REG - Alkemy Capital Invs. - Annual Report & Financial Statements
30/05/2024 16:30
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RNS Number : 5245Q Alkemy Capital Investments PLC 30 May 2024
30 May 2024
Alkemy Capital Investments Plc
Annual Report & Financial Statements
Alkemy Capital Investments plc ("Alkemy") (ALK:LSE) (JV2:FRA) is pleased to
announce the publication of its audited Annual Report and Accounts for the
year ended 31 January 2024 (the "Annual Report"). The Annual Report is
available on the Company's website, www.alkemycapital.co.uk
(http://www.alkemycapital.co.uk) and is set out in full below.
Further information
For further information, please visit Alkemy's
website: www.alkemycapital.co.uk (http://www.alkemycapital.co.uk/) or TVL's
website www.teesvalleylithium.co.uk (http://www.teesvalleylithium.co.uk/) .
-Ends-
Alkemy Capital Investments Plc Tel: 0207 317 0636
info@alkemycapital.co.uk (mailto:info@alkemycapital.co.uk)
Zeus Tel: 0203 883 4430
SI Capital Limited Tel: 0148 341 3500
Chairman's Statement
I have great pleasure in presenting our Annual Report for the year ended 31
January 2024.
Alkemy Capital Investments plc ("Alkemy") was formed to invest in the critical
minerals sector. As a holding company our aim is to foster the growth and
expansion of our subsidiaries, steering them towards operational excellence
and sustainable practices.
Our strategy is to finance the development of the individual businesses at the
asset level through project related debt, and institutional equity or
strategic partnerships.
Alkemy currently has three investments, excluding the service entity ACSA,
namely:
· Tees Valley Lithium Limited ("TVL") which is actively developing
the UK's first Lithium Hydroxide processing facility at Wilton International
in Teesside, UK;
· Tees Valley Graphite Limited ("TVG") which is seeking in
partnership with Syrah Resources to develop a commercial scale natural
graphite active anode material processing facility, also at Wilton
International; and
· Port Hedland Lithium Pty Ltd ("PHL") which is potentially
developing a lithium sulphate refinery in Port Hedland, Western Australia.
TVL, our most advanced project, has received planning and environmental
permissions for the production of up to 96,000 tonnes per annum of battery
grade lithium hydroxide to supply key UK and international customers. We have
entered into feedstock and offtake arrangements with major partners and
established other key strategic partnerships and have worked closely with
government and regulatory bodies, reflecting our commitment to becoming a
leader in the low-carbon production of battery-grade lithium chemicals.
The success of these strategic initiatives and partnerships will place TVL at
the forefront of Europe's lithium refining sector, and we are looking to
replicate this success across other key critical battery minerals, including
graphite, with a view to developing a multi-minerals strategy.
Despite recent market shifts, European demand for lithium remains on an upward
trajectory. With the UK and EU's transition towards electric vehicles (EVs),
there's a forecasted demand for lithium that far exceeds current supply
capacity. The UK and European Commission's move to ban combustion engine cars
by 2035 is a significant catalyst, signalling a shift towards a more
sustainable and electric future. This policy change, along with similar
initiatives worldwide, is expected to fuel a consistent and growing demand for
lithium.
As Europe's car makers make the switch to EVs to meet this burgeoning demand
there is over 700GW of gigafactory capacity either in construction or planned
to provide the batteries for these EVs. These gigafactories will require
over 650,000 tonnes of locally refined lithium per year in the form of either
hydroxide or carbonate depending on the type of vehicle. Currently the UK and
Europe has limited lithium refining capacity. Building a European lithium
processing facility will reduce the regional dependence on China, which
currently controls 90% of the world's lithium refining capacity.
Recognising the escalating demand for lithium, Alkemy has been actively
developing its lithium refining portfolio through TVL and PHL. Alkemy's
focus is not just on meeting the immediate market needs but on establishing a
supply chain that is resilient, environmentally responsible, and capable of
adapting to the rapidly evolving energy landscape.
Tees Valley Lithium
TVL is currently developing a lithium hydroxide monohydrate ("LHM") refinery
at the Wilton International Chemicals Park in Teesside, UK.
Since its inception, TVL has achieved a number of key milestones and in late
2023 reached an agreement in principle with Wogen Resources Limited to supply
up to 20,000 tonnes of technical grade lithium carbonate feedstock per annum
for an initial period of five years. The supply will be sufficient to fill the
first of the proposed four trains at Wilton producing around 24,000 tonnes of
battery grade lithium hydroxide or lithium carbonate equivalent.
Wogen is a leading international trader of off-exchange specialty metals and
minerals, with a long history and well-established presence in the battery
metals market across Asia, the United States and Europe. Wogen has an active
trading book in lithium products procuring from an array of producing
countries and selling into the battery supply chain.
In late 2023 Alkemy and TVL appointed to their respective Board of Directors
battery metals supply chain expert Vikki Jeckell. Vikki's appointment comes at
a crucial time for Alkemy as it embarks on its ambitious growth plans in the
rapidly evolving battery materials sector. Vikki brings a wealth of experience
and expertise in supply chain management, particularly within the battery
materials industry. Her extensive background includes five years at Johnson
Matthey as Head of Supply Chain Strategy for Battery Materials.
TVL, also in late 2023, awarded preferred vendor status to industry leaders
Jord Proxa and Eurodia Industrie SAS. The completion of the technology
selection process and the awarding of preferred vendor status to these two
industry leaders is an important step forward in the project's development.
TVL is currently in advanced discussions with a number of offtake customers,
including European gigafactories and electric vehicle original equipment
manufacturers (OEMs). These customers are increasingly focussed on price,
transparency and low embedded carbon, when sourcing high grade lithium
products.
By sourcing low carbon feedstock and powering an electrochemical refining
process with offshore wind, TVL aims to supply its UK and European customers
with the world's lowest-carbon lithium hydroxide.
TVL is currently in discussions with a number of leading financial
institutions for the financing of its Wilton refinery. The US$300m
approximate capital cost of train 1 is expected to be financed largely through
green bonds (for which TVL will seek accreditation) combined with a mix of
debt, strategic equity finance and grant funding, all at project level.
Having secured feedstock for its first train at Wilton, a key component for
these financing discussions, TVL is in discussions with leading financial
institutions and strategic partners to obtain project-level funding that will
enable it to complete Front End Engineering Design (FEED) and reach a final
investment decision for the bond finance. TVL continues to make steady
progress in these discussions and will update the market as soon as this key
piece of funding is secured.
Port Hedland Lithium
In 2022, Alkemy announced the launch of its strategy to build a lithium
sulphate monohydrate ("LSM") refinery in Port Hedland, Australia, to serve as
a refining hub for Australian spodumene producers. PHL has secured an
allocation of land at the new Boodarie Strategic Industrial Area, alongside
other global leaders in the green industrial sector, to facilitate the
development of the Port Hedland LSM refinery.
In August 2023, PHL announced the completion of a Class 4 Feasibility Study
for its LSM refinery, each train of which will process spodumene concentrate
to produce 40,000 tonnes of lithium sulphate annually. In addition, a Flora
and Fauna baseline survey was completed as part of the required environmental
approvals. PHL will continue to develop its LSM refinery, either standalone or
in conjunction with strategic partners, several of whom it is currently in
discussions with.
Building the Port Hedland LSM refinery will provide Australian spodumene
producers with a complete mid-stream lithium refining solution with direct
access to the European market through TVL's LHM refinery in Teesside, UK.
Importantly, the Port Hedland LSM refinery will bring major value-adding to
the Pilbara region, with significant multiplier benefits for the local
community and the State of Western Australia, whilst reducing the carbon
footprint of the end-to-end lithium battery cell supply chain to meet new
European emissions standards.
Tees Valley Graphite
In January 2024, Alkemy announced the launch of TVG and that TVG had entered
into a non-binding memorandum of understanding (MOU) with Syrah Resources
(SYR:ASX) ("Syrah") for the establishment of a joint venture to develop a
commercial-scale natural graphite active anode material ("AAM") processing
facility ("Wilton AAM facility") located at the Wilton International Chemicals
Park in Teesside, UK.
Syrah and TVG are currently negotiating a binding joint venture agreement and
will each initially have a 50% interest in the joint venture. The Wilton AAM
facility is proposed to be supplied with natural graphite from Syrah's Balama
graphite project in Mozambique, the world's largest integrated graphite
operation.
The joint venture will combine Syrah's global graphite development, operations
and sales expertise with Alkemy's UK development capabilities at the
plug-and-play Wilton International Chemicals Park, benefitting from
well-established infrastructure, essential utilities, and the Teesside
Freeport.
The joint venture will target an initial production capacity of 20,000 tonnes
AAM per annum for supply into cell manufacturers and OEMs located in the UK
and European battery markets. The Wilton AAM facility is expected to gain
access to low-carbon offshore wind power providing 100% certified green
low-cost energy enabling it to produce a low carbon product.
The Wilton AAM facility will leverage the successful planning and approvals
and local knowledge gained by Alkemy portfolio company TVL and will aim to
lower construction costs, project delivery timeframes and bring forward first
production by replicating and upscaling the technology and design used at
Syrah's Vidalia AAM facility in Louisiana, United States.
Syrah is a leading ex-China supplier of quality graphite products and has
significant practical knowledge and know-how in the development of an AAM
processing facility, including in feasibility, detailed design and
engineering, process technologies, equipment selection and procurement,
construction management and product development, product qualification and
offtakes.
Syrah and TVG intend to enter into a binding joint venture agreement, which
will govern feasibility and permitting workplans and schedules, budget and
relevant milestones associated with the Wilton AAM Facility. Ultimately,
development of the Wilton AAM facility is planned to be subject to a final
investment decision being unanimously approved by Syrah and TVG following the
completion of further technical studies, receipt of approvals, entry into a
shareholders' agreement, incorporation of a project company, and financing and
offtake commitments. Syrah and TVG will each initially have a 50% interest in
the joint venture.
The Wilton AAM facility is expected to be financed at project level through
green bonds (for which accreditation shall be sought), combined with a mix of
debt, strategic equity finance and grant funding (via domestic and accessible
international grant funding programmes).
In conclusion, I would like to take this opportunity to thank our shareholders
for their continued support and look forward to reporting on our progress
during the course of 2024.
Paul
Atherley
Non-Executive
Chairman
30 May
2024
Strategic Report
The Directors present the Strategic Report of the Group for the year ended 31
January 2024.
Review of business and future developments
The Company was incorporated and registered in England and Wales on 21 January
2021 and on 27 September 2021 was admitted to the Standard Listing segment of
the Official List of the UK Listing Authority and to trading on the London
Stock Exchange.
The Company was formed to undertake an Acquisition of a controlling interest
in a company or business. Given their experience, the Board focused on the
mining and technology metals sectors.
On 25 February 2022, the Group announced that it had entered into an
exclusivity agreement (the "Exclusivity Agreement") with Sembcorp Utilities
(UK) Limited and a heads of terms in respect of a proposed option to enter
into a lease over a brownfields site (the "Site") at Wilton International (the
"Agreement to Lease") and a long lease over the Site. Wilton International is
a well-established chemical engineering park located in Teesside, a major
Freeport in the UK. The entering into the Exclusivity Agreement and
incorporation of TVL constituted an Acquisition and reverse takeover
transaction under the rules of the London Stock Exchange.
On 19 December 2022 the Group announced that it had entered into the Agreement
to Lease pursuant to which an agreed form lease may be entered into by TVL, a
subsidiary of the Company, following the completion of certain conditions
precedent under the Agreement to Lease (the "Lease"). It is intended that TVL
will be the operating company that develops the Project.
If the Board determines that the opportunities presented by the development of
the Site would be in the best interests of shareholders, the Group, via TVL,
intends to enter into the Lease and to commence the design, finance and
construct of a plant that will produce lithium hydroxide monohydrate from
lithium sulphate or carbonate feedstock with a view to becoming a key supplier
to the UK and European battery cell manufacturers (the "Project").
The principal activity of the Company is to act as the holding company to TVL,
an operating subsidiary, which will enter into the Lease. The Company will
provide a parent company guarantee to Sembcorp in order to guarantee the
operating subsidiary's obligations under the Lease. The Company aims to
implement an operating strategy with a view to generating value for its
shareholders through the creation of a lithium hydroxide monohydrate facility.
Key developments for the Group during the course of the financial year
included the following:
· In August 2023, PHL announced the completion of a Class 4
Feasibility Study for its LSM refinery, each train of which will process
spodumene concentrate to produce 40,000 tonnes of lithium sulphate annually.
In addition, a Flora and Fauna baseline survey was completed as part of the
required environmental approvals.
· In late 2023 the Company reached an agreement in principle with
leading international trader Wogen Resources Limited to supply up to 20,000
tonnes of technical grade lithium carbonate feedstock per annum for TVL's LHM
refinery for an initial period of five years. The supply will be sufficient to
fill the first of the proposed four trains at Wilton producing around 24,000
tonnes of battery grade lithium hydroxide or lithium carbonate equivalent.
· In late 2023 Alkemy and TVL appointed to their respective Board
of Directors, battery metals supply chain expert Vikki Jeckell. Vikki's
extensive background includes five years at Johnson Matthey as Head of Supply
Chain Strategy for Battery Materials.
· TVL, also in late 2023, awarded preferred vendor status to
industry leaders Jord Proxa and Eurodia Industrie SAS. The completion of the
technology selection process and the awarding of preferred vendor status to
these two industry leaders is an important step forward in the development of
TVL's LHM refinery.
· In January 2024, Alkemy announced the launch of TVG and that TVG
had entered into a non-binding MOU with Syrah Resources for the establishment
of a joint venture to develop a commercial-scale natural graphite and active
anode material (AAM) processing facility located at the Wilton International
Chemicals Park in Teesside, UK.
· In February 2024 the Company announced the appointment of Zeus
Capital as Financial Adviser and Corporate Broker.
Alkemy was formed to invest in the critical minerals sector. As a holding
company its strategy is to foster the growth and expansion of its
subsidiaries, steering them towards operational excellence and sustainable
practices and to finance the development of these individual businesses at the
asset level through project related debt, and institutional equity or
strategic partnerships.
TVL is currently in discussions with a number of leading financial
institutions for the financing of its Wilton refinery. The US$300m
approximate capital cost of train 1 is expected to be financed largely through
green bonds (for which TVL will seek accreditation) combined with a mix of
debt, strategic equity finance and grant funding, all at project level.
Having secured feedstock for its first train at Wilton, a key component for
these financing discussions, TVL's primary short term focus is to consummate
discussions with leading financial institutions and strategic partners to
obtain project-level funding that will enable it to complete Front End
Engineering Design and reach a final investment decision for the bond finance.
Key performance indicators
When the Group enters into the Lease, financial, operational, health, safety,
and environmental KPIs will become more relevant and reported upon as
appropriate. As a result, the Directors are of the opinion that analysis using
KPI's is not appropriate for an understanding of the business at this time.
Principal risks and uncertainties
The principal risks and uncertainties currently faced by the Group are set out
further in the Risk Management Report on page 18.
Gender analysis
A split of the Directors, senior managers and employees by gender at the end
of the financial year is as follows:
Male - 2 (directors)
Female - 2 (directors)
The Group recognises the need to operate a gender diverse business. The Board
will also ensure any future employment takes into account the necessary
diversity requirements and compliance with all employment law. The Board has
experience and sufficient training and qualifications in dealing with such
issues to ensure they would meet all requirements. More detail will be
disclosed in the future annual reports once the Company enters into the Lease
and has completed its transition to an operating company.
Corporate social responsibility
The Group aims to conduct its business with honesty, integrity and openness,
respecting human rights and the interests of shareholders and employees. The
Group aims to provide timely, regular and reliable information on the business
to all its shareholders and conduct its operations to the highest standards.
The Group strives to create a safe and healthy working environment for the
wellbeing of its staff and to create a trusting and respectful environment,
where all members of staff are encouraged to feel responsible for the
reputation and performance of the Group.
The Group aims to establish a diverse and dynamic workforce with team players
who have the experience and knowledge of the business operations and markets
in which we operate. Through maintaining good communications, members of staff
are encouraged to realise the objectives of the Group and their own potential.
Corporate environmental responsibility
This will become more relevant once the Company enters into the Lease and
completes its transition to an operating company. The Board contains personnel
with a good history of running businesses that have been compliant with all
relevant laws and regulations and there have been no instances of
non-compliance in respect of environment matters.
The Group's policy is to minimize the risk of any adverse effect on the
environment associated with its activities with a thoughtful consideration of
key areas such as energy use, pollution, transport, renewable resources,
health and wellbeing. The Group also aims to ensure that its suppliers and
advisers meet with their legislative and regulatory requirements and that
codes of best practice are met.
Section 172(1) Statement - Promotion of the Group for the benefit of the
members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Group for the benefit of its members as a whole, as required by
s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
1. Consider the likely consequences of any decision in the
long term,
2. Act fairly between the members of the Group,
3. Maintain a reputation for high standards of business
conduct,
4. Consider the interests of the Group's employees,
5. Foster the Group's relationships with suppliers, customers
and others, and
6. Consider the impact of the Group's operations on the
community and the environment.
The pre-revenue nature of the business is important to the understanding of
the Group by its members, employees and suppliers, and the Directors are as
transparent about the cash position and funding requirements as is allowed
under LSE regulations.
The application of the s172 requirements can be demonstrated in relation to
the some of the key decisions made during 2023 and after the year end:
· The completion by PHL of a Class 4 Feasibility Study for its LSM
refinery
· The execution of an agreement in principle with leading
international trader Wogen Resources Limited to supply up to 20,000 tonnes of
technical grade lithium carbonate feedstock per annum to TVL for an initial
period of five years
· The appointment of battery metals supply chain expert Vikki
Jeckell to the boards of Alkemy and TVL
· The awarding of preferred vendor status to industry leaders Jord
Proxa and Eurodia Industrie SAS
· The launch of TVG and the signing of a non-binding MOU with
industry leader Syrah Resources for the establishment of a joint venture to
develop a commercial-scale natural graphite AAM processing facility
· The appointment of Zeus Capital Limited as financial adviser and
broker
The Board takes seriously its corporate social responsibilities to the
environment in which it works which will become more relevant once the Company
enters into the Lease and completes its transition to an operating company.
Paul Atherley
Non-Executive Chairman
30 May 2024
Board of Directors
Paul Atherley - Non-Executive Chairman
Paul Atherley is a highly experienced senior resources executive with wide
ranging international and capital markets experience. He graduated as mining
engineer from Imperial College London and has held a number of senior
executive and board positions. Paul is currently Chairman of LSE listed
Pensana Plc which is establishing the world's first independent and
sustainable rare earth processing facility in the UK.
Paul is based in London and has broad experience in raising debt and equity
finance for resource companies. He served as Executive Director of the
investment banking arm of HSBC Australia where he undertook a range of
advisory roles in the resources sector. He has completed a number of
acquisitions and financings of resources projects in Europe, China, Australia
and Asia.
Paul is a strong supporter of Women in STEM and has established a scholarship
which provides funding for young women to further their education in science
and engineering.
Sam Quinn - Non-Executive Director
Sam Quinn is a corporate lawyer with over fifteen years' worth of experience
in the natural resources sector, in both legal counsel and management
positions. Sam is a principal of Silvertree Partners, a London-based
specialist corporate services provider for the natural resources industry. In
addition Sam holds various other Non-Executive Directorships and company
secretarial roles for listed and unlisted natural resources companies. During
time spent in these roles, Sam has gained significant experience in the
administration, operation, financing and promotion of natural resource
companies.
Previously, Sam worked as the Director of Corporate Finance and Legal Counsel
for the Dragon Group, a London based natural resources venture capital firm
and as a corporate lawyer for Jackson McDonald Barristers & Solicitors in
Perth, Western Australia and for Nabarro LLP in London.
Helen Pein - Non-Executive Director
Helen Pein has over 30 years' experience in the natural resources sector and
currently serves as a Director of Pan Iberia Ltd, Trident Royalties Plc and
Panex Resources Pty Ltd.
Helen was formerly a Director of Pangea Exploration Pty Ltd, a company
affiliated with Denham Capital where she was part of the team directly
responsible for the discovery of a number of world-class gold and mineral
sands deposit across Africa. Helen is a recipient of the Gencor Geology
Award.
Vikki Jeckell - Non-Executive Director
Vikki Jeckell, appointed 20 November 2023, is a strategic procurement and
supply chain expert with over 15 years' worth of experience in the sector and
is the former the Head of Supply Chain Strategy Development & Control for
Battery Materials at Johnson Matthey. In this role Vikki, led transformative
initiatives, including the establishment of an industry-leading responsible
sourcing program and the formation of strategic partnerships, contributing
substantially to the company's global supply chain capabilities.
Vikki has also worked as Head of Supply Chain Development for hydrogen company
LIFTE H2, held a senior leadership role at Women in Green Hydrogen and in 2022
she founded Supply Tactics Limited, a consultancy firm dedicated to enhancing
supply chain management within the batteries and hydrogen sectors.
Vikki has provided expert testimony to House of Commons committees on several
occasions, reflecting her commitment to help shaping policies within energy
transition. Vikki holds an LLB and an MBA.
Directors' Report
The Directors present their annual report together with the financial
statements and Auditor's Report for the year ended 31 January 2024. The
following information is not presented in the Directors' report as it is
presented in the Strategic Report in accordance with s414C(11); Review of
business, Key Performance Indicators, Principal risks and uncertainties,
Gender analysis, Corporate social responsibility, Corporate environmental
responsibility, Section 172(1) statement.
Results and dividends
The results of the Group for the year ended 31 January 2024 are set out in the
Statement of Comprehensive Income on page 29. The Directors do not recommend
the payment of a dividend for the year.
Directors and Directors' interests
The Directors who served during the year to date are as follows:
Paul Atherley
Sam Quinn
Helen Pein
Vikki Jeckell (Appointed 20 November 2023)
The beneficial shareholdings of the Board in the Company as at 31 January 2024
were as follows:
Number of ordinary shares % of issued share capital Share options
P Atherley 3,313,714 37.59% 250,000
S Quinn 446,428 5.06% 215,000
H Pein 25,000 0.28% 75,000
V Jeckell - - 175,000
Director incentives
Details on Directors remuneration can be found in the Directors Remuneration
report on page 15.
Substantial shareholders
As at the date of this Report, the total number of issued Ordinary Shares with
voting rights in the Company was 8,814,851. The Company has been notified of
the following interests of 3 per cent or more in its issued share capital as
at the date of this report.
Shareholder Number of ordinary shares % of issued share capital
Paul Atherley 3,313,714 37.59%
Sam Quinn 446,428 5.06%
Corporate governance
The Group has set out its full Corporate Governance Statement on page 23. The
Corporate Governance Statement forms part of this Directors' report and is
incorporated into it by cross reference.
Greenhouse gas disclosures
As the Group remains in the early stages of development without any current
physical operations across its portfolio of projects, it is not practical to
obtain and analyse emissions data for the Group operations. However, given
the minor level of physical operations in the year, and the lack of any plant
or office space, the carbon footprint and climate change impact of the Group's
operations are considered to be negligible, and in any event below the 40 MWh
threshold prescribed for detailed emissions disclosures.
As such, the Group does not consider it relevant to provide climate related
disclosures under the recently enacted TCFD guidelines, nor would
determination of the relevant emissions data be practical. Once the Group
has commenced the construction of physical premises across any of its
projects, and hence transitioned into an operating company, it will revisit
its position on climate disclosures accordingly.
Supplier payment policy
The Group's current policy concerning the payment of trade creditors is to
follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre
Point, 103 New Oxford Street, London WC1A 1DU).
The Group's current policy concerning the payment of trade creditors is to:
· settle the terms of payment with suppliers when agreeing the
terms of each transaction;
· ensure that suppliers are made aware of the terms of payment by
inclusion of the relevant terms in contracts; and
· pay in accordance with the Group's contractual and other legal
obligations.
Financial instruments and risk management
The Group is exposed to a variety of financial risks and the impact on the
Group's financial instruments are summarised in the Risk Management Report.
Details of the Group's financial instruments are disclosed in note 17 to the
financial statements.
Directors' insurance
The Group has implemented Directors and Officers Liability Indemnity
Insurance.
Events after the reporting year
On 26 February 2024 the Group appointed Zeus Capital as financial advisor and
broker.
Going concern
As part of their assessment of going concern, the Directors have prepared cash
forecasts to determine the funding requirements of the business over the 18
months from the reporting date. Cash requirements over this period have been
projected in the range of a £2m minimum (decelerated project development
case) to £9m maximum (accelerated project development case) depending on the
level of technical project development work being undertaken, as determined by
funding availability.
As at the date of this report, the Directors are considering a variety of
funding options from numerous parties to consider the option best suited to
balancing the immediate cash flow needs of the business and desire to
accelerate the project development timeframe against the need to avoid
unnecessary dilution of the shareholders during a period of depressed equity
market prices. Options ranging from:
· project level debt or strategic equity which would provide
sufficient funding to accelerate the project development program over the
period of consideration, including the Wilton LHM refinery train 1 FEED study
alongside development of the Port Hedland LSM refinery and TVG graphite
projects, as well as general working capital requirements;
· market equity placings to secure working capital funding needs
whilst project development funding opportunities continue to be assessed;
· convertible lending facilities which may act as a hybrid of
working capital and project development funding, allowing progression of
project development at a less accelerated rate that would be the case under a
more substantial project lending facility;
· any combination of the above.
The Board remains in detailed discussions on the above funding opportunities
and anticipates concluding this process in the near term.
The Directors are therefore reasonably confident that the necessary funding
will be secured, as and when required, by executing on one of the above
options under consideration, such that the Directors have a reasonable
expectation that the Group will continue in operational existence for the next
12 months. However as successful execution of one of the above fundraising
options cannot be assured, a material uncertainty exists which may cast
significant doubt on the ability of the company and group to continue as a
going concern and realise its assets and discharge its liabilities in the
normal course of business.
Accordingly, the Directors believe that as at the date of this report it is
appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Disclosure of information to Auditor
The Directors confirm that:
· So far as each Director is aware, 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
as Directors in order to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
A resolution proposing the re-appointment of Crowe U.K. LLP as auditor will be
put to shareholders at the Annual General Meeting.
This Directors' Report has been approved by the Board and signed on its behalf
by:
Paul Atherley
Non-Executive Chairman
30 May 2024
Directors' Remuneration Report
Until the Lease is entered into and the Company completes its transition to an
operating company, the Company will not have a separate remuneration
committee. The Board will instead periodically review the quantum of
Directors' fees, taking into account the interests of shareholders and the
performance of the Company and the Directors.
The Directors who held office at 31 January 2024 are summarised as follows:
Name of Director Position
P Atherley Non-Executive Chairman
S Quinn Non-Executive Director
H Pein Non-Executive Director
V Jeckell Non-Executive Director
Directors' Letters of appointment
Letter of Appointment - Paul Atherley
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Mr Atherley, Mr Atherley is engaged as Chairman with fees of
£24,000 per annum. The appointment can be terminated by either party on three
months written notice.
Letter of Appointment - Sam Quinn
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Sam Quinn, Mr Quinn is engaged as a Non-Executive Director with
fees of £18,000 per annum. In addition Sam Quinn will be remunerated for
additional work performed for the Company which is outside the scope of his
service agreements, including consultancy and management services, at a rate
of £1,000 per day subject to a maximum of 3 days per calendar month. The
appointment can be terminated by either party on three months written notice.
Letter of Appointment - Helen Pein
Pursuant to a letter of appointment dated 21 September 2021 between the
Company and Helen Pein, Helen is engaged as a Non-Executive Director with fees
of £18,000 per annum. In addition Helen Pein will be remunerated for
additional work performed for the Company which is outside the scope of her
service agreements, including project due diligence, consultancy and
management services at a rate of £1,000 per day subject to a maximum of 3
days per calendar month. The appointment can be terminated by either party on
three months written notice.
Letter of Appointment - Vikki Jeckell
Pursuant to a letter of appointment dated 20 November 2023 between the Company
and Vikki Jeckell, Vikki is engaged as a Non-Executive Director with fees of
£18,000 per annum. The appointment can be terminated by either party on three
months written notice.
Pursuant to a consultancy agreement dated 21 September 2021 between the
Company and Selection Capital Investments Limited, Paul Atherley is engaged as
Key Personnel (as defined under the consultancy agreement) contracted to
provide services to the Company in consideration of payment of £7,000 per
month.
Pursuant to a consultancy agreement dated 1 October 2021 between the Company
and Lionshead Consultants Limited ("Lionshead"), a company of which Sam Quinn
is a director and sole shareholder, Lionshead is contracted to provide
services to the Company in consideration of payment of £5,000 per month.
Pursuant to a consultancy agreement dated 22 September 2022 between Tees
Valley Lithium Limited and Supply Tactics Limited ("Supply Tactics"), a
company of which Vikki Jeckell is a director and 50% shareholder, Supply
Tactics is contracted to provide services to TVL in consideration of payment
of £20,000 per month.
Terms of appointment
The services of the Directors are provided under the terms of letters of
appointments, as follows:
Director Year of appointment Number of periods completed Date of current engagement letter
P Atherley 2021 3 21 September 2021
S Quinn 2021 3 21 September 2021
H Pein 2021 3 21 September 2021
V Jeckell 2023 1 20 November 2023
Consideration of shareholder views
The Board considers shareholder feedback received. This feedback, plus any
additional feedback received from time to time, is considered as part of the
Group's annual policy on remuneration.
Policy for salary reviews
The Group may from time to time seek to review salary levels of Directors,
taking into account performance, time spent in the role and market data for
the relevant role. It is intended that there will be a salary review during
the next year as the Company transitions to an operating company.
Policy for new appointments
It is not intended that there will be any new appointments to the Board in the
near term. It is intended that a full review of the Board will take place on
an annual basis following the Company's full transition to an operating
Company following the entering into of the Lease.
Directors' emoluments and compensation (audited)
Remuneration attributed to the Directors' during the year ended 31 January
2024 was as follows (all figures are stated in GBP):
Year Ended 31 January 2024:
Director Directors fees Salary/Consulting fees Total remuneration
P Atherley 31 Jan 2024 59,765 84,000 143,765
S Quinn 31 Jan 2024 44,824 60,000 104,824
H Pein 31 Jan 2024 18,000 - 18,000
V Jeckell 31 Jan 2024 6,000 40,000 46,000
Total 31 Jan 2024 128,589 184,000 312,589
Year Ended 31 January 2023:
Director Directors fees Salary/Consulting fees Total remuneration
P Atherley 31 Jan 2023 24,000 69,000 93,000
S Quinn 31 Jan 2023 18,000 48,600 66,600
H Pein 31 Jan 2023 18,000 - 18,000
Total 31 Jan 2023 60,000 117,600 177,600
Director incentives
In the year ended 31 January 2024, 325,000 options were granted to Directors
(2023: 390,000). As at 31 January 2024, 715,000 (2023: 390,000) options issued
to Directors were outstanding.
Directors' Remuneration Policy
Pursuant to the Directors' letters of appointment, as described above, the
Directors receive fees, all payable monthly in arrears. There is currently a
long-term incentive plan in operation for the Directors by way of share
incentive options.
Based on the foregoing, the remuneration policy of the Group can be summarised
as follows:
How the element supports our strategic objectives Operation of the element Maximum potential payout and payment at threshold Performance measures used, weighting and time period applicable
Base Pay
Recognises the role and the responsibility for the delivery of strategy and Paid in 12 monthly instalments Contractual sum None
results
Pensions
None n/a n/a n/a
Short term incentives
None n/a n/a n/a
Long term incentives
Aligns directors and shareholders in share price and project development Share options issued TBC 1/3 of the option vest immediately; 1/3 of the options vest following the
completion of the fund raising to fund construction of the first 24,000 tpa
capacity at TVL's Lithium Hydroxide project at Wilton International; and 1/3
of the options vest following commissioning of the first 24,000 tpa capacity
at the project.
A remuneration committee is expected to be appointed once the Lease is entered
into, to consider an appropriate level of Directors' remuneration.
Although there is no formal Director shareholding policy in place, the Board
believe that share ownership by Directors strengthens the link between their
personal interests and those of shareholders.
No views were expressed by shareholders during the year on the remuneration
policy of the Group.
Other matters
The Group does not currently have any short-term incentive schemes in place
for any of the Directors.
The Group does not have any pension plans for any of the Directors and does
not pay pension amounts in relation to their remuneration.
This Directors' Remuneration Report has been approved by the Board and signed
on its behalf by:
Paul Atherley
Non-Executive Chairman
30 May 2024
Risk Management Report
The Group has undertaken an evaluation of the risks it is exposed to which are
summarised as follows:
There is no assurance that the Group will determine that the Project is
economically viable and the Lease may not be entered into
The success of the Group's business strategy is dependent on its ability to
identify sufficient suitable acquisition opportunities. Whist the Group
believes that the Project presents a good opportunity, it is still in the
process of evaluating such opportunity. If the Group fails to complete the
development of the Project or enter into the Lease it may be left with
substantial unrecovered transaction costs, potentially including fees, legal
costs, accounting costs, due diligence or other expenses. Furthermore, even if
an agreement is reached relating to the Project, the Group may fail to
complete the Project for reasons beyond its control. Any such event will
result in a loss to the Group of the related costs incurred, which could
materially adversely affect subsequent attempts to identify and acquire
another target business.
Development and production activities are capital intensive and inherently
uncertain in their outcome and the Group may not make a return on its
investments, recover its costs or generate cash flows
The construction of industrial facilities are capital intensive. In addition,
environmental damage could greatly increase the cost of operations, and
various operating conditions may adversely and materially affect the levels of
production. These conditions include delays in obtaining governmental
approvals or consents, insufficient storage or transportation capacity or a
change in demand for the product. While diligent supervision and effective
maintenance operations can contribute to maximising production rates over
time, production delays and declines from normal operations cannot be
eliminated and may adversely and materially affect the revenues, cash flow,
business, results of operations and financial resources and condition of the
Company and its subsidiary undertakings from time to time (the "Group").
Currently the Group has insufficient capital to meet the funding requirements
for the development of the Project
As the Group is still evaluating the Project, it is still considering the
associated costs with the development of the Project and the amount of
additional capital that may be required.
The Group will need to raise additional funding in the near term to meet its
working capital requirements for the next twelve months. In addition to
working capital needs, the Group is of the opinion that if it decides to
proceed with the Project, the Group does not have sufficient capital in order
to complete the construction of the Project and hence will be required to
raise additional funds in support of project development expenditure
requirements.
Based on a high-level preliminary review of expected costs the Directors
anticipate that a total of approximately £250 - 300 million (excluding
financing costs) of additional equity and / or debt financing will be required
and subject to the outcome of the feasibility and engineering studies the
Group's confirmation to proceed with the Project to fund the evaluation,
development and construction of the Project. The Group intends to raise the
development costs of the Project by:
(a) Debt finance - Any debt finance in respect of the Group for the purposes
of developing and completing the Project, is likely to be subject to customary
conditions precedent. As of the date of this document, the Group has not yet
begun the formal process of seeking third party debt financing in respect of
the Project, however the Group expects to carry out this process immediately
following completion of the feasibility studies and the Group's confirmation
to proceed with the Project.
(b) Equity finance - In relation to any equity financing, the Group expects
to engage advisers to assist the Group with its equity funding requirements.
The Group has not yet begun the formal process of seeking formal engagement
with advisers for equity financing in respect of the Project, however the
Group expects to carry out this process in due course following completion of
the feasibility and engineering studies.
Based on the Group's informal discussions with potential debt and equity
providers to date, the Directors are confident that within the period of
twelve months following the date of this document the Group will be able to
secure all the necessary finance required to develop and complete the Project.
The failure to secure additional financing or to secure such additional
financing on terms acceptable to the Group could have a material adverse
effect on the continued development or growth of the acquired business,
prospects, and the financial condition and results and operations of the Group
and could, ultimately lead to the insolvency of the Company or Group.
The price of lithium hydroxide is affected by factors beyond the Group's
control
If the Group proceeds with the Project, and the market price of lithium
hydroxide decreases significantly for an extended period of time, the ability
for the Group to attract finance and ultimately generate profits could be
adversely affected. Numerous external factors and industry factors that are
beyond the control of the Group that affect the price of lithium hydroxide
include:
· industrial demand;
· levels of production;
· rapid short term changes in supply and demand because of
speculative or hedging activities; and
· global or regional political or economic events.
The price at which the Group can sell any lithium hydroxide it may produce in
the future will therefore be relevant to the future revenues that can be
generated by the Group and its ability to finance the Company going forward
and any adverse effects on such price could have a material adverse effect on
the Group's business, financial performance, results of operations and
prospects.
The Group may be unable to hire or retain personnel required to support the
Group going forward
The Group's ability to compete depends upon its ability to retain and attract
highly qualified management and technical personnel. Following completion of
the Project, the Group will evaluate the personnel of the acquired business
and may determine that it requires increased support to operate and manage the
acquired business in accordance with the Group's overall business strategy.
There can be no assurance that existing personnel of the acquired business
will be adequate or qualified to carry out the Group's strategy, or that the
Group will be able to hire or retain experienced, qualified employees to carry
out the Group's strategy.
During the development of the Project, the Group may be unable to acquire or
renew necessary concessions, licenses, permits and other authorisations
The Project will require certain concessions, licences, permits and other
authorisations to carry out its operations. Any delay in obtaining or renewing
a license, permit or other authorisation may result in a delay in investment
or development of a resource and may have a materially adverse effect on the
acquired business' results of operations, cash flows and financial condition.
In addition, any concessions, licences, permits and other authorisations of
the Project may be suspended, terminated or revoked if it fails to comply with
the relevant requirements.
Failure to obtain (and shortages and disruptions in lead times to deliver)
certain key inputs may adversely affect the Group's operations during the
development of the Project
During the development of the Project, the Group's inability to timely acquire
feedstock, strategic consumables, raw materials, and processing equipment
could have an adverse impact on any results of operations and financial
condition. Periods of high demand for supplies can arise when availability of
supplies is limited. This can cause costs to increase above normal inflation
rates. Interruption to supplies or increase in costs could adversely affect
the operating results and cash flows of the Group during the development of
the Project.
This Risk Management Report has been approved by the Board and signed on its
behalf by:
Paul Atherley
Non-Executive Chairman
30 May 2024
Corporate Governance Statement
The Group observes the requirements of the Quoted Company Alliance corporate
governance code (the "QCA Code") and is in compliance with the QCA Code, save
as set out below:
1. Given the composition of the Board, certain provisions of the QCA Code
are considered by the Board to be inapplicable to the Company. Specifically,
the Company does not consider it necessary to have a senior independent
Director and the Board will, at the outset, consist of three non-executive
Directors and one non-executive chairman.
2. The QCA Code also recommends the submission of Directors for re-election
at annual intervals. The Company Articles of Association require all
directors to retire by rotation and seek reappointment by the shareholders at
a general meeting every two years.
In the future, the Directors may seek to transfer from a Standard Listing to
either a Premium Listing or other appropriate stock market (although there can
be no guarantee that the Group will fulfil the relevant eligibility criteria
at the time and that a transfer to a Premium Listing or other appropriate
stock market will be achieved). However, in addition to or in lieu of a
Premium Listing, the Group may determine to seek a listing on another stock
exchange. Following such a Premium Listing, the Group would comply with the
continuing obligations contained within the Listing Rules and the Disclosure
and Transparency Rules in the same manner as any other group with a Premium
Listing.
The Group does not have nomination, remuneration, audit or risk committees.
The Board as a whole will instead review its size, structure and composition,
the scale and structure of the Directors' fees (taking into account the
interests of shareholders and the performance of the Group), take
responsibility for the appointment of auditors and payment of their audit fee,
monitor and review the integrity of the Group's financial statements and take
responsibility for any formal announcements on the Group's financial
performance. Following entry into the Lease, the Board intends to put in place
nomination, remuneration, audit and risk committees.
The Board has a share dealing code that complies with the requirements of the
Market Abuse Regulations. All persons discharging management responsibilities
(comprising only the Directors) comply with the share dealing code.
Carbon emissions
The Group currently has no trade, and two employees other than the Directors
and has no office. Therefore, the Group has minimal carbon emissions and it is
not practical to obtain emissions data at this stage.
Board of Directors
The Group has a Board it believes is well suited for the purposes of
implementing its business strategy, combining skill sets for the assessment of
investment and acquisition of royalties and streams in the mining sector.
The Directors are responsible for carrying out the Group's objectives,
implementing its business strategy and conducting its overall supervision.
Acquisition, divestment and other strategic decisions will all be considered
and determined by the Board.
The Board will provide leadership within a framework of prudent and effective
controls. The Board will establish the corporate governance values of the
Group and will have overall responsibility for setting the Group's strategic
aims, defining the business plan and strategy and managing the financial and
operational resources of the Group.
The Board aims to hold meetings on a quarterly basis and is regularly in
contact to discuss prospective acquisition opportunities.
The Articles of the Company contain express provisions relating to conflicts
of interest in line with the Companies Act 2006.
Shareholder communications
The Group uses its corporate website (www.alkemycapital.co.uk) to ensure that
the latest announcements, press releases and published financial information
are available to all shareholders and other interested parties.
The AGM is used to communicate with both institutional shareholders and
private investors and all shareholders are encouraged to participate. Separate
resolutions are proposed on each issue so that they can be given proper
consideration and there is a resolution to approve the Annual Report and
Accounts. Notice of the AGM is sent to shareholders at least 21 days before
the meeting and the results are announced to the London Stock Exchange and are
published on the Company's website.
Paul Atherley
Non-Executive Chairman
30 May 2024
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with UK Adopted International Accounting
Standards ("IAS"). Under company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and of the profit or loss for that
period.
In preparing these financial statements, the Directors are required to:
1. select suitable accounting policies and then apply them
consistently;
2. make judgements and accounting estimates that are
reasonable and prudent;
3. state whether applicable IASs as adopted by the United
Kingdom have been followed, subject to any material departures disclosed and
explained in the financial statements; and
4. prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and 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 and enable
them to ensure that the Financial Statements and the Directors Remuneration
Report comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and Group,, and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
They are also responsible to make a statement that they consider that the
Annual Report and Financial Statements, taken as a whole, is fair, balanced,
and understandable and provides the information necessary for the shareholders
to assess the Group's position and performance, business model and strategy.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom. governing the preparation and dissemination
of the Financial Statements may differ from legislation in other
jurisdictions.
Directors' responsibility statement pursuant to disclosure and Transparency
Rule
Each of the Directors, whose names and functions are listed within the Board
of Directors confirm that, to the best of their knowledge:
1. the financial statements are prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the United
Kingdom, give a true and fair view of the assets, liabilities, financial
position and loss of the Company and Group; and
2. the Annual Report and financial statements, including the
Strategic Report, includes a fair review of the development and performance of
the business and the position of the Company and Group, together with a
description of the principal risks and uncertainties that they face.
Approved by the Board on 30 May 2024
Paul Atherley
Non-Executive Chairman
Independent auditor's report to the members of Alkemy Capital Investments Plc
Opinion
We have audited the financial statements of Alkemy Capital Investments Plc
(the "company") and its subsidiaries (the 'group') for the year ended 31
January 2024 which comprise consolidated statement of comprehensive income,
consolidated and company statement of financial position, consolidated and
company statement of changes in equity, consolidated and company statement of
cash flows, and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied
in the preparation of the group financial statements 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 and of the company's affairs as at 31 January 2024 and of the
Group's loss for the year then ended;
· the financial statements have been properly prepared in
accordance with UK-adopted international accounting standards; and
· the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006.
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 and the company 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 public interest 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 the section headed Going Concern at note 2 of the
financial statements, which details factors the Group has considered when
assessing the going concern position. As detailed in note 2 the uncertainty
surrounding the availability of funds to finance the commercial development of
the group's projects indicates the existence of a material uncertainty that
may cast significant doubt on the Group's ability to continue as a going
concern realise its assets and discharge its liabilities in the normal course
of business. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
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 entity's ability to continue to adopt the going concern
basis of accounting included:
· Discussions with management in relation to the future plans of
the Group and Company.
· Reviewing activity after the year end to the date of signing the
financial statements.
· Reviewing the directors' going concern assessment including the
worst-case scenario cash flow forecast that covers at least 12 months from the
date we expect to sign the audit report.
· Assessing the cash flow requirements of the Group and Company
based on forecast capital and administrative expenditure for 12 months after
the date of signing.
· Understanding what forecast expenditure is committed and what
could be considered discretionary.
· Considering the liquidity of existing assets of the statement of
financial position.
· Considering the options available to management for further
fundraising, or additional sources of finance.
· Considering potential downside scenarios and the resultant impact
on funding requirements and the Company and Group's ability to raise such
funds.
· Considered the likelihood of receipt of fundraising.
· Evaluating the reliability of the data underpinning the forecast
cash flows.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be £100,000 (2023: £125,000), based on 5%
of loss before taxation. Materiality for the parent company financial
statements as a whole was set at £46,000 (2023: £28,000) based on
approximately 5% of loss before taxation. We consider this basis of
determining materiality to be appropriate for a holding entity of this nature.
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 70% of materiality for the
financial statements as a whole, which equates to £70,000 (2023: £87,500)
for the group and £32,200 (2023: £35,000) for the parent.
Where considered appropriate performance materiality may be reduced to a lower
level, such as, for related party transactions and directors' remuneration.
We agreed with the Board to report to it all identified errors in excess of
£5,000 (2023: £6,250). Errors below that threshold would also be reported to
it if, in our opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the group and its
environment, including the group's system of internal control, and assessing
the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including
assessing whether there was evidence of bias by the directors that may have
represented a risk of material misstatement.
We identified two significant components, being the parent company and its
principal operating subsidiary, Tees Valley Lithium Limited. The base of
operations is in the United Kingdom, which is where the head office is. Our
group audit strategy focused on the significant components which were subject
to a full scope audit.
The group is accounted for from one central location, the United Kingdom. The
audit of the group was performed by Crowe in the UK. The consolidation was
also subject to a full scope audit performed by the Group audit team.
The remaining components of the group were considered non-significant. All
balances material to the group were audited and the remaining balances subject
to analytical procedures by the Crowe audit team.
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 the key audit matter
Capitalisation of intangible assets
The group continues to invest in the planned construction of LHM refinery in We reviewed the accounting policies adopted by management in relation to the
Wilton International Chemicals Park, Teeside. intangible assets and whether they are consistent with IFRS and meet the
criteria as set out in IAS38, para 31.
Determining whether the cost of development meets capitalisation criteria
requires significant judgement based on the requirements of IAS 38 Intangible We obtained an understanding of the design and implementation of systems and
Assets. controls relevant to impairment assessments of intangibles.
We therefore consider the inappropriate capitalisation of development costs to We tested a sample of capitalised invoices to ensure that these were capital
be a key audit matter. Refer to notes 2 and 10. in nature and related to the underlying asset.
Based on our work performed, we concluded that the carrying value of the
intangible assets is reasonable after proposed audit adjustments.
Our audit procedures in relation to these matters were designed in the context
of our audit opinion as a whole. They were not designed to enable us to
express an opinion on this matter individually and we express no such opinion.
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 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion based on the work undertaken in the course of our audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the directors' report and strategic report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the group and
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the group and company financial statements and the part of the
directors' remuneration report to be audited are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of the directors for the financial statements
As explained more fully in the directors' responsibilities statement set out
on page 23, 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 and the parent company'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 the parent company 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 legal and regulatory frameworks that are
applicable to the Group and company and the procedures in place for ensuring
compliance in the jurisdiction where the Group and company operate, focusing
on those laws and regulations that have a direct effect on the determination
of material amounts and disclosures in the financial statements. The laws and
regulations we considered in this context were the Companies Act 2006 and
relevant taxation legislation.
We assessed the nature of the group's business, the control environment and
performance to date when evaluating the incentives and opportunities to commit
fraud.
We identified the greatest risk of material impact on the financial statements
from irregularities, including fraud, to be the override of controls by
management to manipulate financial reporting and misappropriate funds. Our
procedures to address the risk of management override included:
· enquiries of management about their own identification and
assessment of the risks of irregularities;
· review of the system for the generation, authorisation and
posting of journal entries;
· obtaining supporting evidence for a risk-based sample of
journals, derived using a data analytics tool;
· audit of significant transactions outside the normal course of
business, or those that appear unusual;
· considering audit adjustments identified from our audit work for
evidence of bias in reporting;
· considering significant estimates and judgements made by
management for evidence of bias, and performing retrospective reviews where
applicable;
· reviewing the other information presented in the annual report
for fair representation and consistency with the audited financial statements
and the information available to us as the auditors.
· Review of minutes of board and committee meetings throughout the
period and enquiries of management as to their identification of any
non-compliance with laws or regulations, or any or potential claims of fraud;
Owing to the inherent limitations of an audit, there is an unavoidable risk
that some material misstatements of the financial statements may not be
detected, even though the audit is properly planned and performed in
accordance with the ISAs (UK). The potential effects of inherent limitations
are particularly significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully organized schemes
designed to conceal it, including deliberate failure to record transactions,
collusion or intentional misrepresentations being made to us.
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. This description forms part of our
auditor's report.
Other matters which we are required to address
We were appointed by Board on 27 March 2022 to audit the financial statements
for the period ending 31 January 2022. Our total uninterrupted period of
engagement is three years, covering the periods ending 31 January 2022 to 31
January 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the company and we remain independent of the group's
and the company in conducting our audit.
Our audit opinion is consistent with the additional report to the Board.
Use of our report
This report is made solely to the Group's and company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the group's and 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 group and company and
the group's and company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Matthew Stallabrass
Senior Statutory Auditor
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
30 May 2024
Consolidated Statement of Comprehensive Income
for the year to 31 January 2024
Notes Year to 31 January 2024 Year to 31
January
2023
£ £
Continuing operations
Other income 1,247 -
Administrative expenses 4 (1,454,195) (1,298,002)
Project Development expenses 4 (634,288) (1,298,011)
Business Development costs (1,852) (12,866)
Finance costs (1,697) (1,536)
Foreign exchange gains (losses) (5,215) (34,344)
Loss before taxation (2,096,000) (2,644,759)
Taxation 7 325,018 -
Loss after taxation (1,770,982) (2,644,759)
Other Comprehensive Income
Foreign exchange differences on translation of overseas subsidiaries
(2,306) (2,645)
Total Comprehensive loss for the year (1,773,288) (2,647,404)
Earnings per share:
Basic and diluted earnings per share (pence) 8 (23.43p) (40.24p)
The notes on pages 38 to 55 are an integral part of these financial
statements.
Consolidated Statement of Financial Position
As at 31 January 2024
Notes 31 January 31 January
2024 2023
£ £
Non Current Assets
Intangibles - Project development costs 10 317,089 298,813
Total Non Current Assets 317,089 298,813
Current assets
Trade and other receivables 12 126,303 212,125
Cash and cash equivalents 13 45,458 12,356
Total Current Assets 171,761 224,481
Total Assets 488,850 523,294
Equity
Share Capital 15 176,297 144,000
Share Premium 15 4,261,626 2,413,243
Share Based Payments 15 259,771 63,221
Foreign Exchange Reserve (4,951) (2,645)
Retained Earnings (5,213,391) (3,442,409)
Total Equity (520,648) (824,590)
Current Liabilities
Trade and other payables 14 907,209 1,021,595
Short Term Borrowings 17 102,289 326,289
Current and Total Liabilities 1,009,498 1,347,884
Total Equity and Liabilities 488,850 523,294
The notes on pages 38 to 55 are an integral part of these financial
statements.
The financial statements were approved and authorised for issue by the Board
on 30 May 2024.
Paul Atherley
Director
Alkemy Capital Investments plc
Consolidated Statement of Changes in Equity
For the year ended 31 January 2024
Share capital Share Premium Share Based Payments Foreign Exchange Reserve Retained Earnings Total
£ £ £ £
£ £
As at 1 February 2022 120,000 1,279,094 - - (797,650) 601,444
Loss for the year - - - - (2,644,759) (2,644,759)
Foreign exchange losses on translation of overseas subsidiaries - - - (2,645)
- (2,645)
Total Comprehensive income - - (2,644,759) (2,647,404)
- (2,645)
Transactions with owners:
Issue of shares 24,000 1,134,149 - - - 1,158 149
Issue of options - - 63,221 - - 63,221
Total transactions with owners 24,000 1,134,149 - 1,221,370
63,221 -
Balance at 31 January 2023 144,000 2,413,243 (3,442,409) (824,590)
63,221 (2,645)
Share capital Share Premium Share Based Payments Foreign Exchange Reserve Retained Earnings Total
£ £ £ £
£ £
As at 1 February 2023 144,000 2,413,243 (3,442,409) (824,590)
63,221 (2,645)
Loss for the year - - - - (1,770,982) (1,770,982)
Foreign exchange losses on translation of overseas subsidiaries - - - (2,306)
- (2,306)
Total Comprehensive income - - (1,770,982) (1,773,288)
- (2,306)
Transactions with owners:
Issue of shares 32,297 1,848,383 - - - 1,880,680
Issue of options - - 182,150 - - 182,150
Issue of warrants - - 14,400 - - 14,400
Total transactions with owners 32,297 1,848,383 - 2,077,230
196,550 -
Balance at 31 January 2024 176,297 4,261,626 259,771 (4,951) (5,213,391) (520,648)
The notes on pages 38 to 55 are an integral part of these financial
statements.
Consolidated Statement of Cash Flows
for the year ended 31 January 2024
Notes Year to 31 January 2024 Year to 31
January
2023
£ £
Cash flows from Operating Activities
Loss for the year before tax (1,770,982) (2,644,759)
Share based payments 196,550 63,221
Expenditure met directly by funding provider * - 136,289
Decrease/(Increase) in receivables 12 85,822 (212,052)
(Decrease)/Increase in payables 14 (132,662) 339,705
Net cash outflow from operating activities (1,621,272) (2,317,596)
Cashflows from Investing Activities
Payments for intangible assets 10 - (51,475)
Net cash outflow from investing activities - (51,475)
Cash flows from financing activities
Proceeds of borrowing - 190,000
Repayment of borrowings (224,000) -
Issue of shares (net of share issue expenses) 15 1,880,680 1,080,149
Net cash inflow from financing activities 1,656,680 1,270,149
Net increase/(decrease) in cash and cash equivalents during the year
35,408 (1,098,922)
Cash at the beginning of year 12,356 1,113,923
Effect of foreign exchange on currency holdings (2,306) (2,645)
Cash and cash equivalents at the end of the year 13
45,458 12,356
* During the prior year, expenditure totalling £330,000 (2023: £136,289) was
settled directly by Paul Atherley on behalf of the company against the loan
provided by him. As such these amounts represent a material non cash
transaction.
The notes on pages 38 to 55 are an integral part of these financial
statements.
Company Statement of Financial Position
As at 31 January 2024
Notes 31 January 31 January
2024 2023
£ £
Non Current Assets
Investments in and loans to subsidiaries 11 2,943,953 1,878,904
Total Non Current Assets 2,943,953 1,878,904
Current assets
Trade and other receivables 12 73,710 83,158
Cash and cash equivalents 13 27,961 5,356
Total Current Assets 101,671 88,514
Total Assets 3,045,624 1,967,418
Equity
Share Capital 15 176,297 144,000
Share Premium 15 4,261,626 2,413,243
Share Based Payments 15 259,771 63,221
Retained Earnings (2,263,777) (1,372,013)
Total Equity 2,433,917 1,248,451
Current Liabilities
Trade and other payables 14 509,418 392,678
Short Term Borrowings 102,289 326,289
Current and Total Liabilities 611,707 718,967
Total Equity and Liabilities 3,045,624 1,967,418
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented
its own Statement of Comprehensive Income. The Company's loss for the
financial year was £891,764 (2023: loss of £574,363).
The notes on pages 38 to 55 are an integral part of these financial
statements.
The financial statements were approved and authorised for issue by the Board
on 30 May 2024.
Paul Atherley
Director
Alkemy Capital Investments plc
Company Statement of Changes in Equity
For the year ended 31 January 2024
Share capital Share Premium Share Based Payments Retained Earnings Total
£ £ £ £
£
As at 1 February 2022 120,000 1,279,094 - (797,650) 601,444
Loss for the year - - - (574,363) (574,363)
Total Comprehensive income - - (574,363) (574,363)
-
Transactions with owners:
Issue of shares 24,000 1,134,149 - - 1,158 149
Issue of options - - 63,221 - 63,221
Total transactions with owners 24,000 1,134,149 - 1,221,370
63,221
Balance at 31 January 2023 144,000 2,413,243 (1,372,013) 1,248,451
63,221
Share capital Share Premium Share Based Payments Retained Earnings Total
£ £ £ £
£
As at 1 February 2023 144,000 2,413,243 (1,372,013) 1,248,451
63,221
Loss for the year - - - (891,764) (891,764)
Total Comprehensive income - - (891,764) (891,764)
-
Transactions with owners:
Issue of shares 32,297 1,848,383 - - 1,880,680
Issue of options - - 182,150 - 182,150
Issue of warrants - - 14,400 - 14,400
Total transactions with owners 32,297 1,848,383 - 2,077,230
196,550
Balance at 31 January 2024 176,297 4,261,626 (2,263,777) 2,433,917
259,771
The notes on pages 38 to 55 are an integral part of these financial
statements.
Company Statement of Cash Flows
for the year ended 31 January 2024
Notes Year to 31 January 2024 Year to31
January
2023
£ £
Cash flows from Operating Activities
Loss for the year before tax (891,764) (574,363)
Expenditure met directly by funding provider * - 136,289
Share based payments 196,550 63,221
Decrease/(Increase) in receivables 12 9,448 (83,085)
Increase/(Decrease) in payables 14 116,740 (41,874)
Net cash outflow from operating activities (569,026) (499,812)
Cashflows from Investing Activities
Investments in subsidiaries 11 (2) (2)
Loans provided to subsidiaries 11 (1,065,047) (1,878,902)
Net cash outflow from investing activities (1,065,049) (1,878,904)
Cash flows from financing activities
Proceeds of borrowing - 190,000
Repayment of borrowings (224,000) -
Issue of shares (net of share issue expenses) 15 1,880,680 1,080,149
Net cash inflow from financing activities 1,656,680 1,270,149
Net increase/(decrease) in cash and cash equivalents during the year
22,605 (1,108,567)
Cash at the beginning of year 5,356 1,113,923
Cash and cash equivalents at the end of the year 13
27,961 5,356
* During the prior year, expenditure totalling £330,000 (2023: £136,289) was
settled directly by Paul Atherley on behalf of the company against the loan
provided by him. As such these amounts represent a material non cash
transaction.
The notes on pages 38 to 55 are an integral part of these financial
statements.
Notes to the Financial Statements
1. GENERAL INFORMATION
Alkemy Capital Investments Plc is a company incorporated and domiciled in the
United Kingdom. The Company is a public limited company, which is listed on
the London Stock Exchange. The address of the registered office is 167-169
Great Portland Street, Fifth Floor, London, England W1W 5PF.
The Company was initially formed to undertake an acquisition of a controlling
interest in a company or business in the battery metals sector with the
objective of operating the acquired business and implementing an operating
strategy to generate value for its shareholders through operational
improvements as well as potentially through additional complementary
acquisitions following the Acquisition.
On 25 February 2022, the Company announced that it had formed a subsidiary
called Tees Valley Lithium Limited ("TVL") that would aim to develop the UK's
first Lithium Hydroxide processing facility. This transaction and change of
strategy constituted a reverse takeover transaction under the listing rules of
the London Stock Exchange and resulted in Alkemy becoming an operating
company.
On 2 May 2022 the Company formed a subsidiary in Australia called Alkemy
Capital Services Pty Ltd to act as a project services company for operations
in Australia.
On 22 September 2022 the Company formed a subsidiary in Australia called Port
Headland Lithium Pty Ltd to act as a project holding company for spodumene
enrichment operations in Australia.
Group Subsidiaries as at 31 January 2024:
Subsidiary Name Date of Incorporation Percentage Interest Registered office address Country of Incorporation
Tees Valley Lithium Ltd 25 February 2022 100% 167-169 Great Portland Street, London W1W 5PF United Kingdom
Alkemy Capital Services Pty Ltd 4 May 2022 100% Level 4, 46 Colin Street, West Perth WA 6005, Australia Australia
Port Headland Lithium Pty Ltd 22 September 2022 100% Level 4, 46 Colin Street, West Perth WA 6005, Australia Australia
Tees Valley Graphite Limited 20 November 2023 100% 167-169 Great Portland Street, London W1W 5PF United Kingdom
The financial statements which cover the year to 31 January 2024 are presented
in British Pounds Sterling, the currency of the primary economic environment
in which the Company operates. The comparative financial statements cover
the year to 31 January 2023.
2. SUMMARY OF MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of these financial
statements are set out below. The policies have been consistently applied
throughout the year, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards ("IAS" or "IFRS"), which has been adopted
by both the Company and the Group.
The financial statements are presented in pounds sterling ("£") which is also
the functional currency of the Company.
Going Concern
As part of their assessment of going concern, the Directors have prepared cash
forecasts to determine the funding requirements of the business over the 18
months from the reporting date. Cash requirements over this period have been
projected in the range of a £2m minimum (decelerated project development
case) to £9m maximum (accelerated project development case) depending on the
level of technical project development work being undertaken, as determined by
funding availability.
As at the date of this report, the Directors are considering a variety of
funding options from numerous parties to consider the option best suited to
balancing the immediate cash flow needs of the business and desire to
accelerate the project development timeframe against the need to avoid
unnecessary dilution of the shareholders during a period of depressed equity
market prices. Options ranging from:
· project level debt or strategic equity which would provide
sufficient funding to accelerate the project development program over the
period of consideration, including the Wilton LHM refinery train 1 FEED study
alongside development of the Port Hedland LSM refinery and TVG graphite
projects, as well as general working capital requirements;
· market equity placings to secure working capital funding needs
whilst project development funding opportunities continue to be assessed;
· convertible lending facilities which may act as a hybrid of
working capital and project development funding, allowing progression of
project development at a less accelerated rate that would be the case under a
more substantial project lending facility;
· any combination of the above.
The Board remains in detailed discussions on the above funding opportunities
and anticipates concluding this process in the near term.
The Directors are therefore reasonably confident that the necessary funding
will be secured, as and when required, by executing on one of the above
options under consideration, such that the Directors have a reasonable
expectation that the Company will continue in operational existence for the
next 12 months. However as successful execution of one of the above
fundraising options cannot be assured, a material uncertainty exists which may
cast significant doubt on the ability of the company and group to continue as
a going concern and realise its assets and discharge its liabilities in the
normal course of business.
Accordingly, the Directors believe that as at the date of this report it is
appropriate to continue to adopt the going concern basis in preparing the
financial statements.
Statement of compliance
The financial statements comply with UK adopted International Accounting
Standards ("IAS").
1. The company has adopted all relevant IASs which were in effect from
incorporation when preparing these financial statements.
2. Standards and Interpretations which are effective in the current year
(Changes in accounting policies); None of the standards which became effective
during the year which are applicable to the Company have had a material
impact.
3. Adoption of new Standards and Interpretations to standards in future years;
The Directors anticipate that the adoption of new Standards and
Interpretations in future years will have no material impact on the financial
statements of the Company. The Company expects to adopt all relevant
Standards and Interpretations as and when they become effective.
Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial
Statements of the Company and entities controlled by the Company, its
subsidiaries, made up to 31 January each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the
financial and operating policies so as to obtain economic benefits from their
activities. Subsidiaries are consolidated from the date on which control is
obtained, the acquisition date, until the date that control ceases. They are
deconsolidated from the date on which control ceases.
Intra-group transactions, balances and unrealised gains and losses on
transactions between Group companies are eliminated on consolidation, except
to the extent that intra-group losses indicate an impairment.
Foreign Currencies
Both the functional and presentational currency of the Company is Sterling
(£). Each Group entity determines its own functional currency and items
included in the Financial Statements of each entity are measured using that
functional currency.
The functional currencies of the foreign subsidiaries are the Australian
Dollar ("AUD").
Transactions in currencies other than the functional currency of the relevant
entity are initially recorded at the exchange rate prevailing on the dates of
the transaction. At each reporting date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the exchange rate
prevailing at the reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date, when the fair value was determined. Gains and
losses arising on retranslation are included in profit or loss for the year,
except for exchange differences on non-monetary assets and liabilities, which
are recognised directly in other comprehensive income, when the changes in
fair value are recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group's overseas
operations are translated into the Group's presentational currency at exchange
rates prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the year unless exchange rates
have fluctuated significantly during the year, in which case, the exchange
rate at the date of the transaction is used. All exchange differences arising,
if any, are recognised as other comprehensive income and are transferred to
the Group's foreign currency translation reserve. On disposal of any such
overseas subsidiaries, cumulative foreign exchange losses or gains recognised
in equity via Other Comprehensive Income become realised and are recognised
through the profit and loss account on disposal.
Taxation
Current taxation is the taxation currently payable on taxable profit for the
year.
Current tax is calculated at the tax rates (and laws) that have been enacted
or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the
year when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity. Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the
same taxation authority and the Company intends to settle its current tax
assets and liabilities on a net basis.
Intangible assets - project development costs
Intangible assets comprise project development costs, incurred on the Group's
Wilton International Chemicals Park Lithium Hydroxide Monohydrate processing
facility in Teesside, UK. These costs include the cost of obtaining planning
permission for the development of the facility, design and planning costs and
all technical and administrative overheads directly associated with this
project. These costs are carried forward in the Statement of Financial
Position as non-current intangible assets less provision for identified
impairments. Costs associated with development activity will only be
capitalised if they meet the criteria as set out in IAS 38.
Upon any disposal, the difference between the fair value of consideration
receivable for development assets and the relevant cost within non-current
assets is recognised in the Income Statement.
Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit
balances at banks, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash within a period of 3
months at inception of the instrument/investment and which are subject to an
insignificant risk of changes in value.
Financial Assets held at amortised costs
The Group classifies its financial assets as held at amortised costs, and
consists of trade and other receivables and loans to subsidiaries (for Company
only financial statements).
These assets comprise the types of financial assets, where the objective is to
hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue and are subsequently carried at
amortised cost, using the effective interest rate method, less provision for
impairment. Impairment provisions for current and non-current trade
receivables are recognised, based on the simplified approach within IFRS 9,
using a provision matrix in the determination of the lifetime expected credit
losses. During this process, the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of
the expected loss arising from default to determine the lifetime expected
credit loss for the trade receivables. For the receivables, which are reported
net, such provisions are recorded in a separate provision account, with the
loss being recognised in the consolidated statement of comprehensive income.
On confirmation that the receivable will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to
related parties, are recognised based on a forward-looking expected credit
loss model. The methodology used to determine the amount of the provision is
based on whether there has been a significant increase in credit risk since
initial recognition of the financial asset. For those, where the credit risk
has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross interest income
are recognised. For those for which credit risk has increased significantly,
lifetime expected credit losses along with the gross interest income are
recognised. For those that are determined to be credit impaired, lifetime
expected credit losses along with interest income on a net basis are
recognised.
The Group's financial assets measured at amortised cost comprise trade and
other receivables and cash and cash equivalents in the Consolidated Statement
of Financial Position. Cash and cash equivalents include cash in hand,
deposits held at call with banks, other short term highly liquid investments
with original maturities of three months or less, and - for the purpose of the
statement of cash flows - bank overdrafts. Bank overdrafts are shown within
loans and borrowings in current liabilities on the Consolidated Statement of
Financial Position.
Financial liabilities
Financial liabilities are recognised in the statement of financial position
when the Group and Company becomes a party to the contractual provisions of
the instrument.
The Company's financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently
measured at amortised cost.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity
instruments issued by the Company are recorded at the proceeds received net of
direct issue costs.
Ordinary shares are classified as equity.
Share capital account represents the nominal value of the shares issued.
The share premium account represents premiums received on the initial issuing
of the share capital. Any transaction costs associated with the issuing of
shares are deducted from share premium, net of any related income tax
benefits.
Retained earnings include all current year results as disclosed in the
Statement of Comprehensive Income.
Share-Based Payments
Share Options
The Group operates equity-settled share-based payment arrangements, whereby
the fair value of services provided is determined indirectly by reference to
the fair value of the instrument granted.
The fair value of options granted to Directors and others, in respect of
services provided, is recognised as an expense in the Income Statement with a
corresponding increase in equity reserves - the share-based payment reserve.
The fair value is measured at grant date and charged over the vesting period
during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking
into account the terms and conditions upon which the options were granted. The
exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the
market price of the entity's equity instruments. They are not considered, when
estimating the fair value of a share-based payment. Where the vesting period
is linked to a non-market performance condition, the Group recognises the
goods and services it has acquired during the vesting period, based on the
best available estimate of the number of equity instruments expected to vest.
The estimate is reconsidered at each reporting date, based on factors such as
a shortened vesting period, and the cumulative expense is "trued up" for both
the change in the number expected to vest and any change in the expected
vesting period.
Market conditions are performance conditions that relate to the market price
of the entity's equity instruments. These conditions are included in the
estimate of the fair value of a share-based payment. They are not taken into
account for the purpose of estimating the number of equity instruments that
will vest. Where the vesting period is linked to a market performance
condition, the Group estimates the expected vesting period. If the actual
vesting period is shorter than estimated, the charge is to be accelerated in
the period that the entity delivers the cash or equity instruments to the
counterparty. When the vesting period is longer, the expense is recognised
over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share
options), fair value is measured on the basis of an observable market price.
Critical accounting judgments and estimations
The preparation of the financial statements in conformity with IFRS requires
the use of estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting year. Although
these estimates are based on management's best knowledge of the amounts,
events or actions, actual results ultimately may differ from these estimates.
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.
The Directors consider the areas of critical accounting judgements or
estimations in these financial statements to be the capitalisation of
development expenditure on the Wilton project, vesting periods for share
options and the application of the going concern principal.
On 24 November 2022 the Company received planning permission for the
construction of its planned LHM refinery in Wilton International Chemicals
Park, Teeside from the Redcar & Cleveland Borough Council. The Directors
have determined that this event triggers the eligibility for the
capitalisation of development expenditure. Under IAS 38 as the Company now has
the commercial and legal rights to construct and exploit the plant for future
economic benefit and, in the judgement of the Directors, the Group retains
adequate technical resources and future availability of necessary financial
resources necessary to complete the development of the project. As such, the
costs of obtaining planning permission and all development costs incurred post
receipt of planning permission are recognised as intangible assets in these
financial statements. In the event that future events give rise to
circumstances in which the Group no longer holds the commercial rights to
develop and explant this asset, no longer intends to develop this asset or, in
the opinion of the directors, the Group is no longer considered likely to have
access to the funding necessary to develop the asset in the future, a material
impairment of this asset would be recognised.
During the year the Company issued a number of share options with market based
vesting conditions, notably when the Company share price reaches a certain
threshold. In order to determine the fair value of options as required under
IFRS 2, the Directors have had to make judgements on when these vesting
conditions are likely to be met and the options consequently vest and become
exercisable. The judgements have been formed following analysis of previous
Company share price performance to specific events.
See above for further details on the Directors' assessment that the Company is
a going concern.
Impairment of Investments in and loans to Subsidiaries
The carrying amount of investments in and loans made to subsidiaries is tested
for impairment annually and this process is considered to be key judgement
along with determining whenever events or changes in circumstances indicate
that the carrying amounts for those assets may not be recoverable. When
assessing the recovery of these balances, the directors consider the
likelihood that the subsidiaries will be able to settle amounts owing, either
out of future cashflows or though the recovery of balances receivable or
divestment of assets. Where recovery of these balances is driven by
receivable balances within the subsidiary, assessment of the likelihood of
recovery and present value of future cash inflows is undertaken to ensure the
amounts support the subsidiary loan carrying values in full.
No impairment of inter-company loans were deemed necessary in the year.
3. BUSINESS AND GEOGRAPHICAL REPORTING
The accounting policy for identifying segments is based on internal management
reporting information that is regularly reviewed by the chief operating
decision maker, which is identified as the Board of Directors. The Board of
Directors consider the Group to have two identifiable operating segments; (a)
the construction and operation of the Wilton Park Lithium Hydroxide processing
facility in Teeside, UK and (b) the construction of a Lithium ore enrichment
facility in Port Headland, Australia.
Year to January 2024 UK Australia Total
£ £ £
Other Revenue 1,247 - 1,247
Business development (1,852) - (1,852)
Project Development (349,836) (284,452) (634,288)
Administration expenses (1,295,137) (159,058) (1,454,195)
Foreign exchange (5,215) - (5,215)
Finance costs (1,697) - (1,697)
Loss before tax (1,652,490) (443,510) (2,096,000)
4. EXPENSES BY NATURE
2024 2023
£ £
Employee benefit expense (note 6) 302,733 529,782
Employee benefit - share based payments 66,802 53,844
Advertising and Marketing 122,426 147,199
Regulatory compliance expense 67,481 122,324
Legal fees - 5,584
Share based payments - advisors 115,348 9,377
Travel & accommodation 37,704 81,738
Other professional fees 696,744 267,338
Other operating expenses 44,957 80,816
Total administrative expenses 1,454,195 1,298,002
Project development costs of £634,287 (2023: £1,298,011) in the year
comprise the costs incurred in progressing the Company's Project in Teesside,
U.K and Port Headland, Australia, that do not meet the criteria for
capitalisation into intangible assets.
5. AUDITOR REMUNERATION
During the year the Company obtained the following services from the auditor:
2024 2023
£ £
Fees payable to the auditor for non-audit services - -
Fees payable to the auditor for the audit of the Company 47,350 35,276
Total auditor's remuneration 47,350 35,276
6. EMPLOYEE BENEFIT EXPENSE
2024 2023
£ £
Directors' salaries 128,589 60,000
Share based payments 182,150 63,221
Staff salaries 145,403 272,051
Recruitment and other staff costs 920 158,451
Social security 27,821 39,280
Total employee benefit expense 484,883 593,003
There were two employees in the year other than the Directors. Further
disclosures in respect of Directors' remuneration are included within the
Directors' Remuneration Report.
7. INCOME TAX
2024 2023
£ £
Current tax - -
Total - -
2024 2023
£ £
Loss on ordinary activities before taxation (2,096,000) (2,644,759)
Tax calculated at domestic rate applicable to UK standard rate for small
companies of 19%
(398,240) (502,504)
Effects of:
Expenses not deductible for tax purposes 35,844 12,682
Adjustments relating to tax credits 325,018 -
Tax losses carried forward on which no deferred tax asset is recognised 37,378 489,822
Income tax credit - -
Adjustments relating to tax credits in the year arise from research and
development tax credits received from HMRC under its research and development
support programme.
Tax losses totalling approximately £3,413,038 (2023: £3,375,660) have been
carried forward for use against future taxable profits. No deferred tax
asset has been recognised in respect of these tax losses.
8. EARNINGS PER SHARE
(a) Basic
Basic earnings per share is calculated by dividing the loss attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the year.
2024 2023
£ £
Loss from continuing operations attributable to equity holders of the company
(1,770,982) (2,644,759)
Weighted average number of ordinary shares in issue 7,560,005 6,572,053
Pence Pence
Basic and fully diluted loss per share from continuing operations (23.43) (40.24)
As at 31 January 2024 and 2023 there were no potentially dilutive instruments
in issue for consideration in arriving at the fully diluted loss per share as
the impacts of all such instruments as at the year end are anti-dilutive.
9. DIVIDENDS
There were no dividends paid or proposed by the Company.
10. INTANGIBLE ASSETS - PROJECT DEVELOPMENT COSTS
2024 2023
£ £
At the beginning of the year 298,813 -
Additions in the year 18,276 298,813
At the end of the year 317,089 298,813
On 24 November 2022 the Group was awarded planning permission by the Redcar
& Cleveland Borough Council for the construction of its planned LHM
refinery in Wilton International Chemicals Park, Teeside. In the view of the
directors, this milestone event represents the point when the criteria for
capitalisation of project development costs as outlined in IAS 38 has been
met. As a consequence, the Group has commenced the policy of capitalising
all qualifying expenditure from this date. All costs incurred in the year
that are directly associated with the application for and receipt of planning
approval have been capitalised, including expenditure incurred prior to
receipt of planning permission.
11. INVESTMENT IN AND LOANS TO SUBSIDIARIES (COMPANY)
2024 2023
£ £
Investment in Subsidiaries 4 2
Loans to Subsidiaries 2,943,949 1,878,902
Total 2,943,953 1,878,904
Loans to subsidiaries have been included within the investment balance due to
the long term nature of these receivables. The loans are interest free and
repayable on demand when the subsidiary projects have yielded economic returns
sufficient to settle the value of the loans.
12. TRADE AND OTHER RECEIVABLES
Group 2024 2023
£ £
Prepayments 47,537 45,891
VAT and GST recoverable 73,660 160,165
Other receivables 5,106 6,069
Total 126,303 212,125
Company 2024 2023
£ £
Prepayments 45,490 39,293
VAT and GST recoverable 25,720 39,321
Other receivables 2,500 4,543
Total 73,710 83,157
13. CASH AND CASH EQUIVALENTS
Group 2024 2023
£ £
Cash at bank and on hand 45,458 12,356
45,458 12,356
Company 2024 2023
£ £
Cash at bank and on hand 27,961 5,356
27,961 5,356
All of the Group's and Company's cash and cash equivalents are held in
accounts which bear interest at floating rates and the Directors consider
their carrying amount approximates to their fair value. Details of the
credit risk associated with cash and cash equivalents is set out in note 16.
14. TRADE AND OTHER PAYABLES
Group 2024 2023
£ £
Trade payables 673,199 552,146
Other payables 53,965 17,761
Accrued expenses 180,045 451,688
Total trade and other payables 907,209 1,021,595
Company 2024 2023
£ £
Trade payables 364,948 303,250
Other payables 7,365 6,264
Accrued expenses 137,105 83,164
Total trade and other payables 509,418 392,678
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and ongoing costs. The Directors consider that the carrying amount
of trade payables approximates to their fair value.
15. SHARE CAPITAL, SHARE PREMIUM & SHARE BASED PAYMENTS
Number of ordinary shares of 2p Share Capital Share premium Share based payments
£ £ £
At 31 January 2022 5,999,999 120,000 1,279,094 -
Share issues 1,199,999 24,000 1,175,999 -
Share issue expenses - - (41,850) -
Issue of Options and Warrants - -
- 63,221
At 31 January 2023 7,199,998 144,000 2,413,243 63,221
Share issues 1,614,853 32,297 1,968,497 -
Share issue expenses - - (105,714) -
Issue of Options and Warrants - (14,400)
- 196,550
At 31 January 2024 8,814,851 176,297 4,261,626 259,771
Share issues in year and prior year:
On 5 October 2023 the Company issued 964,853 ordinary shares of 2p for cash at
a price of £1.40 per share.
On 4 January 2024 the Company issued 650,000 ordinary shares of 2p for cash at
a price of £1 per share.
On 9 August 2022 the Company issued 1,199,999 ordinary shares of 2p for cash
at a price of £1 per share.
Options issued in the year and prior year:
On 4 August 2022 the Company issued 590,000 options over ordinary shares,
exercisable for 5 years from grant at a strike price of £1 per share and made
up of three equal tranches with vesting conditions as follows:
A) The options vest when the Company share price has exceeded £5 for a
period of 10 consecutive trading days;
B) The options vest on the later of i) the share price having exceeded £5
for a period of 10 consecutive trading days and ii) completion of project
financing for the construction of the Wilton Park refinery;
C) The options vest on the later of the share price having exceeded £5
for a period of 10 consecutive trading days and ii) the commissioning of train
1 of the Wilton Park refinery.
On 5 August 2022 the Company issued 100,000 options over ordinary shares,
exercisable for 5 years from grant at a strike price of £1 per share and made
up of three equal tranches with vesting conditions as follows:
A) The options vest when the Company share price has exceeded £5 for a
period of 10 consecutive trading days;
B) The options vest on the later of i) the share price having exceeded £5
for a period of 10 consecutive trading days and ii) completion of project
financing for the construction of the Wilton Park refinery;
C) The options vest on the later of the share price having exceeded £5
for a period of 10 consecutive trading days and ii) the commissioning of train
1 of the Wilton Park refinery.
On 19 September 2022 the Company issued 100,000 options over ordinary shares,
exercisable for 2 years from grant at a strike price of £1.5 per share and
made up of two tranches with vesting conditions as follows:
A) The options vest when the Company share price has exceeded £5 for a
period of 10 consecutive trading days - 40%;
B) The options vest when the Company share price has exceeded £10 for a
period of 10 consecutive trading days - 60%;
On 6 June 2023 the Company issued 430,000 options over ordinary shares,
exercisable for 5 years from grant at a strike price of £1.75 per share and
made up of three equal tranches with vesting conditions as follows:
A) The options vest when the Company share price has exceeded £5 for a
period of 10 consecutive trading days;
B) The options vest on the later of i) the share price having exceeded £5
for a period of 10 consecutive trading days and ii) completion of project
financing for the construction of the Wilton Park refinery;
C) The options vest on the later of the share price having exceeded £5
for a period of 10 consecutive trading days and ii) the commissioning of train
1 of the Wilton Park refinery.
D)
The below table provides details on the assumptions used in arriving at the
calculation of Fair Value for each of the above tranches of share options
issued in the year and prior year, using the Black Scholes method.
Date of grant Tranche Number of Options Assumed Exercise date Risk free rate (%) Volatility (%) FV
4 August 2022 A 196,668 4 August 2027 1.719 24.51 £59,500
4 August 2022 B 196,667 4 August 2027 1.719 24.51 £59,500
4 August 2022 C 196,665 4 August 2027 1.719 24.51 £59,500
5 August 2022 A 33,334 5 August 2027 1.875 24.49 £9,600
5 August 2022 B 33,333 5 August 2027 1.875 24.49 £9,600
5 August 2022 C 33,333 5 August 2027 1.875 24.49 £9,600
19 September 2022 A 40,000 19 September 2024 3.13 23.77 £2,525
19 September 2022 B 60,000 N/A - lapse prior to exercise 3.13 23.77 Nil
6 June 2023 A 143,335 6 June 2028 4.39 40.50 £95,150
6 June 2023 B 143,334 6 June 2028 4.39 40.50 £95,149
6 June 2023 C 143,331 6 June 2028 4.39 40.50 £95,147
2024 2023
Company and Group Weighted Weighted
Number of average Number of average
options exercise options exercise
Number price Number price
£ Pence
Outstanding at the beginning of the period 790,000 106.33 - -
Granted during the year 430,000 175 790,000 106.33
Lapsed during the period - - - -
Outstanding at the end of the period 1,220,000 130.53 790,000 106.33
Share Capital
The share capital account represents the par or nominal value received for
ordinary shares issued by the Company.
Share Premium
The share premium account represents the excess of consideration received for
ordinary shares issued above their nominal value net of transaction costs.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative fair value charge
for options and warrants granted by the Company over ordinary shares.
Foreign Exchange Reserve
The translation reserve represents the exchange gains and losses that have
arisen on the retranslation of overseas operations.
16. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group and Company is exposed to a variety of financial risks which result
from both its operating and investing activities. The Group and Company's
risk management is coordinated by the Board of Directors and focused on
actively securing the Group and Company's short to medium term cash flows by
minimising the exposure to financial markets.
The main risk the Group and Company is exposed to through its financial
instruments is credit risk.
Capital risk management
The Group and Company's objectives when managing capital are:
(a) to safeguard the Group and Company's ability to continue as a going
concern, so that it continues to provide returns and benefits for
shareholders;
(b) to support the Group and Company's growth; and
(c) to provide capital for the purpose of strengthening the Group and
Company's risk management capability.
The Group and Company actively and regularly reviews and manages its capital
structure to ensure an optimal capital structure and equity holder returns,
taking into consideration the future capital requirements of the Group and
Company and capital efficiency, prevailing and projected profitability,
projected operating cash flows, projected capital expenditures and projected
strategic investment opportunities. Management regards total equity as capital
and reserves, for capital management purposes. The Group and Company is not
subject to externally imposed capital requirements.
Credit risk
The Group and Company's financial instruments that are subject to credit risk
are cash and cash equivalents. The credit risk for cash and cash equivalents
is considered negligible since the counterparties are reputable financial
institutions.
The Group and Company defines a default by a counterparty to be an event in
which a balance receivable remains unsettled after a period of 90 days from
the date on which the balance was due for settlement.
The Group's maximum exposure to credit risk is £171,761 comprising £126,303
of Trade and other receivables and £45,458 in cash and cash equivalents.
The Company's maximum exposure to credit risk is £3,045,620 comprising
£2,943,949 of intercompany receivables, £73,710 of Trade and other
receivables and £27,961 in cash and cash equivalents.
Liquidity Risk
The Group and Company monitors its rolling cashflow forecasts and liquidity
requirements to ensure it has sufficient cash to meet its operational needs.
As the Group and Company maintains its cash reserves in instant access current
accounts liquidity risk to operations is deemed to be minimal. Short term
borrowings at the year end represent a loan provided by Paul Atherley, Group
CEO and Directors, which is interest free and repayable when the Group and
Company has raised sufficient additional finance to effect settlement.
Interest Rate Risk
As the Group and Company has no debt, other than the non-interest bearing loan
provided by Paul Atherley, and does not maintain cash reserves on long term
deposit accounts liked to interest rates, interest rate risk to operations is
deemed to be minimal.
Foreign Exchange Risk
The Group's transactions are carried out in a variety of currencies, including
Australian Dollars, United Stated Dollars, Papua New Guinea Kina and UK
Sterling. To mitigate the Group's exposure to foreign currency risk,
non-Sterling cash flows are monitored. Fluctuation of +/- 10% in currencies,
other than UK Sterling, would not have a significant impact on the Group's net
assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure
to foreign currency risk as amounts paid and received in specific currencies
are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as
shown in the table below:
Group GBP AUD Total
31 January 2024
£ £ £
Intangibles - Project development costs 317,089 - 317,089
Trade and other receivables 90,273 36,030 126,303
Cash and cash equivalents 34,389 11,071 45,460
Trade and other payables 697,889 209,320 907,209
Short-term borrowings 102,289 - 102,289
The Group did not have any material assets or liabilities in any currencies
other than GBP as at 31 January 2023.
17. FINANCIAL INSTRUMENTS
Categories of financial instruments:
2024 2023
Group £ £
FINANCIAL ASSETS AT AMORTISED COST:
Cash and cash equivalents
45,458 12,356
Trade and other receivables
126,303 212,125
Total financial Assets at amortised cost
171,761 224,481
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables 907,209 1,021,595
Short term borrowings 102,289 326,289
Total financial liabilities at amortised cost 1,009,498 1,347,884
2024 2023
Company £ £
FINANCIAL ASSETS AT AMORTISED COST:
Cash and cash equivalents
27,961 5,356
Trade and other receivables
73,710 83,158
Total financial Assets at amortised cost
101,671 88,514
2024 2023
£ £
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables 509,418 392,678
Short term borrowings 102,289 326,289
Total financial liabilities at amortised cost 611,707 718,967
18. RELATED PARTY TRANSACTIONS
The compensation payable to Key Management personnel comprised £312,589
(2023: £177,600) paid by the Company to the Directors in respect of services
to the Company. Full details of the compensation for each Director are
provided in the Directors' Remuneration Report.
Sam Quinn is a partner in Silvertree Partners LLP who received £65,192 (2023:
£55,980) during the year for the provision of accounting and finance,
administration, bookkeeping and secretarial services. At the year end, an
amount of £31,159 (2023: £12,567) was due to Silvertree Partners LLP.
Sam Quinn is a director and shareholder of Lionshead Consultants Ltd who
received £60,000 (2023: £48,600) during the year for the provision of
consulting services and £2,093 in reimbursement of expenses (2023: £5,390).
At the year end, an amount of £nil (2023: £13,829) was due to Lionshead
Consultants Ltd.
Paul Atherley is a director and shareholder of Selection Capital Ltd who
received £84,000 during the year for the provision of advisory services
(2023: £69,000) and £3,172 (2023: £47,852) during the year in reimbursement
of various costs met on behalf of the Company. At the year end, an amount of
£108,289 (2023: £16,641) was due to Selection Capital Ltd.
During the year, Paul Atherley provided a short term working capital loan to
the Company, with the balance outstanding at the reporting date being
£102,289 (2023: £326,289). The loan is interest free and repayable when
the Company has raised sufficient additional finance to effect settlement.
During the year, the Group incurred £11,075 (2023: £7,775) in travel related
costs and charged £nil (2023: £3,500) in travel related cost recharges to
Pensana plc, a company in which Paul Atherley is a director and shareholder.
As at the reporting date, £18,850 remained outstanding for settlement.
Vikki Jeckel is a director and shareholder of Supply Tactics Ltd who received
£40,000 during the year post appointment for the provision of advisory
services (2023: £nil). At the year end, an amount of £72,000 (2023: £nil)
was due to Supply Tactics Ltd.
During the year, the Company provided loans to its two subsidiaries, Tees
Valley Lithium Limited ("TVL") and Alkemy Capital Services Pty Ltd ("ACSL") by
way of funds provided to meet their ongoing cash needs and the recharging of
expenditure met by the Company on behalf of the subsidiaries. Loans provided
during the period totalled £766,866 (2023: £1,776,103) for TVL, £151,670
(2023: £nil) for PHL and £146,487 (2023: £102,801) for ACSL respectively.
Balances remaining owing from subsidiaries to the Company as at 31 January
2023 were £2,542,969 (2023: £1,776,103) for TVL, £151,670 (2023: £nil) for
PHL and £249,288 (2023: £102,801) for ACSL respectively.
During the year, amounts totalling £57,714 (2023: £56,900) were paid to Alex
Della Bosca, daughter of Paul Atherley, for her employment by the Group.
19. POST YEAR-END EVENTS
The Company's wholly owned subsidiary Tees Valley Graphite, has entered into a
non-binding memorandum of understanding with Syrah Resources Limited for the
establishment of a joint venture to develop a commercial-scale natural
graphite active anode material ('AAM') processing facility located within the
Teesside Freeport, to supply AAM to the European market.
20. ULTIMATE CONTROLLING PARTY
The Directors consider that the Company has no ultimate controlling party, as
no individual member holds more than 50% of the issued shares.
21. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments as at 31 January
2024 (2023: nil).
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