Consolidated Statement of Cash Flows

For the period ended 30 June 2023

 

		2023	2022
	Notes	£000	£000
Cash flows from operating activities
Loss before taxation		(3,920)	(1,785)
Adjustments for:
Depreciation	14	1	3
Finance income		(196)	-
Gain on derivative financial liability		(128)	-
Finance charges		394	-
Share option charge		2,218	-
Foreign exchange movements		9	(4)
Net cashflow before changes in working capital		(1,622)	(1,786)
Movement in receivables		(60)	(21)
Movement in payables		(166)	423
Net cash (used in) operating activities		(1,848)	(1,384)
Cash flows from investing activities
Acquisition of subsidiaries net of cash	17	-	26
Purchase of property, plant and equipment	14	-	(4)
Exploration expenditure	15	(420)	(892)
Loan to associate	19	(1,172)	(4,538)
Proceeds from sale of investment in subsidiary		-	860
Net cash used in investing activities		(2,132)	(4,548)
Cash flows from financing activities
Issue of share capital		1,310	1,550
Cost of issue of shares		(58)	(430)
Proceeds from exercise of warrants		-	788
Proceeds of borrowing		2,760	5,193
Finance expense		(85)	-
Cost of procuring convertible loan notes		-	(798)
Net cash generated from financing activities		3,927	6,303
Net change in cash and cash equivalents during the period		(53)	371
Cash at the beginning of period		371	-
Cash and cash equivalents at the end of the period		318	371

 

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

 

Company Statement of Financial Position

As at 30 June 2023

 

	Notes	2023	2022
		£000	£000
Non-current assets
Property, plant and equipment	14	2	2
Investment in subsidiaries	17	14,905	14,905
Trade and other receivables	20	1,365	1,504
Financial investments	16	1,219	-
Investment in associates	18	-	-
Loans to associates	19	6,493	4,538
Total non-current assets		23,984	20,949
Current assets
Trade and other receivables	20	81	71
Cash and cash equivalents	21	-	199
Current assets		81	270
Total assets		24,065	21,219
Current liabilities
Trade and other payables	22	402	447
Total current liabilities		402	447
Non-current liabilities
Borrowings	23	1,557	-
Derivative financial liability	23	230	-
Total non-current liabilities		1,787	-
Total liabilities		2,189	447
Net assets		21,876	20,772
Equity
Share Capital	24	1,513	1,271
Share Premium	24	21,860	19,770
Warrants reserve	25	1,499	1,420
Share-based payments reserve		2,218	-
Accumulated deficit		(5,214)	(1,689)
Total equity		21,876	20,772

 

The Company profit and loss account has been approved by the Directors, and the use of the exemption under s408 of the Companies Act has been applied to not publish an individual Statement of Comprehensive Income.  Losses for the Company for the period ended 30 June 2023 were £3,525k.

 

These financial statements were approved and authorised for issue by the Board of Directors on 30 October 2023 and were signed on its behalf by: Robin Brundle

 

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

 

Company Statement of Changes in Equity

For the period ended 30 June 2023

 

	Share capital £000	Share Premium £000	Warrants reserve £000	Share-based payments reserve £000	Accumulated deficit £000	Total equity £000
At incorporation on 9 June 2021	50	-	-	-	-	50
Loss for the period	-	-	-	-	(1,925)	(1,925)
Total comprehensive loss for the period	-	-	-	-	(1,925)	(1,925)
Issue of share capital	1,221	22,738	-	-	-	23,959
Share issue costs	-	(1,312)	-	-	-	(1,312)
Warrants issued	-	(1,656)	1,656	-	-	-
Warrants exercised	-	-	(236)	-	236	-
Balance at 30 June 2022	1,271	19,770	1,420	-	(1,689)	20,772
Loss for the year	-	-	-	-	(3,525)	(3,525)
Total comprehensive loss for the period	-	-	-	-	(3,525)	(3,525)
Issue of share capital	242	2,148	-	-	-	2,390
Share issue costs	-	(58)	-	-	-	(58)
Warrants issued	-	-	79	-	-	79
Share-based payment charge	-	-	-	2,218	-	2,218
Balance at 30 June 2023	1,513	21,860	1,499	2,218	(5,214)	21,876

 

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

Company Statement of Cash Flows

For the period ended 30 June 2023

 

		2023	2022
	Notes	£000	£000
Cash flows from operating activities
Loss before taxation		(3,525)	(1,925)
Adjustments for:
Depreciation	14	-	1
Impairment loss		-	462
Finance income		(236)	-
Gain on derivative financial liability		(128)	-
Finance charges		394	-
Share option charge		2,218	-
Management fees charged to group companies		(404)	-
Gain on sale of investment in subsidiary		5	(20)
Net cashflow before changes in working capital		(1,676)	(1,482)
Movement in receivables		(413)	(21)
Movement in payables		(26)	527
Net cash (used in) operating activities		(2,115)	(976)
Cash flows from investing activities
Purchase of property plant and equipment	14	-	(3)
Acquisition of subsidiary	17	-	(20)
Loans to associates	19	(1,712)	(4,538)
Loans to subsidiaries	20	(299)	(1,427)
Proceeds from sale of investment in subsidiary		-	860
Net cash used in investing activities		(2,011)	(5,128)
Cash flows from financing activities
Issue of share capital	24	1,310	1,550
Cost of issue of shares	24	(58)	(430)
Proceeds from exercise of warrants	25	-	788
Proceeds of borrowing		2,760	5,193
Finance expense		(85)
Cost of borrowing		-	(798)
Net cash generated from financing activities		3,927	6,303
Net change in cash and cash equivalents during the period		(199)	199
Cash at the beginning of period		199	-
Cash and cash equivalents at the end of the period	21	-	199

 

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

 

Notes to financial statements

1.   General information

Technology Minerals Plc (the 'Company') is a public limited company incorporated and domiciled in England under the Companies Act with registration number 13446965. The Company is listed on the main market of the London Stock Exchange. The Company's registered office is 18 Savile Row, London, England, W1S 3PW.

 

2.   Basis of preparation

The principal accounting policies, methods of computation and presentation used in the preparation of the consolidated financial information are shown below. The policies have been consistently applied to all the years presented, unless otherwise stated.

As the Company was incorporated on 9 June 2021 and the Group formed on 17 November 2021, the comparative period reported covers the periods from 9 June 2021 to 30 June 2022.

Technology Minerals Plc's consolidated financial statements are presented in Pounds Sterling (£), which is also the functional currency of the parent company. All amounts are rounded to nearest thousand.

There have been no changes to the reported figures as a result of any new reporting standards or interpretations.

 

Basis of preparation

The Group's financial statements have been prepared in accordance with UK adopted international accounting standards (IFRSs) in conformity with the requirements of the Companies Act 2006.

The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.

 

Prior year restatement

Subsequent to the approval of the 2022 financial statements, the Board carried out a review of the prior year acquisition of 100% of the issued share capital of Emperium 1 Holdings Corporation (Emperium), LRH Resources Limited and its wholly owned subsidiary Asturmet Recursos S.L. (LRH Group), Techmin Limited (TML), Onshore Energy Limited (OEL) and its wholly owned subsidiary Technology Minerals Cameroon (TMC). 

The Board concluded that the acquisition had been incorrectly treated as a business combination and should instead have been recognised as an asset acquisition. Consequently, the prior year has been restated resulting in the elimination of goodwill and a corresponding deferred tax liability of £2,891k, with no change in net assets. See note 29. There is no third statement of financial position due to the error solely relating to the prior year and also the length of time that the Company has been established.

 

 

Going Concern

On 18 November 2021 the Group obtained a Standard Listing on the LSE raising gross proceeds of £1.5 million before expenses. Subsequently, warrant exercises raised a further £0.8 million and the Group raised £0.9 million from the sale of a 10% interest in one of its minerals exploration assets. Since then, the Company has been successful in raising additional funding by share placements, convertible bonds and convertible loan notes totalling £5.2 million including £0.7 million raised in September 2023. Funds raised include £1.06 million drawn under a £4 million convertible bond facility with the balance available to be drawn if so required. The Company also believes that, with the securing of Environmental Agency permitting for Recyclus' first Li-ion recycling plant and its achievement of commercial production, repayments of loans made to Recyclus by the Company will occur in the 2023 calendar year.

The Directors have a reasonable expectation that the Group's and Company's cash resources will be adequate to enable them to meet their planned expenditure for at least 12 months from the date of approval of these consolidated financial statements. In determining this expectation, the directors have considered their ability to raise additional funds should they be required, as well as the likelihood and timing of Recyclus Group loan repayments being received.

Although the Directors have been successful in raising finance in the past, no assurance can be given that funding will be available when it is required in future, or that it will be available on acceptable terms. Whilst the Directors are confident that the Recyclus Group will commence revenue generation in the current calendar year this is not a certainty and as a result of Recyclus being pre-revenue it does not yet have a strong track record of repaying its loans to the Company. In view of the foregoing whilst the Directors are confident of the Company's ability to raise finance and Recyclus' ability to generate returns, the Directors consider that a material uncertainty exists as to the Group's and the Company's ability to continue as a going concern.

Having carefully considered the foregoing, the Directors nonetheless maintain their reasonable expectation that the Group and the Company will be able to meet its planned expenditure for at least 12 months from the date of approval of these consolidated financial statements and the consolidated financial statement have therefore been prepared on a going concern basis.

In reaching this conclusion, the Board has considered the magnitude of potential impacts resulting from uncertain future events or changes in conditions, the likelihood of their occurrence and the likely effectiveness of mitigating actions that the Directors would consider undertaking.

The Board continues to monitor the impact of global conflict, including the Ukraine war, on the ability of the Group and the Company to pursue the strategy and will make appropriate changes should they be required. There is not considered to be any material impacts on the financial position or results of the Company or the Group as a result of the global conflict at the reporting date.

The auditors have made reference to going concern by way of a material uncertainty within their audit report.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company its subsidiaries as if they formed a single entity. Subsidiaries are entities over which the Group has control. Control exists when the Company:

• has power over the investee;

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

• has the ability to use its power to affect its returns.

On acquisition, in the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values if acquiring a business or assigned a carrying amount based on relative fair value if acquiring an asset. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Group financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

Investments in subsidiaries are accounted for at cost less impairment within the Company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

Acquisitions and disposals of non-controlling interests in subsidiaries that do not result in a loss of control are accounted as transactions within equity. The difference between the fair value of the consideration paid or received and the amount by which the non-controlling interests are adjusted is recognised in equity and attributed to equity holders of the parent company.

3.   New standards, amendments and interpretations adopted by the Company

The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 July 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in this financial information:

 

Standards/interpretations	Application	Effective from
IAS 12 amendments	Deferred Tax related to Assets and Liabilities arising from a Single Transaction	1 January 2023
IAS 1 amendments	Materiality of Accounting Policy Disclosure	1 January 2023
IAS 1	Presentation of Financial Statements	1 January 2023
IFRS 17	Insurance Contracts	1 January 2023
IAS 8 amendments	Definition of accounting estimates	1 January 2023
IAS 1 amendments	Presentation of Financial Statements	1 January 2024
IAS 1 amendments	Non-current liabilities with covenants	1 January 2024
IFRS 16 (Amendments)	Lease liability in a sale and leaseback	1 January 2024

 

Financial instruments

 

Financial assets

The Company classifies its financial assets in the following measurement categories:

•     those to be measured subsequently at fair value through profit or loss;

•     those to be measured at amortised cost; and

•     those to be measured at fair value through other comprehensive income (FVTOCI).

The classification depends on the business model for managing the financial assets and the contracted terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:

•     the asset is held within a business model whose objective is to collect contracted cash flows; and

•     the contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the consolidated income statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Investments in equity instruments at FVTOCI are initially measured at fair value. Subsequently, they are measured at fair value with net changes in fair value recognised in other comprehensive income. Gains and losses on these financial assets are never recycled to profit or loss.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of financial assets is determined based on the fair value hierarchy which prioritises the inputs to valuation techniques used to measure fair value into three broad levels:

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

·    Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

·    Level 3: Unobservable inputs for the asset or liability.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined based on the lowest level input that is significant to the entire measurement.

Financial liabilities

Basic financial liabilities, being trade and other payables, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. The Company does not hold or issue derivative financial instruments.

Investment in subsidiaries

Investments in subsidiaries are initially measured as cost and reviewed for impairment at each reporting period. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained up to the date that control ceases.

Intra-group balances and any unrealised gains, losses, income or expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Investment in associates

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently associates are accounted for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is recognised in the consolidated statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless there is an obligation to make good those losses).

Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.

Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is objective evidence that the investment in an associate has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.

Financial statements of operations

The assets and liabilities of operations, including goodwill and fair value adjustments arising on consolidation, are translated to Pound Sterling at exchange rates ruling at the date of the consolidated statement of financial position. The revenues and expenses of operations are translated to Pound Sterling at rates approximating to the exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income. They are reclassified to profit or loss upon disposal.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are reclassified to the profit or loss as part of the profit or loss on disposal.

Current and deferred income tax

Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income 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 financial information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Earnings per share

The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. As the Company has not generated a net profit for either the reporting period or the prior year, diluted EPS is not stated.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.

Office equipment is depreciated straight line over three years.

Intangible assets

Intangible assets not acquired as part of an asset acquisition are initially carried at cost. The consideration paid is allocated to assets and liabilities acquired based on their relative fair values, with transaction costs capitalised. No gain or loss is recognised.

Intangible assets acquired as part of a business combination, and separately recognised from goodwill, are capitalised and measured at their fair value at the date of acquisition.

Consideration paid in the form of equity instruments is measured by reference to the fair value of the asset acquired. The fair value of the assets acquired would be measured at the point control is obtained.

Exploration and evaluation costs

These comprise costs directly incurred in exploration and evaluation as well as the cost of mineral licences. Mineral evaluation and exploration costs which are capitalised as intangible assets include costs of licence acquisition, technical services and studies, exploration drilling and testing and appropriate technical and administrative. Exploration costs are capitalised as intangible assets pending the determination of the feasibility and the commercial viability of the project.

When the decision is taken to develop a mine, the related intangible assets are transferred to mines under development within property, plant and equipment and the exploration and evaluation costs are amortised over the estimated life of the project, upon commercial production. Prior to reclassification to property, plant and equipment exploration and evaluation assets are assessed for impairment and any impairment loss is recognised immediately in the statement of comprehensive income.

Where a project is abandoned or is determined not economically viable, the related costs are written off.

The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to the natural resource sector. These include the extent to which the Company can establish mineral reserves on its properties, the ability of the Company to obtain necessary financing to complete the development of such reserves and the future profitable production or proceeds from the disposition thereof.

Impairment of non-financial assets

The carrying amounts of the Group's assets are reviewed at the date of each consolidated statement of financial position to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. Impairment is measured by comparing the carrying values of the asset with its recoverable amount. The recoverable amount of the asset is the higher of the asset's fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in the income statement immediately.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Trade and other receivables 

Trade and other receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. 

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying amount of these assets approximates their fair value.

Trade and other payables 

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

Borrowings

Interest bearing debt facilities are initially recognised at fair value, net of directly attributable transaction costs. Transaction costs are recognised in the income statement on a straight-line basis over the term of the facility.

Borrowings with embedded derivative liability

Convertible debt with an embedded derivative liability pertains to borrowing where the holder has the right to convert the debt into a variable number of shares of the Company or a variable cash amount, such that the conversion feature does not meet the definition of equity under IAS 32 'Financial Instruments: Presentation'.

The convertible debt is initially recognised at its fair value, which is typically the proceeds received, net of transaction costs directly attributable to the issuance of the instrument.

Subsequent measurement

·    Liability Component (Host Contract): After initial recognition, the liability component of the convertible debt (excluding the embedded derivative) is measured at amortised cost using the effective interest method. Interest expense, as calculated using the effective interest rate, is recognised in profit or loss.

·    Embedded Derivative Liability: The embedded derivative is measured at fair value with changes in fair value recognised immediately in profit or loss. The derivative is revalued at each reporting date.

Conversion

·    If the conversion option is exercised, the carrying amount of the liability component and the fair value of the embedded derivative at the date of conversion are transferred to equity, assuming the shares are issued. Any difference between the combined carrying amount and the number of shares issued multiplied by the share price at the conversion date is recognised in profit and loss.

·    If the bondholders choose not to convert and the debt matures, the embedded derivative is derecognised and settled together with the host contract.

Equity instruments and reserves description

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.

Ordinary shares are classified as equity and rank in full for all dividends or other distributions declared, made or paid on the ordinary share capital of the Company.

Share capital account represents the nominal value of the ordinary shares issued.

The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

Warrant reserve represents equity-settled share-based payments made to third parties until such warrants are exercised. Only equity-settled share-based payments that will be settled by the Company exchanging a fixed amount of cash (or another financial asset) for a fixed number of its own equity instruments will be included in the Warrant reserve.

Share-based payment reserve represents equity-settled share-based payments made to directors and employees until such share-based payments are exercised.

Foreign exchange reserve represents:

·    differences arising on the opening net assets retranslation at a closing rate that differs from opening rate; and

·    differences arising from retranslating the income statement at exchange rates at the dates of transactions at average rates and assets and liabilities at the closing rate.

Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive Income.

Warrants

The Company estimates the fair value of the future liability relating to issued warrants using the Black-Scholes pricing model considering the terms and conditions upon which the warrants were issued.

Warrants relating to equity finance are recorded as a reduction of capital stock based on the fair value of the warrants.

Share-based payments

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instrument at the grant date. Fair value is measured by use of Black-Scholes model. Where the value of the goods or services received in exchange for the share-based payment cannot be reliably estimated the fair value is measured by use of a Black-Scholes model.

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

Equity-settled share-based payment transactions with other parties are measured at the fair value of the goods and services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

All equity-settled share-based payments are ultimately recognised as an expense in the profit or loss with a corresponding credit to "Share-based payments reserve".

Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium. No adjustment is made to any expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting or if the share options vest but are not exercised.

When share options lapse or are forfeited the respective amount recognised in the Share-based payment reserve is reversed and credited to accumulated profit and loss reserve.

4.   Financial risk

The following represent the key financial risks that the Company faces:

Financial risk factors

The Company's operations exposed it to a variety of financial risks that had included the effects of credit risk, liquidity risk and interest rate risk. The Company had in place a risk management programme that attempted to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company did not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting was applied.

Given the size of the Company, the Directors did not delegate the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the Board of Directors were implemented by the Company's finance department:

(a) Credit risk

The Company's credit risk was primarily attributable to its trade receivables balance. The amounts presented in the statement of financial position are net of allowances for impairment;

(b) Liquidity risk

Liquidity risk was the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's financial liabilities included its trade and other payables shown in Note 22;

(c) Interest rate cash flow risk

The Company had interest-bearing assets. Interest-bearing assets comprised cash balances and unsecured loans, which earned interest at floating rates. See note 27.

Capital risk management

The Company monitors capital which comprises all components of equity (i.e., share capital, share premium and retained earnings/losses).

5.   Critical accounting estimates and judgements

The preparation of the financial statements require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

Information about such judgements and estimates are contained in the accounting policies and/or the notes to the consolidated financial statements. Areas of judgement that have the most significant effect on the amounts recognised in the consolidated financial statements are as follows:

 

Recyclus Accounted for as an Associated Company

The Company, considering IFRS 28 "Accounting for Associates", has determined that whilst it does have significant influence over Recyclus it does not control and direct it, and the directors of Recyclus who are also directors of the Company are excluded from any Company decisions relating to Recyclus. Therefore the Company believes that it is reasonable to account for Recyclus as an associated company.

 

Valuation of warrants and share options - see note 24

The Company estimates the fair value of the future liability relating to issued warrants and share options using the Black-Scholes pricing model taking into account the terms and conditions upon which the warrants and share options were issued, if the warrant or share option was granted on its own.

 

Warrants relating to equity finance are recorded as a reduction of capital stock based on the fair value of the warrants.

 

Share options are expensed in accordance with their vesting conditions.

 

Loan to associate- see note 19

Determination as to whether, the loan to associate is recoverable involves management estimates and judgement. Management uses discounted cashflow forecasts of the associate to determine whether an impairment of the loan is required. The Company has considered a range of sensitivities in respect of sales, cost of sales and discount rates and has assumed that the relevant environmental permits will be issued to enable the achievement of sales. The Company has concluded that there is considerable headroom over the carrying value of the loan provided commercial production can be achieved.

 

Unquoted financial assets - see note 16

The Company holds certain unquoted investments which are held at fair value through other comprehensive income in the financial statements. The determination of whether the carrying amount of these investments, currently being cost, approximates their fair value requires significant estimates and judgments by management. The following describes the basis and considerations made by management in this determination:

Operating activities and future plans of the Investee: Management reviewed the operating activities and future plans of the investees. The information provided evidence to support the view that the fair value has not significantly changed from cost.

Market and Economic Indicators: Management considered relevant market and economic indicators, industry trends, and other macroeconomic factors that might impact the fair value of the investments.

Impairment Indicators: Management continuously evaluates for any indications of impairment. If there were any external or internal indicators suggesting that the investment might be impaired, a detailed impairment assessment would be undertaken.

Based on the above considerations and the information available, management believes that the carrying amount of the unquoted investments in the financial statements approximates their fair value as of 30 June 2023, being cost. However, given the inherent uncertainties and the lack of a liquid market for these investments, the actual value realised in a sale or immediate transaction could differ from the carrying amount.

Impairment of exploration and evaluation costs - see note 15

Determination as to whether, and by how much, an asset or cash generating unit is impaired involves management estimates. Management uses the following triggers to assess whether impairment has occurred (the list is not exhaustive):

•     The period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future and is not expected to be renewed.

•     Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.

•     Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area.

•     Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full on successful development or by sale.

The Management used the above triggers to evaluate each mineral exploration licence held by the group and determined carrying value of the mineral exploration licences did not need to be impaired.

6.   Operating Segments

In accordance with IFRS 8 'Operational Segments,' the Group determines and presents operating segments based on the information that is provided internally to the Executive Directors, who are the Group's chief operating decision makers ("CODM"). The operating segments are aggregated if they meet certain criteria.

 

Identification of Segments:

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components, and is:

 

a)    Expected to generate revenues and incur expenses.

b)    Regularly reviewed by the CODM to make decisions about resources to be allocated to the segment and assess its performance.

c)    For which discrete financial information is available.

 

Based on the above criteria, the Group has identified its reportable segments as:

·    Mineral Exploration: This segment is engaged in the exploration and assessment of mineral deposits.

·    Battery Recycling: This segment is involved in the recycling of batteries to recover valuable materials.

·    Other: This segment includes expenditure, corporate assets and corporate liabilities that are managed on a group basis, including the loan to its associate undertaking, Recyclus Group Ltd.

 

Measurement:

The CODM assesses the performance of the operating segments based on a measure of operating profit/loss. Interest income and expenditure are not included in the results for each operating segment that is reviewed by the CODM.

 

Below is a summary of the Group's results, assets and liabilities by reportable segment as presented to the Executive Board.

 

 

	Mineral exploration	Battery recycling	Other	Total
	£000	£000	£000	£000
Year ended 30 June 2023:
Operating expenses	(281)	-	(3,639)	(3,920)
Total segment operating loss	(281)	-	(3,639)	(3,920)
Year ended 30 June 2022:
Operating expenses	(130)	-	(1,655)	(1,785)
Total segment operating loss	(130)	-	(1,655)	(1,785)
Total segment assets
At 30 June 2023	15,359	-	8,547	23,906
At 30 June 2022 (restated)	15,681	-	5,930	21,611
Total segment liabilities
At 30 June 2023	(37)	-	(2,187)	(2,224)
At 30 June 2022 (restated)	(111)	-	(512)	(623)

 

7.   Administrative expenses

	2023	2022
	£000	£000
Legal and professional fees	536	816
Employee benefit expense	689	443
Share-based payment charge	2,218	-
Advertising and marketing	312	341
Audit and Tax	65	76
Depreciation	1	3
Other administrative expenses	35	55
	3,856	1,734

 

8.   Auditors' remuneration

	2023	2022
	£000	£000
Fees payable for the audit of the Group	65	47
Fees payable for non-audit services - reporting accountant	-	35
	65	82

 

In December 2022, the Company appointed PKF Littlejohn LLP as auditors to the Company. The fees in the prior year column relate to fees paid to the previous auditors.

 

9.   Employees and Directors

During the period key management personnel were the Directors of the Company.

The average number of persons employed by the Company during the year (including Directors that receive remuneration) was five (2022: 5).

Chang Oh Turkmani does not receive salary or fees in respect of her services as a director of the Company.

The following table sets out the total employee and Director costs.

	2023	2022
	£000	£000
Director and consulting fees	605	473
Wages and salaries	6	18
Social security costs	78	41
	689	531

 

The Directors' remuneration is set out in the Directors' Remuneration Report on page 47 of the Annual Report.

10.  Other income

	2023	2022
	£000	£000
Management fees	47	45

 

11.  Finance income and other finance costs

Finance income	2023	2022
	£000	£000
Interest charged to related parties	196	-
Fair value movement on derivative financial liability	128	-
	324	-

 

Finance charges	2023	2022
	£000	£000
Interest payable	72	-
Amortisation of loan fees	163	-
Unwinding of discount on convertible loans	159	-
	394	-

 

12.  Taxation

	2023	2022
	£000	£000
Current tax	-	-
Deferred tax	-	-
Total income tax expense	-	-

 

	2023	2022
	£000	£000
Loss for the year/period	(3,920)	(1,785)
Tax using the Company's domestic tax rate 20.5% (19%)	(804)	(339)
Effect of non-deductible expenses	455	2
Utilisation of tax losses	-	-
Differences in overseas tax rates	(2)	2
Tax losses carried forward	351	335
Total tax expense	-	-

 

Effective tax rate

The effective tax rate was 20.5% (2022: 19%). Tax charges are affected by the mix of profits and tax jurisdictions in which the Group operates. The impact of unrecognised tax losses and non-deductible items increases the Group's overall effective tax rate.

 

At the period end, the Group had estimated tax losses of £5,037,000 (2022: £3,365,000) available for carry forward against future trading profits. As legislation has been enacted whereby the corporation tax rate is 25% from April 2023, the tax losses would have resulted in an additional deferred tax asset of £1,259,000(2022: £841,000) which has not been recognised in the financial statements due to the uncertainty of the recoverability of the amount.

 

13.  Loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

	2023	2022
	£000	£000
Loss from continuing operations attributable to equity holders of the company	(3,920)	(1,785)
Weighted average number of ordinary shares in issue	1,344,710,781	785,135,966
Basic and fully diluted loss per share from continuing operations in pence	(0.29)	(0.23)

 

 

14.  Property, plant and equipment - Group

Cost		Office equipment £000	Total £000
9 June 2021		-	-
Additions		8	8
30 June 2022		8	8
Additions		-	-
30 June 2023		8	8
Depreciation
9 June 2021		-	-
Depreciation charge		3	3
30 June 2022		3	3
Depreciation charge		1	1
30 June 2023		4	4
Net book value 30 June 2023		4	4
Net book value 30 June 2022		5	5

 

Additions during the period include £nil (2022: £4,000) of office equipment from the acquisition of Techmin Limited.

Property, plant and equipment - Company

Cost		Office equipment £000	Total £000
9 June 2021		-	-
Additions		3	3
30 June 2022		3	3
Additions		-	-
30 June 2023		3	3
Depreciation
9 June 2021		-	-
Depreciation charge		1	1
30 June 2022		1	1
Depreciation charge		-	-
30 June 2023		1	1
Net book value 30 June 2023		2	2
Net book value 30 June 2022		2	2

 

15.  Intangible assets (restated)

Cost	Mineral exploration £000	Total £000
9 June 2021	-	-
Acquisition (restated)	14,477	14,477
Additions	1,746	1,746
Disposals	(814)	(814)
30 June 2022 (restated)	15,409	15,409
Additions	420	420
FX	(40)	(40)
Disposals	-	-
30 June 2023	15,789	15,789
Accumulated amortisation
9 June 2021 and 1 July 2022	-	-
Amortisation	-	-
30 June 2023	-	-
Net book value 30 June 2023	15,789	15,789
Net book value 30 June 2022 (restated)	15,409	15,409

 

See note 17 for further details on the mineral resource exploration projects acquired through the acquisition of Emperium, LRH Group, TML and Onshore Energy Limited ("OEL") in 2022.  As stated in note 29, a prior year adjustment has been recognised in order to treat the transaction as an asset acquisition rather than a business combination.

 

On 20 May 2022, the Company sold 10% interest in Emperium, for a cash consideration of £860,000. The difference between the cash consideration received and the reduction in intangible assets is recognised in the consolidated statement of comprehensive income.

 

 

16.  Financial assets measured at Fair Value through Other Comprehensive Income

The Group holds certain equity investments that are not held for trading purposes. Management has elected to classify these investments as being measured at fair value through other comprehensive income ("FVOCI") because these equities represent investments that the Group intends to hold for the foreseeable future for strategic purposes.

		Group £000	Company £000
9 June 2021		-	-
Additions		1,221	-
Fair value gains/(losses) recognised in OCI		-	-
30 June 2022		1,221	-
Additions		-	1,219
Fair value gains/(losses) recognised in OCI		-	-
30 June 2023		1,221	1,219

The financial assets at FVOCI are measured based on level three inputs of the fair value hierarchy i.e. unobservable inputs, used when relevant observable inputs are not available. Management determined the fair value by reviewing the operating activities and future plans of the investee and by taking into consideration the market and economic indicators, industry trends, and other macroeconomic factors that might impact the fair value of the investments. The information provided evidence to support the view that the fair value has not significantly changed from cost.

 

The additions during the period ended 30 June 2022 were acquired as part of the acquisition of LRH Group and OEL. Additions in the Company during the year ended 30 June 2023 relate to the transfer of investments in OEL to the Company at cost.

 

17.  Investment in subsidiaries

 

Investment in subsidiaries - Company

		Company £000
1 June 2021		-
Additions		15,745
Disposals		(840)
30 June 2022		14,905
Additions/disposals		-
30 June 2023		14,905

 

During the period ended 30 June 2022 10% of Emperium was sold for a cash consideration of £840,000.

 

 

As at 30 June 2023, the Company held interests in the following subsidiary companies:

 

Company	Country of registration	Proportion held	Nature of business
Techmin Limited 18 Savile Row, London, England, W1S 3PW	United Kingdom	100%	Mineral exploration
Onshore Energy Limited 18 Savile Row, London, England, W1S 3PW	United Kingdom	100%	Mineral exploration
Emperium 1 Holdings Corporation 10100, Santa Monica Boulevard #300, Century City Los Angeles, CA90067	USA	90%	Mineral exploration
Technology Minerals Idaho Limited 10100, Santa Monica Boulevard #300, Century City Los Angeles, CA90067	USA	90%	Mineral exploration
LRH Resources Ltd Unit E, Kells Business Park, Cavan Road, Kells Meath A82 HK12, IRELAND	Ireland	100%	Mineral exploration
Asturmet Recursos S.L. Avenida de Galicia, Oviedo Asturias, SPAIN	Spain	100%	Mineral exploration
Technology Minerals Cameroon Limited PO Box 666 Yaounde Cameroon	Cameroon	100%	Mineral exploration

 

 

18.  Investment in associates

In September 2021, the Company acquired 48.35% of a battery-recycling business, Recyclus Group Ltd ("Recyclus") for nil consideration. Under the equity method the initial investment is recognised at cost being nil.

As there are common Directors between Technology Minerals Plc and Recyclus Group Ltd, Technology Minerals Plc is able to influence Recyclus Group Ltd, however, it does not control the Recyclus Group, which has its own operating, technical and financial management, as well as separate financial, human resources and other policies. Recyclus Group Ltd has raised loan and equity funding from third parties, and Technology Minerals Plc does not hold rights to favourable returns from its shareholding in Recyclus Group Ltd under IAS 28 and IFRS 10 criteria. Therefore, management has concluded that its investment in Recyclus is an investment in an associate and it did not control Recyclus as at year ended 30 June 2023. See note 5 for further information.

Summarised financial information for Recyclus (100% basis):

Group and Company	2023 £000	2022 £000
Non-current assets	4,209	3,890
Current assets	525	521
Current liabilities	784	719
Non-current liabilities	7,832	5,847
Revenue for the year	33	114
Loss for the year	(2,405)	(2,007)

The Group's share of the reported loss of Recyclus for the year amounts to £1.2m (2022: £1.0m).

As the Group's share of the losses in Recyclus exceeds its interest in the associate, it has not recognised its share of further losses. Once Recyclus subsequently reports profits, the Group will resume recognising its share of those profits only after its share of the profits equals the share of losses not recognised.

There were no significant transactions between the Group and Recyclus other than the loans provided. See note 19.

19.  Loans to associates

During the period the Company provided an unsecured loan to Recyclus as follows:

	Group £000	Company £000
9 June 2021	-	-
Loans acquired	2,909	2,909
Additions	1,629	1,629
30 June 2022	4,538	4,538
Additions	1,955	1,955
30 June 2023	6,493	6,493

Loans to associates generally bear 2% interest. The loan is repayable in monthly instalments when funds are available.

20.  Trade and other receivables

	Group 2023 £000	Company 2023 £000	Group 2022 £000	Company 2022 £000
Non-current assets
Amounts due from subsidiaries	-	2,452	-	1,504
	-	2,452	-	1,504
Current assets
Other debtors	1	1	15	15
VAT receivable	27	28	23	27
Prepayments and accrued income	53	52	29	29
	81	81	67	71

 

In FY2022, the intercompany loan to Techmin Limited included in amounts receivable from subsidiary undertakings was impaired by £462,000 to £746,000, being the amount considered to be recoverable.

 

Cash and cash equivalent

	Group 2023 £000	Company 2023 £000	Group 2022 £000	Company 2022 £000
Cash and cash equivalents	318	-	371	199
	318	-	371	199

 

£46,000 of cash contributions were made by the subsidiaries acquired during the period ended 30 June 2022.

 

The majority of the Group's funds are held with Revolut Ltd, which is authorised to issue e-money by the Financial Conduct Authority under the Electronic Money Regulations 2011. Revolut Ltd is not recognised as a bank in the UK.

 

21.  Trade and other payables

	Group 2023 £000	Company 2023 £000	Group 2022 £000	Company 2022 £000
Current liabilities
Trade and other payables	230	200	449	310
Taxation and social security	106	104	71	71
Accruals	102	98	82	66
	438	402	602	447
Non-current liabilities
Amounts due to subsidiaries	-	1,087	-	-
	-	1,087	-	-

 

22.  Borrowings and derivative financial liabilities

	Group 2023 £000	Company 2023 £000	Group 2022 £000	Company 2022 £000
Amount owed to third parties	-	-	21	-
Convertible loan notes	1,557	1,557	-	-
Total borrowings	1,557	1,557	21	-
Derivative financial liability	230	230	-	-

 

Bond Facility

The bond facility outstanding at the year-end has been accounted for as a financial liability with a related embedded derivative being the fair value of the convertible feature.  The host contract is measured at amortised cost and the derivative at fair value through profit and loss.

 

On 9 December 2022, the Company entered into a £4.0 million convertible bond facility with Macquarie Bank Limited ("MBL") and Atlas Capital Markets LLC ("ACM").

Under the Facility, MBL and ACM provided access to a £4.0 million convertible bond facility with a coupon of 5% per annum over the SONIA rate, payable quarterly in cash or in shares at the Company's discretion. The Facility could be drawn in eight tranches of up to £500,000 with each tranche being called at the Company's discretion once the previous tranche had been fully converted and subject to certain conditions. MBL and ACM could purchase the convertible bonds at a fixed price equal to 95% of the principal amount.

MBL and ACM could convert the convertible bonds to Technology Minerals Plc Ordinary shares by issuing a conversion notice with the price set at 90% of the 3-day Volume Weighted Average Price of the Shares, where the three days may be consecutive or not and are selected by MBL or ACM (as applicable) from the 20 days prior to the issue of a conversion notice by MBL or ACM. The convertible bonds had a maturity of two years from issuance.

The Company pays a transaction fee equal to 3% of each tranche (the "Commission"). The Commission is payable in cash and is deducted from the amount payable by MBL or ACM (as applicable) to Technology Minerals Plc for each tranche.

In addition, warrants amounting to 30% of each tranche are attached to each tranche of the convertible bonds. The warrants have a strike price fixed at 30% premium to the Volume Weighted Average Price of the Shares for the five consecutive days prior to the issue date of each tranche. The warrants will expire two years after issuance. See note 25 for further information.

All convertible bonds issued to MBL and ACM were converted by the end of the year and accordingly none of those loan notes were outstanding at 30 June 2023.

Convertible loan notes

On 27 March 2023, the Company announced that it had raised funds which included a £1.7 million convertible loan note ("CLN") with a new high net worth investor. Interest accrues on the CLN at 12% compounding annually, with a repayment date of two years from drawdown. The CLN can be converted at any time by the holder at 3.5 pence per share.

23.  Share capital and share premium

 

Group and Company	Number of ordinary shares of 0.1p	Share capital £000	Share premium £000
At 1 July 2022	1,271,423,593	1,271	19,770
Share issue - placings	123,000,000	123	1,187
Share issue - conversion of CLNs	118,186,302	118	942
Share issue - in lieu of services provided	1,100,000	1	20
Share issue - costs	-	-	(59)
At 30 June 2023	1,513,709,895	1,513	21,860

 

The detailed history of the Company's share capital from incorporation to 30 June 2022 is provided in the 2022 Annual Report and Accounts.  Transactions related to the year ended 30 June 2023 are as follows:

 

Placings:

On 9 November 2022 placing of 32,000,000 Ordinary Shares of £0.001 at a price of £0.0125 (Placing Price) per Ordinary Share raising £400,000 before issue costs.

 

On 31 March 2023 placing of 80,000,000 Ordinary Shares of £0.001 at a price of £0.0100 (Placing Price) per Ordinary Share raising £800,000 before issue costs.

 

On 10 May 2023 placing of 11,000,000 Ordinary Shares of £0.001 at a price of £0.0100 (Placing Price) per Ordinary Share raising £110,000 before issue costs.

 

Conversion of CLNs:

Between January and April 2023, total of 118,186,302 Ordinary Shares issued to satisfy conversion of convertible loan notes. See note 22 for further details.

 

Shares issued to settle outstanding debt:

In November 2022 1,100,000 Ordinary Shares were issued at £0.0189 to settle an outstanding debt of £20,790.

 

 

24.  Share Based Payments

Warrants

As described in note 23 the Company entered into a £4.0m Bond Facility, drawn down in tranches. Warrants amounting to 30% of each tranche were issued to the lender on the drawdown of each tranche. The Company drew down the following tranches during the year:

Date	Tranche	Amount
16 December 2022	1	£500,000
30 January 2023	2	£250,000
24 February 2023	3	£310,000
Total		£1.060,000

 

	Tranche 1	Tranche 2	Tranche 3
Number of shares that could be acquired on the exercise of the warrant	6,921,527	4,298,980	5,494,471
Fair value of one CLN Warrant	£0.0053	£0.0046	£0.0041
Warrant Share exercise price	£0.021672	£0.017446	£0.0169
Date of grant	16/12/2022	30/1/2023	24/2/2023
Time to maturity, years	2	2	2
Share price	£0.01525	£0.0135	£0.01225
Expected volatility*,%	78%	72%	74%
Expected dividend growth rate,%	0%	0%	0%
Risk-free interest rate (3 year bond),%	5.00%	4.24%	4.81%

 

*Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant.

 

The exercise price of the above warrants is calculated as 130% of VWAP of the company's share price for the preceding five days of each drawdown.

 

The fair value of the warrants was £79,000 and has been treated as a finance cost of the Bond Facility drawn. This amount was expensed in full during the year, following the conversion of the £1,060,000 into equity.

 

For the period ended 30 June 2022:

 

CLN Warrants

Warrants were issued to the holders of the 2021 Convertible Loan Notes (CLN Warrants), that gave them the right to within two years from Admission to subscribe for one Ordinary Share in the Company for each Ordinary Share issued to the loan note holder on conversion of the loan note at Admission, at the Placing Price x 150%.

 

Placee Warrants

Each placee of the £1.5m share placing on IPO has the right to subscribe for one Ordinary Share in Technology Minerals for each placing share issued to the placee at the Placing Price x 150% exercisable within two years from Admission.

 

Advisor Warrants

Warrants were issued to the Company's advisors that gave them the right to within two years from Admission to subscribe for Ordinary Shares in the Company at exercise prices of £0.03375 and £0.001.

 

The fair value of the warrants issued during the year ended 30 June 2023 was calculated using the Black-Scholes mode using the following information:

 

	CLN Warrants	Placee and advisor Warrants	Advisor Warrants
Number of shares that could be acquired on the exercise of the warrant	306,229,366	72,955,554	7,333,334
Fair value of one CLN Warrant	£0.003937	£0.00401	£0.02151
Warrant Share exercise price	£0.03375	£0.03375	£0.001
Date of grant	29/07/2021	17/11/2021	17/11/2021
Time to maturity, years	2	2	2
Share price	£0.0225	£0.0225	£0.0225
Expected volatility*,%	55%	55%	55%
Expected dividend growth rate,%	0%	0%	0%
Risk-free interest rate (3 year bond),%	0.076%	0.56%	0.56%

 

*Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant.

 

The fair value of the warrants was £1,656,199 and was charged to Share premium.

 

At 30 June 2023, the Company had outstanding warrants to subscribe for Ordinary shares as follows:

 

Warrant exercise price	Expiry date	Fair value of individual warrant	At 01/07/2022	Issued	Exercised	At 30/06/2023
£0.03375	29/07/2023	£0.003937	306,229,366	-	-	306,229,366
£0.03375	17/11/2023	£0.00401	49,808,280	-	-	49,808,280
£0.001	17/11/2023	£0.02151	666,667	-	-	666,667
£0.021672	16/12/2024	£0.0053	-	6,921,527	-	6,921,527
£0.017446	30/01/2025	£0.0046	-	4,298,980	-	4,298,980
£0.0169	24/02/2025	£0.0041	-	5,494,471	-	5,494,471
			356,704,313	16,714,774	-	373,419,087

 

Share options

On 13 April 2023 ("Grant Date"), 128,534,322 share options were issued to Directors and staff. 112,619,136 share options fully vested on the Grant Date. 15,915,186 share options will vest in respect of 1/12 of the shares under option on the Grant Date and quarterly thereafter commencing 1 June 2023.

 

The fair value of the share options issued during the year ended 30 June 2023 was calculated using the Black-Scholes mode using the following information:

 

			2023 share options
Number of shares that could be acquired on the exercise of the warrant			128,534,322
Fair value of one share option			£0.0192
Exercise price			£0.02325
Date of grant			13 April 2023
Time to maturity, years			10
Share price			£0.02325
Expected volatility*,%			80%
Expected dividend growth rate,%			0%
Risk-free interest rate (10 year bond),%			3.45%

*Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant.

 

The aggregate fair value of the share options was £2,473,372 of which £2,218,160 was expensed in FY2023.

 

At 30 June 2023, the Company had outstanding share options to subscribe for Ordinary shares as follows:

 

Exercise price	Expiry date	Fair value of individual share option	At 01/07/2022	Issued	Exercised	At 30/06/2023
£0.02325	13/04/2033	£0.0192	-	128,534,322	-	128,534,322
			-	128,534,322	-	128,534,322

 

Information on the share options granted to each Director is shown in the remuneration report.

 

25.  Non-controlling interests

Non-controlling interests that are material to the Group are reflected in the table below.

 

On 20 May 2022 Technology Minerals Plc sold 10% interest in its wholly owned subsidiary Emperium Ltd, a US cobalt/copper projects: the Blackbird Creek Project and Emperium Project (collectively "the Properties"), to Bluebird Metals LLC, taking its ownership down to 90%. The consideration received for the 10% disposal was £860,000.

 

Summarised below is the financial information for Emperium Ltd, before intragroup eliminations together with amounts attributable to NCI:

 

		2023 £000	2022 £000
Non-current assets		459	376
Current assets		-	-
Non-current liabilities		-	-
Current liabilities		(298)	(119)
Net assets		161	257
Attributable to owners of the parent		147	231
Attributable to non-controlling interests		14	26

 

 

Attributable to non-controlling interests		2023 £000	2022                        £000
Loss for the year		(12)	(3)
Net (decrease)/increase in cash and cash equivalents		-	-

 

26.  Financial risk management

The Group's activities expose it to a variety of financial risks which result from its operating and investing activities; market risk (foreign currency exchange risk), liquidity risk, capital risk and credit risk. These risks are mitigated wherever possible by the Group's financial management policies and practices described below. The Group's financial risk management is carried out by the finance team led by the Chief Financial Officer and under policies approved by the Board. Group finance identifies, evaluates and mitigates financial risks in close co-operation with the Group's senior management team.

 

Financial instruments by category

Group		Group 2023 £000		Company 2023 £000	Group 2022 £000	Company 2022 £000
Financial assets at amortised costs:
Trade and other receivables			81	81	71	71
Cash			318	-	199	199
Loan receivable			6,493	6,493	4,538	4,538
Financial liabilities at amortised costs:
Trade and other payables			438	402	447	447
Borrowings			1,557	1,557	-	-
Financial assets at fair value through other comprehensive income:
Financial assets			1,221	1,219	1,221	-

Investments in equity instruments at FVTOCI are measured at cost, which is considered to be equal to their fair values.

 

Capital risk

Capital risk refers to the risk associated with a Company's ability to maintain an appropriate level of capital to support its operations and absorb potential losses.

 

The Group's objectives when managing capital risk are:

 

·          to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

·    to support the Group's growth; and

·    to provide capital for the purpose of strengthening the Group's risk management capability.

 

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities.  Management regards total equity as capital and reserves, for capital management purposes. The Group is not subject to externally imposed capital requirements.

 

Credit risk

Credit risk refers to the risk that the Group's financial assets will be impaired by the default of a third party (being non-payment within the agreed credit terms). The Group is exposed to credit risk primarily on its cash and cash equivalent balances as set out in note 21 and on its trade and other receivable balances as set out in note 20. The Group's credit risk is primarily attributable to its other receivables, being royalty receivables. It is the policy of the Group to present the amounts in the balance sheet net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and the current economic environment. In certain cases, the Group has the right to audit the reported royalty income.

 

For banks and financial institutions, only parties with a minimum credit rating of BBB are accepted. The majority of cash is held with Revolut Limited in the UK.

 

The Directors have considered the credit exposures and do not consider that they pose a material risk at the present time. The credit risk for cash and cash equivalents is managed by ensuring that all surplus funds are deposited only with financial institutions with high quality credit ratings. There are currently no expected credit losses.

 

Liquidity risk

Liquidity risk relates to the ability of the Group to meet future obligations and financial liabilities as and when they fall due. The Group currently has sufficient cash resources to pay the trade and other payables and contingent consideration when they fall due. 

Future expected payments
Group		2023 £000		2022 £000
Trade and other payables within one year		438		602
Current tax liabilities within one year		-		-

 

Foreign exchange risk

The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the United States Dollar (USD) and the Euro (EUR).

w

The following table highlights the major currencies the Group operates in and the movements against the Great British Pound (GBP) during the course of the year:

	Average rate			Reporting spot rate
	2023	2022	Movement	2023	2022	Movement
United States Dollar	1.20	1.32	(0.12)	1.27	1.22	0.05
Euro	1.15	1.18	(0.03)	1.16	1.16	-

 

The Group's exposure to foreign currency risk based on GBP equivalent carrying amounts of monetary items at the reported date:

 

	2023 £000 USD	2023 £000 USD	2022 £000 USD	2022 £000 USD
Cash and cash equivalents	1	33	-	20
Trade and other receivables	-	4	-	1
Trade and other payables	(8)	(88)	(8)	(105)
Net exposure	(7)	(51)	(8)	(84)

 

The Group does not hedge against foreign exchange movements.

 

Exchange rate sensitivity

The Group is mainly exposed to foreign exchange risk on the cash balances and trade and other payables denominated in currencies other than GBP as detailed above.  A +/- 10% change in the GBP:EUR and GBP:USD rate and the impact of a +/- 10% change on the exchange rates on the translation of foreign subsidiaries into the Group's presentation currency would result in the following changes:

 

	2023 £000	2023 £000	2022 £000	2022 £000
	Profit/(loss) +10%/-10%	Equity +10%/-10%	Profit/(loss) +10%/-10%	Equity +10%/-10%
USD	(11) / 11	16 / (16)	(1) / 1	28 / (28)
EUR	(18) / 18	25 / (25)	(26) / 26	26 / (26)

 

 

27.  Related party transactions

Aggregate base salaries paid to the Executive Directors for the year ended 30 June 2023 were £577k (2022: £358k). See note 9 for further details.

 

The aggregate amount paid to the Non-Executive Directors for services for the year ended 30 June 2023 was £36k (2022: £24k).

 

During the year the Company provided a loan of £6.5m (2022: £4.5m) to Recyclus Group, an associate. Alex Stanbury and Robin Brundle are each Directors of Recyclus Group Limited. The interest charged on the loan is 2% per annum and the amount charged for the period was £196,000 (2022: £46,000). See notes 18 and 19 for further information.

 

During the period the Company charged £356,884 (2022: £140,000) for the provision of management services to its subsidiaries.

 

During the period the Company provided £1,364,000 (2022: £1,504,000) of loans to its subsidiaries. The interest charged on the loans was 2% per annum and the amount charged for the period was £40,075 (2022: £20,000). See note 20.

 

As at 30 June 2023 amounts receivable from subsidiary undertaking was as follows:

 

Company	2023 £000	2022 £000
Techmin Limited	558	746
Onshore Energy Limited	(1,087)	170
Emperium 1 Holdings Corporation	298	119
Technology Minerals Idaho Limited	461	-
Technology Minerals Camaroon	241	-
LRH Resources Ltd	362	225
Asturmet Recursos S.L.	531	244
	1,364	1,504

 

 

28.  Notes supporting statement of cashflows

Significant non-cash transactions from investing activities are as follows:

	2023 £000	2022 £000
Equity consideration for the acquisition of subsidiaries	-	15,725
Equity consideration for the acquisition of mineral resources project	-	473
Shares issued in lieu of services provided by third parties	-	269

See notes 17 and 25 for further information

 

Significant non-cash transactions from financing activities are as follows:

	2023 £000	2022 £000
Conversion of loan notes to equity	1,060	5,193

See note 24 for further information.

Reconciliation of net cash flow to movement in net debt

 

Group	2023 £000	2022 £000
Cash and cash equivalents	318	371
Borrowings	(1,557)	-
Net debt	(1,239)	371
Net (decrease)/increase in cash and cash equivalents in the period	(53)	371
Cash inflow from increase in borrowings	(2,675)	(4,395)
Other non-cash changes	58	-
Conversion of borrowing to equity	1,060	4,395
Change in net debt resulting from cashflows	(1,610)	371
Net debt at the start of the year	371	-
Net debt at the end of the year	(1,239)	371

 

29.  Prior year adjustment

The prior year comparatives for the Group have been restated from those previously reported by the Company as shown below:

	Previous 2022	Adjustment	Restated 2022
	£000	£000	£000
Non-current assets
Property, plant and equipment	5	-	5
Intangible assets	18,300	(2,891)	15,409
Financial assets	1,221	-	1,221
Investment in associates	-	-	-
Loans to associates	4,538	-	4,538
Total non-current assets	24,064	(2,891)	21,173
Current assets
Trade and other receivables	67	-	67
Cash and cash equivalents	371	-	371
Current assets	438	-	438
Total assets	24,502	(2,891)	21,611
Current liabilities
Trade and other payables	602	-	602
Borrowings	21	-	21
Total current liabilities	623	-	623
Non-current liabilities
Deferred tax liability	2,891	(2,891)	-
Total non-current liabilities	2,891		-
Total liabilities	3,514	(2,891)	623
Net assets	20,988	-	20,988
Equity
Share Capital	1,271	-	1,271
Share Premium	19,770	-	19,770
Warrants reserve	1,420	-	1,420
Share-based payments reserve	-	-	-
Foreign exchange reserve	30	-	30
Accumulated deficit	(1,529)	-	(1,529)
Equity attributable to owners of the parent	20,962	-	20,962
Non-controlling interests	26	-	26
Total equity	20,988	-	20,988

 

Subsequent to the approval of the 2022 financial statements the Board carried out a review of the prior year acquisition of 100% of the issued share capital of Emperium 1 Holdings Corporation (Emperium), LRH Resources Limited and its wholly owned subsidiary Asturmet Recursos S.L. (LRH Group), Techmin Limited (TML), Onshore Energy Limited (OEL) and its wholly owned subsidiary Technology Minerals Cameroon (TMC). 

 

The Board concluded that the acquisition should not have included goodwill and corresponding deferred tax liability. Consequently, the prior year has been restated resulting in the restatement of the prior year statement of financial position. A deferred tax liability of £2,891k is no longer recognised along with the resultant goodwill.

 

There is no third statement of financial position due to the error solely relating to the prior year and also the length of time that the Company has been established.

 

30.  Events occurring after the reporting date

On 4 July 2023 the Company entered into a Convertible Loan Note for £500,000 at 6% interest for six months, convertible at 1.8p per share.

 

As announced on 13 July 2023, Global Battery Metals ("GBML") exercised its second option over the Company's Leinster Lithium Property in the Republic of Ireland, bringing GBML's equity interest in the Leinster property to 55%.

 

On 31 August 2023, the Company entered into a Convertible Loan Note for £700,000 at 12% interest for six months, convertible at 1.4p per share and issued warrants to subscribe for 70 million ordinary shares at 2p per shares. Costs associated with this funding were settled by a convertible loan note for £35,000 and warrants for 3.5 million shares on the same terms respectively.

 

 

31.  Ultimate controlling party

The company does not have a single controlling party.