TIDMBKY
RNS Number : 7658R
Berkeley Energia Limited
10 March 2021
BERKELEY EMERGIA LIIMITED
Interim Financial Report for the Half Year Ended 31 December
2020
Informe financiero provisional correspondiente al semestre
terminado el 31 de diciembre de 2020
abn 40 052 468 569
CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO
Directors Solicitors
Mr Ian Middlemas Chairman Spain
Mr Robert Behets Acting Managing Herbert Smith Freehills, S.L.P
Director
Mr Adam Parker Non-Executive Director United Kingdom
Mr Deepankar Panigrahi Non-Executive Bryan Cave Leighton Paisner LLP
Director
Australia
Company Secretary Thomson Geer
Mr Dylan Browne
Bankers
Madrid Head Office Spain
Calle Capitán Haya 1 Santander Bank
Planta 15. Edificio Eurocentro.
28020 Madrid, Spain Australia
National Australia Bank Ltd
Project Office Australia and New Zealand Banking
Berkeley Minera España, S.A. Group Ltd
Carretera SA-322, Km 30
37495 Retortillo Share Registry
Salamanca Spain
Spain Iberclear
Telephone: +34 923 193 903 Plaza de la Lealtad, 1
28014 Madrid, Spain
Registered Office
Level 9, 28 The Esplanade United Kingdom
Perth WA 6000 Computershare Investor Services
Australia PLC
Telephone: +61 8 9322 6322 The Pavilions, Bridgewater Road,
Facsimile: +61 8 9322 6558 Bristol BS99 6ZZ
Telephone: +44 370 702 0000
Website
www.berkeleyenergia.com Australia
Computershare Investor Services
Email Pty Ltd
info@berkeleyenergia.com Level 11, 172 St Georges Terrace
Perth WA 6000
Auditor Telephone: +61 8 9323 2000
Spain
Ernst & Young España Stock Exchange Listing
Spain
Australia Madrid, Barcelona, Bilboa and
Ernst and Young Australia - Perth Valencia Stock Exchanges (Code:
BKY)
United Kingdom
London Stock Exchange (LSE Code:
BKY)
Australia
Australian Securities Exchange
(ASX Code: BKY)
CONTENTS | CONTENIDO
Directors' Report
Directors' Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Condensed Notes to the Financial Statements
To view the following sections as well as all illustrations and
figures, please refer to the the full version of the Interim
Financial Report on our website at www.berkeleyenergia.com :
Auditor's Independence Declaration
Auditor's Review Report
DIRECTORS' REPORT
The Board of Directors of Berkeley Energia Limited present their
report on the consolidated entity of Berkeley Energia Limited ("the
Company" or "Berkeley") and the entities it controlled during the
half year ended 31 December 2020 ("Consolidated Entity" or
"Group").
DIRECTORS
The names of the Directors of Berkeley in office during the half
year and until the date of this report are:
Mr Ian Middlemas Chairman
Mr Robert Behets Non-Executive Director (Acting Managing Director)
Mr Nigel Jones Non-Executive Director (resigned 25 November
2020)
Mr Adam Parker Non-Executive Director
Mr Deepankar Panigrahi Non-Executive Director
Unless otherwise disclosed, Directors were in office from the
beginning of the half year until the date of this report.
OPERATING AND FINANCIAL REVIEW
Summary
Summary for and subsequent to the half year end include:
-- Permitting Update:
Berkeley's focus continues to be on progressing the approvals
required to commence construction of the Salamanca mine and bring
it into production.
In August 2020, the Urbanism License ("UL") was granted by the
Municipality of Retortillo under the terms established in the
Urbanism Law and Urban Planning Regulations of Castilla y León. The
UL is a land use permit needed for construction works at the
Salamanca mine. The grant of the UL was a significant permitting
milestone for Berkeley and a positive step in the development of
the project.
Following the grant of the UL, the Company received formal
notification from the Ministry for Ecological Transition and the
Demographic Challenge ("MITECO") that it had been granted the
renewal of the Initial Authorisation for the uranium concentrate
plant as a radioactive facility at the Salamanca project ("NSC I")
until there is a resolution on the Authorisation for Construction
for the uranium concentrate plant as a radioactive facility ("NSC
II"). This renewal follows the Nuclear Safety Council ("NSC")
issuing a favourable report for the extension of the validity of
NSC I in July 2020.
NSC I was granted in September 2015 by the then Ministry of
Industry, Energy and Tourism, with a 5-year validity period. The
favourable report issued by the NSC in July 2020 considered that
the circumstances and characteristics of the uranium concentrate
plant are the same as those contained in the Initial Authorisation
issued in 2015.
The Company formally submitted updated official documentation in
relation to the NSC II in March 2020. The Company has subsequently
held numerous meetings with the NSC technical team to discuss and
clarify minor queries on the updated documentation. As requested,
the Company submitted written responses to these queries, along
with additional technical information, to the NSC in September 2020
and more recently in early March 2021. The next step in the process
is for the NSC technical team to finalise their report and submit
it to the NSC Board for ratification.
With more than 120 previous permits and favourable reports
granted by the relevant authorities at the local, regional, federal
and European Union levels, NSC II is the only pending approval
required to commence full construction of the Salamanca mine.
The Company continues to engage with the relevant authorities to
advance the approvals process for the Salamanca mine and maintain
strong engagement with all key stakeholders in Spain.
-- Outstanding Contribution to Sustainable Mining - Europe 2020 Award :
In December 2020, the Company was selected as the winner of the
Outstanding Contribution to Sustainable Mining - Europe category in
the 2020 Capital Finance International ("CFI.co") Sustainability
Awards.
The CFI.co Sustainability Awards seek to recognise the best
responses to sustainability issues by country or region,
identifying companies that stand out as examples to others across
the world.
Berkeley is extremely pleased to be recognised for its efforts
in key area of Sustainable Mining. The Company's Salamanca mine is
being developed to the highest international standards and the
Company's commitment to health, safety and the environment is a
priority. It holds certificates in Sustainable Mining (UNE
22470-80), Environmental Management (ISO 14001), and Health and
Safety (ISO 45001) which were awarded by AENOR, an independent
Spanish government agency.
-- Uranium market:
The uranium spot price closed 2020 at US$30.00 per pound having
drifted slightly lower after a period of strong growth in the first
half of 2020.
The market has however, been buoyed towards the end of the half
year due to recent events including:
-- Utilities have increased their spot market purchases,
especially in the US, subsequent to the finalisation of the
amendment to the Russian Suspension Agreement in early October
2020;
-- The US Congress tabled the artisan legislation aimed at
supporting the US' nuclear infrastructure. The proposed "American
Nuclear Infrastructure Act of 2020", provides that a national
strategic uranium reserve be funded and a carbon emissions
avoidance programme be established to support continued operation
of reactors at risk of premature shutdown;
-- The UK published an energy policy paper entitled "Ten Point
Plan for a Green Industrial Revolution," which incorporated an
Advanced Nuclear Fund. The goal of the fund is to provide financial
support for small modular reactor development and advanced modular
reactors; and
-- The Biden Administration has proposed a sweeping clean energy
plan including funding for advanced nuclear reactors and small
modular reactors.
-- Spanish Regulatory Regime :
During the half year, the Company noted that the Spanish Supreme
Court had rejected an appeal filed by a group of opposition parties
against NSC I.
In September 2019, the Spanish National Court fully dismissed a
contentious-administrative appeal filed by the group of opposition
parties against NSC I. Subsequent to the National Court ruling, the
group of opposition parties appealed to the Supreme Court. The
Supreme Court has confirmed all aspects of the ruling of the
National Court and thus, has confirmed the legality of NSC I. As
noted above, MITECO has granted renewal of NSC I through until
there is a resolution on NSC II.
In October 2020, parliamentary groups of two political parties
in the Spanish Government submitted a series of proposed amendments
in October 2020 to a draft climate change and energy transition
bill which was originally presented to the Spanish Parliament in
May 2020.
Under one of the proposed amendments, investigation and
exploitation of radioactive minerals (e.g. uranium) would be
prohibited in the Spanish territory and any open proceedings
related to the authorisation of radioactive facilities of the
nuclear fuel cycle for the processing of such minerals would be
closed.
Subsequent to the end of the half year end, the Company noted
media reports following a meeting of the Ecological Transition
'Ponencia' ("Ponencia") held in February 2021 that discussed
changes to the proposed amendment to the draft climate change and
energy transition bill relating to the investigation and
exploitation of radioactive minerals. Under the modified amendment
proposed by the Ponencia:
-- New applications for exploration, investigation or direct
exploitation concessions for radioactive materials, nor their
extensions, would not be accepted as of the entry into force of
this law.
-- Existing concessions, and open proceedings and applications
related to these, would continue as per normal based on the current
legislation.
Importantly under the modified amendment, existing rights for
exploration, investigation and exploitation concessions would
remain in force during their validity period. Existing proceedings
underway would also continue under the legal framework set up by
the current regulations.
The modified amendment proposed by the Ponencia must now be
reviewed and approved or rejected by the Commission of Ecological
Transition of the Parliament, and subsequently follow the same
process in the Spanish Senate. Accordingly, the proposed modified
amendment relating to the investigation and exploitation of
radioactive minerals may or may not be included in the final draft
of the climate change and energy transition bill.
Berkeley's position on any adverse changes that may be included
in the final draft of the climate change and energy transition bill
is clear: prohibition of economic activities in Spain with no
justified reasons is contrary to the Spanish Constitution and to
the legal rights recognised by other international instruments. In
particular, it must be taken into account that the Company
currently holds legal, valid and consolidated rights for the
investigation and exploitation of its mining projects, including a
valid 30-year mining licence (renewable for two further periods of
30 years) for the Salamanca mine. The approval of any amendment
which would imply a retroactive measure which expropriates the
legal rights of Berkeley with no justification is not
acceptable.
Operations
Permitting Update
During the half year, the Company received formal notification
from the MITECO that it had been granted the renewal of the NSC I
until there is a resolution on NSC II. This renewal follows the NSC
issuing a favourable report for the extension of the validity of
NSC I in July 2020.
NSC I was granted in September 2015 by the then Ministry of
Industry, Energy and Tourism, with a 5-year validity period. The
favourable report issued by the NSC in July considered that the
circumstances and characteristics of the uranium concentrate plant
are the same as those contained in the Initial Authorisation issued
in 2015.
The Company formally submitted updated official documentation in
relation to the NSC II in March 2020. The Company has subsequently
held numerous meetings with the NSC technical team to discuss and
clarify minor queries on the updated documentation. As requested,
the Company submitted written responses to these queries, along
with additional technical information, to the NSC in September 2020
and more recently in early March 2021. The next step in the process
is for the NSC technical team to finalise their report and submit
it to the NSC Board for ratification.
This was proceeded by the grant of the UL by the Municipality of
Retortillo under the terms established in the Urbanism Law and
Urban Planning Regulations of Castilla y León. The UL is a land use
permit needed for construction works at the Salamanca mine. The
grant of the UL was a significant permitting milestone for Berkeley
and a positive step in the development of the project.
With more than 120 previous permits and favourable reports
granted by the relevant authorities at the local, regional, federal
and European Union levels, NSC II is the only pending approval
required to commence full construction of the Salamanca mine.
The Company continues to engage with the relevant authorities
and maintain strong engagement with all key stakeholders in Spain,
as it progresses the approval process required to commence full
construction of the Salamanca mine and bring it into production
.
In December 2020, the Company was selected as the winner of the
Outstanding Contribution to Sustainable Mining - Europe category in
the 2020 CFI.co Sustainability Awards.
The CFI.co Sustainability Awards seek to recognise the best
responses to sustainability issues by country or region,
identifying companies that stand out as examples to others across
the world.
The CFI.co award selection panel uses a wide range of criteria
to help inform decisions regarding the awards, in order to identify
top performing companies not based on the size of the nominated
organisation but rather on its excellence in sustainability.
Berkeley is extremely pleased to be recognised for its efforts
in key area of Sustainable Mining. The Company's Salamanca mine is
being developed to the highest international standards and the
Company's commitment to health, safety and the environment is a
priority. It holds certificates in Sustainable Mining (UNE
22470-80), Environmental Management (ISO 14001), and Health and
Safety (ISO 45001) which were awarded by AENOR, an independent
Spanish government agency.
These management systems ensure that Company procedures are
compliant with current regulations, ensure that the environment is
protected, the project is sustainable, and that all activities are
carried out with respect for and in collaboration with the local
communities.
The Company also strives to uphold the United Nation's
Sustainable Development Goals ("SDGs"). A recent detailed review of
the Company's business strategy and activities in Spain has shown a
close alignment with the SDGs (compliance with 14 out of the 17
SDGs) demonstrating a commitment to the sustainable development
that will continue throughout the execution of the entire
project.
The Company's sustainability strategy is driven by a Programme
of Objectives defined in 2020, which strongly contributes to the
achievement of the SDGs. The Company is working according to the
following key focuses:
Ecodesign: The choice of transfer mining that minimises the
footprint of the project, the closed circuit of industrial water
and zero discharge, as well as heap leaching (that does not
generate tailings in the form of sludge) are some examples of
ecodesign.
Eco-Innovation: The re-use of waste-water and sludge from
municipalities for industrial use will minimise the flow of water
captured from streams and produce materials for the revegetation of
the site.
Circular Economy: Concerned with the Life Cycle perspective, the
objective is maximum efficiency of resources used. This strategy
focuses on responsible consumption, minimising waste, optimising
important resources such as water and energy, as well as reducing
CO(2) emissions. The objective is to minimise the environmental
footprint of activities.
Eco-efficiency: Digitisation of the Company contributes to the
optimisation of resources, which translates into minimising the
environmental impact. Likewise, installing LED lighting and
implementing Fleet Control for the optimisation of material
movement will help protect the environment while improving economic
performance.
Sustainable performance: Committed to creating employment in the
province of Salamanca, the project will create 500 jobs during
construction, and over 1000 direct and indirect jobs in the
operational phase - compatible with existing activities (since 2012
the Company has allowed neighbours to make temporary use of its
land for agricultural activity).
Environmental and sustainability training: Berkeley has set up a
training centre for staff and local people to be trained in new
skills. An interactive space will be created for environmental
education and the dissemination of information regarding the
importance of sustainability.
Spanish Regulatory Regime Update
During the half year, the Company noted that the Spanish Supreme
Court had rejected an appeal filed by a group of opposition parties
against NSC I.
In September 2019, the Spanish National Court fully dismissed a
contentious-administrative appeal filed by the group of opposition
parties against NSC I. Subsequent to the National Court ruling, the
group of opposition parties appealed to the Supreme Court. The
Supreme Court has now confirmed all aspects of the ruling of the
National Court and thus, has confirmed the legality of NSC I. As
noted above, MITECO has granted renewal of NSC I through until
there is a resolution on NSC II.
In October 2020, Parliamentary groups of two political parties
in the Spanish Government (Unidas Podemos and PSOE) submitted a
series of proposed amendments to the draft climate change and
energy transition bill which was originally presented to the
Spanish Parliament in May 2020.
Under one of the proposed amendments, investigation and
exploitation of radioactive minerals (e.g. uranium) would be
prohibited in the Spanish territory and any open proceedings
related to the authorisation of radioactive facilities of the
nuclear fuel cycle for the processing of such minerals would be
closed.
Subsequent to the end of the half year end, the Company noted
media reports following a meeting of the Ponencia held in February
2021 that discussed changes to the proposed amendment to the draft
climate change and energy transition bill relating to the
investigation and exploitation of radioactive minerals. Under the
modified amendment proposed by the Ponencia:
-- New applications for exploration, investigation or direct
exploitation concessions for radioactive materials, nor their
extensions, would not be accepted as of the entry into force of
this law.
-- Existing concessions, and open proceedings and applications
related to these, would continue as per normal based on the current
legislation.
The modified text proposed by the Ponencia establishes that "As
of the entry into force of this law, no new applications will be
accepted for the granting of exploration permits, investigation
permits or direct exploitation concessions, nor their extensions,
regulated under Law 22/1973, of July 21, on mines of radioactive
minerals, as defined in Law 25/1964, of April 29, on nuclear
energy, when such resources are extracted for their radioactive,
fissile or fertile properties. In addition, applications for the
authorisation of new radioactive facilities of the nuclear fuel
cycle for the processing of radioactive minerals, as defined in the
Regulation on nuclear and radioactive facilities, will no longer be
accepted." Importantly, existing rights for exploration,
investigation and exploitation concessions would remain in force
during their validity period. Existing proceedings underway would
also continue under the legal framework set up by the current
regulations.
It is important to note that this remains only a proposed
amendment to the draft climate change and energy transition bill
proposed by the Ponencia that must now be reviewed and approved or
rejected by the Commission of Ecological Transition of the
Parliament, and subsequently follow the same process in the Senate.
The processes in both the Parliament and the Senate must be
completed and consistent, and the proposed amendment supported by a
majority of votes in both Commissions for it to be approved.
Accordingly, the proposed modified amendment relating to the
investigation and exploitation of radioactive minerals may or may
not be included in the final draft of the climate change and energy
transition bill.
Berkeley's position on the any adverse changes that may be
included in the final draft of the climate change and energy
transition bill is clear: prohibition of economic activities in
Spain with no justified reasons is contrary to the Spanish
Constitution and to the legal rights recognised by other
international instruments. In particular, it must be taken into
account that the Company currently holds legal, valid and
consolidated rights for the investigation and exploitation of its
mining projects, including a valid 30-year mining licence
(renewable for two further periods of 30 years) for the Salamanca
mine. The approval of any amendment which would imply a retroactive
measure which expropriates the legal rights of Berkeley with no
justification is not acceptable.
Uranium market:
The uranium spot price closed 2020 at US$30.00 per pound having
drifted lower, after a period of strong growth in the first half of
2020.
The market has however been buoyed towards the end of the half
year due to recent events, including:
-- Spot market purchases by utilities have increased, especially
in the US, subsequent to the finalisation of the amendment to the
Russian Suspension Agreement in early October 2020;
-- The US Congress tabled the artisan legislation aimed at
supporting the US' nuclear infrastructure. The proposed "American
Nuclear Infrastructure Act of 2020", provides that a national
strategic uranium reserve be funded and a carbon emissions
avoidance programme be established to support continued operation
of reactors at risk of premature shutdown;
-- The UK published an energy policy paper entitled "Ten Point
Plan for a Green Industrial Revolution," which incorporated an
Advanced Nuclear Fund. The goal of the fund is to provide financial
support for small modular reactor development and advanced modular
reactors; and
-- The Biden Administration has proposed a sweeping clean energy
plan including funding for advanced nuclear reactors and small
modular reactors.
The COVID-19 pandemic has disrupted global uranium production,
adding to the supply curtailments that have occurred in the
industry for many years, creating uncertainty in the nuclear fuel
supply chain.
Analysts expect further tightening of market conditions as the
current structural supply deficit in the global uranium market is
exacerbated by these, and possible other, COVID-19 supply
disruptions. The current market uncertainty is also expected to
heighten concerns about the security of future supply.
IBEX Small Cap Index
During the half year, the Technical Advisory Committee of the
IBEX INDICES included Berkeley in the IBEX SMALL CAP(R) index. The
index adjustment took effect on the Spanish Stock Exchanges on 19
October 2020.
The IBEX indices measure the performance of securities listed on
the Spanish Stock Market. The IBEX SMALL CAP(R) index is a market
capitalisation weighted index adjusted by free float. It is
Euro-denominated and calculated in real-time within the European
time zone.
The IBEX SMALL CAP(R) index is composed of 30 securities listed
on the Spanish Stock Exchanges that follow certain requirements in
terms of stock market capitalisation, free floating capital, and
annual rotation of the free float capitalisation.
The Technical Advisory Committee of the IBEX INDICES reviews and
adjusts the composition of IBEX SMALL CAP(R) index on a biannual
basis.
COVID-19:
Authorities in Spain, following a second surge in COVID-19 cases
during the half year, tightened measures imposed to stem the spread
of the disease with many Spanish regions being subject to entry and
exit restrictions, including Madrid, the nearest large city to the
Salamanca project.
Many regional authorities have also implemented tighter
restrictions on gatherings and businesses, including the
requirement to implement strict hygiene and social distancing
measures.
The ongoing nationwide state of emergency will remain in effect
until at least 9 May 2021, which empowers the government to limit
certain rights, including freedom of movement. Accordingly, social
gatherings are limited to six people nationwide and a 11pm to 6am
curfew is in effect throughout Spain.
International travel to and from Spain is still possible,
subject to travellers possessing a negative COVID-19 test which
must be taken within 72 hours prior to arrival.
All of the Berkeley team based in Spain are safe and well.
Consistent with current Government guidelines, the Company has
continued its 'work from home' policy. Regular communication has
however, been maintained with the relevant officials from the NSC
and the federal, regional and local governments to ensure the
permitting processes continued to advance.
Corporate:
On 25 November 2020, Mr Nigel Jones resigned as a Director of
Berkeley following the completion of the Company's Annual General
Meeting in November 2020. Mr Jones currently holds the position of
Managing Director of the Simandou iron ore project and corporate
governance policies at Rio Tinto did not allow Mr Jones to continue
to sit on other publicly listed boards.
The net loss of the Consolidated Entity for the half year ended
31 December 2020 was $32,579,000 (31 December 2019: profit of
$5,680,000 Significant items contributing to the current half year
loss and the substantial differences from the previous half year
include the following:
(i) Exploration and evaluation expenses of $2,555,000 (31
December 2019: $2,580,000), which is attributable to the Group's
accounting policy of expensing exploration and evaluation
expenditure incurred subsequent to the acquisition of the rights to
explore and up to and until a decision to develop or mine is
made;
(ii) Business development expenses of $43,000 (31 December 2019:
$772,000), which includes the Group's investor relations activities
including but not limited to public relations costs, marketing and
digital marketing, broker fees, travel costs, conference fees,
business development consultant fees and stock exchange admission
fees;
(iii) Non-cash fair value movement loss of $21,989,000 (31
December 2019: $1,380,000) on the convertible note and unlisted
options issued to the Oman Investment Authority ("OIA") (the "OIA
Options"). These financial liabilities increase or decrease in size
as the share price of the Company fluctuates. The Company has
determined that the convertible note will convert at the floor
price of GBP0.27. This has resulted in the large fair value loss
for the six month period and contributed to the increase in the
financial liability at 31 December 2020. As the convertible note
and OIA Options convert into shares, the liabilities will be
reclassified to equity and will require no cash settlement by the
Company.
Commercially, the intentions of both OIA and the Company prior
to completing the convertible note transaction was to enter into an
equity type deal. The Company has however complied with the
accounting standards and accounted for the convertible note as a
financial liability.
Under the ASX Listing Rules, the convertible note and OIA
options are defined as equity securities.
Due to the conversion terms of the convertible note leading to
the issuance of a variable number of ordinary shares in the Company
in return for conversion of the convertible note, the Company is
required under the accounting standards to account for the
convertible note as a current financial liability at fair value
through profit and loss, despite the Company having no obligation
to extinguish the convertible note using its cash resources;
(iv) Recognition of interest income of $8,000 (31 December 2019:
$829,000). The decrease in interest is a direct result of
significantly lower interest rates being offered by the banks on
USD term deposits due to current global market conditions and the
impact of Covid-19; and
(v) Foreign exchange loss of $7,401,000 (31 December 2019:
$998,000) largely attributable on the US$53 million held in cash by
the Group following the strengthening of the AUD against the USD by
some 12% during the half year period.
Financial Position
At 31 December 2020, the Group is in an extremely strong
financial position with cash reserves of $79,760,000 (30 June 2020:
$91,767,000).
The Group had net assets of $3,361,000 at 31 December 2020 (30
June 2020: $36,211,000), a decrease of 90% compared with 30 June
2020. The decrease is consistent and largely attributable to the
increase in non-cash financial liabilities (the convertible note
and OIA Options).
Berkeley's strategic objective is to create long-term
shareholder value with the Company's primary focus continuing to be
on progressing the approvals required to commence construction of
the Salamanca mine and bring it into production.
To achieve its strategic objective, the Company currently has
the following business strategies and prospects:
-- Continue to progress permitting and maintain the required
licences to develop and operate at the Salamanca mine;
-- Advance the Salamanca mine through the development phase into
the main construction phase and then into production;
-- Progress with seeking further offtake partners. The Company
has maintained its preference to combine fixed and market related
pricing across its contracts in order to secure positive margins in
the early years of production whilst ensuring the Company remains
exposed to potentially higher prices in the future; and
-- Assess other mine development opportunities at the Salamanca mine.
As with any other mining projects, all of these activities are
inherently risky and the Board is unable to provide certainty that
any or all of these activities will be able to be achieved. T he
material business risks faced by the Company that are likely to
have an effect on the Company 's future prospects , and how the
Company manages these risks, include but are not limited to the
following:
-- Mining licences and government approvals required - With the
mining licence, environmental licence and the UL already obtained
at the Salamanca mine, the only major approval to commence full
construction at the Salamanca mine is NSC II.
However, various appeals have also been made against the permits
and approvals discussed above, including the UL and NSC I, as
allowed for under Spanish law. The Company expects that further
appeals will be made against these and future authorisations and
approvals in the ordinary course of events. Whilst none of these
appeals have been finally determined, no precautionary or interim
measures have been granted in relation to the appeals regarding the
award of licences and authorisations at the Salamanca mine to date.
However, the successful development of the Salamanca mine will be
dependent on the granting of all permits and licences necessary for
the construction and production phases, in particular the award NSC
II which will allow for the construction of the plant as a
radioactive facility.
The Company has to date received more than 120 favourable
reports and permits for the development of the mine, however with
any development project, there is no guarantee that the Company
will be successful in applying for and maintaining all required
permits and licences to complete construction and subsequently
enter into production. If the required permits and licences are not
obtained, then this could have a material adverse effect on the
Group's financial performance, which may lead to a reduction in the
carrying value of assets and may materially jeopardise the
viability of the Salamanca mine and the price of its Ordinary
Shares.
Further, the Company's exploration and any future mining
activities are dependent upon the maintenance and renewal from time
to time of the appropriate title interests, licences, concessions,
leases, claims, permits, environmental decisions, planning consents
and other regulatory consents which may be withdrawn or made
subject to new limitations. The maintaining or obtaining of
renewals or attainment and grant of title interests often depends
on the Company being successful in obtaining and maintaining
required statutory approvals for its proposed activities. The
Company closely monitors the status of its mining permits and
licences and works closely with the relevant Government departments
in Spain to ensure the various licences are maintained and renewed
when required. However, there is no assurance that such title
interests, licenses, concessions, leases, claims, permits,
decisions or consents will not be revoked, significantly altered or
not renewed to the detriment of the Company or that the renewals
and new applications will be successful;
-- The Company's activities are subject to Government
regulations and approvals - Any material adverse changes in
government policies or legislation of Spain that affect uranium
mining, processing, development and mineral exploration activities,
income tax laws, royalty regulations, government subsidies and
environmental issues may affect the viability and profitability of
the Salamanca mine. No assurance can be given that new rules and
regulations will not be enacted or that existing rules and
regulations will not be applied in a manner which could adversely
impact the Group's mineral properties. As discussed above, a series
of proposed amendments to the draft climate change and energy
transition bill in Spain has been proposed whereby a meeting of the
Ponencia was held in February 2021 that discussed changes to this
proposed draft climate change and energy transition bill. Under the
modified amendment proposed by the Ponencia:
(i) New applications for exploration, investigation or direct
exploitation concessions for radioactive materials, nor their
extensions, would not be accepted as of the entry into force of
this law; and (ii) Existing concessions, and open proceedings and
applications related to these, would continue as per normal based
on the current legislation. It is important to note that this
remains only a proposed amendment to the draft climate change and
energy transition bill proposed by the Ponencia that must now be
reviewed and approved or rejected by the Commission of Ecological
Transition of the Parliament, and subsequently follow the same
process in the Senate. Berkeley's position on any adverse changes
that may be included in the final draft of the climate change and
energy transition bill the content of this proposed amendment is
clear: prohibition of economic activities in Spain with no
justified reasons is contrary to the Spanish Constitution and to
the legal rights recognised by other international instruments. In
particular, it must be taken into account that the Company
currently holds legal, valid and consolidated rights for the
investigation and exploitation of its mining projects, including a
valid 30-year mining licence (renewable for two further periods of
30 years) for the Salamanca mine. The approval of any amendment
which would imply a retroactive measure which expropriates the
legal rights of Berkeley with no justification is not acceptable.
However, if the draft climate change and energy transition bill is
approved and passed, then this may adversely effective the
viability of the Salamanca mine and the price of the Company's
Ordinary Shares;
-- Additional requirements for capital - The issue of the US$65
million Convertible Note and OIA Options to OIA has provided the
Company the funds to complete the upfront capital items at the
Salamanca mine, subject to the OIA Options being exercised early.
Due to delays in the receipt of NSC II, the Company has been
funding its ongoing working capital requirements which has reduced
the amount available to fund full construction. This position will
continue for so long as NSC II remains outstanding, unless the OIA
Options are exercised early. As a result of the delay, the Company
expects that following receipt of NSC II and in order to fully fund
the full construction of the Salamanca mine into steady state
production, it will be required to raise additional funding in
order to meet the capital costs of the mine development and to fund
working capital until positive cash flows are achieved ;
-- The Company may be adversely affected by fluctuations in
commodity prices - The price of uranium has fluctuated widely since
the Fukushima nuclear power plant disaster in March 2011 and is
affected by further numerous factors beyond the control of the
Company. Future production, if any, from the Salamanca mine will be
dependent upon the price of uranium being adequate to make these
properties economic. The Company currently does not engage in any
hedging or derivative transactions to manage commodity price risk,
but as the Company's Project advances, this policy will be reviewed
periodically;
-- The Group's projects are not yet in production - As a result
of the substantial expenditures involved in mine development
projects, mine developments are prone to material cost overruns
versus budget. The capital expenditures and time required to
develop new mines are considerable and changes in cost or
construction schedules can significantly increase both the time and
capital required to build the mine; and
-- Global financial conditions may adversely affect the
Company's growth and profitability - Many industries, including the
mineral resource industry, are impacted by these market conditions.
Some of the key impacts of the current financial market turmoil
include contraction in credit markets resulting in a widening of
credit risk, devaluations and high volatility in global equity,
commodity, foreign exchange and energy markets, and a lack of
market liquidity. A slowdown in the financial markets or other
economic conditions may adversely affect the Company's growth and
ability to finance its activities.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
(i) On 24 February 2021, the company announced that it had noted
media reports following a meeting of the Ponencia that discussed
changes to the proposed amendment to the draft climate change and
energy transition bill relating to the investigation and
exploitation of radioactive minerals. Under the modified amendment
proposed by the Ponencia: (i) New applications for exploration,
investigation or direct exploitation concessions for radioactive
materials, nor their extensions, would not be accepted as of the
entry into force of this law; and (ii) Existing concessions, and
open proceedings and applications related to these, would continue
as per normal based on the current legislation. It is important to
note that this remains only a modified amendment to the draft
climate change and energy transition bill proposed by the Ponencia
that must now first be reviewed and approved or rejected under
Spanish law.
Other than as disclosed above, there were no significant events
occurring after balance date requiring disclosure.
ROUNDING
The amounts contained in the half year financial report have
been rounded to the nearest $1,000 (where rounding is applicable)
where noted ($000) under the option available to the Company under
ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191. The Company is an entity to which this
legislative instrument applies.
AUDITOR'S INDEPENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors,
Ernst & Young, to provide the Directors of Berkeley Energia
Limited with an Independence Declaration in relation to the review
of the half year financial report. This Independence Declaration is
on page 24 and forms part of this Directors' Report.
Signed in accordance with a resolution of Directors .
Robert Behets
Acting Managing Director
9 March 2021
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Berkeley
Energia Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes are in accordance with
the Corporations Act 2001, including:
(i) complying with Accounting Standard AASB 134 Interim
Financial Reporting and the Corporations Regulations 2001; and
(ii) giving a true and fair view of the consolidated entity's
financial position as at 31 December 2020 and of its performance
for the half year ended on that date.
(b) The Directors Report, which includes the Operating and
Financial Review, provides a fair review of:
(i) important events during the first six months of the current
financial year and their impact on the half year financial
statements, and a description of the principal risks and
uncertainties for the remaining six months of the year; and
(ii) related party transactions that have taken place in the
first six months of the current financial year and that have
materially affected the financial position or performance of the
Group during that period, and any changes in the related party
transactions described in the last annual report that could have
such a material effect; and
(c) there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and
payable.
On behalf of the Board
Robert Behets
Acting Managing Director
9 March 2021
Forward Looking Statement
Statements regarding plans with respect to Berkeley's mineral
properties are forward-looking statements. There can be no
assurance that Berkeley's plans for development of its mineral
properties will proceed as currently expected. There can also be no
assurance that Berkeley will be able to confirm the presence of
additional mineral deposits, that any mineralisation will prove to
be economic or that a mine will successfully be developed on any of
Berkeley's mineral properties.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE HALF YEARED 31 DECEMBER 2020
Half Year Half Year
Ended Ended
31 December 31 December
2020 2019
Note $000 $000
--------------------------------------------- ------- -------------- --------------
Interest income 8 829
Exploration and evaluation costs (2,555) (2,580)
Corporate and administration costs (466) (779)
Business development expenses (43) (772)
Share based payments expense 10 (a) (133) -
Fair value movements on financial
liabilities 5 (21,989) (1,380)
Foreign exchange movements (7,401) (998)
Loss before income tax (32,579) (5,680)
Income tax expense - -
--------------------------------------------- ------- -------------- --------------
Loss after income tax (32,579) (5,680)
--------------------------------------------- ------- -------------- --------------
Other comprehensive income, net of
income tax:
Items that may be reclassified subsequently
to profit or loss:
Exchange differences arising on translation
of foreign operations (402) (948)
Other comprehensive loss, net of
income tax (402) (948)
--------------------------------------------- ------- -------------- --------------
Total comprehensive loss for the
half year attributable to Members
of Berkeley Energia Limited (32,981) (6,628)
============================================= ======= ============== ==============
Basic and diluted loss per share
(cents per share) (7.31) (1.28)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income should be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
Note 31 December 2020 30 June 2020
$000 $000
---------------------------------- ----- ----------------- -------------
ASSETS
Current Assets
Cash and cash equivalents 79,760 91,767
Other receivables 1,411 1,436
Total Current Assets 81,171 93,203
---------------------------------- ----- ----------------- -------------
Non-current Assets
Exploration expenditure 6 8,221 8,293
Property, plant and equipment 7 12,432 12,855
Other financial assets 634 617
---------------------------------- ----- ----------------- -------------
Total Non-Current Assets 21,287 21,765
---------------------------------- ----- ----------------- -------------
TOTAL ASSETS 102,458 114,968
---------------------------------- ----- ----------------- -------------
LIABILITIES
Current Liabilities
Trade and other payables 971 1,158
Derivative financial liabilities 8 97,381 76,747
Other financial liabilities 745 852
Total Current Liabilities 99,097 78,757
---------------------------------- ----- ----------------- -------------
TOTAL LIABILITIES 99,097 78,757
---------------------------------- ----- ----------------- -------------
NET ASSETS 3,361 36,211
================================== ===== ================= =============
EQUITY
Issued capital 9 169,827 169,829
Reserves 10 (1,385) (1,116)
Accumulated losses (165,081) (132,502)
---------------------------------- ----- ----------------- -------------
TOTAL EQUITY 3,361 36,211
================================== ===== ================= =============
The above Consolidated Statement of Financial Position should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEARED 31 DECEMBER 2020
Foreign
Share Based Currency
Issued Payments Translation Accumulated
Capital Reserve Reserve Losses Total
$000 $000 $000 $000 $000
As at 1 July 2020 169,829 294 (1,410) (132,502) 36,211
Total comprehensive income
for the period:
Net loss for the period - - - (32,579) (32,579)
Other comprehensive loss:
Exchange differences
arising on translation
of foreign operations - - (402) - (402)
----------------------------- --------- ------------ ------------- ------------ ---------
Total comprehensive loss - - (402) (32,579) (32,981)
----------------------------- --------- ------------ ------------- ------------ ---------
Issue of ordinary shares - - - - -
Share issue costs (2) - - - (2)
Share-based payment expense - 133 - - 133
As at 31 December 2020 169,827 427 (1,812) (165,081) 3,361
============================= ========= ============ ============= ============ =========
As at 1 July 2019 169,736 341 (872) (89,557) 79,648
Total comprehensive income
for the period:
Net loss for the period - - - (5,680) (5,680)
Other comprehensive loss:
Exchange differences
arising on translation
of foreign operations - - (948) - (948)
----------------------------- --------- ------------ ------------- ------------ ---------
Total comprehensive loss - - (948) (5,680) (6,628)
----------------------------- --------- ------------ ------------- ------------ ---------
Issue of ordinary shares 110 - - - 110
Share issue costs (2) - - - (2)
Lapse of performance
rights - (109) - - (109)
----------------------------- --------- ------------ ------------- ------------ ---------
As at 31 December 2019 169,844 232 (1,820) (95,237) 73,019
============================= ========= ============ ============= ============ =========
The above Consolidated Statement of Changes in Equity should be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEARED 31 DECEMBER 2020
Half Year Ended Half Year Ended
31 December 31 December
2020 2019
$000 $000
------------------------------------------- --------------- ---------------
Cash flows from operating activities
Payments to suppliers and employees (3,226) (5,251)
Interest received 8 752
Net cash outflow from operating activities (3,218) (4,499)
------------------------------------------- --------------- ---------------
Cash flows from investing activities
Payments for property, plant and equipment (27) (159)
------------------------------------------- --------------- ---------------
Net cash outflow from investing activities (27) (159)
------------------------------------------- --------------- ---------------
Cash flows from financing activities
Transaction costs from issue of securities (2) (2)
Net cash outflow from financing activities (2) (2)
------------------------------------------- --------------- ---------------
Net decrease in cash and cash equivalents
held (3,247) (4,660)
Cash and cash equivalents at the beginning
of the period 91,767 96,587
Effects of exchange rate changes on cash
and cash equivalents (8,760) 584
------------------------------------------- --------------- ---------------
Cash and cash equivalents at the end of
the period 79,760 92,511
=========================================== =============== ===============
The above Consolidated Statement of Cash Flows should be read in
conjunction with the accompanying notes.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEARED 31 DECEMBER 2020
1. REPORTING ENTITY
Berkeley Energia Limited is a company domiciled in Australia.
The interim financial report of the Company is as at and for the
six months ended 31 December 2020.
The annual financial report of the Company as at and for the
year ended 30 June 2020 is available upon request from the
Company's registered office or is available to download from the
Company's website at www.berkeleyenergia.com .
2. STATEMENT OF COMPLIANCE
The interim financial report is a general purpose condensed
financial report which has been prepared in accordance with
Accounting Standard AASB 134: Interim Financial Reporting and the
Corporations Act 2001.
This interim financial report does not include all the
information of the type normally included in an annual financial
report. Accordingly, this report is to be read in conjunction with
the annual report of Berkeley Energia Limited for the year ended 30
June 2020 and any public announcements made by Berkeley Energia
Limited during the interim reporting period in accordance with the
continuous disclosure requirements of the Corporations Act
2001.
(a) Basis of Preparation of Half Year Financial Report
The amounts contained in the half year financial report have
been rounded to the nearest $1,000 (where rounding is applicable)
under the option available to the Company under ASIC Corporations
(Rounding in Financial/Directors' Reports) Instrument 2016/191.
(b) Historical cost convention
These financial statements have been prepared under the
historical cost convention, as modified where applicable by the
revaluation of certain financial assets and liabilities at fair
value through profit or loss.
3. SIGNIFICANT ACCOUNTING POLICIES
Accounting policies applied by the Consolidated Entity in this
consolidated interim condensed financial report are the same as
those applied by the Consolidated Entity in its consolidated
financial report for the year ended 30 June 2020.
In the current period, the Group has adopted all of the new and
revised Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (the AASB) that are relevant
to its operations and effective for annual reporting periods
beginning on or after 1 July 2020.
New and revised Standards and amendments thereof and
Interpretations effective for the current half year that are
relevant to the Group include:
-- AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business
-- AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material
-- 2019-1 Amendments to Australian Accounting Standards -
References to the Conceptual Framework
-- Conceptual Framework and Financial Reporting
The adoption of the aforementioned standards have resulted in no
impact on interim financial statements of the Group as at 31
December 2020.
(a) Issued standards and interpretations not early adopted
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet effective have not
been adopted by the Group for the reporting period ended 31
December 2020. Those which may be relevant to the Group are set out
in the table below, but these are not expected to have any
significant impact on the Group's financial statements:
Standard/Interpretation Application Application
Date of Date for
Standard Company
AASB 2020-2 Amendments to Australian Accounting 1 January 1 July 2022
Standards - Annual Improvements 2018-2020 and 2022
Other Amendments (AASB 1, 3, 9, 116, 137 &
141)
------------ ------------
AASB 2020-1 Amendments to Australian Accounting 1 January 1 July 2023
Standards - Classification of Liabilities as 2023
Current or Non-Current
------------ ------------
4. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis
of internal reports about components of the Consolidated Entity
that are regularly reviewed by the chief operating decision maker
in order to allocate resources to the segment and to assess its
performance.
The Consolidated Entity operates in one operating segment, being
exploration for mineral resources within Spain. This is the basis
on which internal reports are provided to the Directors for
assessing performance and determining the allocation of resources
within the Consolidated Entity. All material non-current assets
excluding financial instruments are located in Spain.
5. FAIR VALUE MOVEMENTS
Consolidated Consolidated
31 December 31 December
2020 2019
$000 $000
------------------------------------------ -------------- --------------
Fair value loss on financial liabilities
through profit and loss (21,989) (1,380)
------------------------------------------ -------------- --------------
The fair value movements are a result of the fair value
measurements of the convertible note and unlisted options issued to
the OIA. These financial liabilities increase or decrease in size
as the share price of the Company fluctuates. The Company has
determined that the convertible note will convert at the floor
price of GBP0.27. This has resulted in a fair value loss for the
period. As the convertible note and OIA Options convert into
shares, the liabilities will be reclassified to equity and will
require no cash settlement by the Company. Please refer to note 8
for further disclosure.
6. NON-CURRENT ASSETS - EXPLORATION EXPITURE
Consolidated Consolidated
31 December 30 June 2020
2020
$000 $000
--------------------------------------- -------------- ---------------
The group has mineral exploration
costs carried forward in respect of
areas of interest(1) :
Areas in exploration at cost:
Salamanca mine
Balance at the beginning of period 8,293 8,274
Foreign exchange differences (72) 19
--------------------------------------- -------------- ---------------
Balance at end of period (1,2) 8,221 8,293
======================================= ============== ===============
(1) The value of the exploration interests is dependent upon the
discovery of commercially viable reserves and the successful
development or alternatively sale of the respective tenements. An
amount of EUR 6m was capitalised for the fees paid to ENUSA under
the Co-operation Agreement relating to the tenements within the
State Reserves. The Company reached agreement with ENUSA in July
2012 in the form of an Addendum to the Consortium Agreement signed
in January 2009. The Addendum includes the following terms:
-- The Consortium consists of the Addendum Reserves (State Reserves Salamanca 28 and 29);
-- Berkeley's stake in the Consortium increased to 100%;
-- ENUSA will remain the owner of State Reserves 28 and 29,
however, the exploitation rights have been assigned to Berkeley,
together with authority to submit all applications for the
permitting process;
-- The Company is now the sole and exclusive operator in the
Addendum Reserves, with the right to exploit the contained uranium
resources and have full ownership of any uranium produced;
-- ENUSA will receive a production fee equivalent to 2.5% of the
net sale value (after marketing and transport costs) of any uranium
produced within the Addendum Reserves;
-- Berkeley has waived its rights to mining in State Reserves 2,
25, 30, 31, Hoja 528-1 and the Saelices El Chico Exploitation
Concession, and has waived any rights to management of the Quercus
plant; and
-- The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.
The Group's accounting policy is to account for contingent
consideration on asset acquisitions as contingent liabilities.
(2) In June 2016, the Company completed an upfront royalty sale
to major shareholder Resource Capital Funds ("RCF"). The royalty
financing comprised the sale of a 0.375% fully secured net smelter
royalty over the project for US$5 million (A$6.7million)
7. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT
Land and Buildings Plant and Right-of-use assets Total
equipment
$000 $000 $000 $000
Carrying amount at 1 July 2020 10,798 1,813 244 12,855
Additions - 27 - 27
Depreciation and amortisation (17) (64) (48) (129)
Foreign exchange differences (276) (45) - (321)
--------------------------------------------- ------------------ ---------- ------------------- -------
Carrying amount at 31 December 2020 10,505 1,731 196 12,432
============================================= ================== ========== =================== =======
- at cost 10,779 3,409 407 14,595
- accumulated depreciation and amortisation (274) (1,678) (211) (2,163)
--------------------------------------------- ------------------ ---------- ------------------- -------
8. FINANCIAL LIABILITIES
Consolidated Consolidated
31 December 30 June 2020
2020
$000 $000
------------------------------------ -------------- ---------------
(a) Financial liabilities at fair
value through profit and loss:
Convertible note 89,305 75,331
OIA Options 8,076 1,416
------------------------------------ -------------- ---------------
97,381 76,747
==================================== ============== ===============
On 30 November 2017, the Company issued an interest-free and
unsecured US$65 million convertible note which can be converted
into ordinary shares at GBP0.50 per share upon commissioning of the
Salamanca mine, or by OIA at any time at their choosing. Should the
Company raise further equity prior to conversion of the convertible
note at a price below GBP0.50 then the conversion price of the
convertible note will be reset to the issue price of the equity
raising, subject to a floor price of GBP0.27 per share. If
technical completion (mine commissioning) has not occurred by 30
November 2021, then the convertible note will automatically convert
into shares at the floor price of GBP0.27 per share. The exchange
rate fixed in the contract is US$1.00: GBP0.776. Given technical
completion will not occur by 30 November 2021, the Company has
formed a view that the convertible note will convert at the floor
price of GBP0.27 on 30 November 2021.
Due to the conversion terms of the convertible note leading to
the issuance of a variable number of ordinary shares in the Company
in return for conversion of the convertible note, the Company is
required under the accounting standards to account for the
convertible note as a financial liability through profit and loss.
The Company has no obligation to extinguish the convertible note
using its cash reserves and it is only repayable in an event of
breach of the terms of the investment agreement which includes a
breach of a representation or warranty (at the date of signing the
agreement), a breach of covenants, insolvency of the Company or the
Company ceasing to conduct business or ceasing being listed on a
recognised stock exchange.
As part of the convertible note transaction, the Company also
issued OIA with 50,443,124 unlisted options which are exercisable
at an average price of GBP0.85 per share contributing an additional
US$55 million of funding if exercised in the future.
Consolidated Consolidated
30 June 31 December
2020 2020
---------------------- ---------------- ----------- ----------------- -------------
Fair Value Foreign Exchange
Opening Balance Change Loss/(Gain) Total
$000 $000 $000 $000
---------------------- ---------------- ----------- ----------------- -------------
(b) Reconciliation:
Convertible note 75,331 15,179 (1,205) 89,305
OIA Options 1,416 6,810 (150) 8,076
---------------------- ---------------- ----------- ----------------- -------------
Total fair value 76,747 21,989 (1,355) 97,381
====================== ================ =========== ================= =============
(c) Fair Value Estimation
The fair value of the OIA Options was determined using a
binomial option pricing model. The fair value of the convertible
note has been calculated using a probability-weighted payout
approach on the basis that the convertible note will convert at 30
November 2021 (when automatic conversion occurs) using the floor
price of GBP0.27 as the conversion price. The fair value movement
of both the OIA Options and the convertible note has been
recognised in the Statement of Profit and Loss. Both fair value
measurements are Level 2 valuation in the fair value hierarchy.
The reporting date fair values of the convertible note and OIA
Options were estimated using the following assumptions:
Convertible note:
31 December 2020
------------------------- -----------------
Conversion price GBP0.27
Number of shares ('000) 186,815,000
Fair value ($) $0.478
------------------------- -----------------
OIA Options:
31 December 2020 Tranche 1 Tranche 2 Tranche 3
----------------------- ------------ ------------ ------------
Exercise price GBP0.600 GBP0.750 GBP1.000
Valuation date share GBP0.325
price GBP0.325 GBP0.325
Dividend yield(1) - - -
Volatility(2) 85% 85% 85%
Risk-free interest
rate (0.14%) (0.13%) (0.12%)
Number of OIA Options 10,088,625 15,132,973 25,221,562
Issue date 30 Nov 2017 30 Nov 2017 30 Nov 2017
Estimated Expiry 30 Nov 2023
date 30 Nov 2022 31 May 2023
Fair value (GBP) GBP0.091 GBP0.092 GBP0.089
Fair value ($) $0.161 $0.164 $0.158
----------------------- ------------ ------------ ------------
(1) The dividend yield reflects the assumption that the current
dividend payout will remain unchanged.
(2) The expected volatility reflects the assumption that the
historical volatility is indicative of future trends, which may not
necessarily be the actual outcome
9. CONTRIBUTED EQUITY
(a) Issued and Paid Up Capital
Consolidated Consolidated
31 December 30 June 2020
2020
$000 $000
----------------------------------------- -------------- ---------------
258,605,000 (30 June 2020: 258,605,000)
fully paid ordinary shares 169,827 169,829
----------------------------------------- -------------- ---------------
(b) Movements in Ordinary Share Capital during the Six Month Period ended 31 December 2020:
Number of
Shares
Date Details '000 $000
----------- ------------------- ---------- --------
1 Jul 20 Opening Balance 258,605 169,829
Jul 20 to
Dec 20 Share issue costs - (2)
----------- ------------------- ---------- --------
31 Dec 20 Closing Balance 258,605 169,827
=========== =================== ========== ========
10. RESERVES
Consolidated Consolidated
31 December 30 June 2020
2020
$000 $000
-------------------------------------- -------------- ---------------
Share based payments reserve (Note
10 (a)) 427 294
Foreign currency translation reserve (1,812) (1,410)
(1,385) (1,116)
====================================== ============== ===============
(a) Movements in Options and Performance Rights during the Six
Month Period ended 31 December 2020:
Number of Options Number of Performance Rights
Date Details '000 '000 $000
------------------ ----------------------------- ------------------ ----------------------------- -----
1 Jul 20 Opening Balance 7,400 200 294
Jul 20 to Dec 20 Share based payment expense - - 133
31 Dec 20 Closing Balance 7,400 200 427
================== ============================= ================== ============================= =====
11. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There was no material change in contingent liabilities or
contingent assets from those previously disclosed at the last
reporting period.
12. DIVIDENDS PAID OR PROVIDED FOR
No dividend has been paid or provided for during the half year
(2019: nil).
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The majority of the Group's financial instruments consist of
those which are measured at amortised cost including trade and
other receivables, security bonds, trade and other payables and
other financial liabilities. The carrying amount of these financial
assets and liabilities approximate their fair value. Please refer
to notes 5 and 8 for details on the fair value of non-cash settled
financial liabilities classified as fair value through profit and
loss.
14. RELATED PARTY DISCLOSURE
Balances and transactions between the Company and its
subsidiaries, which are related parties to the Company, have been
eliminated on consolidation. There have been no other transactions
with related parties during the half-year ended 31 December 2020,
other than remuneration with Key Management Personnel.
15. SUBSEQUENT EVENTS AFTER BALANCE DATE
(i) On 24 February 2021, the company announced that it had noted
media reports following a meeting of the Ponencia that discussed
changes to the proposed amendment to the draft climate change and
energy transition bill relating to the investigation and
exploitation of radioactive minerals. Under the modified amendment
proposed by the Ponencia: (i) New applications for exploration,
investigation or direct exploitation concessions for radioactive
materials, nor their extensions, would not be accepted as of the
entry into force of this law; and (ii) Existing concessions, and
open proceedings and applications related to these, would continue
as per normal based on the current legislation. It is important to
note that this remains only a modified amendment to the draft
climate change and energy transition bill proposed by the Ponencia
that must now first be reviewed and approved or rejected under
Spanish law.
Other than as disclosed above, there were no significant events
occurring after balance date requiring disclosure.
aaa
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