REG - Alien Metals Limited - FY23 Results Ended 31 December 2023
23/05/2024 13:15
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RNS Number : 6981P Alien Metals Limited 23 May 2024
Trading Symbols
AIM: UFO
FWB: I3A1
23 May
2024
Alien Metals Ltd
("Alien" or "the Company")
Financial Results for the Year Ended 31 December 2023
Alien Metals Ltd (AIM: UFO), a global minerals exploration and development
company, today announces the release of its audited, financial results for the
year ended 31 December 2023.
The Company's full Annual Report is being sent to shareholders, and is
available on the Company's website, www.alienmetals.uk
(http://www.alienmetals.uk) .
The entirety of the Annual Report is set out below.
For further information please visit the Company's website
at www.alienmetals.uk (https://www.alienmetals.uk/) or contact:
Strand Hanson (Financial and Nominated Adviser)
James Harris / James Dance / Robert Collins
Tel: +44 (0) 207409 3494
WH Ireland Ltd (Broker)
Harry Ansell / Katy Mitchell
Tel: +44 (0) 207 220 1666
Yellow Jersey (Financial PR)
Charles Goodwin / Shivantha Thambirajah / Zara McKinlay
Tel: +44 (0) 20 3004 9512
CHAIRMAN'S REPORT
Dear Shareholders,
I am pleased to present the Chairman's statement for Alien Metals Limited (the
"Company", "Alien Metals", or "Alien") for the year ended 31 December 2023.
The Company made significant progress during the year, particularly on the
Hancock Iron Ore Project, culminating in the publishing of the Development
study in February 2024.
Project updates
Hancock Iron Ore Project:
The 90% owned Hancock Iron Ore Project ("Hancock" or the "Project") is located
17 kilometres ("km") north of the regional iron ore mining hub of Newman,
Western Australia. The geology of the area supports nearby world class iron
ore mines and the Company has an opportunity to build on the current high
confidence JORC compliant mineral resources and ore reserves to develop a long
life, direct ship, high grade iron ore mine.
The Project has progressed significantly during 2023 culminating in the
publishing of a development study (the "Development Study") in early 2024.
Highlights from the Development Study include:
· MRE of 8.4Mt @ 60% Fe JORC Mineral Resource, including an upgraded
Indicated Resource of 4.5Mt@ 60.2% Fe.
· Based on 8Mt of the Mineral Resource being converted to mining
inventory, robust project financials of the base case produced the following:
o an average annualised EBITDA of A$39m
o a pre-tax NPV10 of A$146m and a pre-tax IRR of 133%
o All in sustaining cost of US$85/t
o Production rate of 1.25mtpa
o Initial development Capital Cost of A$28m
o Other key highlights from the Development Study include the following:
o High confidence in the Capital and Operational Costs with pricing received
through the Early Contractor involvement and Preferred Tenderer process
resulting in up-to-date tendered pricing for more than 90% of the Capital
Costs and Operational Costs.
o Initial production plan focussed on current 3.9Mt mining inventory with
further upside to mine the entire Mineral Resource of 8.4Mt and beyond to be
realised through ongoing exploration upside. Further work confirmed a 165%
increase in Indicated Resources from 2.8mt to 4.5mt as part of an updated
Mineral Resource Statement.
Ore processing will utilise a mobile dry crushing and screening plant capable
of producing 1.25Mt to 1.5Mt of 100% fines product per annum on a single shift
basis. Sprint capacity of the plant working on a double shift basis is up to
3.0Mt per annum.
· Low start-up cost of A$28m capital including:
o A$18.0m for main roads intersection and access to Site,
o A$2.5m for site establishment and pre-production capital,
o A$6.5m of owners costs, working capital and contingency allowances.
· Reduction in costs achieved through the close proximity to the Mining
Hub of Newman. The proximity allows the Company to avoid extensive
construction capital costs associated with airstrip, mining camp and
associated services.
· Provisional export capacity through the Port of Port Hedland has been
secured and remains on track for final approvals during the first half of
2024.
CSA Global conducted an independent review based on existing geological
information and a site visit to express an opinion about the Exploration
Potential of the Hancock Project. Their findings included:
· Tenement E47/3954: Significant exploration potential has been
identified, in addition to the 8.4Mt Mineral Resource outside of the known
Mineral Resource area.
· Tenement E47/3954: Walk up drill targets, with a potential to
increase the existing Mineral Resource
· Hancock Project Tenements E47/3954 and E47/5001: Significant strike
lengths of Weeli Wolli Formation BIF and Boolgeeda Iron Formations identified
and yet to be adequately explored.
· Alien has also separately completed an additional internal review of
Project Tenement E47/5001, identifying (interpreted from GSWA 250k mapping)
significant underlying geological lithologies that are suitable hosts for iron
ore mineralisation and exploration potential.
· Success through accelerating exploration activities could therefore
significantly increase the existing 8.4Mt JORC Mineral Resources, resulting in
potential for increases to planned production and mine life.
Alien plans to conduct additional exploration during 2024 to target an
increase in its Mineral Resource while preparing for the mining development.
During April 2024, the Western Australian Department of Mines granted the
mining lease (M47/1633) for the project, giving security of tenure for a 21
year term through to 17 April 2045, and allowing for site development to
commence in 2024, assuming the requisite funding has been secured.
The Company continued work on multiple fronts towards putting the Project into
production.
In November, the Company signed a conditional, non-binding, Memorandum of
Understanding with the Pilbara Ports Authority for Iron Ore exports. This
would provide access to the Utah Bulk Handling Facility, with multi-user berth
in Port Hedland. The Company has also substantially agreed the terms for a
binding agreement, which would be subject to typical regulatory approvals.
The Company executed a Native Title Project Mining Agreement with the Karlka
Nyiyaparli Aboriginal Corporation RNTBC ("KNAC"). This covers the Project and
associated tenements. In addition, the signing of Heritage Agreements with
(KNAC) enabled the Western Australian Department of Mines, Industry Regulation
and Safety to grant the Miscellaneous Licence from the Great Northern Highway
to the project.
During the year, the Company completed infill diamond core drilling (13 holes
for 1,048.9 metres) at the high grade Sirius Deposit in May 2023 with results
released in July 2023 showing consistent grades of over 60% Fe with low levels
of deleterious elements. These results were included in the Mineral Resource
Estimates included in the Development Study.
A Heritage Agreement with the PKKP Aboriginal Corporation RNTBC was also
executed during the year for the Vivash Gorge Project. This was done to
facilitate the exploration of licence E47/3071 cooperatively with the Puutu
Kunti Kurrama and Pinikura people, whilst ensuring best practice protection of
their cultural heritage.
Pinderi Hills Project:
Alien undertook a detailed review of historical data on the Elizabeth Hill
mining lease during the year including site visits. The review supports a
significant opportunity for high-grade polymetallic mineralisation. The key
base metals results of this review, include:
- 1 metre ("m") @ 3.98% Cu, 12 troy ounces ("ozt") Ag, 0.95% Ni from
35m in EC002
- 1m @ 3.5% Cu, 125ozt Ag, 0.58% Ni from 2m in UGD063
- 5.2m @ 2.18% Ni, 166ozt Ag, 0.76% Cu from 3m in UGD069
- 1.05m @ 1.90% Ni, 114ozt Ag, 1.25% Cu, from 5.05m in UGD072
Some of these results extend outside of the known mineralisation zones and
support potential extensions to the silver resource envelope. In addition,
following significant corporate activity targeting the region during the year,
including the announced SQM and Hancock Prospecting joint $1.7 billion bid for
Azure Minerals and SQM's announced strategic joint venture with Novo Resources
(ASX:NVO) for lithium, the Company undertook a preliminary review for lithium
prospectivity within the Pinderi Hills project which is in progress as at the
date of this report.
Alien Metals engaged consultants to review the Munni Munni PGM project during
the period with a view to potential joint venture funding to enable the
project to progress. The project area contains a historic JORC 2004 compliant
resource of 24 million tonnes @ 2.9 grams per tonne ("g/t") PGM and gold
for 1.14 million ounces ('moz') palladium ('Pd'), 0.83 moz Pt ('platinum'),
152 thousand ounces ("koz") Au ("gold") and 76 koz Rh ("rhodium"). Potential
exists for a much larger, high value, multi-commodity resource, many of which
appear on critical mineral lists. Munni Munni represents one of the largest
undeveloped primary PGM Resources in Australia. Alien Metals newly appointed
Board member, Robert Mosig, has intimate knowledge of this project and will
assist in development of plans to extract value.
Subsequent to year end, the Company through its wholly owned subsidiary Alien
Metals Australia Pty Ltd, entered into a joint venture with Errawarra
Resources Ltd (ASX: ERW) in respect of the lithium rights on the Pinderi Hills
Project. Errawarra has the potential to earn up to a 50% interest in the
lithium rights in the Project by spending up to A$4 million with the first
A$500,000 being by the way of a subscription for common shares in the capital
of the Company. Proceeds of the subscription will be applied to general
working capital purposes:
• Stage 1: Errawarra will earn-in for a 25% participating interest in the
joint venture by spending A$1m on the Project, within 24 months of the date of
entering into the Agreement; and
• Stage 2: Errawarra will earn-in for a further 25% participating interest
in the joint venture by spending a further A$2.5m on the Project , within 60
months of the date of entering into the Agreement.
At the conclusion of Stage 2, Errawarra's interest in the Project will be 50%
and from that point, the Parties will contribute towards any Project related
expenditure on a pro-rata basis. If Errawarra does not meet the required spend
(as noted above) in either Stage 1 or Stage 2, its interest in the joint
venture will reduce proportionally. If AMA chooses not to contribute on a
pro-rata basis following the completion of Errawarra's Stage 2 earn in, AMA's
50% interest will dilute on a pro rata basis, and in the event that AMA's
interest in the joint venture falls below 10%, its remaining holding will
convert to a 2% gross revenue royalty.
Donovan 2 Copper-Gold Project:
Alien Metals is taking steps to divest its projects in Mexico given the
strength of its Australian based portfolio.
Funding
The Company raised £2 million in August 2023, issuing 1,000,000,000 shares at
0.2 pence a share. In July 2023 the Company executed a short-term funding
facility for $1 million. $0.5 million of this facility was subsequently
cancelled following the capital raise in August 2023.
Subsequent to year end the Company entered into a further short term funding
facility of A$2 million. This facility will meet short-term capital
requirements and contribute towards exploration and the ongoing review of
strategic funding options to maximise value for the Company's shareholders and
stakeholders, including: Considering various longer-term financing options,
including continued discussions with strategic partners regarding offtake
funding, debt, equity project funding in connection with the Hancock Project
and the Pinderi Hills PGM, silver and base metals project; and actively
exploring the potential for the sale or joint venture of non-core assets
providing further funding for the Company.
Financial Results
Alien Metals Limited reported a loss for the twelve months ended 31 December
2023 of $3,721,000 (31 December 2022: loss of $2,375,000).
Included in the 2023 financial results is non-cash share based payment expense
of $216,000, a write down of the carrying value of the Mexico exploration
assets in the amount of $794,000, and the write down of other assets in the
amount of $140,000.
Board Changes
During the year Mr Guy Robertson (26 April 2023), Ms Elizabeth Henson (4
August 2023) and Mr Alwyn Vorster (4 August 2023) were appointed to the Board.
Mr Vorster resigned subsequent to year end (15 March 2024) given other
commitments, however remains as an advisor on the Hancock project.
Mr Robert Mosig was appointed as a director on 15 March 2024.
Mr Daniel Smith (6 September 2023), Mr Mark Culbert (4 August 2023), Jo
Battershill (26 April 2023) and Mr Roderick McIllree (30 June 2023) resigned
as directors during the year.
Outlook
Looking ahead, we remain focused on delivering long-term value for our
shareholders by continuing to advance our exploration and development
projects.
We will continue to prioritise safety, sustainability, and good governance in
all our operations, as we work to create value for all our stakeholders.
Conclusion
In conclusion, I would like to thank our employees, contractors, and
shareholders for their continued support during the year. We are pleased with
the progress we have made, and we look forward to updating you on our
achievements in the coming year.
Yours sincerely,
Guy Robertson
Interim Executive Chairman
22 May 2024
DIRECTORS' REPORT
The Directors present their Report, together with the Consolidated Financial
Statements and Independent Auditor's Report, for the year ended 31 December
2023.
Principal Activities
The principal activity of the Group is to create and develop a multi-commodity
portfolio of exploration and mining projects in jurisdictions with established
mining communities, stable political backgrounds, and where strong operational
controls can be assured.
The Group's principal activities are in the premier Pilbara mining region of
Western Australia.
Business Review
Alien Metals' geological team continue to assess and identify projects that
fit with the Group's strategic objectives. Wherever possible, the projects are
acquired on a low-cost option basis whilst preliminary exploration is
undertaken to assess the merits of further work and with clear value drivers
for shareholders and stakeholders alike.
Where preliminary studies show evidence of sufficient mineralisation,
increasingly comprehensive studies and development will be undertaken with a
view to delineating a compliant mineral resource estimate in readiness for
mine development or of the potential sale of the asset to a producing mining
company, at which time a significant premium over its acquisition and
development cost may be justified.
A detailed review of the business of the Group during the year and an
indication of likely future developments may be found in the Chairman's Report
on pages 3, 4 and 5.
Principal risks and uncertainties are discussed on pages 7 to 12.
Results and Dividends
The loss of the Group for the year ended 31 December 2023 amounts to
$3,721,000 (31 December 2022: loss of $2,375,000).
The Directors do not recommend the payment of a dividend for the year (31
December 2022: Nil).
Directors and Directors' Interests
The Directors who served during the year ended 31 December 2023 had the
following beneficial interests in the shares of the Company at year end.
Director 31 December 2023 31 December 2022
Ordinary Shares Options Performance Rights Ordinary Shares Options Performance Rights
A Vorster* 12,500,000 65,000,000 - - - -
G Robertson*** - - - - - -
E Henson** 8,455,722 65,000,000 - - - -
D J Smith******* 4,517,715 45,000,000 - 4,517,715 57,342,509 -
M C Culbert****** 6,666,666 - - 6,666,666 7,500,000 -
J L Battershill***** - 50,000,000 - - 50,000,000 -
R McIllree**** 137,404,762 230,000,000 - 137,404,762 230,000,000 -
* Appointed 4 August 2023, resigned 15 March 2024
** Appointed 4 August 2023
*** Appointed 26 April 2023
**** Appointed 7 September 2022, resigned 30 June 2023
***** Resigned 26 April 2023
****** Resigned 4 August 2023
******* Resigned 6 September 2023
Further details on options can be found in Note 17 to the Financial
Statements. Directors' remuneration is disclosed in Note 20.
Substantial shareholders
The substantial shareholders with more than a 3% shareholding at 29 February
2024 are shown below
Percentage
Bennelong Limited 7.21%
Windfield Metals Limited 5.92%
Gilmore Capital Limited 4.06%
Key Performance Indicators ("KPIs")
The Board monitors the activities and performance of the Group on a regular
basis. The Board uses financial indicators based on budget versus actual to
assess the performance of the Group. The indicators set out below will be used
by the Board to assess performance over the period.
The three main KPIs for the Group are as follows. These allow the Board to
monitor costs and plan future exploration and development activities:
2023 2022
Cash and cash equivalents ($) 676,000 2,177,000
Administrative expenses as a percentage of total assets (%) 16% 13%
Exploration costs capitalised during the year ($) 1,708,000 3,029,000
Principal Risks and Uncertainties
Risks are formally reviewed by the Board, and appropriate processes are put in
place to monitor and mitigate them. If more than one event occurs, it is
possible that the overall effect of such events would compound the possible
adverse effects on the Group.
The financing, exploration, development and mining of any of the Company's
properties is subject to a number of factors including the price of copper,
silver, gold, lead, iron ore and zinc, laws and regulations, political
conditions, currency fluctuations, environmental regulations, hiring and
retaining qualified people and obtaining necessary services in jurisdictions
where the Company operates.
The Board periodically carries out robust assessments of the emerging and
principal risks facing the Company including those that would threaten its
business model, future performance, solvency or liquidity. The assessment
includes a review of all material controls including those which are related
to finance, operations and compliance.
The Audit Committee is responsible for monitoring the effectiveness of the
Company's risk management and internal control systems, and reports to the
Board as required.
Alien Metals operates with a small team of key personnel and with open lines
of internal communication. Where new risks are identified, they are reported
to the Company Secretary or the Board. Where practicable, a method of
mitigation is determined, and the risk together with any form of mitigation is
presented to the Board for discussion.
The following is a brief discussion of those distinctive or special
characteristics of the Company's operations and industry which may have a
material impact or constitute risk factors in respect of the Company's future
financial performance.
Principal risks and uncertainties
Key risks Description of risk Mitigating factors
Strategic risks
Exploration and development and future acquisitions The Group's operations are subject to all of the hazards and risks incidental Our mineral concessions are evaluated carefully by qualified geologists and
to exploration, development and the production of minerals, including damage independent advisors are engaged as and when appropriate.
to life or property, environmental damage and legal liability for damage,
which could have a material adverse impact on the business and its financial
performance.
The management team has significant experience operating in Australia.
The Group may acquire additional mining concessions in Australia or elsewhere
in the world.
The Group may be unable to obtain suitable mining concessions at competitive
prices.
Any exploration programme entails risks relating to the location of economic
ore bodies, the development of appropriate metallurgical processes, the
receipt of necessary governmental permits and the construction of mining and
processing facilities.
In the event that the Group's portfolio of mining concessions is deemed by
management not to warrant further exploration and the Group is unsuccessful in
acquiring suitable new projects, the Group will have no exploration or
development projects to pursue.
No reserves or resources The Group has announced its maiden mining reserve and associated mining The Group received an independent assessment of the reserve resource potential
inventory. of the Hancock project and believes that there is good potential to delineate
additional mineral resources in accordance with JORC.
No assurance can be given that any future exploration programme will result in
any new resources and or discoveries.
Key risks Description of risk Mitigating factors
Strategic risks
Mineral concessions and titles risks In relation to exploration and mining concessions over which the Group holds The Group's mineral concessions have been registered in the name of CMEP and
legal rights, if the Group fails to fulfil the specific terms of any of its no contest or objection was received.
concessions or operates in the concession areas in a manner that violates
Mexican or Australian mining law, regulators may impose fines, suspend or
revoke the concessions, any of which could have a material adverse effect on
the Group's operations and proposed operations. The Group is aware of necessary minimum expenditure and annual rental
obligations for all its exploration and mining permits and maintains the
necessary payments and expenditure obligations to negate any risk from this
aspect.
Ownership of the mineral concessions in Mexico has been transferred from the
Group's former operating subsidiary Alien Metals de Mexico SA de CV ("ASM") to
its new operating subsidiary, Compañía Minera Estrella de Plata SA de CV
("CMEP"). Whilst the Group has previously received legal opinions in respect Prior to entering into agreements relating to mineral concessions, formal
of title of ASM to its properties. There is no guarantee that the title to searches and reviews of legal documentation are conducted to provide evidence
such properties will not be challenged or impugned by third parties. The of the legal owner, including outsourcing of legal and/or tenement due
Group's concessions could be subject to prior unregistered agreements, diligence to legal practitioners.
transfers or other claims and title could be affected by unidentified or
unknown defects or government actions. A formal legal opinion has not been
obtained as to the legal title of CMEP to the mineral concessions.
At 31 December 2023 the exploration and evaluation assets in Mexico had been
written down to nil.
Key risks Description of risk Mitigating factors
Financial risks
Requirement of additional financing Failure to obtain sufficient financing for any projects would result in a The Group has an experienced Board and management team with significant
delay or indefinite postponement of exploration, development or production on experience in financing mining activities.
properties covered by the Group's concessions or even the loss of a
concession.
The Group has been successful in raising funds in the past and it is our
intention to raise additional funds in future to support the ongoing
Additional financing might not be available when needed, or if available, the development of the business.
terms of such financing might not be favourable to the Group and could involve
substantial dilution to shareholders. In the absence of adequate funding or
cost reductions, the Group may not be able to continue as a going concern.
Liquidity risk The Group's approach to managing liquidity risk is to ensure that it will have The Group ensures sufficient funds will be available to allow it to meet its
sufficient liquidity to meet liabilities when due. The Group's accounts liabilities as they fall due. To achieve this, cash balances and cash flow
payable have contractual maturities of less than 30 days and are subject to projections are reviewed by the Board on a regular basis. The Board will not
normal trade terms. In the short-term, liabilities will be funded by cash. commit to material expenditures prior to being satisfied that sufficient
funding is available.
Capital management risk The Group's objective when managing capital is to safeguard the Group's In order to maintain or adjust the capital structure, the Group may issue new
ability to continue as a going concern and have access to adequate funding for shares, acquire debt, or sell assets. Management regularly reviews cash flow
its exploration and development projects so that it can provide returns for forecasts to determine whether the Group has sufficient cash reserves to meet
shareholders and benefits for other stakeholders. The Group manages the future working capital requirements and to take advantage of business
capital structure and makes adjustments in light of changes in economic opportunities.
conditions and risk characteristics of the underlying assets.
Price risk The price risk is the risk that the fair value or future cash flows of a The Group does not currently have any financial instruments in issue other
financial instrument will fluctuate because of changes in market prices, than share options and warrants.
whether those changes are caused by factors specific to the individual
financial instrument or its issuer, or factors affecting all similar financial
instruments in the market.
The Group does not hedge its exposure to price risk.
Foreign currency risk The Group's exploration expenditure is made in Mexican pesos, Australian The Group does not currently hedge foreign exchange risk.
dollars or US dollars and head office expenses are predominantly made in the
UK in pounds sterling. The Group is therefore exposed to the movement in
exchange rates for these currencies.
There is not considered to be any material exposure in respect of other
monetary assets and liabilities of the Group.
At the year end, the majority of the Group's cash resources were held in GBP
and AUD. The Group therefore also has downside exposure to any weakening of
GBP and AUD against the US dollar as this would increase expenses in US dollar
terms and accelerate the depletion of the Group's cash resources. Any
strengthening of GBP or AUD against the US dollar would, however, result in a
reduction in expenses in US dollar terms and preserve the Group's cash
resources.
In addition, any movements in pounds sterling, Australian dollars or Mexican
peso would affect the presentation of the consolidated statement of financial
position when the net assets of the Mexican and Australian subsidiaries and
the parent company in the UK are translated from their functional currencies
into US dollars.
Credit risk The Group's credit risk is primarily attributable to cash and the financial The Group invests its cash in deposits with well-capitalised financial
stability of the institutions holding it. institutions with strong credit ratings.
The Group's maximum exposure to credit risk is attributable to cash. The
credit risk on cash is limited because the Group invests its cash in deposits
with well capitalised financial institutions with strong credit ratings.
Investment risk The Group may from time to time hold shares in other mining companies. There The Group has previously been successful in realising value from investments.
is not always a liquid market for the shares in companies and it may not
always be possible to sell such shares at the optimum time or price.
Key risks Description of risk Mitigating factors
External risks
Metals prices The Group's ability to obtain further financing will depend in part on the It is an accepted risk that the Group's performance will be impacted by the
price of commodity prices, including copper, silver, lead, iron ore and zinc, price of metals.
and the industry's perception of its future price. The Group's resources and
financial results of operations will also be affected by fluctuations in metal
prices over which the Group has no control.
The Board and management believe the price of precious metals in particular
A reduction in the metal prices could prevent the Group's properties from will increase in the long term.
being economically mined or result in curtailment of existing production
activities or result in the impairment and write-off of assets. The price of
commodities, which is affected by numerous factors including inflation levels,
fluctuations in the US dollar and other currencies, supply and demand and The Group does not hedge its exposure to metals prices.
political and economic conditions, could have a significant influence on the
market price of the Company's common shares.
Key risks Description of risk Mitigating factors
Operational risks
Reliance on contractors The Group relies on contractors to implement exploration and development The Group has operated in Australia and in Zacatecas in Mexico, for several
programmes. The failure of a contractor or key service provider to properly years and has well-established and trusted relationships with various
perform its services to the Group could delay or inconvenience the Group's contractors.
operations and have a materially adverse effect on the Group.
Key personnel The Group's business is dependent on retaining the services of a small number The Board has established a Nomination & Remuneration Committee which is
of key personnel of the appropriate calibre as the business develops. The responsible for considering succession planning and ensuring remuneration is
Group has entered into employment agreements with certain key managers. The sufficient to attract and retain staff of the necessary calibre. The Company
success of the Group is and will continue to be to a significant extent, also has the ability, and track record, to attract new Directors and personnel
dependent on the expertise and experience of the directors and senior if and when required.
management. The loss of one or more of these individuals could have a
materially adverse effect on the Group. The Group does not currently have any
insurance in place with respect to key personnel.
Environmental factors The Group's operations are subject to environmental regulation in the The Group has an experienced Board and management team with an awareness and
jurisdictions in which it operates. Such regulation covers a wide variety of knowledge of these types of risk.
matters including, without limitation, prevention of waste, pollution and
protection of the environment, labour regulations and health and safety. The
Group might also be subject under such regulations to clean-up costs and
liability for toxic or hazardous substances, which might exist on or under any Concessions are evaluated carefully prior to their acquisition for
of the properties covered by its concessions, or which might be produced as a environmental risks and consultants are engaged to advise on specific risks
result of its operations. when appropriate.
If the Group does not comply with environmental regulations or does not file The Group has an excellent track record on environmental matters.
environmental impact statements in relation to each of its concessions, it
might be subject to penalties, its operations might be suspended, closed
and/or its concessions may be revoked.
Environmental legislation and permit requirements are likely to evolve in a
manner which will require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their directors and employees.
The Group's activities could be subject to prolonged disruptions due to
weather conditions depending on the location of operations in which the Group
has interests.
Political risk The Group is conducting its exploration activities in the Zacatecas region of The Directors believe the governments of Australia and Mexico support the
Mexico, and in Western Australia. The Group may be adversely affected by development of natural resources by foreign operators.
changes in economic, political, judicial, administrative or other regulatory
factors such as taxation in these jurisdictions, where the Group operates and
holds its major assets.
Mexico may have a more volatile political environment and/or more challenging
trading conditions than in some other parts of the world. There is no
assurance that future political and economic conditions in Mexico will not
result in the government of Mexico adopting different policies in respect of
foreign development and ownership of mineral resources. Any such changes in
policy may result in changes in laws affecting ownership of assets, taxation,
rates of exchange, environmental protection, labour relations, and
repatriation of income and return of capital. These changes may affect both
the Group's ability to undertake exploration and development activities in
respect of future properties in the manner currently contemplated, as well as
its ability to continue to explore and develop those properties, in respect of
which it has obtained exploration and development rights to date.
Payment obligations Under the mineral property concessions and certain other contractual The Directors have in place a system of internal controls to ensure any
agreements to which a member of the Group is, or may in the future become, a payment obligations are complied with.
party, any such company is, or may become, subject to payment and other
obligations. If such obligations are not complied with when due, in addition
to any other remedies which may be available to other parties, this could
result in dilution or forfeiture of interests held by such companies.
Regulatory approvals The operations of the Group require approvals, licenses and permits from The Group has significant experience in operating in Mexico and Australia and
various regulatory authorities, governmental and otherwise. There can be no believes that the Group holds or will obtain all necessary approvals, licenses
guarantee that the Group will be able to obtain or maintain all necessary and permits under applicable laws and regulations in respect of its current
approvals, licenses and permits that may be required to explore and develop projects.
its various projects and/or commence construction or operation of mining
facilities that economically justify the cost.
Competition The Group competes with numerous other companies and individuals in the search The Group and its management team have significant experience in mining
for and acquisition of mineral claims, leases and other mineral interests, as operations in Australia and Mexico. Through its experience and relationships,
well as for the recruitment and retention of qualified employees. There is counterparties may consider the Group to have lower transaction risk than its
significant competition for the silver and other precious metals opportunities competitors.
available and, as a result, the Group may be unable to acquire further mineral
concessions on terms it considers acceptable.
Conflicts of interest Certain directors and officers of the Group also serve as directors and/or The Group's Articles of Association have been adopted by shareholders and any
officers of other companies involved in mineral exploration and development conflicts of interest are dealt with in accordance with the rules set out
and consequently there is the potential for conflicts of interest. The Group therein.
expects that any such director or officer shall disclose such interest in
accordance with its articles of association or his contractual obligations to
the Group and any decision made by any of such directors and officers
involving the Group will be made in accordance with their duties and In the event of a conflict of interests, the conflicted director shall not
obligations to deal fairly and in good faith with a view to the best interests vote on the relevant matter.
of the Group and its shareholders.
Health and Safety Alien Metals operates in an environment with work related hazards and risk of The Group has established and published robust corporate health, safety,
injuries and accidents. A comprehensive health and safety programme is the environmental and community relations policies, and at the operations level
primary means for delivering best practices in health and safety management. have put into place clear safe operating procedures covering a variety of the
This programme is regularly required to be updated to incorporate employee Group's activities. The active participation of all staff in the development,
suggestions, lessons learned from past incidents and new guidelines related to implementation and further development of these procedures is actively
new projects with the aim of identifying areas for further improvement of encouraged.
health and safety management. This requires continuous improvement of the
health and safety programme. Employee involvement is recognised as fundamental
in recognising and reporting unsafe conditions and avoiding events that may
result in injuries and accidents.
Internal Controls
The Board recognises the importance of both financial and non-financial
controls and has reviewed the Group's control environment and any related
shortfalls during the year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the Group, adequate
internal controls have been implemented. Whilst they are aware that no system
can provide absolute assurance against material misstatement or loss, in light
of the current activity and proposed future development of the Group,
continuing reviews of internal controls will be undertaken to ensure that they
are adequate and effective.
Going Concern
These financial statements have been prepared on a going concern basis, as set
out in Note 2.4.
The Directors have prepared cash flow forecasts for the period ending 31 May
2025, which take into account the cost and operational structure of the Group
and Parent Company, planned exploration and evaluation expenditure, licence
commitments and working capital requirements. These forecasts indicate that
the Group and parent Company's cash resources are not sufficient to cover the
projected expenditure for the period of 12 months from the date of approval of
these financial statements. These forecasts indicate that the Group and Parent
Company, in order to meet their operational objectives, and expected
liabilities as they fall due, will be required to raise additional funds
within the next 12 months.
Whilst the Directors are confident that they will be able to secure the
necessary funding, the current conditions do indicate the existence of a
material uncertainty that may cast doubt regarding the applicability of the
going concern assumption and the auditors have made reference to this in their
audit report. The Directors are confident in the Company's ability to raise
additional funds as required, from existing and/or new investors, within the
next 12 months. Thus, they continue to adopt the going concern basis of
accounting in preparing these financial statements. The auditors make
reference to going concern by way of a material uncertainty over the ability
of the Company and the Group to fund the forecasted expenditure.
Directors' and Officers' Indemnity Insurance
During the financial year, the Company maintained insurance cover for its
Directors and Officers under a Directors' and Officers' liability insurance
policy. The Company has not provided any qualifying indemnity cover for the
Directors.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
· there is no relevant audit information of which the Company's auditor
is unaware; and
· the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
Auditor
PKF Littlejohn LLP was appointed in the current year and signified its
willingness to be reappointed in office as auditor.
This report was approved by the Board on 21 May 2024 and signed on its behalf.
Guy Robertson
Executive Chairman
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with the applicable law and regulations
including the AIM Rules for Companies.
The Directors are required to prepare Financial Statements for each financial
year. The Directors have elected to prepare the Group's Financial Statements
in accordance with UK-adopted International Accounting Standards. 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 Group and
of the profit or loss of the Group for that period. In preparing these
Financial Statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether applicable UK-adopted International Accounting Standards
have been followed, subject to any material departures disclosed and explained
in the Financial Statements;
· prepare the Financial Statements on the going concern basis unless it
is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group. They are
also responsible for safeguarding the assets 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 Group's website,
https://www.alienmetals.uk. The Group is compliant with AIM Rule 26 regarding
the Group's website.
The Directors confirm that they have complied with the above requirements in
preparing these Financial Statements.
CORPORATE GOVERNANCE REPORT
The Board recognises the value and importance of maintaining the highest
standards of corporate governance and is committed to the principles and best
practice of good corporate governance. In this regard the Directors have
elected to comply with the 2018 UK Corporate Governance Code ("the Code")
though there are a number of provisions which the Group have not complied with
due to it not being practical to do so, having regard to the size and stage of
development of the Group. The Directors remuneration is disclosed in Note 19.
Although the Code contains a set of five Principles that emphasise the value
of good corporate governance to long term sustainable success and focuses on
the application of such Principles, it does not set out a rigid set of rules
but instead offers flexibility through the application of Principles and
through "comply or explain" Provisions and supporting guidance.
The Company is small with a modest resource base. The Company has a clear
mandate to optimise the allocation of limited resources to support its
development plans. As such, the Company strives to maintain a balance between
conservation of limited resources and maintaining robust corporate governance
practices. As the Company evolves, the Board is committed to enhancing the
Company's corporate governance policies and practices deemed appropriate for
the size and maturity of the organisation.
During the year the Board consisted of three Directors: an Non-Executive
Chairman, an Executive Director and one Non-Executive Director ("NED"). The
Board considers that appropriate oversight of the Group's provided by the
currently constituted Board. The sections below set out the way in which the
Group applies the Principles.
Principle 1: Board Leadership and Company Purpose
Alien Metals' objective is to create a multi-commodity portfolio of
exploration and mining projects in established mining jurisdictions, stable
political backgrounds and where strong operational controls can be assured.
The Company routinely evaluates mining projects in a wide array of world-class
mining jurisdictions including Mexico and Australia.
Where preliminary studies evidence sufficient mineralisation, increasingly
comprehensive studies will be undertaken with a view to delineating a
compliant mineral resource estimate in readiness for the potential sale of the
asset to a producing mining company, at which time a significant premium over
its acquisition and development cost may be justified.
The Executive Director is responsible for overseeing the long-term success and
strategic direction of the Company in accordance with the schedule of matters
reserved for Board decision and is responsible for monitoring the activities
of the executive management.
The Board usually meets a minimum of four times a year but may meet more
frequently on ad-hoc basis as and when required. The Chairman is ultimately
responsible for ensuring that each Board decision is taken having sufficient
information on and with all due discussion as is relevant to such decision.
All Directors attended each meeting held during the year.
The Company has effective procedures in place to monitor and deal with
conflicts of interest. The Board is aware of the other commitments and
interests of its Directors and changes to these commitments and interests are
reported to, and, where appropriate, agreed with the rest of the Board.
The Company has also adopted an Anti-Corruption and Bribery Policy to ensure
compliance with the relevant laws governing anti-corruption and anti-bribery
as well as a Share Dealing Code for Directors and applicable employees to
ensure compliance with AIM Rule 21 and the provisions of the Market Abuse
Regulations relating to dealings in the Group's securities.
Provision 5 of the Code recommends that the Board appoints a Director from the
workforce, creates a formal workforce advisory panel or appoints a designated
Non-Executive Director to engage with the workforce. However, due to the Group
currently having a small number of employees, the Board does not consider this
to be appropriate but at such time as the size of the workforce increases, it
will review the position and make any such appointments or take other actions
it considers appropriate.
Principle 2: Division of Responsibilities
The Group has a schedule of matters reserved for its own decision and two
committees comprised entirely of Non-Executive Directors: the Audit and Risk
Committee (the "ARC") and the Nomination and Remuneration Committee (the
"N&R Committee", each with formally delegated duties and responsibilities
set out in respective Terms of Reference.
The division of responsibilities between the Chairman and senior management is
clearly defined in writing. However, they work closely together to ensure
effective decision making and the successful delivery of the Group's strategy.
Each Director has a Letter of Appointment or a Services Agreement in place to
ensure that they clearly understand the requirements of the role. All
Directors are required to allocate sufficient time to the Company to discharge
their responsibilities effectively.
Due to the size of the Board, the nomination of any one particular director to
act as a Senior Independent Director, as recommended by Code Provision 12, is
not currently considered to be appropriate or improve the effective operation
of the Board. However, the matter is kept under review.
Provision 11 of the Code requires at least half the Board, excluding the
Chairman, to be Non-Executive Directors whom the Board considers to be
independent. During the year the Alien Metals Board consisted of three
Non-Executive Directors - Daniel Smith, Mark Culbert and Jonathan Battershill
- of which Mark Culbert was deemed to be independent by virtue of not having
been granted Options in the prior year. Daniel Smith and Jonathan Battershill
were not considered to be independent by virtue of each having been granted
Options in the most recent award and as each were recompensed for the
provision of material consultancy services to the Company outside of their
respective standard remuneration as Directors.
The change in Board during the year saw the appointment of an Executive
Director, Guy Robertson, and two Non-Executive Directors, Alwyn Vorster and
Elizabeth Henson. Subsequent to the period end, on 15 March 2024, Rob Mosig
was appointed as a Non-Executive Director, replacing Alwyn Vorster, and Guy
Robertson resumed his position as Executive Chairman on an interim basis. On
the same date, Elizabeth Henson assumed the role of Senior Independent
Non-Executive Director.
Principle 3: Composition, Succession and Evaluation
During the year ended 31 December 2023, the Board comprised of one Executive
Director and three Non-Executive Directors.
The Board established a N&R Committee and an ARC, each with formally
delegated duties and responsibilities set out in respective Terms of
Reference, to assist with oversight and governance.
The Board and its advisers have significant experience in the mining sector
and from that, a strong network of individuals working in the sector. The
N&R Committee leads the process for Board appointments and is responsible
for review of the Board size, structure and composition (both Executive and
Non-Executive) including any potential new applicants to ensure the Board
contains the right balance of skills, knowledge and experience to manage and
grow the business. The N&R Committee will make recommendations to the
Board on any proposed or suggested changes to the Board with a view on the
leadership needs of the business including succession planning.
The Board does not carry out a formal annual evaluation of its performance,
its committees, the Chairman and individual Directors, which is contrary to
the recommendation of Code Provision 21.
However, the Chairman continuously considers the performance of the Board, its
committees and of individual directors and provides feedback when appropriate.
Similarly, the Chairman invites feedback in the same manner from the
Non-Executive Directors and the Company Secretary.
The Board considers the time and cost involved in carrying out a formal
process, especially one that is externally facilitated, cannot be justified
for the Company at this stage in its development. Nonetheless, the Board
acknowledges the merits in carrying out formal Board evaluations and will
monitor the continuing suitability of this stance as the Company grows in
size.
Principle 4: Audit, Risk and Internal Control
The ARC is currently comprised of the full Board, given the Company had only 3
Directors at year end. However, other individuals such as executive management
may be invited to attend all or any part of any meeting when deemed
appropriate. The Company's external auditors are invited to attend meetings of
the Committee on a regular basis
The ARC has responsibility for, among other things, the monitoring of the
integrity of the financial statements of the Company and its Group and the
involvement of the Group's auditors in that process. It focuses in particular
on compliance with accounting policies and ensuring that an effective system
of external audit and financial control is maintained, including considering
the scope of the annual audit and the extent of the non-audit work undertaken
by external auditors and advising on the appointment of external auditors. The
ultimate responsibility for reviewing and approving the annual report and
accounts and the half-yearly reports remains with the Board. The Audit
Committee will meet at least three times a year at the appropriate times in
the financial reporting and audit cycle. The committee also review the
emerging and principal risks of the business, refer to Principal Risks and
Uncertainties on page 7.
Independence of the External Auditor
The independence of the auditor is considered by the Audit Committee each
year. In assessing the auditor's independence, the Audit Committee considers:
· Ratio of audit fees to non-audit fees
· Length of tenure
· Whether there are any known material relationships between the
Company, its directors and senior executives, and the audit firm, its
partners, and the audit team
· Application of constructive challenge and professional scepticism
Audit and non-audit fees are disclosed in the financial statements.
The Audit Committee considers the nature and value (in the context of the
audit fee) of any non-audit services on the auditor's independence and is
required to give its prior approval of any such non-audit services.
Effectiveness of the external audit process
In considering the effectiveness of the external audit process, the Audit
Committee consider:
· Effectiveness of the audit plan, its delivery and execution
· Knowledge and experience of the audit team
· Robustness of the audit
The Group's external auditor is PKF Littlejohn LLP for the audit of the 31
December 2023 accounts.
Having assessed the performance, objectivity and independence of the auditor,
the Committee will be recommending the reappointment of PKF Littlejohn LLP as
auditor to the Company at the 2024 Annual General Meeting.
During the year to 31 December 2023, the Audit Committee considered the
following key issues in relation to the Financial Statements:
Issue Action
· Accounting policies The Committee reviewed and discussed the significant accounting policies with
management and the external auditor and reached the conclusion that each
policy was appropriate to the Group.
· Carrying value of intangibles The Committee reviewed the impairment assessment report prepared by management
and agreed that given the reasonable expectation that the Group will achieve
its milestone targets in the near future that no impairment to the value of
the intangibles was required as at 31 December 2023, other than the impairment
recorded in relation to assets in Mexico.
· Going concern review The Committee considered the ability of the Group to operate as a Going
Concern considering cash-flow forecasts for the next 12 months. It was
determined by the Committee that the forecasts indicate that the Group and
parent Company's cash resources are not sufficient to cover the projected
expenditure for the period of 12 months. Notwithstanding, the Directors are
confident in the Company's ability to raise additional funds as required, from
existing and/or new investors, within the next 12 months. Thus, they continue
to adopt the going concern basis of accounting preparing these financial
statements. Refer to page 12 and note 2.4 for further information on going
concern.
· Review of audit and non-audit services and fees The external auditor is not engaged by the Group to carry out any non-audit
work in respect of which it might, in the future, be required to express an
audit opinion.
The Committee reviewed the fees charged for the provision of audit and
non-audit services and determined that they were in line with fees charged to
companies of similar size and stage of development.
The Committee considered and was satisfied the external auditor's assessment
of its own independence.
Internal audit function
The Audit Committee considers annually whether there is a need for an internal
audit function and makes a recommendation to the Board if a change is
considered to be appropriate. The Company's operations are small in scale, the
organisational structure is flat, and the cost of an internal audit function
is not considered to be justified at present.
Principle 5: Remuneration
The N&R Committee is currently comprised of the full Board, given the
Company had only three Directors at year end.
The N&R Committee recognises that an effective Board comprises a range and
balance of skills, experience, knowledge, genders and independence, with
individuals that are prepared to challenge each other whilst working as a
team, which requires a range of personal attributes, including character,
intellect, sound judgement, honesty and courage.
In addition, the N&R Committee is responsible for establishing a formal
and transparent procedure for developing policy on executive remuneration and
to set the remuneration packages of individual Directors. This includes
agreeing with the Board the framework for remuneration of executive management
of the Company as it is designated to consider. It is furthermore responsible
for determining the total individual remuneration packages of each Director
including, where appropriate, bonuses, incentive payments and share options.
Provision 34 of the Code specifies that the remuneration of Non-Executive
Directors should not include share options or other performance-related
elements. However, although all Non-Executive Directors have been granted
Options, the Board considers the quantum of Options granted to each
Non-Executive Director is such that it does not impair or compromise their
impartiality or objectivity in decision making. The independence of
Non-Executive Directors is reviewed and will continue to be reviewed by the
Board on a regular basis.
The scale and structure of the remuneration and compensation packages for the
Directors is set taking into account time commitment, comparatives, and risks
and responsibilities, to ensure that the amount of compensation adequately
reflects the individual's previous performance, achievements, experience,
responsibilities and the risks of the office or position held, and in the
context of the Company's risk profile, to ensure they do not encourage
excessive risk taking.
Remuneration Policy
The Company's remuneration policy is intended to support the Company's
long-term strategy and sustainable success in a manner consistent with the
Company's purpose and values, attracting and retaining the highest quality of
directors and senior executives. The pay policy aligns with Provision 40 of
the code and is as follows:
· remuneration of Directors is disclosed in annual accounts for clarity
and to ensure transparency.
· remuneration structures are limited to salaries and options to avoid
complexity and are clearly communicated by the Board to ensure predictability.
· align the interests of the Board and senior executives with
shareholders'.
· align the interests of the workforce (including the Board and senior
executives) with the Company's purpose and values.
· avoid incentivising excessive risk taking by the Board and senior
executives.
· be proportionate to the contribution of the individuals concerned,
and;
· be sensitive to pay and employment conditions elsewhere in the group.
The remuneration policy does not require post-employment shareholding
requirements. Share options ordinarily lapse upon the resignation of the
option holder, unless the Board determines otherwise.
The scale and structure of the remuneration and compensation packages of
Directors is set taking into account time commitment, comparatives, risks and
responsibilities, to ensure that the amount of compensation adequately
reflects the individual's previous performance, achievements, experience,
responsibilities and risks of the office or position held, and in the context
of the Company's risk profile, to ensure they do not encourage excessive risk
taking on the part of the recipient of such compensation.
As the Company is at an early stage of development, the use of traditional
performance standards, such as corporate profitability, is not considered by
the N&R Committee to be appropriate in the evaluation of corporate or
directors' performance. Discretionary bonuses may be paid to aid staff
retention and reward performance.
The Board considers that the remuneration policy has operated as intended in
terms of company performance and quantum.
The Company provides executive directors with base salaries which represent
their minimum compensation for services rendered during the financial year.
The base salaries of Directors and senior executives depend on the scope of
their experience, responsibilities, and performance. A description of the
material terms of each director's contract is provided under "Terms of
Directors' Employment, Termination and Change of Control Benefits" below.
The N&R Committee has considered the risk implications of the Company's
compensation policies and practices and has concluded that there is no
appreciable risk associated with such policies and practices since such
policies and practices do not have the potential of encouraging an executive
officer or other applicable individual to take on any undue risk or to
otherwise expose the Company to inappropriate or excessive risks. Furthermore,
although the Company does not have in place any specific prohibitions
preventing executives from purchasing financial instruments, including prepaid
variable forward contracts, equity swaps, collars, or units of exchange funds
that are designed to hedge or offset a decrease in market value of options or
other equity securities of the Company granted in compensation or held
directly or indirectly, by the director, the Company is unaware of the
purchase of any such financial instruments by any director.
The Chair welcomes major shareholders to discuss the Company's strategy and
governance, including, on the appointment of key Board appointments. The Chair
reports to the Board as a whole, on the views of major shareholders.
The Company does not anticipate making any significant changes to its
compensation policies and practices during 2024.
Culture and employees
At the Company's present stage of development, it has fewer than 10 employees
and its culture therefore exists principally in the Boardroom and amongst any
contractors. It is considered that the Board is well positioned to ensure that
policy, practices and behaviour throughout the business is aligned with the
Company's purpose, values and strategy. In the event that the Board had any
concerns, it would require management to take remedial action.
The Board recognises the importance of the remuneration structure supporting
its strategy and reinforcing the culture of the organisation.
Board assessments
The Chair continuously considers the performance of the Board, its committees
and of individual directors, and provides feedback when appropriate.
Similarly, the Chair invites feedback in the same manner from the
Non-Executive Directors and the Company Secretary. The N&R Committee
considers the time and cost involved in carrying out a formal process,
especially one that is externally facilitated, cannot be justified for the
Company at this stage in its development.
The N&R Committee acknowledges the merits in carrying out formal Board
evaluations and will monitor the continuing suitability of this stance as the
Company grows in size.
Relations with stakeholders
The Company is committed to a continuous dialogue with shareholders as it
believes that this is essential to ensure a greater understanding of and
confidence amongst its shareholders in the medium and longer term strategy of
the Group and in the Board's ability to oversee its implementation. It is the
responsibility of the Board as a whole to ensure that a satisfactory dialogue
takes place.
Whilst the Company is a BVI registered company, the UK Corporate Governance
code references Section 172 of the Companies Act 2006 which requires Directors
to take into consideration the interests of stakeholders in their decision
making. The Board is committed to understanding and engaging with all key
stakeholder groups of the Company in order to maximise value and promote
long-term Company success in line with our strategic objectives. The Board
recognises how the Company's activities and decisions will impact employees,
those with which it has a business relationship, the community and environment
and its reputation for high standards of business conduct. In weighing all of
the relevant factors, the Board, acting in good faith and fairly between
members, makes decisions and takes actions that it considers will best lead to
the long-term success of the Company.
During the year, the Board assessed its current activities between the Board
and its stakeholders, which demonstrated that the Board actively engages with
its stakeholders and takes their various objectives into consideration when
making decisions. Specifically, actions the Board has taken to engage with its
stakeholders in 2023 include:
• Attended the 2023 AGM and prepared to answer any
questions raised by shareholders;
• Made presentations at conferences and published
recordings and slide decks on the Company's exploration activities;
• Evaluated the relationships with the Company's various
collaborators through management and identified ways to strengthen
relationships and arrangements with key collaborations; and
• Monitored company culture and engaged with employees on
efforts to continuously improve company culture and morale.
The Board believes that appropriate steps and considerations have been taken
during the year so that each Director has an understanding of the various key
stakeholders of the Company. The Board recognises its responsibility to
consider all such stakeholder needs and concerns as part of its discussions,
decision-making, and in the course of taking actions, and will continue to
make stakeholder engagement a top priority in the coming years.
The Chairman and other Directors, as appropriate, make themselves available
for contact with major shareholders and other stakeholders in order to
understand their issues and concerns.
The Company plans to use the AGM as an opportunity to communicate with its
shareholders. To ensure compliance with the Governance Code, the Board
proposes separate resolutions for each issue, and proxy forms allow
shareholders who are unable to attend the AGM to vote for or against or to
withhold their vote on each resolution. The results of all proxy voting will
be published on the Group's website after the AGM. Shareholders who attend the
AGM will have the opportunity to ask questions.
The Group's website is the primary source of information on the Group. The
website includes an overview of the activities of the Group and all recent
Group announcements.
Going Concern
The Directors have reviewed cash flow forecasts for the period ending 31 May
2025, which indicate that the Group and parent Company's cash resources are
not sufficient to cover the projected expenditure for the period of 12 months
from the date of approval of these financial statements. The Directors are
confident in the Company's ability to raise additional funds as required, from
existing and/or new investors, within the next 12 months. Thus, they continue
to adopt the going concern basis of accounting preparing these financial
statements
Provisions not applied
The Company is small with a modest resource base. The Company has a clear
mandate to optimise the allocation of limited resources to support its
development plans. To ensure the appropriate corporate governance is applied
to the size and maturity of the Company, there are certain provisions the
group specifically does not comply with, given the size of the Group, as noted
below:
Employee Engagement
Due to the Company only having a small number of employees, the Board has not
appointed a director from the workforce, created a formal workforce advisory
panel or designated a Non-Executive Director to engage with the workforce.
This is contrary to Code Provision 5 and is explained in the section headed
"Culture and employees". At such time as the size of the workforce increases,
the Board will review the position and make any such appointments or take
other actions it considers appropriate.
Senior Independent Director
The Board had not appointed a Senior Independent Director for the full year.
This is contrary to Code provision 12. The role of a Senior Independent
Director is to provide a sounding board for the Chair and serve as an
intermediary for the other directors and shareholders. In addition, a senior
independent director would be expected to meet the other Non-Executive
directors without the Chair present, to appraise his performance. Elizabeth
Henson was appointed as Senior Independent Non-Executive Director from 4
August 2023.
The Company Secretary, as well as each of the Non-Executive Directors, is
available as a sounding Board to the Chair and to serve as an intermediary for
shareholders. The Company Secretary is also available to serve as an
intermediary for any of the directors when required. Due to the size of the
Board, the nomination of any one particular director to act as a Senior
Independent Director is not currently considered to be appropriate and would
not improve its effective operation. However, the matter is kept under review.
Open advertising
The Board does not always use open advertising and/or an external search
consultancy for the appointment of the Chair and Non-Executive Directors. This
is Contrary to Code Provision 20. Given the size of the Company and skills
required by the Board it is not always possible to run an open advertising
process.
Annual evaluation of the performance of the Board
The Board does not carry out a formal annual evaluation of its performance,
its committees, the Chair and individual directors. This is contrary to Code
Provision 21 and is explained in the section headed "Board assessments".
Board Committees
The Nomination and Remuneration Committee and the Audit and Risk Committee are
comprised of two Non-Executive directors, Ms Elizabeth Henson and Mr Robet
Mosig.
Performance related pay
Non-Executive Directors participate in the Company's share option plan. This
is contrary to Code Provision 34. The Company's Non-Executive Directors
participate in the Company's discretionary share option plan (the "Unapproved
Plan") because the Board considers that the holding of options helps align the
interests of the Non-Executive Directors with shareholders by incentivising
their decision making with a view to providing growth in the Company's share
price. The Company's long-term success will be dependent upon raising
additional finance in future; aligning the interests of all directors and
senior executives with shareholders incentivises all concerned to achieve the
best possible price for such placings and to minimise undue dilution of
interests.
Viability statement
In accordance with the UK Corporate Governance Code published in July 2018,
the Directors have assessed the prospects of the Group and concluded that it
is appropriate to adopt the going concern basis of accounting based on the
amount of cash on hand at the end of the year and alternative funding options
available at the time of publication of this report. The assessment of going
concern is disclosed in Note 2.
The Board's assessment of the Group's current position and principal risks are
disclosed in the Directors' Report on page 6.
The Directors consider that the Annual Report and the Financial Statements,
taken as a whole, are fair, balanced, and understandable and provide the
information necessary for the shareholders to assess the Company's position
and performance, business model and strategy. Refer to the Statement of
Directors Responsibilities on page 13.
Elizabeth Henson
Senior Independent Non-Executive Director
22 May 2024
Independent Auditor's Report to the Members of Alien Metals Limited
Opinion
We have audited the financial statements of Alien Metals Limited (the 'Group')
for the year ended 31 December 2023 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Statement of
Cash Flows and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in their preparation is applicable law and UK-adopted International Accounting
Standards.
In our opinion, the financial statements:
· give a true and fair view of the state of the Group's affairs as at
31 December 2023 and of its loss for the year then ended; and
· have been properly prepared in accordance with UK-adopted
International Accounting Standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2.4 in the financial statements, which indicates
that the Group holds a cash and cash equivalents balance of $676,000 as at 31
December 2023 and that the Group will be required to raise further finance,
equity and/or debt, in order to fund its forecasted expenditure over the next
twelve months. As stated in note 2.4, these events or conditions, along with
the other matters as set forth in note 2.4, indicate that a material
uncertainty exists that may cast significant doubt on the Group's ability to
continue as a going concern. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the Group's ability to continue to adopt the going concern basis
of accounting included reviewing and challenging cashflow forecasts prepared
by management covering the 12 months from the approval of these financial
statements and the related key assumptions, confirming their mathematical
accuracy, ascertaining the Group's current financial position and cash
reserves, discussing their strategies regarding future fund raises, and
reviewing post year end arrangements entered into by the Group.
In relation to the Group's reporting on how it has applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in
relation to:
· the directors' statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis of
accounting; and
· the directors' identification in the financial statements of the
material uncertainty related to the entity's ability to continue as a going
concern over a period of at least twelve months from the date of approval of
the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The
quantitative and qualitative thresholds for materiality determine the scope of
our audit and the nature, timing and extent of our audit procedures.
Materiality for the consolidated financial statements was set at $360,000 and
was based upon 2% (2022: 1.5%) of gross assets (2022: $274,000). Performance
materiality and the triviality threshold for the financial statements were set
at $252,000 and $18,000 respectively (2022: $137,000 and $13,700). We also
agreed to report to the Board of Directors any other differences below the
threshold for triviality that we believed warranted reporting on qualitative
grounds. The amount was determined based upon where the areas of significant
risk arose. Gross assets include exploration and evaluation assets which make
up the majority of the financial statement balances and the going concern of
the group is dependent on its ability to fund operations going forward
including the valuation of its assets which represent the underlying value of
the Group.
For each component in the scope of our Group audit, we allocated a materiality
that was less than our overall Group materiality. The range of materiality
applied across group components was between $228,000 and $117,000 (2022:
$185,000 and $130,000).
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of
material misstatement in the financial statements. In particular we looked at
areas involving significant accounting estimates and judgements by the
directors and considered future events that are inherently uncertain, such as
the carrying value of exploration and evaluation assets and the fair value
assigned to share warrants and share options issued in the year. We also
addressed the risk of management override of internal controls, including
among other matters consideration of whether there was evidence of bias that
represented a risk of material misstatement due to fraud.
A full scope audit was performed on the complete financial information of four
of the components of the Group and a limited scope review was performed on the
remaining three as they were assessed as insignificant.
Of the seven reporting components of the Group, one is located in the British
Virgin Islands, one is located in Mexico, two are located in the United
Kingdom and three are located in Australia. PKF Littlejohn LLP audited the
ultimate parent company, situated in the British Virgin Islands, and all other
reporting components. The Engagement Partner conducted audit work in the
United Kingdom but interacted regularly with the management team in the
Australia during all stages of the audit and was responsible for the scope and
direction of the audit process. This, in conjunction with additional
procedures performed, gave us appropriate evidence for our opinion on the
Group financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of intangible assets (Note 8)
The carrying value of intangible assets related to exploration and evaluation Our work in this area included but was not limited to:
assets amounted to $16,593k as at 31 December 2023 and as such, is material.
The carrying value of these assets is dependent on the successful development · Substantive testing on additions capitalised to exploration and
on its iron ore resources in Western Australia. evaluation assets during the year to especially assess whether they are:
Management are required to assess by reference to IFRS 6 Exploration and o appropriate to capitalise; and
Evaluation Assets, whether there are potential indicators of impairment of the
Group's exploration and evaluation assets at each reporting date. o are allocated to a valid legal right to explore which is owned by the
Group.
If potential indicators of impairment are identified, management are required
to perform a full assessment of the recoverable value of the exploration and · Obtaining, reviewing and critically assessing management's impairment
evaluation assets in accordance with IAS 36 Impairment of Assets. assessment and obtaining supporting evidence for management's key inputs and
judgements therein;
Given the inherent judgement involved in the assessment of whether there are
indications of impairment in exploration and evaluation assets, as required by · Assessing whether impairment indicators exist in line with IFRS 6,
IFRS 6, there is a risk the carrying amount of exploration and evaluation including considering factors such as the licence status and its expiry date.
assets are overstated and should be impaired.
· Reviewing the licences terms to ensure that any minimum expenditure terms
enclosed have been adequately met or are expected to be met over the licence
period;
· Discussing with management their plans regarding future exploration on
the licence areas; and
· Assessing the appropriateness of the accounting policies and disclosures
included in the financial statements in accordance with IFRS 6.
Our work found the judgements applied to assess the carrying value of
exploration and evaluation assets to be reasonable. We note that the
recoverability of the carrying value of exploration and evaluation assets is
dependent upon the Group successfully securing additional funding or obtaining
the financial support of a joint venture partner or similar.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the Group financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Corporate Governance Statement
We have reviewed the directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the company's compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
· Directors' statement with regards the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified
set out on page 18 and 19;
· Directors' explanation as to their assessment of the Group's
prospects, the period this assessment covers and why the period is appropriate
set out on page 18 and 19;
· Directors' statement on whether they have a reasonable expectation
that the Group will be able to continue in operation and meets its liabilities
set out on page 18 and 19;
· Directors' statement that they consider the annual report and the
financial statements, taken as a whole, to be fair, balanced and
understandable set out on page 19;
· Board's confirmation that it has carried out a robust assessment of
the emerging and principal risks set out on page 15;
· The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on page
15; and
· The section describing the work of the audit committee set out on
page 15 and 16.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the Group and the sector in which it
operates to identify laws and regulations that could reasonably be expected to
have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management and
independent research.
· We determined the principal laws and regulations relevant to the
Group in this regard to be those arising from the British Virgin Islands
("BVI") Business Companies Act, AIM Rules, local tax legislation and local
environmental, employment and health and safety laws.
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the Group with those
laws and regulations. These procedures included, but were not limited to:
o Discussions with management regarding compliance with laws and regulations
by the Group;
o Reviewing of Board meeting minutes; and
o Reviewing of regulatory news announcements.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that there was potential for management bias in relation to the
carrying value of intangible assets and the accounting for asset acquisitions.
We addressed these risks by challenging the assumptions and judgements made by
management when auditing these significant accounting estimates (see the Key
Audit Matters section of our report).
· As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included,
but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with our engagement letter dated 28 March 2023. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Alistair Roberts (Engagement Partner)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory
Auditor
London E14 4HD
22 May 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2023
Group
Note Year ended 31 December 2023 Year ended 31 December 2022
$ $
Continuing Operations
Administration expenses 6 (2,712,000) (2,352,000)
Other losses 6 (1,153,000) (30,000)
Other gains 6 178,000 -
Operating loss (3,687,000) (2,382,000)
Finance costs 18 (42,000) -
Finance income 18 8,000 7,000
Loss for the year before taxation (3,721,000) (2,375,000)
Income tax 7 - -
Loss for the year (3,721,000) (2,375,000)
Loss attributable to:
- owners of the Parent (3,721,000) (2,375,000)
(3,721,000) (2,375,000)
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Exchange differences recognised directly in equity
(415,000) (1,531,000)
Total Comprehensive Income (415,000) (1,531,000)
Attributable to:
- owners of the Parent (415,000) (1,531,000)
Total Comprehensive Income (415,000) (1,531,000)
- Total comprehensive income attributable to continuing operations
Total comprehensive loss for the year attributable to equity shareholders of
the parent
(4,136,000) (3,906,000)
Earnings/(loss) per share (cents) from continuing operations attributable to 21 (0.065) (0.050)
owners of the Parent - Basic & Diluted
The Notes on pages 30 to 49 form part of these Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
Group
Note 2023 2022
$ $
Non-Current Assets
Intangible assets 8 16,593,000 15,639,000
Assets under construction 9 455,000 455,000
Plant and equipment 10,000 -
Right of use asset 10 24,000 17,000
Total Non-current assets 17,082,000 16,111,000
Current Assets
Trade and other receivables 11 261,000 318,000
Cash and cash equivalents 12 676,000 2,177,000
Total Current Assets 937,000 2,495,000
Total Assets 18,019,000 18,606,000
Current Liabilities
Trade and other payables 13 726,000 446,000
Lease liability 10 26,000 17,000
Convertible note 14 571,000 -
Total Current Liabilities 1,323,000 463,000
Total Liabilities 1,323,000 463,000
Net Assets 16,696,000 18,143,000
Equity attributable to owners of the Parent
Share capital 15 82,097,000 79,586,000
Warrant reserve 16 834,000 739,000
Share-based payment reserve 16 854,000 771,000
Foreign exchange translation reserve 16 279,000 694,000
Accumulated losses (67,368,000) (63,647,000)
Total Equity 16,696,000 18,143,000
The Financial Statements were approved and authorised for issue by the Board
of Directors on 20 May 2024 and were signed on its behalf by:
Guy Robertson
Interim Executive Chairman
The Notes on pages 30 to 49 form part of these Financial Statements.
Share capital Warrant reserve Share based payment reserve Foreign exchange translation reserve Retained losses Total equity
$ $ $ $ $ $
As at 1 January 2022 70,422,000 865,000 1,179,000 2,225,000 (62,420,000) 12,271,000
Loss for the year - - - - (2,375,000) (2,375,000)
Other comprehensive income
Exchange differences recognised directly in equity - - - (1,531,000) - (1,531,000)
Total comprehensive income for the year - - - (1,531,000) (2,375,000) (3,906,000)
Transactions with owners
Issue of ordinary shares 9,365,000 - - - - 9,365,000
Cost of capital (141,000) - - - - (141,000)
Share based payment charge (60,000) 422,000 192,000 - - 554,000
Exercise of options & warrants - (437,000) (17,000) - 454,000 -
Expiry of warrants & options - (111,000) (8,000) - 119,000 -
Expiry of options in prior year - - (575,000) - 575,000 -
Total transactions with owners 9,164,000 (126,000) (408,000) - 1,148,000 9,778,000
As at 31 December 2022 79,586,000 739,000 771,000 694,000 (63,647,000) 18,143,000
Loss for the year - - - - (3,721,000) (3,721,000)
Other comprehensive income
Exchange differences recognised directly in equity - - - (415,000) - (415,000)
Total comprehensive income for the year - - - (415,000) (3,721,000) (4,136,000)
Transactions with owners
Issue of ordinary shares 2,606,000 - - - - 2,606,000
Cost of capital (128,000) - - - - (128,000)
Share based payment charge - 95,000 121,000 - - 216,000
Exercise of options & warrants 33,000 - (38,000) - - (5,000)
Total transactions with owners 2,511,000 95,000 83,000 - - 2,689,000
As at 31 December 2023 82,097,000 834,000 854,000 279,000 (67,368,000) 16,696,000
The Notes on pages 30 to 51 form part of these Financial Statements
Group
Note 2023 2022
$ $
Cash flows from operating activities
Loss before taxation from continuing operations (3,721,000) (2,375,000)
Adjustments for:
Share based payments 17 216,000 192,000
Impairment - Exploration and evaluation 6,8 794,000 -
Impairment - Other 6 140,000 -
Loss on initial recognition of convertible note 6 198,000 -
Other gains 6 (169,000) -
Exchange difference (379,000) (42,000)
Finance charges - (7,000)
Depreciation and amortisation 6 52,000 102,000
Increase in trade and other receivables (94,000) (53,000)
Decrease in trade and other payables (242,000) (209,000)
Net cash used in operating activities (3,205,000) (2,392,000)
Cash flows from investing activities
Acquisition of intangibles 8 (21,000) (432,000)
Additions of intangibles 8 (1,708,000) (3,029,000)
Expenditure on plant and equipment (10,000) -
Expenditure on assets under construction 9 - (164,000)
Net cash used in investing activities (1,739,000) (3,625,000)
Cash flows from financing activities
Proceeds from issue of shares 15 2,639,000 2,452,000
Cost of share issue 15 (128,000) (141,000)
Proceeds from convertible note 14 500,000 -
Lease payments 10 (46,000) (102,000)
Net cash generated from financing activities 2,965,000 2,209,000
Net decrease in cash and cash equivalents (1,979,000) (3,808,000)
Cash and cash equivalents at beginning of year 2,177,000 6,431,000
Effect of exchange rate fluctuations on translation 478,000 (446,000)
Cash and cash equivalents at end of year 12 676,000 2,177,000
Major non-cash transactions
During the year, shares based payment expenses of $216,000 relating to the
issue of options and warrants were recorded.
During the year, an impairment of $794,000 related to exploration and
evaluation assets in Mexico was recorded. During the year, an impairment of
$140,000 related to other net assets recorded in Mexico was recorded.
During the year, a gain on derivative liability of $131,000 was recorded in
other gains which represented the change in value of the option for the
convertible note to be settled in shares of the Company. A further $38,000 was
recorded as a write-back of a deferred tax liability.
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
ACCOUNTING POLICIES
1. General Information
The principal activity of Alien Metals Limited ("the Company") and its
subsidiaries (together "the Group") is the acquisition and development of
mineral resource assets.
The Company's shares are traded on AIM, a market operated by the London Stock
Exchange. The Company is incorporated in the British Virgin Islands and
domiciled in the United Kingdom.
The address of its registered office is Craigmuir Chambers, PO Box 71, Road
Town, Tortola, BVI.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these
Financial Statements are set out below. These policies have been consistently
applied to all the periods presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
The Group Financial Statements have been prepared in accordance with
UK-adopted international accounting standards. The Group Financial Statements
have also been prepared under the historical cost convention, except as
modified for assets and liabilities recognised at fair value on an asset
acquisition.
The Financial Statements are presented in US dollars rounded to the nearest
thousand.
The preparation of Financial Statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Accounting Policies. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the Group and Company Financial
Statements are disclosed in Note 4.
2.2 Changes in Accounting Policy and Disclosures
(a) New and amended standards adopted by the Group
The International Accounting Standards Board (IASB) issued various amendments
and revisions to International Financial Reporting Standards and IFRIC
interpretations. The amendments and revisions applicable for the period ended
31 December 2023 did not result in any material changes to the financial
statements of the Group.
b) New standards, amendments and interpretations in issue but not yet
effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have
not been early adopted are as follows:
Standard Impact on initial application Effective date
IAS 1 (Amendments) Classification of liabilities as current or non-current 1 January 2024
IAS 1 (Amendments) Presentation of Financial Statements: Non-current liabilities with covenants 1 January 2024
IFRS 16 (Amendments) Lease Liability in a Sale and Leaseback 1 January 2024
None are expected to have a material effect on the Group Financial Statements.
2.3 Basis of Consolidation
The Group Financial Statements consolidate the Financial Statements of Alien
Metals Limited and the Financial Statements of all of its subsidiary
undertakings made up to 31 December 2023.
Subsidiaries are entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Where an entity does not have
returns, the Group's power over the investee is assessed as to whether control
is held. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases.
Below is a summary of subsidiaries of the Group:
Name of subsidiary Place of business Parent company Share capital held Principal activities
Arian Silver Corporation (UK) Ltd England and Wales Alien Metals Limited 100% Holding
Arian Silver (Holdings) Limited England and Wales Alien Metals Limited 100% Holding
A.C.N. 643 478 371 Pty Ltd Australia Alien Metals Limited 100% Exploration
Iron Ore Company of Australia Pty Ltd Australia Alien Metals Limited 100% Exploration
Alien Metals Australia Pty Ltd Australia Alien Metals Limited 100% Exploration
Mallina Exploration Pty Ltd Australia Alien Metals Limited 100% Exploration
Compañía Minera Estrella de Plata S.A. de C.V. Mexico Alien Metals Limited 100% Exploration
Inter-company transactions, balances, income and expenses on transactions
between group companies are eliminated on consolidation. Profits and losses
resulting from intercompany transactions that are recognised in assets are
also eliminated. Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by the Group.
2.4 Going Concern
These financial statements have been prepared on the going concern basis. The
Group's business activities, together with the factors likely to affect its
future development, performance and position are set out in the Chairman's
Statement and the Strategic Report.
As at 31 December 2023, the Group had cash and cash equivalents of $676,000.
The Directors have prepared cash flow forecasts to 31 May 2025 which take
account of the cost and operational structure of the Group, planned
exploration and evaluation expenditure, licence commitments and working
capital requirements. These forecasts indicate that the Group's cash resources
are not sufficient to cover the projected expenditure for the period for a
period of 12 months from the date of approval of these financial statements.
In common with many exploration and evaluation entities, the Company will need
to raise further funds within the next 12 months in order to meet its expected
liabilities as they fall due and progress the Group into construction and
eventual production of revenues. The Directors are confident in the Company's
ability to raise additional funds as required, from existing and/or new
investors, within the next 12 months.
Given the Group's current cash position and its demonstrated ability to raise
capital, the Directors have a reasonable expectation that the Group and Parent
Company has adequate resources to continue in operational existence for the
foreseeable future.
Notwithstanding the above, these circumstances indicate that a material
uncertainty exists that may cast significant doubt on the Group's ability to
continue as a going concern and, therefore, that the Group and Parent Company
may be unable to realise their assets or settle their liabilities in the
ordinary course of business. As a result of their review, and despite the
aforementioned material uncertainty, the Directors have confidence in the
Group and Parent Company's forecasts and have a reasonable expectation that
the Group will continue in operational existence for the going concern
assessment period and have therefore used the going concern basis in preparing
these consolidated financial statements. The auditors make reference to going
concern by way of a material uncertainty in their report.
2.5 Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors that makes strategic decisions.
Segment results, include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. The Board of Directors
considers there to be only one operating segment during the year, the
exploration, development and exploitation of mineral resources, and three
geographical segments, being Mexico, Australia and United Kingdom.
2.6 Foreign Currencies
(a) Functional and presentation currency
Items included in the Financial Statements of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional currency of the
Company is Pounds Sterling, the functional currency of the Australian
subsidiaries is Australian Dollars and Mexican subsidiary Mexican pesos. The
Financial Statements are presented in US dollars, rounded to the nearest
thousand.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Consolidated Statement of
Comprehensive Income.
(c) Group companies
The results and financial position of all the Group's entities (none of which
has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the
presentation currency as follows:
· assets and liabilities for each statement of financial position
presented are translated at the closing rate at the date of that statement of
financial position;
· income and expenses for each statement of comprehensive income
presented are translated at average exchange rates (unless this average is not
a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
· all resulting exchange differences are recognised in other
comprehensive income where material.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future, are taken to other comprehensive income. When a
foreign operation is sold, such exchange differences are recognised in the
income statement as part of the gain or loss on sale.
2.7 Intangible Assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it
determines that those assets will be successful in finding specific mineral
resources. Expenditure included in the initial measurement of exploration and
evaluation assets and which are classified as intangible assets relate to the
acquisition of rights to explore, topographical, geological, geochemical and
geophysical studies, exploratory drilling, trenching, sampling and activities
to evaluate the technical feasibility and commercial viability of extracting a
mineral resource. Capitalisation of pre-production expenditure ceases when the
mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation but are
assessed annually for impairment. The assessment is carried out by allocating
exploration and evaluation assets to cash generating units ("CGU's"), which
are based on specific projects or geographical areas. The CGU's are then
assessed for impairment using a variety of methods including those specified
in IFRS 6.
Whenever the exploration for and evaluation of mineral resources in cash
generating units does not lead to the discovery of commercially viable
quantities of mineral resources and the Group has decided to discontinue such
activities of that unit, the associated expenditures are written off to the
Consolidated Statement of Comprehensive Income.
Exploration and evaluation assets recorded at fair-value on acquisition
Exploration assets which are acquired are recognised at fair value. When an
acquisition of an entity whose only significant assets are its exploration
asset and/or rights to explore, the Directors consider that the fair value of
the exploration assets is equal to the consideration. Any excess of the
consideration over the capitalised exploration asset is attributed to the fair
value of the exploration asset.
During the year, the Company completed one acquisition which has been treated
as an asset acquisition. Per IFRS 3, an entity shall determine whether a
transaction or other event is a business combination by applying the
definition in this IFRS, which requires that the assets acquired and
liabilities assumed constitute a business. If the assets acquired are not a
business, the reporting entity shall account for the transaction or other
event as an asset acquisition. As the acquisitions were not considered to meet
the definition of a business combination under IFRS 3, the Group Financial
Statements are prepared as though the group has acquired an asset. The fair
value of the assets were determined by management and the assets were
classified as intangible assets given that they represent exploration and
evaluation assets.
2.8 Investment in Subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
2.9 Assets Under Construction
Assets under construction are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Assets under construction
are not depreciated until they are completed and brought into use.
All assets are subject to annual impairment reviews. An asset's carrying
amount is written down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replacement
part is derecognised. All other repairs and maintenance are charged to the
Consolidated Statement of Comprehensive Income during the financial period in
which they are incurred.
The asset's residual value and useful economic lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
Gains and losses on disposal are determined by comparing the proceeds with the
carrying amount and are recognised within 'Other net gains / (losses)' in the
Consolidated Statement of Comprehensive Income.
2.10 Right of Use Assets and Leases
The Group leases certain property, plant and equipment.
The lease liability is initially measured at the present value of the lease
payments that are not paid. Lease payments generally include fixed payments
less any lease incentives receivable. The lease liability is discounted using
the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group's incremental borrowing rate. The Group estimates the
incremental borrowing rate based on the lease term, collateral assumptions,
and the economic environment in which the lease is denominated. The lease
liability is subsequently measured at amortized cost using the effective
interest method. The lease liability is remeasured when the expected lease
payments change as a result of new assessments of contractual options and
residual value guarantees.
The right-of-use asset is recognised at the present value of the liability at
the commencement date of the lease less any incentives received from the
lessor. Added to the right-of-use asset are initial direct costs, payments
made before the commencement date, and estimated restoration costs. The
right-of-use asset is subsequently depreciated on a straight-line basis from
the commencement date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
Each lease payment is allocated between the liability and finance charges. The
corresponding rental obligations, net of finance charges, are included in
lease liabilities, split between current and non-current depending on when the
liabilities are due. The interest element of the finance cost is charged to
the Statement of Profit and Loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period. Assets obtained under finance leases are depreciated over
their useful lives. The lease liabilities are shown in Note 10.
Exemptions are applied for short life leases and low value assets, with
payment made under operating leases charged to the Consolidated Statement of
Comprehensive Income on a straight-line basis of the period of the lease.
2.11 Impairment of Non-Financial Assets
Assets that have an indefinite useful life, for example, intangible assets not
ready to use, are not subject to amortisation and are tested annually for
impairment. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset's fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash generating
units).
Non-financial assets that suffered impairment (except goodwill) are reviewed
for possible reversal of the impairment at each reporting date.
2.12 Financial Assets
(a) Classification
The Group classifies its financial assets in the following categories: at
amortised cost including trade receivables and other financial assets at
amortised cost, at fair value through other comprehensive income and at fair
value through profit or loss, loans and receivables, and available-for-sale.
The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at
initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of
consideration that is unconditional, unless they contain significant financing
components, in which case they are recognised at fair value. The group holds
the trade and other receivables with the objective of collecting the
contractual cash flows, and so it measures them subsequently at amortised cost
using the effective interest method.
The group classifies its financial assets 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 the contractual cash flows; and
· the contractual terms give rise to cash flows that are solely
payments of principle and interest.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other
receivables due in less than 12 months, the Group applies the simplified
approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group
does not track changes in credit risk, but instead, recognises a loss
allowance based on the financial asset's lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are
90 days past due. However, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual
amounts in full before taking into account any credit enhancements held by the
Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit-impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to
the cash flows from the asset expire, or when it transfers the financial asset
and substantially all the risks and rewards of ownership of the asset to
another entity.
On derecognition of a financial asset measured at amortised cost, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss. This is
the same treatment for a financial asset measured at fair value through profit
and loss.
2.13 Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate. All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The Group's financial liabilities include trade and other payables. Financial
liabilities measured at amortised cost include current borrowings and trade
and other payables that are short term in nature. Financial liabilities are
derecognised if the Group's obligations specified in the contract expire or
are discharged or cancelled. Convertible loan notes are classified entirely as
liabilities and contain an embedded derivative which has been designated as at
fair value through profit or loss on initial recognition and, as such, the
embedded conversion feature is not separated.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as
described below:
Trade and other payables
After initial recognition, trade and other payables are subsequently measured
at amortised cost using the effective interest rate ('EIR method'). Gains and
losses are recognised in the statement of profit or loss and other
comprehensive income when the liabilities are derecognised, as well as through
the EIR amortisation process.
Amortised cost is calculated by considering any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the Consolidated Statement of
Comprehensive Income.
Derecognition
A financial liability is derecognised when the associated obligation is
discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in
profit or loss and other comprehensive income.
Fair value
All assets and liabilities for which fair value is measured or disclosed in
the consolidated Financial Statements are categorised within the fair value
hierarchy. The fair value hierarchy prioritises the inputs to valuation
techniques used to measure fair value. The Group uses the following hierarchy
for determining and disclosing the fair value of financial instruments and
other assets and liabilities for which the fair value was used:
- level 1: quoted prices in active markets for identical assets or
liabilities;
- level 2: inputs other than quoted prices included in level 1 that
are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices); and
- level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
2.14 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.15 Taxation
Tax for the period comprises current and deferred tax. Tax is recognised in
the income statement, except to the extent that it relates to items recognised
directly in equity. In this case the tax is also recognised directly in other
comprehensive income or directly in equity, respectively. The current income
tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the
Company's subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
It establishes provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated Financial Statements. However, the
deferred tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination that, at
the time of the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted, or substantially enacted, by the end of the reporting period 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 only to the extent that it is
probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences
arising from investments in subsidiaries, associates and joint arrangements,
except for deferred income tax liability where the timing of the reversal of
the temporary difference is controlled by the group and it is probable that
the temporary difference will not reverse in the foreseeable future.
Generally, the group is unable to control the reversal of the temporary
difference for associates. Only where there is an agreement in place that
gives the group the ability to control the reversal of the temporary
difference not recognised.
Deferred income tax assets are recognised on deductible temporary differences
arising from investments in subsidiaries, associates and joint arrangements
only to the extent that it is probable the temporary difference will reverse
in the future and there is sufficient taxable profit available against which
the temporary difference can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities, and when the deferred income tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the taxable
entity or different taxable entities where there is an intention to settle the
balances on a net basis.
There has been no tax credit or expense for the period relating to current or
deferred tax.
2.16 Share Capital, and Other Reserves
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity, as a
deduction, net of tax, from the proceeds provided
Other reserves consist of the share option reserve and the foreign exchange
translation reserve. See Note 16 for further detail.
2.17 Share Based Payments
The Group operates a number of equity-settled share-based schemes, under which
the entity receives services from employees or third-party suppliers as
consideration for equity instruments (shares, options and warrants) of the
Group. The Group may also issue warrants to share subscribers as part of a
share placing. The fair value of the equity-settled share based payments is
recognised as an expense in the Consolidated Statement of Comprehensive Income
or charged to equity depending on the nature of the service provided or
instrument issued. The total amount to be expensed or charged in the case of
options is determined by reference to the fair value of the options or
warrants granted:
· including any market performance conditions;
· excluding the impact of any service and non-market performance
vesting conditions (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period); and
· including the impact of any non-vesting conditions (for example, the
requirement for employees to save).
In the case of shares and warrants the amount charged is determined by
reference to the fair value of the services received if available. If the fair
value of the services received is not determinable the shares are valued by
reference to the market price and the warrants are valued by reference to the
fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of
options or warrants that are expected to vest. The total expense or charge is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period, the directors revise their estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Consolidated
Statement of Comprehensive Income or equity as appropriate, with a
corresponding adjustment to the share based payment reserve or warrant reserve
in equity.
When the warrants or options are exercised, the Company issues new shares. The
proceeds received, net of any directly attributable transaction costs, are
credited to share capital (nominal value) when the warrants or options are
exercised.
2.18 Finance Income and Cost
Finance income and finance costs are recognised using the effective interest
rate method.
3. Financial Risk Management
3.1 Financial Risk Factors
The Group's activities expose it to a variety of financial risks being market
risk (including, interest rate risk, currency risk and price risk), credit
risk and liquidity risk. The Group's overall risk management programme focuses
on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Group's financial performance.
Market Risk
Market risk is the risk that the Group's future earnings will be adversely
impacted by changes in market prices. Market risk for Alien Metals comprises
two types of risk: foreign currency risk and price risk.
(b) Foreign currency risks
The Group's operational expenditure is made in Mexico in Mexican pesos, in
Australia in Australian dollars, and head office expenses are predominantly
made in the UK in pounds sterling, and United States dollars. The Group is
therefore exposed to the movement in exchange rates for these currencies. The
Group does not currently hedge foreign exchange risk.
At the year end the majority of the Group's cash resources were held in
Australian dollars. The Group therefore also has downside exposure to any
strengthening of United States dollar and pounds sterling against the
Australia dollar as this would increase expenses in Australian dollar terms
and accelerate the depletion of the Group's cash resources. Any weakening of
United States dollar, or pounds sterling against the Australian dollar would,
however, result in a reduction in expenses in Australian dollar terms and
preserve the Group's cash resources.
The carrying amounts of the Group's foreign currency denominated financial
assets and monetary liabilities at the reporting date are as follows:
Liabilities Assets
2023 2022 2023 2022
Pounds sterling 123,893 51,000 2,646,758 4,605,000
Australian dollars 500,848 196,000 15,363,381 13,495,000
Mexican pesos - 41,000 - 142,000
Sensitivity Analysis
The Group holds cash in pounds sterling and Australian dollars to settle
accounts payable balances derived in those currencies. The main risk is
through foreign exchange fluctuations in companies where the cash balances are
held in a currency that is different to the functional currency.
Exposure to foreign currency risk sensitivity analysis:
Against A$
US$
15% strengthening in the United States dollar (77,000)
15% weakening in the United States dollar 77,000
A 15% variation is considered an appropriate level of sensitivity given recent
levels of foreign exchange volatility.
(c) Price risk
The price risk is the risk that the Group's future earnings will be adversely
impacted by changes in the market prices of commodities. Given the Group has
yet to enter production it is not possible to quantify this impact at this
stage.
(d) © Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or
cash flows associated with the instrument will fluctuate due to changes in
market interest rates. Interest rate risk arises from interest bearing
financial assets and liabilities that the Group uses. Treasury activities take
place under procedures and policies approved and monitored by the Board to
minimise the financial risk faced by the Group. Interest bearing assets
comprise cash and cash equivalents which are considered to be short-term
liquid assets. No sensitivity analysis has been disclosed as management does
not consider any reasonable fluctuation in interest rates to be sufficiently
material to disclose as there are no variable interest bearing loans and
interest income is only from cash held with banks.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding
receivables. Management does not expect any losses from non-performance of
these receivables.
The amount of exposure to any individual counter party is subject to a limit,
which is assessed by the Board. No credit limits were exceeded during the
reporting period, and management does not expect any losses from
non-performance by these counterparties.
The Group considers the credit ratings of banks in which it holds funds in
order to reduce exposure to credit risk.
Liquidity Risk
The Company's approach to managing liquidity risk is to ensure that it will
have sufficient liquidity to meet liabilities when due. The directors
regularly review cash flow forecasts to determine whether the Group has
sufficient cash reserves to meet future working capital requirements and
discretionary business development opportunities including exploration
activities.
As at 31 December 2023, the Company had cash and other receivables of $937,000
to settle accounts payable and lease liabilities of $752,000. The Company's
accounts payable have contractual maturities of less than 30 days and are
subject to normal trade terms. In the short-term, liabilities will be funded
by cash.
The Group's assets are at an early stage and in order to meet financing
requirements for their development the Company has raised funds by way of
several share placements, which is a common practice for junior mineral
exploration companies.
Although the Company has been successful in the past in raising equity
finance, there can be no assurance that the funding required by the Group will
be made available to it when needed or, if such funding were to be available,
that it would be offered on reasonable terms. The terms of such financing
might not be favourable to the Group and might involve substantial dilution to
existing shareholders.
3.2 Capital Risk Management
The Group's objective when managing capital is to safeguard the Group's
ability to continue as a going concern and have access to adequate funding for
its exploration and development projects, so that it can provide returns for
shareholders and benefits for other stakeholders. The Group manages the
capital structure and makes adjustments in the light of changes in economic
conditions and risk characteristics of the underlying assets. In order to
maintain or adjust the capital structure the Group may issue new shares,
acquire debt, or sell assets. Management regularly reviews cash flow forecasts
to determine whether the Group has sufficient cash reserves to meet future
working capital requirements and to take advantage of business opportunities.
4. Critical Accounting Estimates and Judgements
The preparation of the Group Financial Statements in conformity with IFRSs
requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the Financial Statements and the reported amount of
expenses during the year. Actual results may vary from the estimates used to
produce these Financial Statements.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Significant items subject to such estimates and assumptions include, but are
not limited to:
Recognition and Impairment of exploration and evaluation costs
Exploration and evaluation costs had a carrying value at 31 December 2023 of
$16,593,000 (2022: $15,639,000): refer to Note 8 for more information. During
the year asset acquisitions with a carrying value of $21,000 were recognised
(2022: $7,707,000), refer to Note 8 for more information. The Group has a
right to renew exploration permits and the asset is only depreciated once
extraction of the resource commences. Management tests annually whether
exploration projects have future economic value in accordance with the
accounting policy stated in Note 2.7.
Each exploration project is subject to an annual review by either a consultant
or senior company geologist to determine if the exploration results returned
during the year warrant further exploration expenditure and have the potential
to result in an economic discovery. This review takes into consideration the
expected costs of extraction, long term metal prices, anticipated resource
volumes and supply and demand outlook. In the event that a project does not
represent an economic exploration target and results indicate there is no
additional upside, a decision will be made to discontinue exploration.
Fair value of assets acquired
During the prior year the group acquired a number of interests in different
projects and these acquisitions did not fall within the scope of IFRS 3 but
rather IFRS 6. As a result, these assets acquired were required to initially
be recognised as fair value. The Directors assessed the fair value of all
project interests acquired as being equal to the fair value of the
consideration to acquire said interests in projects. See note 9 for further
details
Fair value of financial liabilities
During the year the group entered into a convertible loan note with an
embedded derivative and warrants which were measured at fair value. See note
14 for further details.
Share based payment transactions
The Group has made awards of options and warrants over its unissued share
capital to certain Directors and employees as part of their remuneration
package. Certain warrants have also been issued to shareholders as part of
their subscription for shares and to suppliers for various services received.
The valuation of these options and warrants involves making a number of
critical estimates relating to price volatility, future dividend yields,
expected life of the options and forfeiture rates. These assumptions have
been described in more detail in Note 17.
5. Segmental Information
As at 31 December 2023, the Group operates in three geographical areas, the
UK, Mexico and Australia. The Company operates in one geographical area, the
UK. Activities in the UK are mainly administrative in nature whilst activities
in Australia and Mexico relate to exploration and evaluation work. The reports
used by the chief operating decision maker are based on these geographical
segments.
The Group generated $9,000 in other income during the year ended 31 December
2023 (2022: Nil).
2023 Australia Mexico UK Total
$ $ $
Administrative expenses (870,000) (1,000) (1,841,000) (2,712,000)
Other losses (557,000) (140,000) (456,000) (1,153,000)
Other gains - - 178,000 178,000
Operating loss from continued operations per reportable segment (1,427,000) (141,000) (2,119,000) (3,687,000)
Reportable segment assets 15,290,000 - 2,729,000 18,019,000
Reportable segment liabilities (544,000) - (779,000) (1,323,000)
Reportable segment net assets 14,746,000 - 1,950,000 16,696,000
Segment assets and liabilities are allocated based on geographical location.
2022 Australia Mexico UK Total
$ $ $
Administrative expenses (171,000) (98,000) (2,083,000) (2,352,000)
Other gains/(losses) - - (30,000) (30,000)
Operating loss from continued operations per reportable segment (171,000) (98,000) (2,113,000) (2,382,000)
Reportable segment assets 15,660,000 783,000 2,163,000 18,606,000
Reportable segment liabilities (291,000) (15,000) (157,000) (463,000)
Reportable segment net assets 15,369,000 768,000 2,006,000 18,143,000
6. Expenses/Income by Nature
2023 2022
$ $
Directors' fees (Note 20) 273,000 438,000
Employee wages and salaries 864,000 307,000
Fees payable to the Company's auditors for the audit of the consolidated 62,000
financial statements
59,000
Professional, legal and consulting fees 1,013,000 962,000
Insurance 71,000 82,000
Office and administrative expenses 185,000 90,000
Depreciation 52,000 102,000
Travel and subsistence 194,000 133,000
Share option expense 216,000 192,000
Other expenses 190,000 42,000
Foreign exchange movement (408,000) (55,000)
Total administrative expenses 2,712,000 2,352,000
Impairment - Exploration and evaluation assets 794,000 -
Impairment - Other net assets 140,000 -
Loss on initial recognition of convertible note 198,000 -
Other 21,000 -
Other losses 1,153,000 -
Gain on revaluation of convertible note derivative 131,000 -
Other 47,000 -
Other gains 178,000 -
7. Taxation
Group
2023 2022
$ $
Loss before tax from continued operations (3,721,000) (2,375,000)
Income tax using the weighted corporation tax rate 19.2% (2022: 18.6%) (713,000) (442,000)
Expenditure not deductible for tax purposes 248,000 (57,000)
Net tax effect of losses carried forward on which no deferred tax asset is
recognised
465,000 385,000
Income tax for the year - -
No charge to taxation arises due to the losses incurred.
The weighted average applicable tax rate of 19.2% (2022: 18.6%) used is a
combination of the 19% standard rate of corporation tax in the UK, 25%
Australian corporation tax and 30% Mexican tax rate. The Group has accumulated
tax losses of approximately $32,887,000 (2022: $30,459,000) available to carry
forward against future taxable profits.
Under IFRS, a net deferred tax asset has not been recognised due to the
uncertainty as to the amount that can be utilised. No adjustments are required
in respect of the subsidiaries.
8. Intangible Assets
Exploration & Evaluation Assets at Cost and Net Book Value 2023 2022
$ $
Balance as at 1 January 15,639,000 5,939,000
Additions 1,708,000 3,029,000
Asset acquisitions 21,000 7,707,000
Impairment (794,000) -
Foreign exchange differences 19,000 (1,036,000)
As at 31 December 16,593,000 15,639,000
Deferred exploration costs relate to the initial acquisition of the licences
and subsequent exploration expenditure incurred in evaluating the projects.
Asset acquisitions related to the assets of Mallina Exploration Pty Ltd. A
subsidiary of the Group also granted a 2% gross revenue royalty to the seller
of any iron ore produced from the tenement.
In accordance with IFRS 6, the Directors undertook an assessment of the
following areas and circumstances which could indicate the existence of
impairment:
• The Group's right to explore in an area has expired or will expire in
the near future without renewal.
• No further exploration or evaluation is planned or budgeted for.
• A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the book value may not be
fully recovered from future development and production.
As a result of the review, the Directors concluded that the Mexico assets were
fully impaired, as no further exploration or evaluation is planned for Mexico.
An impairment of $794,000 was recorded in other losses for the year. The
Directors do not consider any other assets to be impaired.
9. Assets Under Construction
2023 2022
$ $
Balance as at 1 January 455,000 291,000
Additions - 164,000
As at 31 December 455,000 455,000
Mining plant equipment, recertification costs and the related transport costs
capitalised as a Mining asset in A.C.N 643 478 371 Pty Ltd in relation to the
headframe and associated equipment for the Elizabeth Hill Silver mine.
10. Right of Use Assets and Lease Liability
At the reporting date, the Group had one property, in Australia, under lease
agreement. The Group recognised the following right of use asset and related
lease liability in respect of this lease agreement. A lease previously
recognised for office space in London, United Kingdom, was fully amortised
during the year.
Right of use asset
2023 2022
$ $
Balance as at 1 January 17,000 131,000
Additions 55,000 -
Amortisation (48,000) (102,000)
Foreign exchange differences - (12,000)
As at 31 December 24,000 17,000
Lease liability
2023 2022
$ $
Balance as at 1 January 17,000 131,000
Additions 55,000 -
Rental payments (46,000) (102,000)
Foreign exchange differences - (12,000)
As at 31 December 26,000 17,000
A maturity analysis of the undiscounted minimum lease payments due are as
follows:
2023
$
No later than one year 41,000
As at 31 December 41,000
11. Trade and Other Receivables
2023 2022
$ $
VAT receivable 125,000 133,000
Prepayments 7,000 95,000
Other receivables 129,000 90,000
As at 31 December 261,000 318,000
Trade and other receivables are all due within one year. The fair value of all
receivables is the same as their carrying values stated above. These assets,
excluding prepayments, are the only form of financial asset within the Group,
together with cash and cash equivalents.
The carrying amounts of the Group's trade and other receivables are
denominated in the following currencies:
2023 2022
$ $
UK Pounds 171,000 173,000
Australian Dollars 90,000 75,000
Mexican Peso - 70,000
As at 31 December 261,000 318,000
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of receivable mentioned above. The Group does not hold any
collateral as security. All trade and other receivables are considered fully
recoverable and performing.
12. Cash and Cash Equivalents
2023 2022
$ $
Cash at bank and in hand 676,000 2,177,000
13. Trade and Other Payables
2023 2022
$ $
Trade payables 591,000 272,000
Other payables 36,000 69,000
Accrued expenses 99,000 105,000
As at 31 December 726,000 446,000
The carrying amounts of the Group's trade and other payables are denominated
in the following currencies:
2023 2022
$ $
UK Pounds 207,000 148,000
US Dollars - 37,000
Mexican Peso - 15,000
Australian Dollars 519,000 246,000
As at 31 December 726,000 446,000
14. Convertible Note
2023 2022
$ $
Liability - Host 500,000 -
Liability - Derivative 71,000 -
Total 571,000 -
During the year, the Company issued 500,000 convertible notes with a face
value of US$500,000 which was received in cash. The initial fair value of the
liability portion of the convertible notes was determined using a market
interest rate for an equivalent non-convertible notes at the issue date. The
liability is subsequently measured on an amortised cost basis until
extinguished on conversion or maturity. The convertible notes include a
derivative liability, which represents the value of the option to convert the
notes to ordinary shares of the Company. The fair value of the derivative
liability was determined using a Monte Carlo Simulation model. A loss of
$198,000 was recognised on the initial recognition of the derivative
liability, which was recorded in other losses. Thereafter a revaluation gain
of $131,000, which represents the change in value of the derivative liability
during the year, was recorded in other gains. Refer to note 17 for further
details.
15. Share Capital and Share Premium
The Company is authorised to issue an unlimited number of common shares of no
par value.
Issued share capital
Group Number of shares Total
$
At 1 January 2022 3,902,181,625 70,422,000
Share issue costs - 1 January 2022 - (60,000)
Issue of Ordinary Shares on exercise of warrants - 21 January 2022 202,247,000 367,000
Issue of Ordinary Shares on exercise of options - 21 January 2022 1,100,000 4,000
Issue of Ordinary Shares on exercise of warrants - 10 February 2022 1,111,111 5,000
Issue of Ordinary Shares on exercise of warrants - 10 February 2022 816,666 3,000
Issue of Ordinary Shares as consideration for asset acquisition - 23 February 50,000,000 467,000
2022 (Note 8)
Issue of Ordinary Shares on exercise of warrants - 14 March 2022 3,333,333 12,000
Issue of Ordinary Shares as consideration for asset acquisition - 22 March 138,703,396 1,384,000
2022 (Note 8)
Issue of Ordinary Shares as consideration for asset acquisition - 22 March 358,617,818 3,577,000
2022 (Note 8)
Issue of Ordinary Shares on exercise of warrants - 22 March 2022 66,666,666 153,000
Issue of Ordinary Shares on exercise of warrants - 22 March 2022 26,610,661 73,000
Issue of Ordinary Shares on exercise of warrants - 13 April 2022 14,000 1,000
Issue of Ordinary Shares on exercise of warrants - 13 April 2022 122,267 1,000
Issue of Ordinary Shares on exercise of warrants - 13 April 2022 984,375 3,000
Issue of Ordinary Shares on exercise of options - 26 April 2022 2,000,000 7,000
Issue of Ordinary Shares as consideration for asset acquisition - 20 June 2022 7,827,883 69,000
(Note 8)
Share issue costs - 7 September 2022 - (12,000)
Issue of Ordinary Shares for cash - 8 September 2022 300,000,000 1,814,000
Share issue costs - 28 September 2022 - (128,000)
Issue of Ordinary Shares on exercise of options - 1 December 2022 2,500,000 8,000
Issue of Ordinary Shares as consideration for asset acquisition - 20 December 260,000,000 1,416,000
2022 (Note 8)
At 31 December 2022 5,324,836,801 79,586,000
Issue of Ordinary Shares for cash - 12 January 2023 2,500,000 8,000
Issue of Ordinary Shares for cash - 16 May 2023 8,142,373 25,000
Issue of Ordinary Shares for cash - 10 August 2023 1,000,000,000 2,545,000
Issue of Ordinary Shares in lieu of fees - 3 November 2023 26,315,000 61,000
Share issue costs - 10 August 2023 - (128,000)
At 31 December 2023 6,361,794,174 82,097,000
On 12 January 2023 2,500,000 options, with no par value, were exercised at an
issue price of 0.25 pence per share.
On 16 May 2023 8,142,373 options, with no par value, were exercised at an
issue price of 0.25 pence per share.
On 10 August 2023, the Company completed a placement of 1,000,000,000 shares,
at 0.20 pence per share, in order to raise gross proceeds of GBP 2,000,000.
On 3 November 2023, the Company issued 26,315,000 shares in lieu of fees.
16. Other Reserves
2023 2022
$ $
Foreign currency translation reserve 279,000 694,000
Share based payment reserve 854,000 771,000
Warrant reserve 834,000 377,000
The foreign currency translation reserve represents the effect of changes in
exchange rates arising from translating the Financial Statements of subsidiary
undertakings into the Company's presentational currency. The share-based
payment reserve arises on the grant of share options to directors, employees
and other eligible persons under the share option plan. Refer to Note 17 for
more information. The warrants reserve arises on the issue of warrants. Refer
to Note 17 for further information.
17. Share Based Payments
Share options outstanding at 31 December 2023 have the following expiry dates
and exercise prices:
Number
Grant date Expiry date Exercise price in £ per share 2023 2022
2018 14-May-23 0.0025 - 10,642,373
2019 28-Mar-24 0.0025 12,342,509 12,342,509
2019 28-Mar-24 0.0022 3,000,000 3,000,000
2019 28-Mar-24 0.0030 3,000,000 3,000,000
2019 28-Mar-24 0.0045 4,000,000 4,000,000
2020 30-Aug-23 0.0045 - 18,750,000
2020 30-Aug-23 0.0050 - 18,750,000
2020 30-Aug-23 0.0055 - 22,500,000
2021 21-Oct-24 0.0100 10,000,000 10,000,000
2021 21-Oct-24 0.0115 10,000,000 10,000,000
2021 21-Oct-24 0.0145 15,000,000 15,000,000
2022 26-Sep-26 0.008 - 0.014 345,000,000 345,000,000
2023 31-Jul-27 0.0072 22,500,000 -
2023 31-Jul-27 0.0090 30,000,000 -
2023 31-Jul-27 0.0108 37,500,000 -
2023 31-Jul-27 0.0126 40,000,000 -
Total 532,342,509 472,984,882
Options with an expiry date of 28-Mar-24 expired subsequent to year
end.
Warrants outstanding at 31 December 2023 have the following expiry dates and
exercise prices:
Grant date Expiry date Exercise price in £ per share Number
Number 2023 2022
2020 18-May-23 0.0012 - 2,625,000
2020 10-Sep-23 0.006 - 12,000,000
2020 18-May-23 0.015 - 11,208,125
2020 30-Nov-23 0.013 - 13,600,000
2021 17-Nov-24 0.085 23,529,401 23,529,401
2022 14-Sept-25 0.0025 7,200,000 7,200,000
2022 31-Dec-25 0.0025 100,000,000 100,000,000
2023 1-Jul-26 0.005198 10,000,000 -
2023 1-Jul-24 Note 1 250,000 -
2023 1-Jul-26 Note 1 250,000 -
Total 141,229,401 170,162,516
Note 1: During the year, commitment and conversion warrants were issued in
relation to the convertible note. The number of warrants to be issued depends
on the number of notes converted to shares at a future date. Each tranche of
the Conversion Warrants will have an exercise price to the lower of a 25%
premium to the 10-day VWAP on Alien's shares prior to the date of the Deed (1
July 2023) and the Assumed Conversion Date (1 July 2024). Where the noteholder
elects to convert the notes in to shares, the noteholder will receive 0.5 12
month warrants, and 0.5 36 month warrants for every note converted. The
maximum number of warrants to be issued is therefore 250,000 12 month warrants
and 250,000 36 month warrants.
The estimate of the fair value of the share options and warrants is measured
based on the Black-Scholes model. The parameters used for options and warrants
granted in the year ended 31 December 2023 are detailed below:
2023 Options 2023 Options 2023 Options 2023 Options
Granted on: 07/07/2023 07/07/2023 07/07/2023 07/07/2023
Life (years) 3 years 3 years 3 years 3 years
Exercise price (pence per share) 0.72 0.90 1.08 1.26
Risk free rate 4.1% 4.1% 4.1% 4.1%
Expected volatility 102% 102% 102% 102%
Expected dividend yield - - - -
Marketability discount - - - -
Total fair value (£) 50,000 62,000 74,000 75,000
2023 Conversion Warrants 2023 Conversion Warrants 2023 Commitment Warrants
Granted on: 01/07/2023 01/07/2023 01/07/2023
Life (years) 1 year 3 years 3 years
Exercise price (pence per share) Variable Variable 0.5198
Risk free rate 4.7% 3.6% 3.6%
Expected volatility 75% 75% 75%
Expected dividend yield - - -
Marketability discount - - -
Total fair value (£) 29,000 42,000 5,000
The expected volatility is based on the historical share prices over the prior
comparable period of the Company share price.
The movement of share options for the year to 31 December 2023 is shown below:
2023 2022
Number Weighted average exercise price (£) Number Weighted average exercise price (£)
As at 1 January 472,984,882 0.0100 134,834,882 0.0100
Granted (not yet vested) 130,000,000 0.0106 345,000,000 0.0100
Exercised (10,642,373) 0.0100 (5,600,000) 0.0100
Expired (60,000,000) 0.0050 (1,250,000) 0.0100
Outstanding as at 31 December 532,342,509 0.0100 472,984,882 0.0100
Exercisable at 31 December 57,342,509 0.0100 127,984,882 0.0100
The movement of warrants for the year to 31 December 2023 is shown below:
2023 2022
Number Weighted average exercise price (£) Number Weighted average exercise price (£)
As at 1 January 170,162,516 0.004 389,620,248 0.0024
Granted 10,000,000 0.0052 130,729,411 0.0025
Granted 500,000 Variable
Exercised - NA (301,906,079) 0.0024
Expired (39,433,115) 0.0068 (48,281,064) 0.0024
Outstanding as at 31 December 141,229,401 0.004 170,162,516 0.004
Exercisable at 31 December 140,729,401 0.004 170,162,516 0.004
The weighted price and life for warrants and options for the year end 31
December 2023 is as follows:
2023
Range of exercise prices ($) Weighted average exercise price ($) Number of shares Weighted average remaining life expected (years) Weighted average remaining life contracted (years)
0.004-0.6 0.00874 674,071,899 1.85 1.85
The total fair value charged to the statement of comprehensive income for the
year ended 31 December 2023 and included in administrative expenses was
$216,000 (2022: $192,000).
Options and warrants exercised in 2023 resulted in 10,642,374 shares being
issued (2022: 130,729,411) at a weighted average price of £0.0025 each (2022:
£0.0025 each) and as a result $38,377 was recorded as share capital.
During the year 130,000,000 incentive options (2022: 178,000,000) were
conditionally granted to certain directors and are to be awarded on the basis
of length of service. The options were granted with various exercise prices at
premiums to the share price on the date they were awarded.
Number Exercisable by Premium to price on date of issue Exercise price in £ per share
A Vorster 12,500,000 31/07/2027 100% 0.0072
A Vorster 15,000,000 31/07/2027 150% 0.0090
A Vorster 17,500,000 31/07/2027 200% 0.0108
A Vorster 20,000,000 31/07/2027 250% 0.0126
E Henson 10,000,000 31/07/2027 100% 0.0072
E Henson 15,000,000 31/07/2027 150% 0.0090
E Henson 20,000,000 31/07/2027 200% 0.0108
E Henson 20,000,000 31/07/2027 250% 0.0126
18. Net Finance Charges
Group
2023 2022
$ $
Finance charges (42,000) -
Interest income 8,000 7,000
34,000 7,000
19. Employees
Group
Staff costs (excluding Directors) 2023 2022
$ $
Salaries and wages 760,000 256,000
Social security costs 34,000 13,000
Pensions 70,000 38,000
864,000 307,000
The average monthly number of employees during the year was 4 (2022: 6).
20. Directors' Remuneration
Short term employment benefits Share based payment Total
2023 $ $ $
Executive Directors
G Robertson 44,000 - 44,000
R McIllree 37,000 - 37,000
Non-Executive Directors
A Vorster 61,000 61,000 122,000
E Henson 26,000 61,000 87,000
D Smith 37,000 - 37,000
J Battershill 5,000 - 5,000
M C Culbert 10,000 - 10,000
220,000 122,000 342,000
Employers tax contributions of $10,000 have not been included in the above.
During the year, A Vorster was issued 65,000,000 options and E Henson was
issued 65,000,000 options, with fair value charged to the statement of
comprehensive income for $61,000 and $61,000, respectively.
Short term employment benefits Share based payment Total
2022 $ $ $
Executive Directors
B Brodie Good 210,000 - 210,000
R McIllree 27,000 - 27,000
Non-Executive Directors
D J Smith 74,000 - 74,000
J L Battershill 63,000 192,000 255,000
M C Culbert 32,000 - 32,000
406,000 192,000 598,000
Employers tax contributions of $31,000 have not been included in the above.
During 2022, Jonathan Battershill was issued 35,000,000 options with fair
value charged to the statement of comprehensive income for $192,000.
21. Loss per Share
The calculation of the total basic losses per share of 0.065 pence (2022: loss
0.050 pence) is based on the losses attributable to equity owners of the group
of $3,721,000 (2022: $2,375,000) and on the weighted average number of
ordinary shares of 5,728,076,556 (2022: 4,712,310,829) in issue during the
year.
In accordance with IAS 33, basic and diluted earnings per share are identical
as the effect of the exercise of share options or warrants would be to
decrease the loss per share.
22. Commitments
(a) Work programme commitment
As at 31 December 2023, Alien Metals owned 16 mineral exploration licenses in
Australia and 9 mineral exploration licenses in Mexico. These licences include
commitments to pay annual licence fees and minimum spend requirements as
follows:
License fees Minimum spend requirements $ Total
$ $
Less than 1 year 91,000 455,000 546,000
1 to 5 years 291,000 1,964,000 2,255,000
Total 382,000 2,419,000 2,801,000
(b) Lease agreements
The Group had London offices under lease agreement. The agreement was signed
on 21 April 2021 and covered office rent for the period from 1 May 2021 until
28 Feb 2023, with monthly payments of £6,916 (US$9,514) and a deposit of
£20,748 (US$28,542). This lease was not renewed. At 31 December 2023, nil
remained payable in respect of this lease.
The Group leased a property in West Australia for on-site staff accommodation
until 30 November 2024 with current monthly payments of A$3,545. At 31
December 2023, $40,737 remained payable in respect of this lease.
23. Related Party Transactions
Transactions with key management personnel
During the year ended 31 December 2023, the Company did not enter into
transactions involving Directors other than Directors remuneration outlined in
note 20.
24. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
25. Events after the Reporting Date
On 15 March 2024, the Company executed a funding package of up to A$2m that
has been made available through a convertible loan note from Bennelong
Resource Capital Pty Limited, a shareholder in the Company, with a current
holding of 7.2%. The facility is to be drawn in three tranches of A$1m, $0.5m,
and $0.5m, respectively. The facility is available for a period of 12 months,
incurs interest at the Secured Overnight Financing Rate plus 10%, has a face
value of A$1 per convertible security, a commitment fee of 3% of funds drawn,
and the lender is to receive 25,000,000 warrants. The balance due under the
facility (including accrued interest at the end of each fiscal quarter) can be
converted into Ordinary Shares at the option of the lender.
On 15 March 2024, Mr Alwyn Vorster resigned as a director of the Company and
was replaced by Mr Robert Mosig.
During April 2024 the Company, through its wholly owned subsidiary Alien
Metals Australia Pty Ltd, entered into a joint venture with Errawarra
Resources Ltd (ASX: ERW) in respect of the lithium rights on the Pinderi Hills
Project. Errawarra has the potential to earn up to a 50% interest in the
lithium rights in the Project by spending up to A$4 million with the first
A$500,000 being by the way of a subscription for common shares in the capital
of the Company.
There were no matters or circumstances that have arisen since the end of the
financial year, other than those outlined above, that have significantly
affected or may significantly affect the operations of the Company, the
results of those operations, or state of affairs in future financial years.
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