REG - Rockfire Resources - Annual Results for the year ended 31 December 2023
31/05/2024 07:00
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RNS Number : 5402Q Rockfire Resources PLC 31 May 2024
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
31 May 2024
Rockfire Resources plc
("Rockfire" or the "Company")
Annual Results for the year ended 31 December 2023
Rockfire Resources plc (LON: ROCK), the base metal, precious metal, and
critical mineral exploration company, announces its audited results for the
year ended 31 December 2023.
Posting of Annual Report and Notice of AGM
The Company's Annual Report and Financial Statements for the year ended 31
December 2023 will be made available on the Company's website
(www.rockfireresources.com (http://www.rockfireresources.com) ) and will be
sent to shareholders shortly.
The Company will hold its Annual General Meeting at 5 St Helen's Pl, London
EC3A 6AB, United Kingdom on Friday 28th June 2024 at 10:00am and the Notice of
Annual General Meeting to that effect will be sent to shareholders shortly and
will be available on the Company's website.
For further information on the Company, please
visit www.rockfireresources.com (http://www.rockfireresources.com/) or
contact the following:
Rockfire Resources plc: info@rockfire.co.uk (mailto:info@rockfire.co.uk)
David Price, Chief Executive Officer
Allenby Capital Limited (Nominated Adviser & Broker): Tel: +44 (0) 20 3328 5656
John Depasquale / George Payne (Corporate Finance)
Guy McDougall / Matt Butlin (Sales and Corporate Broking)
Notes to Editors
Rockfire Resources plc (LON: ROCK) is a gold, base metal and critical mineral
exploration company, with a high-grade zinc/lead/silver/germanium deposit in
Greece and a portfolio of gold/copper/silver projects in Queensland Australia.
§ The Molaoi deposit in Greece has a JORC Inferred Resource of 2.3 million
tonnes @ 11 % ZnEq. for 250,000 tonnes of ZnEq. This resource uses a 4%
low-grade cut, with individual elemental grades of 9.4 % Zn, 1.7 % Pb and 47
g/t Ag. This equates to 210,000 tonnes of zinc, 39,000 tonnes of lead and 3.5
million ounces of silver.
§ The Plateau deposit in Queensland has a JORC resource of 131,000 ounces of
gold and 800,000 ounces of silver, using a 0.5g/t Au cut off. 53,000 of these
ounces lie within the top 100m from surface. Plateau is subject to a joint
venture with ASX-listed Sunshine Metals Ltd (ASX:SHN).
CHAIRMAN'S STATEMENT
The last financial year has provided highs and lows for the Company, including
a number of surprising turns of events. Management was disappointed not to
have implemented its strategy to acquire a cash-generating business but was,
at the same time, thankful to avoid any negative impacts which may have
resulted from the completion of the transaction under sanction conditions.
Exploration Review
The Molaoi base metal and critical mineral project in Greece continued to
provide a bright spot for the Company and remains the Company's principal
focus. There was important diamond drilling completed during the reporting
period, with much of the year's drilling objectives being:
· To confirm the depth to mineralisation throughout the
mineralisation model;
· To confirm the positioning of mineralisation along the length of
the mineralised zone;
· To drill between historical drill holes to confirm the continuity
of mineralisation;
· To drill close to historical drill holes to confirm the grade and
width of mineralisation; and
· To determine the geotechnical parameters of the ore zone with
respect to ground integrity, fracture density, rock quality designator values,
friability and structure orientation where possible.
These outcomes were successful, and management is pleased with the results and
continues to be pleased with the on-going progress of the project.
Overall, the grades and widths intersected by Rockfire correlate very well
with the results anticipated from historical drilling. The confirmation of the
positioning, grades, depths, and widths provides encouragement for Rockfire's
technical team to rely on the results of historical drilling. This means that
most of the historical holes are likely to be included in any future resource
estimates and mine planning.
A significant milestone was announced to the market on 20 April, when the
Greek Government approved the environmental study permit for exploration to
occur over the following five years for Molaoi. This decision by the Greek
Government was received in swift time and is a clear affirmation of the
resolve of the Greek Government to facilitate foreign investment in the mining
sector.
The Company encountered record-breaking zinc grades at Molaoi, with an
interval of 0.2m grading 50.8% Zn being returned from drill hole MO_GTK_003A
at 142.7m depth. Overall, MO_GTK_003A has a continuous zinc lode interval
of 11.3m @ 9.2% ZnEq. commencing from 141.7m depth (37.3g/t Ag, 1.2% Pb, 8.1%
Zn). These intervals are robust and would be expected to be included in
planned underground mine designs.
Throughout the year, drilling continued to prove the continuity of the zinc
mineralisation, as well as the grade and the positioning of the lodes. Despite
the trading of Rockfire shares being under suspension for much of this period,
the Company continued to release drilling results from Molaoi.
Up until 23 August 2023, Rockfire's analysis for germanium failed to detect
any elevated germanium. The Company believed this to be highly irregular,
given that germanium was identified in historical drill core. The Company's
technical team elected to reanalyse the core for germanium using a different
analytical method. Instead of using a 4-acid digest, the laboratory was
instructed to use lithium borate fusion. This technique successfully detected
high-grade germanium associated with zinc.
Germanium and gallium are both included on the US and EU lists of critical
minerals, owing to geological scarcity. Gallium is included on the UK list
of critical minerals. During the latter part of 2023, China announced
restrictions on the export supplies of both gallium and germanium products,
citing national security reasons. The Ge and Ga grades at Molaoi are expected
to add significant further value as a bi-product to the project economics.
Germanium traded above US$1.5m per tonne of metal product for most of the
year.
Each hole drilled by Rockfire has intersected zinc, lead, silver and germanium
mineralisation at the anticipated depth, the expected elevation, the
calculated average grade, and the precise location modelled by the historical
drilling. This is a good sign that the original drilling data can be relied
upon and can be used in future feasibility studies and resource upgrades.
A farm-in and joint venture agreement was announced to the market on 20
January 2023. Rockfire had entered a new joint venture ("JV") at the Plateau
gold deposit in Queensland, Australia. The binding heads of agreement is with
Sunshine Gold Limited ("Sunshine"), a company which is listed on
the Australian Stock Exchange (ASX:SHN).
The JV includes the Lighthouse tenement (EPM25617) and the adjoining
Kookaburra tenement (EPM26705) and will result in Sunshine sole-funding
exploration at Plateau for the next three years, with funding being engaged on
direct exploration activity. Rockfire's intention is to focus its financial,
logistical and human resources on the Molaoi zinc deposit in Greece.
Rockfire has the option to retain 25% ownership of the Plateau gold project by
participating in 25% expenditure in on-going exploration, or the Company may
elect to convert its right over a 25% share of the tenements to a 1.5% net
smelter royalty. With this structure, any discovery success by Sunshine will
directly benefit shareholders of Rockfire.
Several updates on exploration progress at Lighthouse were provided by
Sunshine during the year. At the Plateau, Horse Creek and Cardigan Dam
prospects, rock chip sampling returned high grade gold up to 8.35g/t Au and
silver up to 116g/t Ag.
Field mapping and sampling at Cardigan Dam identified a gossanous breccia.
The best rock chip assayed 13.20g/t Au. A new zone of mineralisation was
identified and rock sampling returned 9.58g/t Au. Follow-up sampling at
Cardigan Dam confirmed a second gossanous zone, where rock chip sampling
resulted 59.5g/t Au.
Corporate
A number of important milestones were announced to the market on 15 September
2023. Foremost of these was the proposed acquisition of Emirates Gold DMCC and
Emperesse Bullion LLC (the "Proposed RTO"). This Proposed RTO was part of the
Directors' ambitious growth strategy to acquire cash-generating and profitable
companies.
Due to the Proposed RTO constituting a reverse takeover under the AIM Rules
for Companies, the Company's shares were suspended from trading on the AIM
Market of the London Stock Exchange on 15 September 2023.
Simultaneous to the announcement of the Proposed RTO, the Company raised £3.5
million from two new institutional investors. The successful result of this
subscription was announced to the market on 20(th) September 2023, with net
proceeds to be used for the following purposes:
1) to satisfy the payment of US$2m for the initial consideration for the
Proposed RTO;
2) to contribute towards costs associated with the Proposed RTO;
3) to continue drilling at the Company's Molaoi zinc, silver, lead and
germanium project in Greece; and
4) to fund the working capital requirements within the Company.
Rockfire's management team, financial advisers, consultants, lawyers and
accountants were in the process of undertaking a thorough due diligence on the
companies to be acquired, as well as preparation of the admission document
required to lift the suspension on the Company's shares. However, on 8
November 2023, the Foreign, Commonwealth & Development Office, a
department of the Government of the United Kingdom, imposed a sanction on the
vendor of Emirates Gold and Emperesse Bullion.
Rockfire was unable to complete the Proposed RTO without breaching the
sanctions and therefore, on 13 November 2023, the Company announced the
termination of the acquisitions of the two companies and the withdrawal from
the share purchase agreement. Trading on AIM in the Company's shares was
restored on 13 November 2023.
I present to you, the Annual Report for Rockfire for the financial year ended
31 December 2023. The year ahead will focus on Molaoi, as well as the
evaluation of new business to build the Company, in line with the Board's
growth ambitions.
Financial review
The income statement for the year shows a loss of £1,988,747 (2022: loss
£614,329).
The Company was pleased to welcome a number of institutional and high net
worth shareholders during the year and raised a total of £4.38m. This funding
was used for the continuation of drilling at Molaoi, and to appraise and
assess the possible acquisitions outlined above.
On 1 June 2023, the Company announced a subscription for 400,000,000 new
ordinary shares to be issued to Paloma Precious DMCC. This subscription raised
£880,000, before expenses, at a price of 0.22 pence per share.
On 20 September 2023, the Company announced that it had successfully raised
£3.5m before expenses from two new institutional investors subscribing for
700,000,000 new ordinary shares at a price of 0.5 pence per share. This
subscription was at a premium of approximately 36 per cent. to the closing
mid-market price of an ordinary share on 14 September 2023 and represented
approximately 27.5% of the Company's issued share capital as enlarged by the
subscription.
Material events since the end of 2023
On 1 February 2024 the Company confirmed the return of the US$2 million
initial consideration which was paid by Rockfire as part of its terminated
acquisition of Emirates Gold DMCC and Emperesse Bullion LLC.
Gordon Hart
Chairman
30 May 2024
STRATEGIC REPORT
CORPORATE
The last financial year has provided highs and lows for the Company, including
a number of surprising turns of events. Management was disappointed not to
have implemented its strategy to acquire a cash-generating business but was,
at the same time, thankful to avoid any negative impacts which may have
resulted from the completion of the transaction under sanction conditions.
On 1 June 2023, the Company announced a subscription for 400,000,000 new
ordinary shares to be issued to Paloma Precious DMCC. This subscription raised
£880,000, before expenses, at a price of 0.22 pence per share. At the
completion of the subscription, Paloma held approximately 21.7 per cent. of
the issued share capital of the Company.
Rockfire has over 130,000 ounces of gold and over 5 million ounces of silver
in JORC resources, with 3.5 million ounces of silver at Molaoi alone. At the
time, the Board believed this long-term partnership could be a very logical
one, particularly with the increasing demand for silver in the solar energy
industry. The proceeds of the subscription were to allow for the commencement
of resource upgrade drilling at Molaoi and an updated mineral resource.
A number of important milestones were announced to the market on 15 September
2023. Foremost of these was the proposed acquisition of Emirates Gold DMCC and
Emperesse Bullion LLC, which are two trading companies registered in the
United Arab Emirates. This transaction was part of the Directors' ambitious
growth strategy to acquire cash-generating and profitable companies.
Due to the Proposed RTO constituting a reverse takeover under the AIM Rules
for Companies, the Company's shares were suspended from trading on the AIM
Market of the London Stock Exchange on 15 September 2023.
In accordance with rule 14 of the AIM Rules, the acquisition would require
application to be made for the enlarged share capital to be readmitted to AIM,
the publication of an AIM admission document, and approval by shareholders of
the Company at a general meeting.
On the signing of a share purchase agreement, Rockfire paid USD$2 million in
cash to acquire 10% of both Emirates and Emperesse. Rockfire conditionally
agreed to acquire the remaining shares in the two companies, which were to be
transferred to Rockfire on final completion of the transaction.
On the same day (15 September 2023), the Company also announced that it
proposed to raise £3.5 million before expenses, from two new institutional
investors subscribing for 700,000,000 new ordinary shares at a price of 0.5
pence per share. This subscription was at a premium of approximately 36 per
cent. to the closing mid-market price of an ordinary share on 14 September
2023 and represented approximately 27.5% of the Company's issued share capital
as enlarged by the subscription.
The successful result of the subscription was announced to the market on 20
September 2023, whereby the Company successfully raised £3.5 million before
expenses, through two new institutional investors subscribing for 700,000,000
new ordinary shares at a price of 0.5 pence per share.
The net proceeds of the subscription were to be used for:
1) to satisfy the payment of US$2m for the initial consideration for the
acquisitions;
2) to contribute towards costs associated with the transaction;
3) to continue drilling at the Company's Molaoi zinc, silver, lead and
germanium project in Greece; and
4) to fund the working capital requirements within the Company.
Paloma Precious DMCC notified the Company via a TR-1 form that it had sold
400,000,000 ordinary shares in an off-market transaction at a price of 0.5
pence per share. This disposal was announced to the market on 22 September
2023 and following the disposal, Paloma held no interest in Rockfire's issued
share capital.
Rockfire's management team and its advisers were in the process of undertaking
a thorough due diligence on the companies to be acquired, as well as
preparation of the admission document required for the RTO. This due diligence
involved two law firms in London, two legal firms in Dubai, the Company's
accountants, an audit firm, Rockfire's nominated advisor and broker, as well
as multiple departments within the government of the UAE.
On 8 November 2023, the Foreign, Commonwealth & Development Office, a
department of the Government of the United Kingdom, imposed sanctions on
Paloma Precious DMCC and 28 other individuals and entities. Rockfire
immediately sought legal advice regarding the Proposed RTO. The conclusion
from this advice was that Rockfire was unable to complete the transaction
without breaching the sanctions and therefore, on 13 November 2023, the
Company announced the termination of the acquisition of the two companies and
the withdrawal from the share purchase agreement.
Following the termination of the transaction, Trading on AIM in the Company's
shares was restored on 13 November 2023.
Rockfire announced to the market on 4 December 2023, that is had made
application to the UK Government's Office of Financial Sanctions
Implementation ("OFSI") for authority to recover the US$2 million
consideration which Rockfire paid as the initial consideration for the
acquisition of Emirates and Emperesse. This application was subsequently
approved by the OFSI and announced to the market on 1 February 2024, that
Rockfire received the US$2m into its bank account.
Molaoi Zinc Project, Greece
The Molaoi project continues to advance, with significant and important
diamond drilling completed during the reporting period. Rockfire, through its
100%-owned subsidiary, Hellenic Minerals S.A. completed a total of seven
geotechnical drill holes. These holes were designed for the following
outcomes:
· To confirm the depth to mineralisation throughout the
mineralisation model;
· To confirm the positioning of mineralisation along the length of
the mineralised zone;
· To drill between historical drill holes to confirm the continuity
of mineralisation;
· To drill close to historical drill holes to confirm the grade and
width of mineralisation; and
· To determine the geotechnical parameters of the ore zone with
respect to ground integrity, fracture density, rock quality designator values,
friability and structure orientation where possible.
These outcomes were successful, and management is pleased with the results.
The ground conditions are very poor above the mineralisation and significant
ground support is anticipated when mining commences. Owing to poor ground
conditions, the preferred access to the ore body is expected to be a shaft,
rather than a decline. This will minimise the amount of development in
unstable ground.
Overall, the grades and widths intersected by Rockfire correlate very well
with the results anticipated from historical drilling. The confirmation of the
positioning, grades, depths, and widths provides enormous encouragement for
Rockfire's technical team to rely on the results of historical drilling. This
means that most of the historical holes are likely to be included in any
future resource estimates and mine planning.
The year commenced well when on 23 January 2023, the Company announced the
first assay results from hole MO_GTK_001. This hole confirmed that Molaoi
comprises multiple lodes, and perhaps as many as four stacked, high-grade
lodes. Best results included:
· 13.4% ZnEq. over 7.18m width, from 130.62m (11.3% Zn, 1.4% Pb and
50g/t Ag).
· 15.6% ZnEq. over 0.17m width, from 142.60m (14.3% Zn, 0.5% Pb and
41.80g/t Ag).
· 10.7% ZnEq. over 1.73m width, from 144.90m (8.3% Zn, 1.3% Pb and
62g/t Ag).
· 19.5% ZnEq. over 2.24 m width, from 161.10m (16.6% Zn, 3.1% Pb
and 36g/t Ag).
Overall, the main, second and third lodes comprise a broad mineralised zone
with an intersection of 7.5% ZnEq. over 16m width, from 130.62m (6.2% Zn, 0.8%
Pb and 31 g/t Ag). The highest individual samples obtained were 20.5% Zn and
93.4g/t Ag over 1.25m (from 132.15m depth) and 4.1% Pb over 1.0m (from
161.10m).
Further high grades were announced on 4 April 2023, when hole MO_GTK_002
results were released to the market. High-grade individual zinc values up
to 19.7% Zn over 0.4m width were found to occur from 108.40m depth.
Individual peak silver values are up to 94.2g/t Ag, and individual peak lead
values are up to 2.5% Pb. An overall width of 2.4m recorded an average grade
of 5.8% ZnEq., from 106.94m (5.4% Zn, 0.6% Pb and 17.8g/t Ag). Results
continue to confirm the location, continuity, and high-grade nature of the
zinc resource. Potentially economic zinc grades continue to occur over widths
deemed suitable for mechanised underground mining. The close association of
zinc, silver and lead continues to be demonstrated.
A milestone was announced to the market on 20 April 2023, when the Greek
Government approved the environmental study permit for exploration to occur
over the following 5 years for Molaoi. This decision by the Greek Government
was received in swift time and is a clear affirmation of the resolve of the
Greek Government to facilitate foreign investment in the mining sector.
On 26 May 2023, the Company released record-breaking zinc grades at Molaoi,
with an interval of 0.2m grading 50.8% Zn being returned from drill hole
MO_GTK_003A at 142.7m depth. This result is immediately followed by a second
interval of 0.7m grading 43.2% Zn. This lens of record-breaking grade averages
36% ZnEq. over a 1.42m total length (127.5g/t Ag, 2.7% Pb, 33.6% Zn) and
represents the highest grades encountered at Molaoi so far, from 180 drill
holes already drilled. This very high-grade interval occurs within a broader,
high-grade zone of 4.85m @ 14.6% ZnEq. (58.3g/t Ag, 1.9%Pb, 12.97% Zn). A
lower, footwall lode was encountered from 150.5m depth, grading 11.7% ZnEq.
over a width of 2.5m (49.1g/t Ag, 1.6% Pb, 10.2% Zn). Overall, MO_GTK_003A has
a continuous zinc lode interval of 11.3m @ 9.2% ZnEq. commencing from 141.7m
depth (37.3g/t Ag, 1.2%Pb 8.1% Zn).
Throughout the year, drilling continued to prove the continuity of the zinc
mineralisation as well as the grade and the positioning of the lodes. Further
high-grade drilling results were released on 13 June 2023, including results
from Hole MO_GTK_004, with an upper lode of 2.37m @ 6.0% Zn occurring from
107m, along with 0.8% Pb and 31.3g/t Ag. A lower lode of 2.3m @ 5.3% Zn was
also encountered from 110m, with 1.3% Pb and 13.6g/t Ag. Individual peak zinc
values up to 17.6% Zn, 3.0% Pb and 91.8g/t Ag were recorded in this hole.
Results from drill hole MO_GTK_005 were released to the market on 19 July
2023. These results included an upper lode of 2.40m @ 5.5% ZnEq. from 81m
(4.7% Zn, 21.9g/t Ag, 0.9% Pb) and a main lode, comprising 3.5m @ 7.3% ZnEq.
This occurs within a broader zone of 3.96m @ 6.6% ZnEq., starting from 87.94m.
Individual peak zinc values are up to 29.8% Zn, 3.3% Pb and 204.0g/t Ag.
Despite the trading of Rockfire shares being under suspension for much of this
period, the Company continued to release drilling results from Molaoi. Drill
hole MO_GTK_006 returned an excellent interval of 3.3m @ 22.1% ZnEq. (17.1%
Zn, 1.9% Pb and 100.4g/t Ag), as announced on 1 August 2023. The interval
quoted above lies within a broader interval of 5.8m @ 13.6% ZnEq. (10.5% Zn,
1.2% Pb and 61.1g/t Ag), which commences at 75.20m depth. The highest
individual assay is just under 1m wide (0.94m), and grades 34.0% Zn, 4.1% Pb
and 252.0g/t Ag. Results from hole MO_GTK_007 were released in the same RNS,
informing the market that this hole was terminated early due to badly
fractured and broken ground. Despite the early termination of the hole, an
interval of 1.95m grading 3.0% ZnEq. was intersected. It is expected that this
hole will be redrilled later to intersect the main lode deeper.
During all this time and up until 23 August 2023, Rockfire's analysis for
germanium in holes MO_GTK_001 through to hole MO_GTK_007 failed to detect any
elevated germanium. The Company believed this to be highly irregular, given
that germanium was identified in historical drill core. The Company's
technical team elected to reanalyse the core for germanium using a different
analytical method. Instead of using a 4-acid digest, the laboratory was
instructed to use lithium borate fusion. This technique successfully detected
germanium associated with the high-grade zinc.
Germanium grades between 9.0 and 40.0 g/t were returned from the reanalysis,
with an average from seven holes of 23.7 g/t Ge over an average downhole
intersection of 4.6 metres. The highest individual germanium assay recorded
was 73.8g/t Ge in hole MO_GTK_003A. Gallium grades between 9.7 and 19.0 g/t
were detected, with an average of 15.3 g/t Ga over an average downhole
intersection of 4.6 metres, with the highest individual gallium assay being
33.3g/t Ga in hole MO_GTK_003A.
Germanium and gallium are both included on the US and EU lists of critical
minerals, owing to geological scarcity. Gallium is included on the UK list of
critical minerals. China recently announced restrictions on the export
supplies of both gallium and germanium products, citing national security
reasons. The high Ge and Ga grades at Molaoi are expected to add significant
further value to the project economics.
On 3 October 2023, the Company announced the commencement of a five-hole
drilling programme, which was designed to replicate several historical drill
holes. Successful replication of the historical holes would establish a high
confidence in the positioning of those holes. Increased confidence in the
positioning of historical holes is expected to enable inferred resources to
convert to indicated resources, which can then be used in future feasibility
studies.
Lighthouse, Queensland Australia
A strategically important joint venture was announced to the market on 20
January 2023. Rockfire had entered a new joint venture ("JV") at the Plateau
gold deposit in Queensland, Australia. The purpose of the JV was to test
regional targets, as well as the discovery of higher-grade gold, close to
Rockfire's JORC resource. The binding heads of agreement is with Sunshine Gold
Limited ("Sunshine"), a company which is listed on the Australian Stock
Exchange (ASX:SHN).
The JV includes the Lighthouse tenement (EPM25617) and the adjoining
Kookaburra tenement (EPM26705) and will result in Sunshine sole-funding
exploration at Plateau for the next three years, with funding being engaged on
direct exploration activity. Rockfire's intention is to focus its financial,
logistical and human resources on the Molaoi zinc deposit in Greece.
Exploration by Sunshine will target regional prospects in the Lighthouse
tenement, including Double Event, Cardigan Dam, Bluff Creek, Bullseye,
Rollston River, Warrawee, Lower Lighthouse and Horse Creek, aiming to
delineate near-surface resources at each of these regional prospects.
Rockfire has the option to retain 25% ownership of the Plateau gold project by
participating in 25% expenditure in on-going exploration, or the Company may
elect to convert its right over a 25% share of the tenements to a 1.5% net
smelter royalty. With this structure, any discovery success by Sunshine will
directly benefit shareholders of Rockfire.
An update of activities at the Lighthouse project was provided by Sunshine on
14 March 2023. At the Plateau prospect, two rock chips returned 7.46g/t Au,
116g/t Ag, 0.50% Ba, 0.16% V2O5 and 1.53g/t Au, 8.35g/t Ag, 0.74% Pb, 0.44%
Zn. Rock samples from Cardigan Dam assayed 8.35g/t Au, 32.8g/t Ag, 0.28% Cu,
0.13% Co, 1.0% Ba. At Horse Creek, a prospect immediately north of Plateau, a
rock chip assayed 1.1% Ni, 0.27% Cr, 0.12g/t Au, 0.75g/t Pt, 0.45g/t Pd, 0.05%
Co.
Several updates on exploration progress at Lighthouse were provided by
Sunshine during the year. On 6 April 2023, it was announced that field mapping
and sampling over a previously identified 300m ridge of gold anomalism at
Cardigan Dam identified a gossanous breccia. The best rock chip assayed
13.20g/t Au and 4.8g/t Ag. A new zone of mineralisation was identified
approximately 500m south of the gossanous ridge and rock sampling returned
9.58g/t Au and 9.9g/t Ag. A single rock chip returned elevated cobalt and
copper over a strong magnetic anomaly, approximately 250m northeast of the
gossanous ridge, returning 0.62% Co, 0.48% Cu, 0.92% Ba and 185ppm Ni. The
discovery of an elevated cobalt sample is an interesting discovery,
particularly with the increasing demand for cobalt. Cobalt is used in large
quantities in battery storage of energy and the supply of cobalt as a raw
material for future energy storage is a growing and important industry.
On 12 September 2023, Sunshine released an announcement notifying that a rock
chip from the main gossan at Cardigan Dam assayed 8.35g/t Au, 32.8g/t Ag,
0.28% Cu and 0.13% Co. Further mapping and sampling at Cardigan Dam had
confirmed a second gossanous zone, where rock chip sampling resulted 59.5g/t
Au and 41g/t Ag. Gold up to 1.68g/t Au and 415g/t Ag was returned from a ~700m
x 600m area at Cardigan Dam breccia pipe.
Sunshine announced on 15 November 2023 that it had commenced drilling at
Lighthouse. Three holes (23PLRC_Prop_001, 002, 004) were expected to target
the northeast contact of the main diorite at Plateau, in a sparsely drilled
location. Hole 23PLRC_Prop_003 was designed to test a structure coming off the
northeast contact and trending eastward and a third hole, 23PLRC_Prop_007
targeted a zone of elevated gold-in-rocks, which includes a Rockfire sample
assaying 6.96g/t Au and validated by Sunshine with a value of 7.46g/t Au.
Five drill holes (23CDRC_Prop_001 - 004; and CD23_Prop_010) were being
proposed at Cardigan Dam West and designed to target the main gossan and its
eastern extension. Holes 001-003 were to target the central part of the
surface anomalism, which trends northwest. Hole 010 was proposed to target a
mapped east-west trending breccia zone, believed to be the eastern extension
of the main gossan structure. One hole, (23CDRC_Prop_004) is expected to test
a northwest-trending lineament which has returned rock chips up to 59.5g/t Au.
One drill hole (23HCRC_Prop_001) was being planned to target immediately below
a nickel-in-rock assay at Horse Creek Prospect, which lies approximately 750m
northeast of Plateau.
Qualified Person Statement
The technical information present is based on information compiled by Mr David
Price, the Chief Executive Officer of Rockfire Resources plc, who is a Fellow
of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Price has
sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity which has been undertaken to
qualify as a "Qualified Person" in accordance with the AIM Rules Guidance Note
for Mining and Oil & Gas Companies. Mr Price consents to the inclusion in
the announcement of the matters based on their information in the form and
context in which it appears.
KEY PERFORMANCE INDICATORS (KPIs)
The Board monitors KPIs, which it considers appropriate for a group at
Rockfire's stage of development.
Financial KPIs
During the year, the Board monitored the following KPIs:
· Cash flow and working capital.
RISK MANAGEMENT
The Board regularly reviews the risks to which the Group is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its
development are:
Risk of Sanction
During 2023, Rockfire was exposed to a potential risk of sanction. The owner
of two companies being acquired by Rockfire in the United Arab Emirates
("UAE") was sanctioned by the United Kingdom Government during the course of
the acquisition process.
On learning of the sanctions being imposed on the seller of the assets,
Rockfire immediately sought legal opinion. That opinion was that the
acquisition could not proceed without breaching the sanctions. On receiving
this advice, Rockfire immediately withdrew from the share purchase agreement
and discontinued its acquisition of the two companies in the UAE.
Rockfire has developed a new sanctions policy to assist with the avoidance of
exposure to sanction risk, as well as to manage any exposure to risk in the
future.
Money-laundering risk
The procedure for dealing with the risk of money-laundering has been put in
place by Rockfire management. Rockfire has developed a new anti
money-laundering policy to assist with the avoidance of exposure to such risk,
as well as to manage any exposure to risk in the future.
Exploration risk
The Group's business has been primarily mineral exploration and evaluation
which are speculative activities and whilst the Directors are satisfied that
good progress is being made, there is no certainty that the Group will be
successful in the definition of economic mineral deposits, or that it will
proceed to the development of any of its projects or otherwise realise their
value.
The Group aims to mitigate this risk when evaluating new business
opportunities by targeting areas of potential where there is at least some
successful historical drilling or geological data available.
Resource risk
All mineral projects have risk associated with defined grade and continuity.
Mineral reserves and resources are calculated by the Group in accordance with
accepted industry standards and codes but are always subject to uncertainties
in the underlying assumptions which include geological projection and
commodity price assumptions.
The Group reports mineral resources and reserves in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves ('the JORC Code'). The JORC Code is a professional code of
practice that sets minimum standards for public reporting of mineral
exploration results, mineral resources and ore reserves. Further information
on the JORC Code can be found at www.jorc.org (http://www.jorc.org) .
Environmental, landowner and native title risk
Exploration and development of a project can be adversely affected by
environmental legislation and the unforeseen results of environmental studies
carried out during evaluation of a project. Once a project is in production,
unforeseen events can give rise to environmental liabilities.
Access and compensation agreements are required to be negotiated between the
Company and the landowner at each project. Greek legislation provides an
agreement template which may be modified by the Company and the landowner. The
Company cannot guarantee landowners will provide access, regardless of
existing laws in place to ensure such access is negotiated on fair terms.
The Group is currently in the exploration stage. Any disturbance to the
environment during this phase is minimal and is rehabilitated in accordance
with the prevailing regulations of the countries in which we operate.
Financing and liquidity risk
The Group has an ongoing requirement to fund its activities through the equity
markets and in the future to obtain finance for project development. There is
no certainty such funds will be available when needed. To date, Rockfire has
managed to raise funds primarily through equity placements despite the very
difficult markets that currently exist for raising funding in the junior
mining industry.
Political risk
All countries carry political risk that can lead to interruption of activity.
Politically stable countries can have enhanced environmental and social
permitting risks, risks of strikes and changes to taxation whereas less
developed countries can have in addition, risks associated with changes to the
legal framework, civil unrest and government expropriation of assets.
Bribery risk
The Group has adopted an anti-corruption policy and whistle blowing policy
under the Bribery Act 2010. Notwithstanding this, the Group may be held liable
for offences under that Act committed by its employees or subcontractors,
whether or not the Group or the Directors had knowledge of the committing of
such offences.
Insurance coverage
The Group maintains a suite of insurance coverage that is appropriate for the
Group and Company. This is arranged via a specialist mining insurance broker
and coverage includes public and products liability, corporate and
professional, travel, property and medical coverage and assistance while Group
employees and consultants are travelling on Group business. This is reviewed
at least annually and adapted as the Group's scale and nature of activities
changes.
Internal controls and risk management
The Directors are responsible for the Group's system of internal financial
control. Although no system of internal financial control can provide absolute
assurance against material misstatement or loss, the Group's system is
designed to provide reasonable assurance that problems are identified on a
timely basis and dealt with appropriately.
In carrying out their responsibilities, the Directors have put in place a
framework of controls to ensure as far as possible that ongoing financial
performance is monitored in a timely manner, that corrective action is taken
and that risk is identified as early as practically possible. The Directors
review the effectiveness of internal financial control at least annually.
The Board continuously monitors and upgrades its internal control procedures
and risk management mechanisms and assesses both for effectiveness during the
annual review. This process enables the Board to determine if the risk
exposure has changed during the year. The Company has a risk management
policy, which is reviewed annually. The Executive Directors report regularly
to the Board on the management of material business risks.
The Board, subject to delegated authority, reviews capital investment,
property sales and purchases, additional borrowing facilities, guarantees and
insurance arrangements.
CORPORATE SOCIAL RESPONSIBILITY
The Board takes account of the significance of social, environmental and
ethical matters affecting the business of the Group. At this stage in the
Group's development the Board has not adopted a specific policy on corporate
social responsibility as it has a limited pool of stakeholders other than its
shareholders. Rather, the Board seeks to protect the interests of Rockfire's
stakeholders through individual policies and through ethical and transparent
actions.
SHAREHOLDERS
The Directors are always prepared, where practicable, to enter into dialogue
with shareholders to promote a mutual understanding of objectives and
outcomes. The Annual General Meeting provides the Board with an opportunity to
informally meet and communicate directly with investors.
ENVIRONMENT
The Board recognises that the Group's principal activity, mineral exploration,
has the potential to impact on the local environment. To date, activities at
the various projects have been limited to surveying and drilling activities
and the Group does comply with local regulatory requirements with regard to
environmental compliance and rehabilitation. The impact on the environment of
the Group's activities has the potential to increase should our projects move
into a development or production phase. This is currently assessed through
baseline environmental studies that are being undertaken and identifying
resources needed to manage environmental compliance in the future.
Given the Group's size and scale it is not considered practical or cost
effective to collect and report data on carbon emissions.
EMPLOYEES
The Group engages its employees to understand all aspects of the Group's
business and seeks to remunerate its employees fairly, being flexible where
practicable. The Group gives full and fair consideration to applications for
employment received regardless of age, gender, colour, ethnicity, disability,
nationality, religious beliefs, transgender status or sexual orientation. The
Group takes account of employees' interests when making decisions and welcomes
suggestions from employees aimed at improving the Group's performance.
The Group now operates in Greece and Australia where it recruits locally as
many of its employees and contractors as practicable.
SUPPLIERS AND CONTRACTORS
The Group recognises that the goodwill of its contractors, consultants and
suppliers is important to its business success and seeks to build and maintain
this goodwill through fair dealings. The Group has a prompt payment policy and
seeks to settle all agreed liabilities within the terms agreed with suppliers.
The Company encourages best practice from suppliers and contractors with
regards to environmental issues.
HEALTH AND SAFETY
The Board recognises that it has a responsibility to provide strategic
leadership and direction in the development of the Group's health and safety
strategy in order to protect all of its stakeholders. The Group does not have
a formal health and safety policy at this time. This is re-evaluated as and
when the Group's nature and scale of activities change.
ENGAGEMENT WITH STAKEHOLDERS
The Board of Rockfire is proud of the high standard of corporate governance it
has established and maintains. The Board makes a conscious effort to
understand the interests and expectations of the Company's stakeholders, and
to reflect these in the choices it makes in its effort to create long-term
sustainable success for our business.
Engagement with our shareholders and wider stakeholder groups, including
employees, landowners, suppliers, contractors and government agencies, plays a
central role throughout Rockfire's business. The Board is aware that each
stakeholder group requires a specific and unique engagement approach in order
to create and maintain effective, sustainable and mutually beneficial
relationships.
The Board's understanding of various stakeholder interests is factored into
programme planning, boardroom discussions, strategy and budgets to assess
potential long-term impacts of our business on each group, and how we might
best address stakeholder expectations from our business.
Throughout this Annual Report, we provide examples of how we:
· Take into account the likely consequences of long-term
decisions;
· Foster relationships with stakeholders;
· Understand our impact on our local communities and the
environment; and
· Demonstrate the importance of behaving responsibly.
This engagement with stakeholders section forms our section 172 statement and
should be read in conjunction with other information included in this Annual
Report. Section 172 of the Companies Act 2006 requires the Directors to act in
a way that they consider, in good faith, would most likely promote the success
of the Company for the benefit of its members as a whole, taking into account
the factors listed in section 172.
The Directors continue to observe, plan for, and communicate the interests
of the Company's stakeholders, including the impact of its exploration
activities on local communities and the environment. Acting in good faith and
fairly between members, the Directors consider what is most likely to promote
the success of the Company for its members in the long term.
The Board regularly reviews its principal stakeholders and how it engages with
each. Stakeholder expectations are brought into the boardroom throughout the
annual cycle through information provided by management and by direct
engagement with stakeholders themselves. The priority of each stakeholder
group may increase or decrease, depending on the degree of impact any decision
may have on any particular stakeholder group. The Board therefore seeks to
consider the impact and priorities of each stakeholder group during its
discussions and as part of its decision making.
The table below sets out the key stakeholder groups, their interests and how
Rockfire has engaged with them over the reporting period. However, given the
importance of stakeholder focus, long-term strategy and reputation, these
themes are also discussed throughout this Annual Report.
Stakeholder Their interests How we engage
Our investors · Comprehensive review of financial performance of the business · Annual Report
· Business sustainability · Company website
· High standard of governance · Shareholder circulars
· Success of the business · Podcasts and interviews
· Ethical behaviour · Corporate information including Company announcements and
presentations
· Director experience
· AGM results
· Awareness of long-term strategy and direction
· Conference presentations
· Project prospectivity
· Stock exchange announcements
· Improving market perception of the business
· Press releases
· Appointment of a public relations advisor
· Frequent communication through briefings with management
· Shareholder communication policy, which is renewed annually
· Specific shareholder liaison officer on the Board (Chief
Executive Officer)
· Social media
· One- to- one meetings with large existing or potential new
shareholders
Regulatory bodies · Compliance with regulations · Company website
· Worker pay and conditions · Stock Exchange announcements
· Health and safety · Interim and Annual Report
· Brand reputation · Regular contact with QCA, share registrar, LSE and Companies
House
· Waste and environment
· Compliance updates at Board meetings
· Insurance
· Risk management policy, updated annually
· Environmental protection
· Compliance with local regulatory requirements and industry
standard principles for environmental and social risk management
· Appointment of a nominated advisor in accordance with the AIM
Rules
· Appointment of a competent person in accordance with the AIM
Rules
· Adhere to Australian and Greek laws and regulations
· Adoption of best practice policies recommended by the World
Bank and The International Council on Mining and Metals
Community · Sustainability · Philanthropy. Drilling of a water bore is offered to the
landowner during each drill programme
· Human rights
· Corporate responsibility is overseen by a dedicated exploration
· Community outreach manager
· Employment of local contractors wherever possible
· Prompt rehabilitation of drill sites
· Providing opportunity for local businesses to cater for our
exploration programs
· Local landowners are paid promptly
· Landowner access and compensation agreements
· Active communication with landowners and communities where
field work is taking place
· Adhere to Queensland Government guidelines for approaching
landowner and native title holder discussion
Environment · Energy usage · All operational waste is completely removed from site and taken
to a waste and/or recycling facility
· Recycling
· Detailed field operation guidelines to minimise any negative
· Waste management environmental impact of exploration activities
· Obtaining environmental permits for exploration works in Greece
and Australia, granted by the relevant government
· Ensuring operational protocols are in place and monitoring the
adherence to those protocols
Suppliers · Terms and conditions of contract · All supplies are sourced locally where possible
· Procurement opportunities · Our suppliers and contractors have received repeat business
from Rockfire, which is testimony to the fine working relationship established
· Workers' rights
· Supplier performance is continually monitored by a dedicated
· Supplier engagement exploration manager
· Sustainability · All field programs, including supplier quotes are authorised by
the Executive Directors prior to implementation
· Long-term partnerships
· Local suppliers are paid promptly
· Fair trading and payment terms
· Contact and feedback to suppliers is regular and personal via a
dedicated exploration manager
Contractors · Terms and conditions of contract · All contractors are sourced locally where possible
· Health and safety · Contractors are trained in senior first aid, paid for by
Rockfire
· Human rights and modern slavery
· On-the-job training is provided
· Working conditions
· Local contractors are paid promptly
· Diversity and inclusion
· Rockfire pays contractors standard industry rates, which are
well in excess of minimum average wages
· Communication with contractors is frequent through a dedicated
exploration manager
· Induction for health and safety is mandatory for contractors
visiting site
· Daily safety meetings have been implemented during all field
operations
· Rockfire has a whistle-blower policy and procedure in place to
ensure compliance, safety and governance
· Code of conduct providing a framework for ethical decision
making
· Contact and feedback to contractors is regular and personal via
a dedicated exploration manager
· Anti-corruption and bribery policy
On behalf of the Board
David Price
Chief Executive Officer
30 May 2024
DIRECTORS' REPORT
Principal activities
The principal activities of the Group are currently exploration for base
metals and critical minerals in Greece, as well as gold and copper resources
in Australia. The Group's strategy is to explore for and, where the Directors
believe that it is commercially feasible, develop deposits of base metals,
precious metals and critical minerals. The Company strategy includes
considering opportunities for project sale or joint venture at a point when
any of the Group's projects becomes appropriately advanced enough to consider
such options.
The Group currently holds one exploration and exploitation licence in Greece,
and five exploration permits for minerals in Queensland, Australia.
Financial overview
The loss for the year is higher than anticipated owing to the unsuccessful
acquisition of Emirates Gold DMCC and Emperesse Bullion DMCC. The Directors
are confident that they will be able to secure additional funding when
required. The Directors are also of the view that the investment sentiment in
the resource sector is currently slow, but improving, to the extent that the
exploration success the Company has achieved to date should enable it to raise
sufficient additional exploration funding to continue its exploration
programmes.
Further details of the Group's business, including its targets and strategies
is given in the Chairman's Statement and the Strategic Report.
Major events after the reporting period
For information regarding events after the reporting date, see note 21 to the
financial statements.
Dividends
The Directors are unable to recommend the payment of a dividend for the year
ended 31 December 2023 (2022: £nil).
Going concern
The Board believes the Group will generate sufficient working capital to
continue in operational existence and will have the ongoing support of its
shareholders, as required, for the foreseeable future. Refer to the going
concern accounting policy note for more detail.
Directors
The Directors in office during the year are listed below. The interests of the
Directors in the shares of the Company, and share options were as follows:
As at 31 December 2023 As at 31 December 2022 As at 31 December 2023 As at 31 December 2022
Ordinary shares Ordinary shares Options Options
Gordon Hart 18,423,530 14,423,530 10,000,000 10,000,000
Patrick Elliott 55,594,744 40,042,765 - 6,000,000
Ian Staunton - - - 6,000,000
Nicholas Walley 75,200,000 75,200,000 - 6,000,000
David W Price 46,350,000 46,350,000 10,000,000 10,000,000
Significant shareholdings
As at 15 May 2024, being the latest practical date prior to publication of
this document, the Company was aware of the following holdings of 3% or more
of the issued share capital of the Company:
Ordinary shares % of the Company's issued share capital
Rostra Holdings 480,000,000 18.78%
TPM Middle East Dubai 312,000,000 12.21%
The Wonderful Group 308,000,000 12.05%
Directors' remuneration
Full details of Directors' emoluments are set out in note 5 to the financial
statements.
Environmental policy
The Group's projects are subject to the relevant Greek and Australian laws and
regulations relating to environmental matters.
The Group's strategy is to explore for and, where the relevant studies
indicate that it is economically viable to do so, to develop mineral deposits.
It is the Group's intention to conduct its exploration and investigation
activities in a professional and responsible manner, for the benefit of the
Company's shareholders, its employees and the national and local communities
within which it operates.
The Group aims, at all times, to conduct its operations in an environmentally
responsible manner and in accordance with relevant legislation. The Group aims
to adopt best practice policies as recommended by the World Bank, the
International Council on Mining & Metals ("ICMM") and others where the
Group deems local legislation to be inadequate in terms of environmental
protection. The Group has in place a detailed field operations guidelines
manual which covers in considerable detail the measures to be taken by field
personnel to minimise any negative environmental impact of current exploration
activities on the environment.
The Group also recognises the enormous potential of its activities for
positive impact on the communities in which it operates and strives to
optimise these positive impacts as far as possible.
Directors' indemnities
The Group has directors and officers' indemnity insurance to cover its
Directors and officers against the costs of defending themselves in legal
proceedings taken against them in that capacity and in respect of any damages
resulting from those proceedings.
Political contributions
No political contributions have been made.
Auditor
A resolution proposing that PKF Littlejohn LLP be re-appointed will be put to
the forthcoming Annual General Meeting.
Statement of disclosure to auditor
The Directors who held office at the date of approval of this Annual Report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's auditor is unaware and each Director has
taken all steps that he ought to have taken as a Director in order to make
himself aware of any relevant audit information and to establish that the
Company's auditor is aware of that information.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Strategic Report, the
Director's 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 prepared the Group and
Company financial statements in accordance with UK-adopted international
accounting standards and as regards the Company financial statements, as
applied in accordance with the requirements of the Companies Act 2006.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit or loss of the Group
and Company for that period.
In preparing the Group and Company financial statements, the Directors are
required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they comply with UK-adopted international
accounting standards, subject to any material departures disclosed and
explained in the financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The Group's Annual Report will be published on the Group's website and in this
regard the Directors accept responsibility for the maintenance and integrity
of the website.
Annual General Meeting and recommendation
The Board considers that the resolutions to be proposed at the Annual General
Meeting are in the best interests of the Company and the Group as a whole and
its unanimous recommendation is that shareholders support these proposals as
the Directors intend to do in respect of their own holdings. Further details
regarding the location and timing of the Company's forthcoming Annual General
Meeting will be provided shortly.
We thank you for your continuing support of Rockfire and welcome you to remain
a shareholder as we strive to build Rockfire into a cash-positive company.
On behalf of the Board
David Price, Chief Executive Officer
30 May 2024
INDEPENDENT AUDITOR'S REPORT
Opinion
We have audited the financial statements of Rockfire Resources Plc (the
'parent company') and its subsidiaries (the 'group') for the year ended 31
December 2023 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Statements of Financial Position,
the Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements of Cash Flows and notes to the
financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards and as regards the
parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
· the financial statements give a true and fair view of the state
of the group's and of the parent company's affairs as at 31 December 2023 and
of the group's loss for the year then ended;
· the group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting standards and
as applied in accordance with the provisions of the Companies Act 2006; 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 parent 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 entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 3 in the financial statements, which indicates that
the group will require further funds to be raised over the next 12 months in
order for the group to meet its exploration expenditure commitments, undertake
the budgeted exploration activities and progress new business development
opportunities. As stated in note 3, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the group's and
parent company's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group's and parent company's ability to continue to adopt
the going concern basis of accounting included a review of the cash flow
forecasts prepared by management, a review of management's assessment of going
concern and post year end information impacting going concern.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
Materiality Basis for materiality
Group £144,000 (2022: £102,000) 2% of gross assets
Company £100,800 (2022: £75,000) 2% of gross assets with 5% of loss before tax to obtain coverage of
expenditure
We consider gross assets to be the most significant determinant of the group's
financial position and performance used by shareholders, with the key
financial statement balances being intangible exploration and evaluation
assets and cash and cash equivalents. The going concern of the group is
dependent on its ability to fund operations going forward, as well as on the
valuation of its assets, which represent the underlying value of the group.
The basis for calculating materiality was unchanged from the prior year.
Whilst materiality for the group financial statements as a whole was set at
£144,000, materiality for the parent company was £100,800 and for
significant components was set at a range between £100,800 and £71,400
(2022: £71,000 and £63,350). Performance materiality at 70% was set at
£100,800 for the group, £70,560 for the parent company (2022: £71,400 and
£52,500, respectively) and for the significant components at a range between
£70,560 and £49,980 (2022: £49,700 and £44,350). We applied the concept of
materiality both in planning and performing our audit, and in evaluating the
effect of misstatements.
We agreed with the audit committee that we would report to the committee all
audit differences identified during the course of our audit in excess of
£7,200 (2022: £5,100) for the group and £5,040 (2022: £3,750) for the
parent company.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of
material misstatement in the financial statements. In particular, we looked at
areas requiring the directors to make subjective judgements, for example in
respect of assessing the recoverability of exploration, evaluation and
development expenditure, the valuation of share-based payments, the carrying
value and recoverability of investments in subsidiaries at parent company
level, and the consideration of future events that are inherently uncertain.
We also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
An audit was performed on the financial information of the group's significant
operating components which, for the year ended 31 December 2023, were located
in the United Kingdom, Australia and Greece. The audit of significant
components was performed in London solely by PKF Littlejohn LLP using a team
with experience of auditing mineral exploration and publicly listed entities.
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 matters
described in the Material uncertainty related to concern section we have
determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value and appropriate capitalisation of Intangible Assets (refer Note
9) (GROUP)
The group carrying value of intangible assets in relation to capitalised Our work in this area included:
exploration costs for its Australian and Greek projects is material. There is
a risk that these assets have been incorrectly capitalised in accordance with
the requirements of IFRS 6 and that there are indicators of impairment as at
31 December 2023. · Confirmation that the group has good title to the applicable
exploration licences, and has fulfilled any specific conditions therein
particularly having regard to minimum expenditure requirements;
Particularly for early stage exploration projects, where the calculation of · Review and substantive testing of capitalised costs, and
recoverable amount via value in use calculations is not possible, management's consideration of appropriateness for capitalisation under IFRS 6;
assessment of impairment under IFRS 6 requires significant estimation and
judgement. · Assessment of progress at the individual projects during the year
and post year-end;
· Consideration of management's impairment reviews in light of
impairment indicators identified in accordance with IFRS 6, including
corroboration and challenge thereof; and
· Evaluating the disclosures included within the financial
statements.
Recoverability of investments and intragroup balances (refer Notes 11 and 12)
(COMPANY)
Investments in subsidiaries and intragroup loans are significant assets in the Our work in this area included:
parent company's financial statements. Their recoverability is directly linked
to the recoverability of intangible assets in those entities, and hence may · Confirmation of ownership of the investments;
not be fully recoverable.
· Review of management's calculations of expected credit losses on
the intragroup balances to ensure the rationale and accounting treatment is in
accordance with IFRS 9;
· Consideration of recoverability of investments and intragroup
loans by reference to underlying net asset values and exploration projects;
and
· Evaluating the disclosures included within the financial
statements.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the group and parent company 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, based on the work undertaken in the course of the 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 strategic report and the directors' 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 parent
company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the parent company financial statements 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 directors
As explained more fully in the directors' responsibilities statement, the
directors are responsible for the preparation of the group and parent company
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 group and parent company 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 group and parent company and
the sector in which they operate to identify laws and regulations that could
reasonably be expected to have a direct effect on the financial statements. We
obtained our understanding in this regard through discussions with management
and application of our cumulative audit knowledge and experience of the
industry. We ensured that the audit team collectively had the appropriate
experience with auditing entities within this industry, facing similar audit
and business risks, and of a similar size.
· We determined the principal laws and regulations relevant to the
group and parent company in this regard to be those arising from:
o AIM Rules;
o UK employment law; and
o Local tax laws and regulations.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
and parent company with those laws and regulations. These procedures included,
but were not limited to:
o Making enquiries of management;
o A review of Board minutes;
o A review of legal ledger accounts; and
o A review of regulated news service announcements.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to the impairment assessment of intangible assets and we addressed this by
challenging the assumptions and judgements made by management when auditing
that significant accounting estimate.
· We addressed the risk of fraud arising from management override
of controls by performing audit procedures which included, but were not
limited to: the testing of journals, reviewing accounting estimates for
evidence of bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
David Thompson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor, 30 May 2024
London E14 4HD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Note 2023 2022
£ £
Interest income 2 1
Administrative expenses (1,785,547) (753,213)
Operating loss 6 (1,785,545) (753,212)
Loss before taxation (1,785,545) (753,212)
Taxation 7 - -
(1,785,545) (753,212)
Loss for the year attributable to shareholders of the Company
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation movement (203,202) 138,883
Total comprehensive loss attributable to shareholders of the Company (1,988,747) (614,329)
Loss per share attributable to shareholders of the Company
Basic and diluted 8 (0.10)p (0.06)p
The notes form part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2023
Note 2023 2022
£ £
Assets
Non-current assets
Intangible assets 9 4,972,616 4,451,118
Property, plant and equipment 10 28,244 38,323
Other receivables 12 94,301 85,872
5,095,161 4,575,313
Current assets
Cash and cash equivalents 13 436,575 420,255
Trade and other receivables 12 1,732,419 106,171
2,168,994 526,426
Total assets 7,264,155 5,101,739
Equity and liabilities
Equity attributable to shareholders of the Company
Share capital 14 8,548,460 7,435,409
Share premium 15 21,210,144 18,233,976
Other reserves 15 2,190,753 2,295,035
Merger relief reserve 15 190,000 190,000
Foreign exchange reserve 15 (254,325) (51,123)
Retained deficit (24,842,895) (23,161,632)
Total equity 7,042,137 4,941,665
Current liabilities
Trade and other payables 17 222,018 160,074
Total liabilities 222,018 160,074
Total equity and liabilities 7,264,155 5,101,739
The notes form part of these financial statements
David Price
Chief Executive Officer
The notes form part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Share capital Share premium Other reserves Merger Foreign exchange reserve Retained deficit Total equity
relief
reserves
£ £ £ £ £ £ £
As at 1 January 2022 7,078,136 18,180,659 2,295,035 - (190,006) (22,408,420) 4,955,404
Loss for the financial year - - - - - (753,212) (753,212)
Foreign exchange translation movement - - - - 138,883 - 138,883
Total comprehensive loss - - - - 138,883 (753,212) (614,329)
Shares issued during the year 307,273 95,727 - - - - 403,000
Share issuance costs - (42,410) - - - - (42,410)
Acquisition of subsidiary 50,000 - - 190,000 - - 240,000
Total transactions with shareholders 357,273 53,317 - 190,000 - - 600,590
At 31 December 2022 7,435,409 18,233,976 2,295,035 190,000 (51,123) (23,161,632) 4,941,665
As at 1 January 2023 7,435,409 18,233,976 2,295,035 190,000 (51,123) (23,161,632) 4,941,665
Loss for the financial year - - - - - (1,785,545) (1,785,545)
Foreign exchange translation movement - - - - (203,202) - (203,202)
Total comprehensive loss - - - - (203,202) (1,785,545) (1,988,747)
Shares issued during the year 1,113,051 3,299,719 - - - - 4,412,770
Share issuance costs - (323,551) - - - - (323,551)
Transfer on lapse of options - - (104,282) - - 104,282 -
Total transactions with shareholders 1,113,051 2,976,168 (104,282) - - 104,282 4,089,219
At 31 December 2023 8,548,460 21,210,144 2,190,753 190,000 (254,325) (24,842,895) 7,042,137
The notes form part of these financial statements.
2023 2022
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2023
Note £ £
Cash flow from operating activities
Loss for the year before tax (1,785,545) (753,212)
Depreciation 10 7,317 8,677
Expenses settled in shares 32,484 28,000
Loss on disposal of property, plant and equipment 1,770 -
Finance income (2) 1,477
Foreign exchange differences (40,854) (105,327)
(Increase) / decrease in trade and other receivables 12 (1,671,558) 20,617
Increase/ (decrease) in trade and other payables 17 97,949 (96,804)
Net cash outflow from operating activities (3,358,439) (896,572)
Cash flow from investing activities
Exploration expenditure (681,668) (459,292)
Payment of long term deposit - (85,872)
Cash acquired with subsidiary - 82,282
Acquisition of property, plant and equipment 10 (2,147) (25,003)
Property, plant and equipment sale proceeds 1,837 -
Interest received 2 -
Net cash used in investing activities (681,976) (487,885)
Cash flow from financing activities
Proceeds from issuance of ordinary shares 4,380,286 375,000
Share issuance costs 14 (323,551) (42,410)
Interest paid - (1,477)
Net cash generated from financing activities 4,056,735 331,113
Net increase / (decrease) in cash and cash equivalents 16,320 (1,053,344)
Cash and cash equivalents at the beginning of the year 13 420,255 1,473,599
Cash and cash equivalents at the end of the year 436,575 420,255
The notes form part of these financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1 Reporting entity
Rockfire Resources plc is a public limited company, quoted on AIM and
incorporated in England and Wales.
2 Adoption of new and revised standards
(i) New and amended standards, and interpretations issued and effective for
the financial year beginning 1 January 2023
The following new standards, amendments and interpretations are effective for
the first time in these financial statements. However, none has had a material
impact on the financial statements:
Standard Effective date
IFRS 17 Insurance Contracts; 1 January 2023
Definition of Accounting Estimates - amendments to IAS 8; 1 January 2023
Deferred Tax related to Assets and Liabilities arising from a Single 1 January 2023
Transaction -amendments to IAS 12;
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice 1 January 2023
Statement 2;
Amendments to IAS 1 - Classification of Liabilities as Current or Non-current; 1 January 2023
and Amendments to IAS 1 - Non-current Liabilities with Covenants.
(ii) New standards, amendments and interpretations in issued but not yet
effective
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective: (and in some cases not yet adopted by the
UK):
Standard Effective date
Amendments to IAS 1 - Classification of Liabilities as Current or Non-current; 1 January 2024
Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements; and 1 January 2024
Amendment to IFRS 16 Leases: Lease Liability in a sale & leaseback*. 1 January 2024
* Subject to UK endorsement
The Directors do not expect that the adoption of these standards will have a
material impact on the financial statements of the Group or Company in future
periods.
3 Basis of preparation and significant accounting
policies
a) Basis of preparation
These financial statements have been prepared in accordance with UK-adopted
international accounting standards and with the requirements of the Companies
Act 2006. The Financial statements are prepared under the historical cost
convention as modified by the measurement of certain financial instruments at
fair value.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's and Company's
accounting policies.
b) Basis of consolidation
Subsidiaries are entities controlled by the Group. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its
power over the investee. Specifically, the Group controls an investee if, and
only if, the Group has:
· Power over the investee (i.e., existing rights that give it the
current ability to direct the relevant activities of the investee);
· Exposure, or rights, to variable returns from its involvement
with the investee; and
· The ability to use its power over the investee to affect its
returns.
Generally, when the Group has less than a majority of the voting or similar
rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
· The contractual arrangement(s) with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date that
control commences until the date that control ceases. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group. Intra-group balances and any unrealised gains
or losses or income or expenses arising from intra-group transactions are
eliminated in preparing the Group financial statements.
c) Functional and presentation currency
These consolidated financial statements are presented in GB pounds sterling
(GBP), which is the Company's functional currency.
d) Going concern
The Company has prepared a cash flow forecast to 30 June 2025 which supports
the Directors' expectation that the Group has adequate resources to continue
in operational existence for a period of not less than 12 months from the date
of signing these financial statements. This cash flow forecast assumes that
the exploration programmes, including minimum expenditure commitments, will
only continue with additional equity funding secured by the Group. This
additional funding is not guaranteed, however, to date the Group has been
successful in securing funding when required. On 15 September 2023, the
Company announced that it had successfully completed a placing of new ordinary
shares in the Company, raising gross proceeds of £3.5 million, which
comprised 700,000,000 new ordinary shares of 0.1 pence each in the Company
being placed with an institutional investor at an issue price of 0.5 pence per
share.
Additionally on 1 February 2024, the Company announced that it had received
the return of a US$2 million consideration which was paid by Rockfire as part
of its terminated acquisition of Emirates Gold DMCC and Emperesse Bullion LLC.
These funds will be put towards multiple activities which the Company is
currently undertaking. The first is the continuation of drilling at the
Company's 100%-owned Molaoi base metal and critical mineral deposit in Greece.
Funds will also contribute to on-going working capital requirements of the
Company. As such, the financial statements have been prepared assuming the
Group and Company will continue as a going concern.
The Directors believe the Group will generate sufficient working capital and
cash flows to continue in operational existence and will have the ongoing
support of its shareholders, if required, for the foreseeable future.
e) Business combinations
The Group applies the acquisition method in accounting for business
combinations. The consideration transferred by the Group to obtain control of
a subsidiary is calculated as the sum of the acquisition-date fair values of
assets transferred, liabilities incurred, and the equity interests issued by
the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as
incurred. Assets acquired and liabilities assumed are generally measured at
their acquisition-date fair value.
f) Property, plant and equipment
Items of property, plant and equipment are stated at historical cost less
accumulated depreciation.
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
· Motor vehicles
- 20% straight line
· Office equipment
- 25% straight line
· Building improvements
- 10% straight line
The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date.
g) Intangible assets - exploration costs
Exploration costs comprise costs associated with the acquisition of mineral
rights and mineral exploration and are capitalised as intangible assets
pending the feasibility of the project. They also include certain
administrative costs that are allocated to the extent that those costs can be
related directly to exploration activities.
If an exploration project is deemed successful based on feasibility studies,
the related expenditure is transferred to development and production assets
and amortised over the estimated useful life of the ore reserves on a unit of
production basis. Where a project is abandoned or considered to be no longer
economically viable, the related costs are written off to profit or loss.
To date, the Group has not progressed to the development and production stage
in any area of operation.
h) Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, the Group estimates the asset's
recoverable amount. An asset's recoverable amount is the higher of an assets
or cash-generating unit's fair value less costs to sell and its value in use
and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent from those of other assets or groups
of assets. Where the carrying value of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs to sell, an
appropriate valuation model is used.
Exploration projects at an early stage of development are assessed under the
following areas, in accordance with the criteria contained within IFRS 6, for
circumstances that may indicate the existence of impairment:
· The Group's right to explore in an area has expired, or will
expire in the near future without renewal;
· No further exploration or evaluation is planned or budgeted;
· A decision has been taken by the Board to discontinue exploration
and evaluation in an area due to the absence of a commercial level of
reserves; or
· Sufficient data exists to indicate that the book value will not
be fully recovered from future development.
Impairment losses of continuing operations are recognised in profit or loss in
those expense categories consistent with the function of the impaired asset.
For impaired assets, an assessment is made at each reporting date as to
whether there is any indication that previously recognised impairment losses
may no longer exist or may have decreased. If such indication exists, the
Group makes a revised estimate of recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the last impairment
loss was recognised. If that is the case the carrying amount of the asset is
increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior years.
i) Financial instruments
Financial assets
Classification
The Group classifies its financial assets at amortised cost. Financial assets
do not comprise prepayments. Management determines the classification of its
financial assets at initial recognition. The classification of financial
assets at initial recognition that are debt instruments depends on the
financial asset's contractual cash flow characteristics and the business model
for managing them. In order for a financial asset to be classified and
measured at amortised cost it needs to give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
Amortised cost
The Group's financial assets held at amortised cost comprise trade and other
receivables and cash and cash equivalents in the statement of financial
position. These assets are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They arise
principally through the provision of goods and services to customers (e.g.,
trade receivables), but also incorporate other types of contractual monetary
asset. 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 method, less provision
for impairment.
Impairment of financial assets
An impairment provision is recognised when there is objective evidence of a
default event (e.g., significant financial difficulties on the part of the
counterparty or default or significant delay in payment) such that the Group
may be unable to collect all of the amounts due under the terms receivable,
the amount of such a provision being the difference between the net carrying
amount and the present value of the future expected cash flows associated with
the impaired asset.
Impairment provisions for trade receivables and other receivables are
recognised based on the simplified approach within IFRS 9 using lifetime
expected credit losses (ECLs). During this process the probability of
non-payment of receivables is assessed. This probability is then multiplied by
the amount of expected loss arising from the default to determine the ECL.
Financial liabilities
The Group classifies its financial liabilities in the category of financial
liabilities at amortised cost. All financial liabilities are recognised in the
statement of financial position when the Group becomes a party to the
contractual provision of the instrument. Trade and other payables and
borrowings are included in this category.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the statement of comprehensive income over the period
of the borrowings using the effective interest method.
Borrowings are de-recognised from the balance sheet when the obligation
specified in the contract is discharged, is cancelled or expires. The
difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other operating income or finance costs.
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
Trade and other payables
Trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost using the effective interest method.
Accounts payable are classified as current liabilities if payment is due
within one year or less. If not, they are presented as non-current
liabilities.
j) Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is
probable that an outflow of economic benefit will be required to settle the
obligation. If the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects the
current market assessment of the time value of money and where appropriate,
the risks specific to the liability.
k) Current and deferred tax
Tax represents the sum of current and deferred tax.
Tax payable or receivable is based on taxable profit or loss for the year.
Taxable profit or loss differs from accounting profit or loss as reported in
the consolidated statement of comprehensive income because it excludes items
of income or expense that are taxable or deductible in other years and further
excludes items that are never taxable or deductible. Current tax is measured
using tax rates 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 future taxable profits will be available, against which
deductible temporary differences can be utilised.
l) Pensions
Pension costs charged in the financial statements represent the contributions
payable by the Group during the year into defined contribution pension
schemes.
m) Foreign currencies
The individual financial statements of each Group entity are presented in the
currency of the primary economic environment in which the entity operates (its
functional currency). For the purpose of the financial statements, the results
and financial position of each entity are expressed in GBP.
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the balance
sheet date.
Exchange differences arising on the settlement of monetary items and on the
retranslation of monetary items are included in the statement of comprehensive
income for the period.
For the purpose of presenting consolidated financial statements, the assets
and liabilities of the Group's foreign operations are expressed in GBP using
exchange rates prevailing at the balance sheet date. Income and expense items
are translated at the average exchange rates for the period. Exchange
differences arising, if any, are classified as other comprehensive income and
are transferred to the Group's translation reserve.
When the settlement of a monetary item receivable from or payable to a foreign
operation is neither planned nor likely in the foreseeable future, foreign
currency gains and losses arising from such items are considered to form part
of a net investment in the foreign operation and are recognised in other
comprehensive income and presented in the exchange reserve in equity.
n) Investments
Investments held as non-current assets comprise investments in subsidiary
undertakings and are stated at cost less any provision for impairment.
o) Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares are recognised as a deduction
from equity, net of any tax effects.
p) Share-based payments
The Group makes equity-settled share-based payments to certain Directors and
employees. Equity-settled share-based payments are measured at fair value at
the date of grant by reference to the fair value of the equity instruments
granted.
The fair value determined at the grant date of equity-settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of the number of instruments that will eventually vest
with a corresponding adjustment to equity. Fair value is measured by use of
the Black Scholes model. The expected life used in the model has been
adjusted, based on management's best estimate, for the effect of
non-transferability, exercise restrictions, and behavioural considerations.
Non-vesting and market vesting conditions are taken into account when
estimating the fair value of the option at grant date. Service and non-market
vesting conditions are taken into account by adjusting the number of options
expected to vest at each reporting date.
q) Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting
estimates will, by definition, seldom equal the actual results. 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. Certain amounts included in the
financial statements involve the use of judgement and/or estimation. These
judgements and estimates are based on management's best knowledge of the
relevant facts and circumstances, but actual results may differ from the
amounts included in the financial statements. The Board has considered the
critical accounting estimates and assumptions used in the financial statements
and concluded that the areas of judgement that have the most significant
effect on the amounts recognised in the financial statements are as set out
below.
Recoverability of deferred exploration costs
All costs directly attributable to exploration are capitalised on a project
basis, pending a decision on the economic feasibility of the project. The
capitalisation of such costs gives rise to an intangible asset in the
consolidated and parent company statements of financial position. Exploration
costs are capitalised where it is considered likely that the amount will be
recovered by future exploitation, sale or alternatively where the activities
have not reached a stage which permits a reasonable assessment of the
existence of reserves. This requires management to make estimates and
assumptions as to the future events and circumstances, especially in relation
to whether an economically viable extraction operation can be established.
Such estimates are subject to change and should it become apparent that
recovery of the expenditure is unlikely, the relevant amount is written off in
the statement of comprehensive income.
Receivables from Group undertakings
The Company makes assumptions when implementing the forward-looking ECL model.
This model is used to assess intercompany loans for impairment.
Estimates are made regarding the credit risk and the underlying probability of
default in each of the credit loss scenarios. The scenarios identified by the
Company are production, divestment, fire-sale and failure. The Directors make
judgements on the expected likelihood and outcome of each of the scenarios,
and these expected values are applied to the loan balances.
4 Segmental reporting
During the year, the Group had one business segment which was exploration for
gold and copper resources. Accordingly, no segmental analysis is appropriate.
5 Staff costs
Number of employees
The monthly average number of employees (excluding Directors) of the Group
during the year was:
2023 2022
No. No.
Professional 2 2
Employment costs (excluding directors) 2023 2022
£ £
Wages and salaries 91,467 126,531
Post-employment benefits - 8,687
Total 91,467 135,218
Directors' emoluments
2023
Short-term benefits Post-employment benefits Total
£ £ £
David Price 188,457 19,114 207,571
Gordon Hart 126,507 10,831 137,338
Ian Staunton 36,547 - 36,547
Patrick Elliott 32,841 - 32,841
Nicholas Walley 36,547 - 36,547
Total 420,899 29,945 450,844
2022
Short-term benefits Post-employment benefits Total
£ £ £
David Price 162,547 16,662 179,209
Gordon Hart 88,699 9,092 97,791
Ian Staunton 31,576 - 31,576
Patrick Elliott 29,540 - 29,540
Nicholas Walley 31,576 - 31,576
Total 343,938 25,754 369,692
The key management personnel of the Group are considered to be the Directors.
6 Operating loss
Operating loss is stated after charging:
2023 2022
£ £
Fees payable to the Group auditor for the audit of the Group and Company 29,350 27,960
financial statements
Fees payable to the Group auditor for taxation services 2,500 2,000
Other fees payable to the Group auditor 110,000 -
Other fees in the year ended 31 December 2023 were in respect of reporting
accountant work on the terminated acquisition of Emirates Gold and Emperesse
Bullion (2022: £Nil).
7 Taxation
2023 2022
£ £
Factors affecting tax charge for the year
Loss on ordinary activities before taxation (1,785,545) (753,212)
Loss on ordinary activities at the UK standard rate (419,603) (143,110)
Effects of:
UK carried forward losses 345,761 95,432
Non-deductible expenses 99 45
Losses of overseas subsidiaries carried forward 73,743 47,633
Current tax charge - -
Corporation tax for the year ended 31 December 2023 was calculated using a
marginal tax rate of 23.5 per cent. (2022: 19%). The UK corporation tax was
set at the main rate of 25% from 1 April 2023.
The Group has estimated UK tax losses of approximately £6,928,732 (2022:
£5,671,000), and losses of overseas subsidiaries approximately £1,356,259
(2022: £1,153,000) available to carry forward against future trading profits.
The Group has not recognised a deferred tax asset on any losses carried
forward due to the uncertainty of future profits.
8 Earnings per share
2023 2022
£ £
Loss for the purpose of basic and diluted loss per share (1,785,545) (753,212)
Weighted average number of ordinary shares for the purpose of basic and 1,865,306,230 1,166,576,254
diluted loss per share
Loss per share - basic and diluted (pence) (0.10) (0.06)
Basic EPS 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. Diluted EPS is calculated by adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares. The Company, being loss making in both this year and the
comparative period would mean that any exercise would be anti-dilutive.
9 Intangible assets
Group Exploration costs
£
At 1 January 2022 3,447,739
Additions 459,292
Acquisition 394,530
Foreign exchange differences 149,557
At 31 December 2022 4,451,118
At 1 January 2023 4,451,118
Additions 681,668
Foreign exchange differences (160,170)
At 31 December 2023 4,972,616
As at 31 December 2023, the Group had future commitments of £6,176,680 (2022:
£6,910,544) in relation to exploration projects:
Minimum
spend
£
1 year 1,176,680
Later than 1 year but no more than 5 years 5,000,000
Total 6,176,680
Company Exploration costs
£
At 1 January 2022 13,380
Transferred to subsidiary (13,380)
At 31 December 2022 -
At 1 January 2023 -
At 31 December 2023 -
10 Property, plant and equipment
Group Motor vehicles Office equipment Building improvements Total
£ £ £ £
Cost
At 1 January 2022 28,977 5,677 - 34,654
Additions 20,773 3,165 1,065 25,003
Foreign exchange differences 2,247 347 44 2,638
At 31 December 2022 51,997 9,189 1,109 62,295
At 1 January 2023 51,997 9,189 1,109 62,295
Additions - 2,147 - 2,147
Disposals (13,158) (1,150) - (14,308)
Foreign exchange differences (1,944) (311) (24) (2,279)
At 31 December 2023 36,895 9,875 1,085 47,855
Depreciation
At 1 January 2022 11,113 3,352 - 14,465
Charge for the year 534 4,507 - 5,041
Depreciation capitalised 3,637 - - 3,637
Foreign exchange differences 563 266 - 829
At 31 December 2022 15,847 8,125 - 23,972
At 1 January 2023 15,847 8,125 - 23,972
Charge for the year 5,834 1,367 116 7,317
Disposals (9,551) (1,150) - (10,701)
Foreign exchange differences (702) (277) 2 (977)
At 31 December 2023 11,428 8,065 118 19,611
Net book value
At 31 December 2022 36,150 1,064 1,109 38,323
At 31 December 2023 25,467 1,810 967 28,244
10 Property, plant and equipment (continued)
Company Office equipment Total
£ £
Cost
At 1 January 2022 1,150 1,150
At 31 December 2022 1,150 1,150
At 1 January 2023 1,150 1,150
Additions 1,940 1,940
Disposals (1,149) (1,149)
At 31 December 2023 1,941 1,941
Depreciation
At 1 January 2022 460 460
Charge for the year 581 581
At 31 December 2022 1,041 1,041
At 1 January 2023 1,041 1,041
Charge for the year 554 554
Disposals (1,150) (1,150)
At 31 December 2023 445 445
Net book value
At 31 December 2022 109 109
At 31 December 2023 1,496 1,496
11 Investments
Company 2023 2022
£ £
At beginning of the year 1,030,640 648,000
Additions in respect of acquisitions - 362,147
Additional issue of share capital - 20,493
Total 1,030,640 1,030,640
On 8 March 2022, Rockfire announced the winning of an Open International
Tender for a 30-year licence to explore and mine the high-grade Molaoi
Zn/Pb/Ag deposit, located in the Hellenic Republic of Greece. Rockfire
participated in the tender under a Memorandum of Understanding with a local
Greek Company, Hellenic Minerals IKE, now Hellenic Minerals SA ("Hellenic"),
the applicant in the tender.
On 16 May 2022, the Company acquired 100% of the issued share capital in
Hellenic. Consideration was paid by the Company issuing 50,000,000 new
ordinary shares to the vendors of Hellenic at an issue price of 0.01p and
potential deferred consideration of £400,000 in respect of obtaining a
JORC-compliant mineral resource exceeding four hundred thousand tonnes of zinc
equivalent value. The vendors of Hellenic retain a 2% gross production
royalty on saleable product from all metals extracted from the Molaoi project.
The Company has the option to acquire the gross production royalty for a cash
consideration of £1,000,000 at any time.
Additional share capital investment of €24,000 was agreed by the Board on 8
August 2022, in respect of the conversion of Hellenic to an SA Company, to
meet the statutory requirements of capital invested per Greek company law.
11 Investments (continued)
The Group's subsidiary undertakings at 31 December 2023, were as follows:
Entity name Proportion held Class of shareholding Nature of business Country of incorporation Registered office
BGM Investments Pty Limited 100% Ordinary Exploration Australia c/o WSC Group Accountants, 11/800-812 Old Illawarra Road, Menai, NSW 2234,
Australia
Hellenic Minerals SA 100% Ordinary Exploration Greece Philellinon No 9, Alexandroupoli, 68131, Greece.
As at 31 December 2023, the 100% owned subsidiary, Papua Mining Limited, had
been summarily wound up and therefore BGM Investments Pty Limited and Hellenic
Minerals SA remain the only subsidiary of the Company. The registered office
of Papua Mining Limited was c/o AA Corporate Management 13, Boulevard
Princesse Charlotte, Monte Carlo, Monaco, MC98000.
12 Trade and other receivables
Current 2023 2022
Group £ £
Other receivables 1,732,419 106,171
2023 2022
Company £ £
Amounts owed by Group undertakings 2,829,109 4,561,444
Other receivables 1,608,402 44,375
Total 4,437,511 4,605,819
Receivables due from Group undertakings are net of cumulative ECLs of
£2,281,052 (2022: £704,890).
As at 31 December 2023 other receivables comprise standard prepayments and
additionally an amount of £1,568,744 (2022: £nil), relating to
US$2,000,0000, being the initial consideration for 10% shareholding in
Emirates Gold DMCC and Emperesse Bullion LLC paid in September 2023. This
transaction did not complete due to the Foreign, Commonwealth &
Development Office of the United Kingdom imposing sanctions on Paloma and
therefore Rockfire withdrew from the agreement. The full amount of
US$2,000,000 was due back to the Company with the full amount received by the
Company on 1 February 2024.
Non - Current 2023 2022
Group £ £
Other receivables 94,301 85,872
The other receivables balance of £94,301 (2022: £85,872) relates to deposits
held in respect of a guarantee given to the Greek Government which expires in
2028.
13 Cash and cash equivalents
2023 2022
Group £ £
Cash and cash equivalents 436,575 420,255
Company
Cash and cash equivalents 425,619 37,005
14 Share capital
Group and Company
Issued share capital 2023 2022
No. No.
Deferred shares of £0.099 each 51,215,534 51,215,534
Ordinary shares of £0.001 each 2,552,791,046 1,439,739,067
Ordinary Shares
2023 2022
Number Number
Allotted, called up and fully paid
At 1 January 1,439,739,067 1,082,466,125
Issued for cash 1,100,000,000 300,000,000
Issued in lieu of fees 13,051,979 7,272,942
Issued in asset acquisition - 50,000,000
At 31 December 2,552,791,046 1,439,739,067
Share Capital
2023 2022
£ £
Allotted, called up and fully paid
At 1 January 7,435,409 7,078,136
Issued for cash(1) 1,100,000 300,000
Issued in lieu of fees 13,051 7,273
Issued in asset acquisition - 50,000
At 31 December 8,548,460 7,435,409
(1)In the year ended 31 December 2023 includes issue costs of £323,551 (2022:
£42,410).
The nominal value of the issued share capital includes a cumulative foreign
exchange difference of £925,332 which crystallised in 2017 when the Group's
functional and presentational currency was changed from US$ to GBP.
15 Reserves
Share premium
The share premium account represents amounts subscribed for share capital in
excess of nominal value, net of directly attributable issue costs.
Foreign exchange reserve
Cumulative gains and losses on translating the net assets of overseas
operations to the presentation currency.
Merger relief reserve
The balance on the merger relief reserve represents the fair value of the
consideration given in excess of the nominal value of the ordinary shares
issued as consideration on the acquisition of Hellenic.
Other reserves
Represents the reserve arising from a share for share exchange as part of a
group reorganisation in 2011.
Retained deficit
Cumulative realised losses of the Group.
16 Share options and warrants
Share options
2023 2022
Options Weighted Options Weighted
average exercise average exercise
price price
No. £ No. £
Outstanding at 1 January 54,000,000 0.02 54,000,000 0.02
Granted during the year - - - -
Lapsed during the year (18,000,000) 0.02 - -
Outstanding at 31 December 36,000,000 0.02 54,000,000 0.02
Exercisable at 31 December 36,000,000 0.02 54,000,000 0.02
The weighted average life of the outstanding and exercisable options was 57
days (2022: 366 days).
Share options held by Directors were as follows:
2023 2022
No. No.
David Price 10,000,000 10,000,000
Gordon Hart 10,000,000 10,000,000
Ian Staunton - 6,000,000
Patrick Elliot - 6,000,000
Nicholas Walley - 6,000,000
Warrants 2023 2022
Warrants Weighted Warrants Weighted
average exercise average exercise
price price
No. £ No. £
Outstanding at 1 January - - 30,899,999 0.010
Lapsed during the year - - (30,899,999) 0.010
Outstanding and exercisable at 31 December - - - -
The weighted average life of the outstanding and exercisable warrants at 31
December 2023 was nil days (2022: 279 days).
17 Trade and other payables
2023 2022
Group £ £
Trade payables 29,546 80,587
Other payables 71,507 22,278
Accruals 120,965 57,209
Total 222,018 160,074
2023 2022
Company £ £
Trade payables 14,771 46,667
Other payables 17 20
Accruals 117,416 43,612
Total 132,204 90,299
18 Financial instruments
In common with other businesses, the Group is exposed to risks that arise from
its use of financial instruments. This note describes the Group's objectives,
policies and processes for managing those risks and the methods used to
measure them. Further quantitative information in respect of these risks is
presented throughout these financial statements.
The significant accounting policies regarding financial instruments are
disclosed in Note 3.
The Group does not have any derivative products or any long-term borrowings.
The Group is not exposed to interest-bearing indebtedness. The exploration
activities of the Group are financed by the proceeds of share issues.
Principal financial instruments
The principal financial instruments at amortised cost used by the Group, from
which financial instrument risk arises, are as follows:
2023 2022
Group £ £
Financial assets
Cash and cash equivalents 436,575 506,127
Trade and other receivables 1,826,720 192,043
Total 2,263,295 698,170
Financial liabilities
Trade payables 29,546 80,587
Other payables 71,507 22,278
Total 101,053 102,865
Company
Financial assets
Cash and cash equivalents 425,619 37,005
Trade and other receivables 4,437,511 4,605,819
Total 4,863,130 4,642,824
Financial liabilities
Trade payables 14,771 46,667
Other payables 17 20
Total 14,788 46,687
The Directors consider that the fair value of the above financial instruments
is equal to the carrying values.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the Group's
risk management objectives and policies. The Board regularly reviews the
effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets.
The overall objective of the Directors is to set policies that reduce risk as
far as possible without unduly affecting the Group's competitiveness and
flexibility.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations. The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the reporting date was
as follows:
18 Financial instruments (continued)
2023 2022
Group £ £
Financial assets
Cash and cash equivalents 436,575 506,127
Trade and other receivables 1,826,720 192,043
Total 2,263,295 698,170
Company
Financial assets
Cash and cash equivalents 425,619 37,005
Trade and other receivables 4,437,511 4,605,819
Total 4,863,130 4,642,824
Liquidity risk
Liquidity risk relates to the ability of the Group to meet future obligations
and financial liabilities. To date the Group has relied upon shareholder
funding of its activities. Future exploration and development activities is
dependent upon the Group's ability to obtain further financing through equity
financing or other means.
The following table shows the Group's financial liabilities:
2023 2022
Group £ £
Financial liabilities
Trade payables 29,546 80,587
Other payables 71,507 22,278
Total 101,053 102,865
Company
Financial liabilities
Trade payables 14,771 46,667
Other payables 17 20
Total 14,788 46,687
The financial statements have been prepared on a going concern basis and note
3(d) provides further information in this regard.
Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial
commitment, recognised asset or liability will fluctuate due to changes in
foreign currency rates.
The Group operates in Australia and Greece. As such the Group is exposed to
transaction foreign exchange risk. The mix of currencies and terms of trade
with its suppliers are such that the Directors believe that the Group's
exposure is minimal and consequently they have not, to date, specifically
sought to hedge that exposure. Most of the Group's funds are in GBP with only
sufficient funds held overseas to meet local costs. The Group and Company's
net exposure to foreign currency risk at the reporting date is as follows:
18 Financial instruments (continued)
Group Company
Net foreign currency financial (liabilities)/assets Year Year Year Year
ended 31 December 2023 ended 31 December 2022 ended 31 December 2023 ended 31 December 2022
£ £ £ £
US Dollars 1,700,215 - 1,652,483 -
EURO 193,010 83,781 47,732 -
AUD (11,111) 376,655 2,733 -
1,882,114 460,436 1,702,948 -
Sensitivity analysis
The following table details the impact of changes in foreign exchange rates on
financial assets and liabilities at the balance sheet date, illustrating the
(decrease)/increase in Group operating result caused by a 10 per cent
strengthening of GBP compared to the year-end spot rate. The analysis assumes
that all other variables remain constant.
Profit or loss Equity
Net foreign currency financial Year Year Year Year
(liabilities)/assets ended 31 December 2023 ended 31 December 2022 ended 31 December 2023 ended 31 December 2022
£ £ £ £
US Dollars (170,022) - (170,022) -
Euros (19,301) (8,378) (19,301) (8,378)
AUD 1,111 (37,666) 1,111 (37,666)
(188,212) (46,044) (188,212) (46,044)
Commodity price risk
Commodity price risk is the risk that the Group's future earnings will be
adversely impacted by changes in the market prices of commodities. The Group
is not currently exposed to commodity price risk, but future revenues will be
determined by reference to market commodity prices.
Capital management
The Group's objectives when managing capital is to maintain its ability to
continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to ensure sufficient resources are
available to meet day to day operating requirements. The Group defines capital
as 'equity' and 'cash' as shown in the consolidated statement of financial
position. As at 31 December 2023 the Group held equity and cash balances of
£7,229,081 and £436,575 (2022: £4,941,665 and £420,255), respectively. The
Board takes full responsibility for managing the Group's capital and does so
through Board meetings and reviews of financial information.
The Group's policy is to invest its cash in deposits with high credit worthy
financial institutions with short term maturity.
19 Related party transactions
During the year, the Company advanced funds to BGM Investments Pty Ltd
totalling £426,347 (2022: £570,641). The loan is repayable in GBP on demand
and as at 31 December 2023, £4,407,424 (2022: £3,981,077) was outstanding. A
cumulative expected credit loss provision of £2,281,052 (2022: £704,890) has
been recognised at the year-end in respect of the loan.
19 Related party transactions (continued)
During the year, the Company advanced funds to Hellenic totalling £984,291
and transferred exploration costs of £nil (2022: £563,635 and £13,380,
respectively). The loan is repayable in GBP on demand and as at 31 December
2023 £1,564,635 (2022: £580,344) was outstanding. A cumulative expected
credit loss provision of £156,637 (2022: £nil) has been recognised at the
year-end in respect of the loan.
20 Joint venture
On 20 January 2023 the Company announced that it had entered into a joint
venture (''JV'') with Sunshine Gold Limited to advance the Plateau gold
deposit in Queensland, Australia. The JV will result in Sunshine Gold Limited
sole-funding exploration at Plateau for the next 3 years, with funding being
engaged on direct exploration activity.
The JV includes the Lighthouse Project exploration permit tenement EPM25617
and the adjoining Kookaburra exploration permit tenement EPM26705 in
Queensland. As at 31 December 2023 these tenements accounted for £1,630,604
of the Group's Intangible assets. As all expenditure on the tenements are
capitalised, there were no losses or profits attributed to the tenements.
During the sole funding period, Sunshine Gold Limited must keep the tenements
in good order and meet all statutory reporting, rehabilitation and expenditure
obligations. On the occurrence of each milestone set out in the table below,
Sunshine Gold Limited will acquire the corresponding participating interest in
the tenements. Up until the point as Sunshine Gold Limited reaches the stage 1
milestone, Sunshine Gold Limited will have a participating interest in the
tenements of 0%.
Stage Milestone Total participating interest earned by Sunshine at end of stage Time frame
1 Sunshine Gold Limited has sole funded AUD $600,000 in expenditure. 40% Maximum of 1 Year from execution date.
2 Sunshine Gold Limited has sole funded a further AUD $600,000 in expenditure. 51% Maximum of 2 years from execution date.
3 Sunshine Gold Limited has sole funded a further AUD $1,000,000 in expenditure. 75% Maximum of 3 years from execution date
The expenditure requirement for each Stage 1, 2 and 3 is independent of the
other stages and not cumulative.
At the conclusion of Stage 3, the Company has 60 days from receipt of all data
and reports and proposed program and budget, by written notice, to elect to
either:
- Contribute its 25% share of on-going exploration
and development expenditure; or
- Convert its 25% share to a 1.5% net smelter
royalty.
The terms of the net smelter royalty are to be based on the standard Energy
& Resources Law Association (formerly AMPLA Ltd) template.
As at 31 December 2023 Sunshine Gold Limited had spent £195,682 in respect of
the JV meaning none of the expenditure thresholds had been met in regards to
Stage 1 - 3 detailed above. As such Sunshine Gold Limited holds a 0%
participating interest in the tenement EPM25617 and the adjoining tenement
EPM26705 at 31 December 2023.
21 Subsequent events
On 1 February 2024, the US$2 million consideration, due back to the Company,
in respect of the aborted acquisition of Emirates Gold DMCC and Emperesse
Bullion LLC was returned into the Company's bank account, in full.
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