See 'Review of investments and operations' in the Strategic Report for more information.  

The Company's credit risk primarily arises from inter-company debtors, which are considered to form part of the Company's investment in the subsidiaries (see Note 11 to the Financial Statements) and cash at bank and other debtors. Should the subsidiaries' exploration activities not be successful, it is possible that these debtors may become irrecoverable.

Liquidity Risk

Liquidity risk arises from the management of cash funds and working capital. The risk is that the Group will fail to meet its financial obligations as they fall due. The Group operates within the constraints of available funds and cash flow projections are produced and regularly reviewed by management.

Interest rate risk profile of financial assets

The only financial assets (other than short term debtors) are cash at bank and in hand, which comprises money at call. The Directors believe the fair value of the financial instruments is not materially different to the book value.

Interest rate risk profile of financial liabilities

The only financial liabilities (other than short term creditors) are interest bearing loans and convertible loan notes. The Directors believe the fair value of the financial instruments is not materially different to the book value.

Foreign currency risk

The Group has a United States subsidiary and it operates in Europe through its UK subsidiary with an investment in Italy, which can affect the Group's sterling denominated reported results as a consequence of movements in the Sterling/US dollar/Euro exchange rates. The Group also incurs costs denominated in foreign currencies which gives rise to short term exchange risk. The Group does not currently hedge against these exposures as they are deemed immaterial and there is no material exposure as at the year end (2021: £nil).

Market risk

The Group is also exposed to market risk arising from unlisted investments which are stated at their fair value.

KEY PERFORMANCE INDICATORS (KPIs)

The Company's financial statements can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board.

At this stage in the Company's development, the Directors regularly monitor key performance indicators associated with funding risk, being primarily projected cash flows associated with general administrative expenses and projected cash flows on a project-by-project basis. This year, the Company has been able to raise the funds as needed to finance its activities.

KPIs are not appropriate as a means of assessing the value creation of a company which is involved in natural resource investments, and which currently has no turnover. The Board considers that the detailed information in the Business Review in the Strategic Report is the most appropriate guide to the Group's performance during the year.

CORPORATE RESPONSIBILITY

MetalNRG aims to be socially and environmentally responsible, following and exceeding standards set for exploration and investment companies around the world. As a responsible operator, the Company has developed a Corporate Social Responsibility ("CSR") policy that aims to align exploration and investment activities with the expectation of local stakeholders in relation to environmental, economic and social impacts. As an explorer, MetalNRG's impact on local communities is the most significant area of focus. 

The firm's CSR framework places the emphasis on stakeholder engagement and information dissemination, ensuring the local community is aware of the Company plans and activities where appropriate.

GOVERNANCE

The Board considers sound governance as a critical component of the Company's success and the highest priority. The Company seeks to retain a strong non-executive presence drawn from varied backgrounds and with well-functioning governance committees. Through the Company's compensation policies and variable components of employee remuneration, the Remuneration Committee of the Board seeks to ensure that the Company's values are reinforced in employee behaviour and that effective risk management is promoted.

ANALYSIS BY GENDER

EMPLOYEES AND EMPLOYEE DEVELOPMENT

The Company is dependent upon the qualities and skills of its employees and their commitment plays a major role in the Company's business success. Employees' performance is aligned to the Company's goals through an annual performance review process and via incentive programmes. The Company provides employees with information about its activities through regular briefings and other media. The Company operates a share option scheme, operated at the discretion of the Remuneration Committee.

DIVERSITY AND INCLUSION

The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-disability, sexual orientation or marital status. The Company gives due consideration to all applications and provides training and the opportunity for career development wherever possible. The Board does not tolerate discrimination of any form, positive or negative, and all appointments are based solely on merit.

HEALTH AND SAFETY

The Company includes Health and Safety ("H&S") procedures and frameworks in all of its planning and field activities, with an emphasis on top-down as well as bottom-up ownership and responsibility, quality training of all personnel, and risk assessments that go beyond mere regulatory compliance. Comprehensive Risk Assessments of Health and Safety Systems have been developed to identify existing risks, to implement relevant mitigation measures and to identify new risks before they may be directly applicable to our operations. MetalNRG's H&S strategy includes project and location specific training, H&S inductions, Emergency Response Plans and field team reporting procedures applied to MetalNRG's projects worldwide.

SECTION 172(1) STATEMENT

MetalNRG and its Board members understand the importance and relevance of considering stakeholder groups in long-term decision making; we therefore engage in a systematic manner with our key stakeholders.

First and foremost, the Directors act in a way that they consider, in good faith and with the information available, to be most likely to promote the success of our Company and of all our stakeholders. This includes considering the interests of employees, contractors, advisers and consultants, maintaining high standards of business conduct while considering the impact on communities and the environment.

Section 172 specifies that the Directors must act in good faith when promoting the success of the Company and have regards (amongst other things) to the following:

·    the likely consequences of any Board decision in the long-term;

·    to the extent the Company has employees, the interests of the Company's employees;

·    the need to foster the Company's business relationships with suppliers, customers and others;

·    the impact of the Company's operations on the community and the environment;

·    the desirability of the Company's maintaining a reputation for high standards of business conduct;

·    and to act fairly as between members of the Company

The Board of Directors is collectively responsible for the decisions made towards the long-term success of the Company.

Considering the broad range of interests in the Company is an important part of the way the Board makes decisions; however, in balancing those different perspectives, it won't always be possible to deliver everyone's desired outcome.

Engaging with stakeholders

We consistently engage with stakeholders to inform our decision making and to support the Board's understanding of how our activities impact them. Specifically, the Directors take time to meet and discuss various topics with our advisers, contractors, suppliers, brokers and our shareholders.

The Board considers and discusses information received from across the organisation to help it understand the impact of its operations, and the interests and views of our key stakeholders. The Board of Directors are presented with a CEO report and financial management accounts on a monthly basis and from time to time commentary from other relevant executive team members. The CEO report and financial management accounts form the basis for formal Board meetings. In addition to the formal Board meetings, informal meetings of the Board are also regularly held. At the beginning of each financial year, a strategic business plan and budgets are presented to the Board by the CEO and these form the basis for on ongoing and regular reviews of the Company's performance.

The Company regularly releases social media commentary, which any stakeholder can reply to, our PR advisers monitor comments on social media and will review the comments with the CEO and together they will develop and adjust their communications plan based on issues that arise.

As a result of these activities, the Board has an overview of engagement with stakeholders, and other relevant factors, which enables the Directors to comply with their legal duty under section 172 of the Companies Act 2006.

Employees, contractors and consultants

The Company has few employees, however we do work with a number of contractors and consultants and the Board will engage with all three of the above as we see them as an extension of the Company when working together. We hold regular face to face and virtual online meetings to ensure that all health & safety matters are adhered to and that the Company's Code of Business Conduct is followed by all. We also actively seek their input to further improve performance, health and safety and our own engagement processes. Due to the fact that we work with specialist consulting firms, we also recognise that in certain areas their knowledge and expertise might be better than our own and we will take advice from them but we will retain ultimate responsible on those matters.

Partners

The Company works in close partnership with EQTEC plc to develop waste to energy projects which is part of our efforts towards the achievement of zero emissions. Our first joint investment in Italy is a good example of how we work closely together in the interest of all stakeholders involved in the project. While recommissioning the plant, we have been involved in all the decision-making processes, engaging with local political representatives who have an interest in the project while at the same time working closely with the contractors and suppliers on site to secure ultimate success. We have attended regular meetings and are part of the Board of the SPV set up to manage the project.

Governments & Regulators

We seek to build strong and transparent relations with host governments and regulatory bodies. This is carried out by the Board members of the SPVs who are charged with developing the specific asset; together we will agree the framework to follow and they will adapt it to the local regulatory environment and report back to the Company's main Board via monthly reports. These reports are discussed at Board meetings and the CEO is charged with supplying the SPVs' managements and Board with feedback. For example, our partner in Kyrgyzstan holds regular meetings with government representatives in country seeking to resolve the uranium mining licence suspension in country. Prior to any meeting, we discuss our approach internally and following every meeting the local management team supplies the Board with a written report on the meeting and supplies us with any written correspondence along with its translation; the Board will then discuss these documents and will supply feedback where required.

Community & Environment

MetalNRG is extremely conscious of the potential impact on the environment its activities may have and also on the local communities. As a Board we consider these aspects carefully in our decision making and we ensure that environmental considerations and implications are integrated in the business plans developed by the SPVs developing specific assets. The SPVs also have to follow their industry requirements on environmental impact and in most of our assets environment impact studies must be presented to the regulators. The Company's Board will work with the SPVs' managements to adhere to the regulators requirements and provide guarantees as and when they might be required.

Maintaining High standards of Business Conduct

MetalNRG is incorporated in the UK and governed by the Companies Act 2006. The Company has adopted a Code of Business Conduct and the Board recognises the importance of maintaining a good level of corporate governance, which, together with the requirements to comply with Market Regulatory rules, ensures that stakeholders interests are safeguarded. The Board requires ethical behaviour and business practices to be implemented throughout its business and the SPVs it has an interest in. Our anti-bribery statement is clear and straight-forward and the Company expects and demands professional, honest and fair behaviour at all times and there is a zero tolerance for bribery and unethical behaviour, which as a Board we follow with conviction.

Shareholders

As a company whose issued ordinary share capital is listed on the standard segment of the Official List and which are traded on the Main Market for listed securities of the London Stock Exchange, the Board responsibilities are clear and our legal advisers work closely with us on ensuring the Company's compliance. The investor section on our web site serves as our primary method for shareholder communications and on which we publish our reports, results and other relevant information on the Company and its assets. Regular dialogue is maintained with our shareholders through presentations, meetings and social media. The Company conducts a quarterly review of its shareholders and reviews the results at Board level, the Board also engages formally with shareholders at the AGM.

The requirements for compliance to section 172 of the Companies Act will be monitored on an ongoing basis and the Board is committed to making ongoing improvements in this area.

CLIMATE RELATED FINANCIAL DISCLOSURES

Introduction

MetalNRG knows that transparency regarding climate-related risks and opportunities is critical to maintaining the trust of our stakeholders and allows our investors to better understand the implications of climate change. This is why we are adopting the recommendations of the Task Force on Climate-related Financial Disclosures (the "TCFD"). Our first report is aligned to the TCFD's guidelines and is structured into four sections: Governance, Risk Management, Strategy and Metrics & Targets. These topics align to the TCFD's recommended disclosures and provide a comprehensive view into how we understand and manage the risks and opportunities associated with climate change at MetalNRG.

Governance

The Board of Directors actively oversees MetalNRG's investment strategy. At each Board meeting our Board engages in robust discussions about its current investments and any potential investment opportunities where they address any emerging challenges and disruptions. At the same time, our Board works with senior management to develop a comprehensive view of MetalNRG's short and long-term business risks. Both our Board and senior management team recognise that operating responsibly, which includes minimizing the environmental impact of our operations, is fundamental to the long-term success of MetalNRG. We believe building a better future involves making climate awareness "business as usual" throughout our organization, starting at the top.

Our Board oversees the management of specific risks and opportunities, including climate-related risks and opportunities. The senior management team provides regular updates to our Board on their activities and, in addition, our Board reviews the risks associated with MetalNRG's investment strategy throughout the year.

Risk Management

MetalNRG recognises that climate change risk is a global issue that may impact how we run our business, both today and in the future. As such, we continue to look for ways to improve our understanding of climate-related risks. However, although the impact of climate change is relatively low at this stage in MetalNRG's development, we are conscious that "doing nothing" isn't an acceptable response to the impact climate change may have on the business in the future. We are therefore working to integrate climate risk variables into our overall risk management process and establish formal multi-disciplinary processes that engage both our Board and senior management team.

Strategy

MetalNRG operates from a corporate head office in the UK but holds investments in several global jurisdictions including the UK, USA (through its wholly owned subsidiary, Gold Ridge Holdings Ltd), Tanzania and Italy (through its wholly owned subsidiary, MetalNRG Eco Ltd). The nature of these investments includes oil and gas, gold and copper exploration, mining and extraction and producing energy from waste.

The Board is conscious of the inherently "dirty" nature of mining and exploration activities. However, the Board actively encourages its investment partners to operate within international mining guidelines and to carry out its activities using the most up-to-date equipment. In fact, as part of MetalNRG's due diligence undertaken prior to any investment, it insists that any mining and exploration activities are carried out within the International Council on Mining and Metals' ("ICMM") mining principals. 

In addition, MetalNRG's most recent investment in a waste-to-energy facility in Italy (through its wholly owned subsidiary, MetalNRG Eco Ltd) in conjunction with its partner, EQTEC plc, which utilises its advanced gasification technique to convert agricultural and forestry waste into electrical power and biochar, is evidence of MetalNRG's commitment to investing in clean energy production.

Metrics & Targets

MetalNRG is committed to reducing its impact on the environment in all aspects of its business activities and in all jurisdictions in which it operates. The Board engages with all its key stakeholders and partners and encourages the reduction of Co2 emissions throughout the value chain to promote an environment that actively strives towards achieving 'net zero' by 2035. However, at this stage in the Company's development there are no formal metrics or targets to measure the Company's emissions against, but the Board continues to review the need to implement metrics & targets. 

CAPITAL MANAGEMENT

The Company's objective when managing capital is to safeguard the Group's ability to continue as a going concern and develop its mining, exploration and investment activities to provide returns for shareholders. The Group's funding comprises equity and debt. The Directors consider the Company's capital and reserves to be capital. When considering the future capital requirements of the Group and the potential to fund specific project development via debt, the Directors consider the risk characteristics of all the underlying assets in assessing the optimal capital structure. This includes the Company's ability to maintain the investment for the foreseeable future, its ability to settle any outstanding debt and the potential return on the investment to shareholders.

DIRECTORS' REPORT

The Directors are pleased to submit their Annual Report and audited financial statements for MetalNRG plc ("MetalNRG" or the "Company" and collectively with its subsidiaries the "Group") for the year ended 31 December 2022.

The Strategic Report contains details of the Group's principal activities and includes an Operational Review which provides detailed information on the development of the Group's businesses during the year ended 31 December 2022 and which provided indications of likely future developments and events that have occurred after the Balance Sheet date. The Strategic Report also contains details of the Company's Principal Risks and Uncertainties of the Group's exposure to risks and uncertainties and the Company's risk management.

This Directors' Report includes the information required to be included under the Companies Act 2006 or, where provided elsewhere, an appropriate cross-reference is given. The Corporate Governance Statement, approved by the Board, is provided and is incorporated by reference herein.

GOING CONCERN

In common with many other natural resource investing and mineral exploration companies, the Company raises finance for its natural resources and energy investing activities in tranches as and when required. When any of the Group's projects move to the development stage specific project financing is required.

The Directors prepare budgets that extend beyond the period of 18 months from the date of this report. Taking into account the Company's cash resources at the year end, these projections include the proceeds of further fundraisings that may be required within the next 12 months to meet the Group's overheads and planned project expenditure and maintain the Company and its subsidiaries as going concerns.  Although the Company has been successful in raising funding in the past, there is no guarantee that it will be able to raise sufficient funding in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Company's and the Group's ability to continue as going concerns and accordingly the Company and the Group may be unable to realise their assets and discharge their liabilities in the normal course of business. Nevertheless, the Directors are confident that that they will be able to secure additional funding when required to meet further costs for the foreseeable future as well as its corporate overheads and the Directors therefore believe that the going concern basis is appropriate for the preparation of the Group's financial statements.

RISKS AND UNCERTAINTIES AND FINANCIAL INSTRUMENTS

The business of mineral exploration, evaluation and development has inherent risks. The Company's exposure to risks is explained in Principal Risks and Uncertainties in the Strategic Report together with the policies of the Board for the review and management of those risks.

THE GROUP'S PERFORMANCE AND FUTURE DEVELOPMENTS

A review of the Group's projects and their performance during the financial year and details of future developments and an indication of the outlook for the future, are contained in the Strategic Report.

The Board will continue with its strategic plans to generate growth in value for shareholders in line with its business model which is explained in the Strategic Report.

DIRECTORS

The Directors of the Company during the year were:

Christopher Peter Latilla-Campbell - Non-Executive Chairman of the Board and Chairman of the Audit Committee

Rolf Ad Gerritsen - Executive Director

Christian Schaffalitzky de Muckadell - Non-Executive Director and Chairman of the Remuneration Committee

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS

The Board retains control of the Group with day-to-day operational control delegated to Rolf Gerritsen, the Chief Executive Officer.  The full Board meets at least 4 times a year and on other occasions when necessary. During the financial year under review the Directors held 7 Board Meetings, all of which were held by video conference.

A table setting out the Directors' attendance at Board and Committee meetings during the financial year under review is set out below.

DIRECTORS' INTERESTS

The Directors who served during the year under review and their beneficial interests (held directly or indirectly, including interests held by spouses, children and associated parties) in the Company's ordinary shares as at 31 December 2022 are set out below:

* Christopher Latilla-Campbell's interests includes 24,750,000 ordinary shares held by Buchanan Trading Inc, in whose shares he is deemed to be interested, as he is a potential beneficiary of a discretionary trust which controls it. In addition, Mr. Latilla-Campbell is the beneficial owner of 100,000 ordinary shares held by London Finance & Investment Corporation, a company he is a director of. Mr. Latilla-Campbell is also the beneficial owner of 8,523,775 ordinary shares held by CGWL Nominees Ltd.

** Rolf Gerritsen's interests includes 30,109,573 ordinary shares held by Pearman Investment Partners LLP, a company Mr. Gerritsen is a designated member of.

DIRECTORS' WARRANTS AND OPTIONS

As at 31 December 2022, the Directors held the following warrants and options over the Company's ordinary shares:

Christopher Latilla-Campbell holds 1,500,000 options exercisable within 3 years from 1 February 2021 at an exercise price of 0.67p per share.

Rolf Gerritsen holds 5,977,612 options exercisable within 3 years from 1 February 2021 at an exercise price of 0.67p per share.

Christian Schaffalitzky de Muckadell holds 1,500,000 options exercisable within 3 years from 1 February 2021 at an exercise price of 0.67p per share.

Save for the options referred to above, none of the Directors held any other options or warrants over the Company's ordinary shares as at 31 December 2022.

SHARE CAPITAL

The Company's issued ordinary share capital is listed on the standard segment of the Official List and the ordinary shares are admitted to trading on the Main Market for listed securities of the London Stock Exchange. As at 31 December 2022, the Company had 1,231,704,269 ordinary shares of £0.0001 in issue.

RE-ELECTION OF DIRECTORS

At the next Annual General Meeting of the Company, to be held on 28 July 2023, all of the Directors will retire in accordance with the Articles of Association and, being eligible, offer themselves for re-election. 

INDEPENDENT ADVICE TO THE BOARD

The Board has the ability to seek independent professional advice and during the year and in the previous year the Board sought independent legal advice from Orrick, Herrington & Sutcliffe (UK) LLP and CMS Cameron McKenna Nabarro Olswang LLP during its dispute with BritNRG Limited et el.

SUBSTANTIAL INTERESTS

As at 30 June 2023, the Company had been notified that, other than the Directors, the following shareholders were interested in 3% or more of the issued ordinary share capital of the Company:

The Company is not aware of any other interests which may be 3% or more.

MATTERS COVERED IN THE STRATEGIC REPORT

The business review, review of KPI's and details of future developments are included in the Strategic Report.

ENVIRONMENTAL RESPONSIBILITY

The Company is aware of the potential impact that its subsidiary companies may have on the environment. The Company policy is to follow the best international practice in mitigating and minimising impacts through exploration and mining activities. The Company ensures that it and its subsidiaries comply with the local regulatory requirements and industry standards for environmental and social risk management.

CO2 EMISSIONS

Given the early developmental stage of the projects in the Group portfolio, the Board does not consider it a practical possibility to reliably assess the carbon emissions of the Group's operations and so has not included disclosure of emissions estimates in this Annual Report. The Board will continue to assess the possibility of measuring these levels as the Company continues to grow and develop.

POLITICAL AND CHARITABLE DONATIONS

No political or charitable donations have been made during the year under review.

POST PERIOD EVENTS

See the Strategic Report and Note 24 to the Financial Statements.

DISCLOSURE GUIDANCE AND TRANSPARENCY RULES - COMPLIANCE STATEMENT

The following disclosures relating to the Company's share capital and control and its Directors are made pursuant to Rule 7.2.6.R of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules ("DTRs").

As at 31 December 2022:

a)    Details of significant direct or indirect holdings of ordinary shares in the capital of the Company are set out above in this Directors' Report.

b)    The Company is not aware of any agreements between shareholders which may result in restrictions on the transfer of securities or on voting rights.

c)    There are no persons who hold securities carrying special rights regarding control of the Company.

d)    The Company is not a party to any significant agreements which take effect, alter or terminate upon a change of control of the Company following a takeover bid.

e)    All ordinary shares carry one vote per share without restriction.

f)     The Company's rules about the appointment and replacement of directors are contained in the Company's Articles of Association and accord with the Companies Act 2006. Amendments to the Company's Articles of Association must be approved by the Company's shareholders by passing a special resolution.

g)    The Company may exercise in any manner permitted by the Companies Act 2006 any power which a public company limited by shares may exercise under the Companies Act 2006. The business of the Company is managed by or under the direction of the Directors. The Directors may exercise all the powers of the Company except any powers that the Companies Act 2006 or the Articles of Association requires the Company to exercise.

h)    Subject to any rights and restrictions attached to a class of shares and in compliance with the Companies Act 2006, the Company may allot and issue unissued shares and grant options over unissued shares, on any terms, at any time and for any consideration, as the Directors resolve. This power of the Company can only be exercised by the Directors. The Company may reduce its share capital and buy-back shares in itself on any terms and at any time. However, the Companies Act 2006 sets out certain procedures which must be followed in relation to reductions in share capital and the buy-back of shares.

DISCLOSURE OF INFORMATION TO THE AUDITOR

In the case of each person who was a Director at the time this report was approved:

·          so far as that Director was aware there was no relevant audit information of which the Company's auditor was unaware; and

·          that Director had taken all steps that the Director ought to have taken as a director to make himself or herself aware of any relevant audit information and to establish that the Company's auditor was aware of that information.

This information is given and should be interpreted in accordance with the provisions of section 418 of Companies Act 2006.

AUDITORS

RPG Crouch Chapman LLP were appointed as the Company's Auditors on 5 April 2023. A resolution to re-appoint RPG Crouch Chapman LLP will be proposed at the next Annual General Meeting of the Company, to be held on 28 July 2023.

Approved by the Board of Directors

and signed on behalf of the Board

Rolf Gerritsen

Director 

30 June 2023

Directors' responsibilities for the financial statements

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the group and parent company financial statements in accordance with applicable law and International Financial Reporting Standards ("IFRSs") as adopted by the European Union and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that year.

In preparing those financial statements, the Directors are required to:

·    select suitable accounting policies and then apply them consistently;

·    make judgements and accounting estimates that are reasonable and prudent;

·    state whether applicable IFRSs as adopted by the European Union have been followed subject to any material departures disclosed and explained in the financial statements; and

·    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company/Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

They are further responsible for ensuring that the Strategic Report and the Directors' Report and other information included in the Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.

The Directors, after making enquiries, have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. They therefore continue to adopt the going concern basis in preparing the accounts.

Auditor

RPG Crouch Chapman LLP has signified its willingness to be appointed as independent auditor to the Company. Under the Companies Act 2006 section 487(2) RPG Crouch Chapman LLP will be automatically re-appointed as auditor 28 days after these financial statements are sent to members, unless the members exercise their rights under the Companies Act 2006 to prevent the re-appointment.

The Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Company's independent auditor for the purposes of the audit and to establish that the independent auditor is aware of that information. The Directors are not aware of any relevant audit information of which the independent auditor is unaware.

Website publication

The maintenance and integrity of the MetalNRG website is the responsibility of the Directors; the work carried out by the independent auditor does not involve the consideration of these matters and, accordingly, the independent auditor accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the MetalNRG website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.