TIDMECR
ECR MINERALS plc
("ECR Minerals", "ECR" or the "Company")
AUDITED FINANCIAL STATEMENTS FOR YEARED 30 SEPTEMBER 2020
ECR Minerals plc is pleased to announce its audited financial
statements for the year ended 30 September 2020. The information
presented below has been extracted from the Company's Annual Report
and Accounts 2020.
Copies of the Annual Report and Accounts 2020 with the notice of
annual general meeting will be posted to shareholders tomorrow and
will be available on the Company's website www.ecrminerals.com. The
Company intends to holds its annual general meeting at 9am on 19
April 2021 at Chester House, 81-83 Fulham High Street, Fulham
Green, London SW6 3JA. As a result of the current crisis of
COVID-19 and the UK Government's restrictions on public gatherings,
the holding of the Company's AGM will be facilitated by the Company
to ensure a quorum is present. Shareholders should therefore not
attend the meeting in person and instead are strongly encouraged to
submit their proxy vote, appointing the Chairman of the meeting as
their proxy to ensure that their votes are registered. This can be
done by completing their form of proxy which must be received
before the proxy voting deadline of 9.00 a.m. on 15 April 2021.
Market Abuse Regulations (EU) No. 596/2014
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 (MAR). Upon the
publication of this announcement via Regulatory Information Service
(RIS), this inside information is now considered to be in the
public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
ECR Minerals plc Tel: +44 (0)20 7929 1010
David Tang, Non-Executive Chairman
Craig Brown, Director & CEO
Email:
info@ecrminerals.com
Website: www.ecrminerals.com
WH Ireland Ltd Tel: +44 (0)207 220 1666
Nominated Adviser
Katy Mitchell/James Sinclair-Ford
SI Capital Ltd Tel: +44 (0)1483 413500
Joint Broker
Nick Emerson
Novum Securities Limited Tel: +44 (0)2073 999400
Joint Broker
Jon Belliss
ABOUT ECR MINERALS PLC
ECR Minerals is a mineral exploration and development company.
ECR's wholly owned Australian subsidiary Mercator Gold Australia
Pty Ltd has 100% ownership of the Bailieston and Creswick gold
projects in central Victoria, Australia, and two license
applications lodged in eastern Victoria for the Tambo Gold project.
ECR is currently drilling high priority targets on the Bailieston
gold project using the Company's own diamond drill rig, backed by a
support network at the company's central Victoria HQ at Bendigo.
ECR has an experienced exploration team with significant local
knowledge in the Victoria Goldfields and wider region.
Following the sale of the Avoca, Moormbool and Timor gold
projects in Victoria, Australia to Fosterville South Exploration
Ltd (TSX-V: FSX), ECR has the right to receive up to A$2 million in
payments subject to future resource estimation or production at
those projects.
ECR has earned a 25% interest in the Danglay gold project, an
advanced exploration project located in a prolific gold and copper
mining district in the north of the Philippines, and holds a
royalty on the SLM gold project in La Rioja Province,
Argentina.
FORWARD LOOKING STATEMENTS
This announcement may include forward looking statements. Such
statements may be subject to numerous known and unknown risks,
uncertainties and other factors that could cause actual results or
events to differ materially from current expectations. There can be
no assurance that such statements will prove to be accurate and
therefore actual results and future events could differ materially
from those anticipated in such statements. Accordingly, readers
should not place undue reliance on forward looking statements. Any
forward-looking statements contained herein speak only as of the
date hereof (unless stated otherwise) and, except as may be
required by applicable laws or regulations (including the AIM Rules
for Companies), the Company disclaims any obligation to update or
modify such forward-looking statements because of new information,
future events or for any other reason.
The Directors of ECR Minerals plc (the "Directors" or the
"Board") present their report and audited financial statements for
the year ended 30 September 2020 for ECR Minerals plc ("ECR", the
"Company" or the "Parent Company") and on a consolidated basis (the
"Group")
Chairman's Statement
Despite the COVID-19 pandemic, the financial year ended 30
September 2020 and the period since the year-end have been a time
of much progress for ECR. The centre of the Group's operations
remains the state of Victoria in Australia, where ECR's wholly
owned Australian subsidiary Mercator Gold Australia Pty Ltd ("MGA")
is concentrating on two highly promising gold exploration projects:
Bailieston and Creswick.
As I write, MGA is drilling at the Baillieston gold project
using its newly purchased diamond drill rig. The focus of initial
drilling activity is the Historic Reserve #3 (HR3) area, which
comprises at least four closely-spaced lines of reef, including the
Byron, Dan Genders, Scoulars and Maori Reefs, plus numerous
cross-structures. This provides a number of drill-ready targets,
with Byron the first to be tested.
With the benefit of the Group's strong cash position, which at
the date of this report is approximately GBP3.955m, the intention
is that in-house drilling activity will be sustained for a long
period and the Directors believe this programme has the potential
to generate transformational results for the Group. We therefore
look to the future with great optimism.
MGA disposed of several non-core projects in Victoria during the
year but retains exposure to potential upside from those projects
by way of contingent payments of up to A$2 million in total. We
remain open to the possibility of further transactions in relation
to MGA's assets in Victoria, and we have also taken steps to add to
MGA's Victorian gold project portfolio by applying for two
exploration licences in eastern Victoria, which will comprise the
Tambo project, and by applying for a licence surrounding the
operating Ballarat gold mine.
Finally, I am pleased to welcome Adam Jones as a non-executive
director of the Company. Adam, is an experienced gold geologist who
is based in Victoria within easy reach of the Bailieston and
Creswick gold projects. He already has detailed knowledge of these
projects, having assisted MGA as a consultant since 2018, and I am
sure as a director of ECR he will make a significant contribution
to the success of our activities.
Weili (David) Tang
Chairman
23 March 2021
Chief Executive Officer's Report
With the gold price having exceeded USD 2,000/oz last year and
trading largely in a range between USD 1,700 and USD 1,900 in
recent months, these are exciting times for gold explorers such as
ECR. We are also fortunate to have experienced no significant
operational disruption as a result of the COVID-19 pandemic, which
has not affected Australia to the same extent as, for example, the
UK.
As in the previous year, the centre of the Group's operations
was Victoria, Australia, with activities concentrated on the
Bailieston and Creswick gold projects. Several non-core projects in
Victoria were disposed of by ECR's wholly owned Australian
subsidiary Mercator Gold Australia Pty Ltd ("MGA"), and a number of
new exploration licences were applied for in order to rejuvenate
MGA's project portfolio and maintain a pipeline of opportunities
for the future.
Interest from a number of third parties in joint venture or
earn-in type transactions in relation to either Bailieston or
Creswick was explored extensively during the financial year under
review, and the Company continues to consider opportunities as they
arrive.
Following the year under review, in January 2021, MGA commenced
drilling in the Historic Reserve #3 (HR3) area of the Bailieston
project, having taken delivery of a new Cortech CSD1300G diamond
drill rig in November 2020. Drilling can now continue on a bespoke
basis, supported by ECR's strong cash position.
Exploration at Bailieston and Creswick Projects
Notable outcomes of exploration work during the year ended 30
September 2020 included positive findings of an alteration study on
reverse circulation (RC) drill cuttings from the Creswick project,
announced in March 2020, and confirmation of high-grade gold
mineralisation at Creswick by the completion of 'full bag' testing,
announced in November 2019.
At Bailieston, work during the year has included field mapping
and geochemistry across numerous gold prospects, which has enabled
MGA's geologists to define a number of drill-ready targets.
Drilling has now commenced at the Byron prospect in the HR3 area,
and after Byron, it is planned that drilling will continue in the
same area to test the Maori, Dan Genders, Scoulars and Hard-Up
reefs. This drilling will aim to provide for the first time a
framework of the geological structures hosting the reefs, which
will be used to attempt to target coalescing reef
intersections.
From HR3, it is currently planned that the rig will be moved to
test the Cherry Tree prospect, or for further drilling at the Blue
Moon discovery. Cherry Tree and Blue Moon are also within the
Bailieston project. The results of 2019 drilling at Blue Moon by
MGA included intersections of 15 metres at 3.81 g/t gold and 11
metres at 2.42 g/t gold (announced on 14 March 2019).
MGA is also keen to follow up on previous drilling results at
Creswick, where individual samples returned assays as high as 80.97
g/t gold over one metre (announced on 5 November 2019). Further
drill sites at Creswick have already been determined and approval
has been received from the relevant government authorities. In
addition, after the end of the period under review, in the final
quarter of calendar year 2020, MGA completed a soil geochemistry
survey of the Jackass Reef prospect at Creswick, the results of
which, the Directors believe, will assist drill targeting in that
area at the appropriate time.
Overview of Victorian Exploration Licence Portfolio
At the end of the financial year under review, MGA held six
granted mineral exploration licences in Victoria (EL5387, EL5433,
EL006184, EL006280, EL006278 and EL006913).
In April 2020 MGA entered into an agreement for the sale of
exploration licences EL5387 (the Avoca project), EL006278 (the
Timor project), plus EL006280 and EL006913 (the Moormbool project),
and after the end of the period under review, these licences were
formally transferred to Currawong Resources Pty Ltd.
At the time of this report, MGA has a total of eight exploration
licence applications pending in Victoria, and holds two granted
exploration licences (EL5433 and EL006184), which respectively
forms part of the Bailieston and Creswick projects. These are
augmented, in the case of Bailieston, by exploration licence
applications EL006911, EL006912 and EL007296; and in the case of
Creswick, exploration licence applications EL006713 and
EL006907.
In November 2020, MGA lodged exploration licence application
EL007537 for an area which surrounds mining licences MIN5396 and
MIN4847. These mining licences, which are not held by MGA, contain
the operating Ballarat gold mine. The area of EL007537 includes the
southern extension of the Dimocks Main Shale, which is the
principal target of exploration at MGA's Creswick gold project
located a short distance to the north, the northern extension of
the Ballarat East line and the depth extensions of the Ballarat
West line. EL007537 is a competitive bid with three other
applicants.
New Gold Project: Tambo
In September 2020, MGA lodged two new exploration licence
applications in eastern Victoria, EL007484 and EL007486, to
comprise the Tambo gold project, which covers a sizeable area of
prospective geology near historic goldfields and has received
little contemporary exploration.
The applications cover portions of the historic Swifts
Creek/Omeo and Haunted Stream goldfields. These goldfields have
recorded historical gold production of 205,000 and 25,000 oz
respectively, according to figures published by the Geological
Survey of Victoria. MGA considers the application areas to be
prospective for orogenic reef gold and additionally for
intrusion-related gold and base metal systems.
Sale of Exploration Licences to Currawong Resources Pty Ltd
In April 2020 MGA entered into an agreement for the sale of
exploration licences EL5387, EL006280, EL006913 and EL006278 in
Victoria (the "Licences") to Currawong Resources Pty Ltd, a wholly
owned subsidiary of Fosterville South Exploration Ltd ("Fosterville
South"), which listed on the TSX Venture Exchange in April 2020,
for the following consideration:
1. A$500,000 in cash, which was paid to MGA immediately;
2. A further payment of A$1 for every ounce of gold or gold
equivalent of measured resource, indicated resource or inferred
resource estimated within the area of one or more of the Licences
in any combination or aggregation of the foregoing, up to a maximum
of A$1,000,000 in aggregate;
3. A further payment of A$1 for every ounce of gold or gold
equivalent produced from within the area of one or more of the
Licences, up to a maximum of A$1,000,000 in aggregate.
All of the Licences had been formally transferred to Currawong
by January 2021.
In February 2021, Leviathan Gold Ltd ("Leviathan") listed on the
TSX Venture Exchange. Leviathan is a 'spin-out' from Fosterville
South, and has acquired rights to EL5387 (the Avoca project) and
EL006278 (the Timor project) from Currawong. MGA still has the
right to further payments in respect of EL5387 and/or EL006278
based on resource estimation or production, as set out above.
Disposal of Ochre Mining SA and SLM Gold Project
In February 2020, the Company sold its wholly owned Argentine
subsidiary Ochre Mining SA, which holds the SLM gold project in La
Rioja, Argentina. The sale allows ECR to focus on its core gold
exploration activities in Australia. The purchaser, Hanaq Argentina
SA ("Hanaq"), is a Chinese-owned company engaged in lithium, base
and precious metals exploration in Northwest Argentina including
Salta, Jujuy and La Rioja, with a highly experienced management
team.
ECR retains an NSR royalty of up to 2% to a maximum of USD 2.7
million in respect of future production from the SLM gold project.
The Directors believe that Hanaq has the operational capabilities
and access to Chinese investment capital necessary to put the SLM
project into production, subject to the usual prerequisites such as
further exploration and feasibility studies being successfully
completed (if deemed necessary by Hanaq) and to the necessary
permits for production being obtained.
The founder and CEO of Hanaq Group, of which Hanaq Argentina SA
is part, is Mr Xiaohuan (Juan) Tang, who has a substantive track
record in Latin America, including responsibility for the
successful permitting of the Pampa de Pongo iron ore project in
Peru in his former capacity as General Manager of Jinzhao Mining
Peru. Pampa de Pongo is one of the largest iron ore deposits in
Latin America. Mr Tang has degrees from Tsinghua University in
China, and Imperial College, Cambridge University and Oxford
University in the UK.
Danglay Gold Project, Philippines
ECR is entitled to a 25% interest in the Danglay gold project in
the Philippines, which is held by a Philippine corporation called
Cordillera Tiger Gold Resources, Inc. ("Cordillera Tiger") under an
Exploration Permit, the renewal of which is pending. The issuance
of a 25% shareholding in Cordillera Tiger to the Company is
expected in due course, but has been delayed since 2016, largely
due to a court case filed by an individual who is a minority
shareholder and former director of Cordillera Tiger. The court
issued a decision in the case in June 2020 which is discussed in
the Strategic Report.
The Directors believe the political climate for the minerals
industry in the Philippines is on course to improve in future, and
consider that the Danglay gold project, which is located in a
prolific gold and copper mining district in the north of the
country, has potential for further exploration to build upon the
existing inferred mineral resource estimate of 63,500 ounces of
gold at 1.55 g/t gold. This resource was reported by ECR in 2015 to
the Canadian NI43-101 standard, based on exploration carried out at
Danglay by ECR during 2014 and 2015. In addition to the resource,
an NI43-101 target for further exploration (conceptual potential
quantity and grade of mineralisation expressed as ranges) of 95,000
to 170,000 ounces of gold at 5 to 7.5 g/t was reported. Further
information regarding Cordillera Tiger and the Danglay gold project
is provided in the Strategic Report.
FINANCIAL RESULTS FOR THE YEARED 30 SEPTEMBER 2020
For the year to 30 September 2020 the Group recorded a total
comprehensive loss of GBP2,595,002, compared with GBP762,586 for
the year to 30 September 2019.
The largest contributor to the total comprehensive loss was the
loss on disposal of Ochre Mining SA and the SLM gold project which
amounted to GBP1,986,469. Excluding the loss on disposal of Ochre
Mining SA and the SLM gold project the loss for the year to 30
September 2020 was less than the total comprehensive loss for the
year to 30 September 2019. Although the disposal resulted in a loss
the Group has the potential to recover more than this loss through
future royalty payments from Ochre Mining SA.
The Group's net assets at 30 September 2020 were GBP3,563,819,
in comparison with GBP3,640,604 at 30 September 2019. The decrease
is due to the disposal of Ochre Mining and SLM gold project during
the year. The increase is due to increased exploration assets as a
result of the capitalisation of exploration expenditure during the
year, and an increase in cash as a consequence of the sale of
projects by MGA to Currawong Resources Pty Ltd and the exercise of
share warrants issued by the Company in previous years. At the time
of writing, the Group cash position is approximately GBP4m.
Craig Brown
Chief Executive Officer
23 March 2021
Independent Auditor's Report
For the year ended 30 September 2020
Independent Auditor's Report to the Members of ECR Minerals
Plc
Opinion
We have audited the financial statements of ECR Minerals Plc
(the 'parent company') and its subsidiaries (the 'group') for the
year ended 30 September 2020 which comprise the Consolidated Income
Statement, 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 a summary of
significant accounting policies. The financial reporting framework
that has been applied in their preparation is international
accounting standards in conformity with the Companies Act 2006 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 30 September 2020 and
of the group's and parent company's loss for the year then ended;
-- the group financial statements have been properly prepared in accordance
with international accounting standards in conformity with the Companies
Act 2006;
-- the parent company financial statements have been properly prepared in
accordance with international accounting standards in conformity with the
Companies Act 2006 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.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting in the
preparation of the financial statements is not appropriate; or
-- the directors have not disclosed in the financial statements any
identified material uncertainties that may cast significant doubt about
the group's or the parent company's ability to continue to adopt the
going concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for issue.
Our application of materiality
The scope of our audit was influenced by our application of
materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing
and extent of our audit procedures. Group materiality was GBP55,000
(2019: GBP60,000) based upon 2% of gross assets. We consider gross
assets to be the main driver of the business as the group is still
in the exploration stage and therefore no revenues are currently
being generated, and that current and potential investors will be
most interested in the recoverability of the exploration and
evaluation assets. The parent company materiality was GBP45,000
(2019: GBP40,000) based upon an average of 2% of gross assets and
5% of adjusted loss before tax.
Whilst materiality for the financial statements as a whole was
set at GBP55,000, each significant component of the group was
audited to an overall materiality ranging between GBP40,000 --
GBP45,000 with performance materiality set at 70% for all
entities.
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 GBP2,750 (2019: GBP3,000) as well as differences
below these thresholds that, in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our 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 significant
accounting estimates including the carrying value of intangible
assets 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 operating entities which for the year ended 30 September
2020 were located in the United Kingdom and Australia. The
Argentine operations which were previously held by the group were
disposed of during the year. The audit work on each significant
component was performed by us as group auditor based upon
materiality or risk profile, or in response to potential risks of
material misstatement to the group.
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.
Key Audit Matter How the scope of our audit responded
to the key audit matter
Recoverability of intangible assets -- Our work in this area included: --
exploration and evaluation assets Sample testing of exploration and
(refer to note 10) The group as at 30 evaluation expenditure to assess their
September 2020 had ongoing early stage eligibility for capitalisation under
exploration projects in the IFRS 6 by corroborating to the
Philippines and Australia. There is a original source documentation. --
risk that the expenditure is not Inspection of the current exploration
correctly capitalised in accordance licences to verify they remained valid
with IFRS 6. There is also a risk that and that the group held good title. --
the capitalised exploration costs are Review of correspondence (where
not recoverable and should be applicable) with licensing authorities
impaired. The carrying value of to ensure compliance and assess the
intangible exploration and evaluation risk of non-renewal. We assessed the
assets as at 30 September 2020, which sampling results and progress of the
is tested annually for impairment, is projects and whether they indicate the
GBP1,869,184. The impairment existence of commercially viable
assessment requires management projects. -- Review and challenge of
judgement and estimation of a range of management's documented consideration
applicable factors. Specifically, of impairment by individual project.
there is an ongoing dispute over the -- Establishing the intention of the
Danglay Project (Philippines) where Board to undertake future exploration
ECR believe they have fulfilled the work. -- Review of any internal /
criteria of the Earn-in and JV external resource estimates produced
Agreement such that ECR has earned a during the year. -- Discussion of
25% interest. Relevant disclosures in status of all projects with
the financial statements are made in management. As disclosed in Note 10 to
Note 2 surrounding critical accounting the financial statements, the group
judgements, and in Note 10 for has not yet formally acquired title to
Intangible assets. its 25% interest in Cordillera Tiger
Gold Resources, Inc. ("Cordillera")
which is the holder of the exploration
permit for the Danglay gold project in
the Philippines. The conditions for
the earn-in have been satisfied but
the relevant shareholding has yet to
be issued, despite the Board of
Cordillera authorising the issue. In
addition, the exploration permit for
the Danglay gold project held by
Cordillera expired on 30 September
2015. Cordillera is currently waiting
for the Philippine authority to
formally grant its renewal
application. This indicates the
existence of a material uncertainty
over the recoverability of the
carrying value of the Danglay gold
project, which amounted to
GBP1,185,297 as at 30 September 2020.
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. 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. In
connection with our audit of the financial statements, 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
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. 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.
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 London E14 4HD
23 March 2021
Consolidated Income Statement
For the year ended 30 September 2020
Year ended Year ended
30 September 2020 30 September 2019
Note GBP GBP
Proceeds from disposal of licenses 275,701 -
Less: expenditure on licences
disposed (169,509) -
Gain on disposal 106,192 -
Continuing operations
Other administrative expenses (799,585) (833,203)
Currency exchange differences (33,497) (6,051)
Gain from hyperinflation
adjustment - 113,310
Total administrative expenses (833,082) (725,944)
Operating loss 3 (726,890) (725,944)
Other financial assets -- fair
value movement 9 13,683 (8,112)
Aborted transaction option fee (25,000)
(713,207) (759,056)
Financial income 7 478 1,846
Other income 8,316 -
Finance income and costs 8,794 1,846
Loss for the year before taxation
Income tax 5 (704,413) (757,210)
Loss for the year from continuing
operations (704,413) (757,210)
Loss on disposal of subsidiary (1,986,469) -
Loss for the year from
discontinued operations (1,986,469) -
Loss for the year - all
attributable to owners of the
parent (2,690,882) (757,210)
Earnings per share - basic and
diluted On continuing operations 4 (0.14)p (0.18)p
On discontinued operations (0.39)p -
The notes set out below are an integral part of these financial
statements.
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2020
Year ended Year ended
30 September 2020 30 September 2019
GBP GBP
Loss for the year (2,690,882) (757,210)
Items that may be reclassified
subsequently to profit or loss
Gain/(Loss) on exchange translation 95,880 (5,375)
Other comprehensive gain/(loss) for the
year 95,880 (5,375)
Total comprehensive loss for the year (2,595,002) (762,586)
Attributable to: -
Loss on continuing operations (608,533) (762,586)
Loss on discontinued operations (1,986,469) -
The notes set out below are an integral part of these financial
statements.
Consolidated & Company Statement of Financial Position
At 30 September 2020
Group Company
30 30 30
September September September 30 September
2019 2019
Note 2020 GBP GBP 2020 GBP GBP
Assets
Non-current
assets
Property,
plant and
equipment 8 183,539 1,041 2,737 548
Investments
in
subsidiaries 9 - -- - 852,728
Intangible
assets 10 1,869,184 3,295,996 1,333,282 2,272,553
Other
receivables 11 - -- 1,029,067 983,864
2,052,723 3,297,037 2,365,086 4,109,694
Current
assets
Trade and
other
receivables 11 108,617 108,654 726,689 616,190
Financial
assets at
fair value
through
profit or
loss 9 26,870 13,187 26,870 13,187
Cash and cash
equivalents 12 1,497,231 268,517 1,207,190 227,508
1,632,718 390,358 1,960,749 856,885
Total assets 3,685,441 3,687,395 4,325,835 4,966,578
Current
liabilities ,
Trade and
other
payables 14 121,622 46,791 93,848 22,990
121,622 46,791 93,848 22,990
Total
liabilities 121,622 46,791 93,848 22,990
Net assets 3,563,819 3,640,604 4,231,987 4,943,589
Equity
attributable
to owners of
the parent
Share capital 13 11,286,928 11,284,845 11,286,928 11,284,845
Share premium 13 47,090,048 45,391,202 47,090,048 45,391,202
Exchange
reserve 531,453 (394,876) - --
Other
reserves 440,706 742,698 440,706 742,698
Retained
losses (55,785,316) (53,383,265) (54,585,695) (52,475,157)
Total equity 3,563,819 3,640,604 4,231,987 4,943,589
The Company has elected to take the exemption under section 408
of the Companies Act 2006 from presenting the parent company profit
and loss account. The loss for the parent company for the year was
GBP2,399,369 (2019: GBP623,683 loss).
The notes set out below are an integral part of these financial
statements. The financial statements were approved and authorised
for issue by the Directors on 23 March 2021 and were signed on its
behalf by:
Weili (David) Tang Craig Brown
Non--Executive Chairman Director & Chief Executive
Officer
Consolidated Statement of Changes in Equity
For the year ended 30 September 2020
Share Share Exchange Other Retained
capital premium reserve reserves reserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP GBP
Balance at 30
September
2018 11,283,756 44,460,171 (389,501) 1,381,998 (53,084,878) 3,651,546
Loss for the
year -- -- -- -- (757,120) (757,120)
Loss on
exchange
translation -- -- (5,375) -- -- (5,375)
Total
comprehensive
loss -- -- (5,375) -- (757,120) (762,586)
Shares issued 1,039 737,745 -- -- -- 738,784
Share issue
costs -- (38,040) -- -- -- (38,040)
Lapsed or
expired
share-based
payments -- 180,476 -- (639,300) 458,824 --
Shares issued
in payment of
creditors 50 50,850 -- -- -- 50,900
Total
transactions
with owners,
recognised
directly in
equity 1,089 931,031 -- (639,300) 458,824 751,644
Balance at 30
September
2019 11,284,845 45,391,202 (394,876) 742,698 (53,383,264) 3,640,604
Loss for the
year -- -- -- -- (2,690,882) (2,690,882)
Gain on
exchange
translation -- -- 95,880 -- -- 95,880
Total
comprehensive
loss -- -- 95,880 -- (2,690,882) (2,595,002)
Shares issued 2,067 1,754,986 -- -- -- 1,757,053
Share issue
costs -- (77,000) -- -- -- (77,000)
Share based
payments -- 13,161 -- (301,992) 288,831 --
Recycled
through
profit or
loss on
disposal of
subsidiary -- -- 830,449 -- -- 830,449
Share issued
in payment of
creditors 15 7,699 -- -- -- 7,714
Total
transactions
with owners,
recognised
directly in
equity 2,083 1,698,846 830,449 (301,992) 288,831 2,518,216
Balance at 30
September
2020 11,286,928 47,090,048 531,453 440,706 (55,785,316) 3,563,819
The notes set out below are an integral part of these financial
statements.
Company Statement of Changes in Equity
For the year ended 30 September 2020
Share Share Other Retained
capital premium reserves reserves
(Note 13) (Note 13) Total
GBP GBP GBP GBP GBP
Balance at 30
September
2018 11,283,756 44,460,171 1,381,998 (52,310,297) 4,815,628
Loss for the
year -- -- -- (623,682) (623,682)
Total
comprehensive
expense -- -- -- (623,682) (623,682)
Shares issued 1,039 737,745 -- -- 738,784
Share issue
costs -- (38,040) -- -- (38,040)
Lapsed or
expired share
based
payments 180,476 (639,300) 458,824 --
Shares issued
in payment of
creditors 50 50,850 -- -- 50,900
Total
transactions
with owners,
recognised
directly in
equity 1,089 931,031 (639,300) 458,824 751,644
Balance at 30
September
2019 11,284,845 45,391,202 742,698 (52,475,156) 4,943,589
Loss for the
year -- -- -- (2,399,369) (2,399,369)
Total
comprehensive
expense -- -- -- (2,399,369) (2,399,369)
Shares issued 2,067 1,754,986 -- -- 1,757,054
Share issue
costs -- (77,000) -- -- (77,000)
Share based
payment -- 13,161 (301,992) 288,831 --
Shares issued
in payment of
creditors 15 7,699 -- -- 7,714
Total
transactions
with owners,
recognised
directly in
equity 2,083 1,698,846 (301,992 ) 288,831 1,687,768
Balance at 30
September
2020 11,286,928 47,090,048 440,706 (54,585,695) 4,231,987
The notes set out below are an integral part of these financial
statements.
Consolidated & Company Cash Flow Statement
For the year ended 30 September 2020
Group Company
Year ended Year ended
30 30 Year ended 30 Year ended 30
September September September September
2020 2019 2020 2019
Note GBP GBP GBP GBP
Net cash used
in
operations 20 (668,377) (773,318) (694,408) (761,915)
Investing
activities
Purchase of
property,
plant &
equipment 8 (186,307) -- (5,963) --
Increase in
exploration
assets 10 (180,653) (436,522) - (16,244)
Proceeds from
disposal of
licenses 275,701 -- -- --
R&D tax
credits on
exploration 307,818 - - -
Loan to
subsidiary -- -- - (455,370)
Interest
income 7 478 1,846 - 1,268
Net cash
generated
from / (used
in) investing
activities 217,037 (434,676) (5,963) (460,346)
Financing
activities
Proceeds from
issue of
share capital
(net of issue
costs) 1,680,054 700,744 1,680,054 700,744
Net cash from
financing
activities 1,680,054 700,744 1,680,054 700,744
Net change in
cash and cash
equivalents 1,228,714 (507,250) 979,682 (521,517)
Cash and cash
equivalents
at beginning
of the year 268,517 781,142 227,508 749,025
Effect of
changes in
foreign
exchange
rates -- (5,375) -- --
Cash and cash
equivalents
at end of the
year 12 1,497,231 268,517 1,207,190 227,508
Non-cash
transactions:
1. Settlement of creditors of GBP7,715 (2019: GBP89,684) with
ordinary shares.
The notes on pages 28 to 44 are an integral part of these
financial statements.
Notes to the Financial Statements
For the year ended 30 September 2020
1 General information
The Company and the Group operated mineral exploration and
development projects. The Group's principal interests are located
in Australia, Argentina and the Philippines.
The Company is a public limited company incorporated and
domiciled in England. The registered office of the Company and its
principal place of business is Unit 119, Chester House, 81-83
Fulham High Street, Fulham Green, London SW6 3JA. The Company is
quoted on the Alternative Investment Market (AIM) of the London
Stock Exchange.
2 Accounting policies
Overall considerations
The principal accounting policies that have been used in the
preparation of these consolidated financial statements are set out
below. The policies have been consistently applied unless otherwise
stated.
Basis of preparation
a) Statement of compliance
The consolidated financial statements have been prepared in
accordance with international accounting standards in conformity
with the Companies Act 2006. The financial statements are prepared
on the historical cost basis or the fair value basis where the fair
valuing of relevant assets or liabilities has been applied.
b) (i) New and amended standards, and interpretations issued and
effective for the financial year beginning 1 October 2019
There were no new standards, amendments or interpretations
effective for the first time for periods beginning on or after 1
October 2019 that had a material effect on the Group or Company
financial statements
(ii) New standards, amendments and interpretations in issue 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 had not been adopted by the EU):
-- Amendments to References to Conceptual Framework in IFRS Standards --
effective 1 January 2020
-- Definition of Material (Amendments to IAS 1 and IAS 8) -- effective 1
January 2020
-- Amendment to IFRS 3 Business Combinations -- effective 1 January 2020
-- Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform
-- effective 1 January 2020
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate
Benchmark Reform -- Phase 2 -- effective 1 January 2021*
-- Amendment to IFRS 3 Business Combinations -- Reference to the Conceptual
Framework -- effective 1 January 2022*
-- Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent
Assets -- effective 1 January 2022*
-- Annual Improvements to IFRS Standards 2018-2020 Cycle -- effective 1
January 2022*
-- Amendments to IAS 1 Presentation of Financial Statements: Classification
of Liabilities as Current or Non-current and Amendments to IAS 1:
Classification of Liabilities as Current or Non-current -- Deferral of
Effective Date -- effective 1 January 2023*
*subject to EU endorsement
The Group and Company intend to adopt these standards when they
become effective. The introduction of these new standards and
amendments is not expected to have a material impact on the Group
or Company.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and one of its subsidiaries made up to 30
September 2020. Subsidiary undertakings acquired during the period
are recorded under the acquisition method of accounting and their
results consolidated from the date of acquisition, being the date
on which the Company obtains control, and continue to be
consolidated until the date such control ceases.
The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity.
Going concern
It is the prime responsibility of the Board to ensure the Group
and Company remains a going concern. At 15 March 2021, the Group
has cash and cash equivalents of GBP3,954,919 and no
borrowings.
The Group's financial projections and cash flow forecasts
covering a period of at least twelve months from the date of
approval of these financial statements show that the Group will
have sufficient available funds in order to meet its contracted and
committed expenditure. Further details are included in Note 21 to
the financial statements.
Based on their assessment of the financial position, the
Directors have a reasonable expectation that the Group and Company
will be able to continue in operational existence for the next 12
months and continue to adopt the going concern basis of accounting
in preparing these Financial Statements.
Cash and cash equivalents
Cash includes petty cash and cash held in current bank accounts.
Cash equivalents include short--term investments that are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value.
Property, plant and equipment
Property, plant and equipment are stated at cost, less
accumulated depreciation and any provision for impairment
losses.
Depreciation is charged on each part of an item of property,
plant and equipment so as to write off the cost of assets less the
residual value over their estimated useful lives, using the
straight--line method. Depreciation is charged to the income
statement. The estimated useful lives are as follows:
Office equipment 3 years
Furniture and fittings 5 years
Machinery and equipment 5 years
Expenses incurred in respect of the maintenance and repair of
property, plant and equipment are charged against income when
incurred. Refurbishments and improvements expenditure, where the
benefit is expected to be long lasting, is capitalised as part of
the appropriate asset.
An item of property, plant and equipment ceases to be recognised
upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on cessation of
recognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is
included in the income statement in the year the asset ceases to be
recognised.
Exploration and development costs
All costs associated with mineral exploration and investments
are capitalised on a project--by--project basis, pending
determination of the feasibility of the project. Costs incurred
include appropriate technical and administrative expenses but not
general overheads. If an exploration project is successful, the
related expenditures will be transferred to mining assets and
amortised over the estimated life of the commercial ore reserves on
a unit of production basis. Where a licence is relinquished or a
project abandoned, the related costs are written off in the period
in which the event occurs. Where the Group maintains an interest in
a project, but the value of the project is considered to be
impaired, a provision against the relevant capitalised costs will
be raised.
The recoverability of all exploration and development costs is
dependent upon continued good title to relevant assets being held
(or, in the case of the Company's interest in the Danglay gold
project, to good title being secured), the discovery of
economically recoverable reserves, the ability of the Group to
obtain necessary financing to complete the development of reserves
and future profitable production or proceeds from the disposition
thereof.
Impairment testing
Individual assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount of an
asset may exceed its recoverable amount, being the higher of net
realisable value and value in use. Any such excess of carrying
value over recoverable amount or value in use is taken as a debit
to the income statement.
Intangible exploration assets are not subject to amortisation
and are tested annually for impairment.
Provisions
A provision is recognised in the Statement of Financial Position
when the Group or Company has a present legal or constructive
obligation as a result of a past event, and it is probable that an
outflow of economic benefits 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 current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Leased assets
Assets and liabilities arising from a lease are initially
measured on a present value basis. The lease payments are
discounted using the interest rate implicit in the lease. If that
rate cannot be readily determined, the lessee's incremental
borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset
of similar value to the right-of-use asset. Lease payments are
allocated between principal and finance cost. All other short term
leases are regarded as operating leases and the payments made under
them are charged to the income statement on a straight-line basis
over the lease term.
Taxation
There is no current tax payable in view of e losses to date.
Deferred income taxes are calculated using the Statement of
Financial Position liability method on temporary differences.
Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases.
However, deferred tax is not provided on the initial recognition of
goodwill or on the initial recognition of an asset or liability
unless the related transaction is a business combination or affects
tax or accounting profit. Deferred tax on temporary differences
associated with shares in subsidiaries and joint ventures is not
provided if reversal of these temporary differences can be
controlled by the Company and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available
to be carried forward as well as other income tax credits to the
Company are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no
discounting. Deferred tax assets are recognised to the extent that
it is probable that the underlying deductible temporary differences
will be able to be offset against future taxable income. Current
and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at
the Statement of Financial Position date.
Changes in deferred tax assets or liabilities are recognised as
a component of tax expense in the income statement, except where
they relate to items that are charged or credited directly to
equity, in which case the related current or deferred tax is also
charged or credited directly to equity.
Investments in subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the
entity.
The investments in subsidiaries held by the Company are valued
at cost less any provision for impairment that is considered to
have occurred, the resultant loss being recognised in the income
statement.
Equity
Equity comprises the following:
-- "Share capital" represents the nominal value of equity shares, both
ordinary and deferred.
-- "Share premium" represents the excess over nominal value of the fair
value of consideration received for equity shares, net of expenses of the
share issues.
-- "Other reserves" represent the fair values of share options and warrants
issued.
-- "Retained reserves" include all current and prior year results, including
fair value adjustments on financial assets, as disclosed in the
consolidated statement of comprehensive income.
-- "Exchange reserve" includes the amounts described in more detail in the
following note on foreign currency below.
Foreign currency translation
The consolidated financial statements are presented in pounds
sterling which is the functional and presentational currency
representing the primary economic environment of the Group.
Foreign currency transactions are translated into the respective
functional currencies of the Company and its subsidiaries using the
exchange rates prevailing at the date of the transaction or at an
average rate where it is not practicable to translate individual
transactions. Foreign exchange gains and losses are recognised in
the income statement.
Monetary assets and liabilities denominated in a foreign
currency are translated at the rates ruling at the Statement of
Financial Position date.
The assets and liabilities of the Group's foreign operations are
translated at exchange rates ruling at the Statement of Financial
Position date. Income and expense items are translated at the
average rates for the period. Exchange differences are classified
as equity and transferred to the Group's exchange reserve. Such
differences are recognised in the income statement in the periods
in which the operation is disposed of.
Share--based payments
The Company awards share options to certain Company Directors
and employees to acquire shares of the Company. Additionally, the
Company has in previous years issued warrants to providers of
equity finance.
All goods and services received in exchange for the grant of any
share--based payment are measured at their fair values. Where
employees are rewarded using share--based payments, the fair values
of employees' services are determined indirectly by reference to
the fair value of the instrument granted to the employee.
The fair value is appraised at the grant date and excludes the
impact of non--market vesting conditions. 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
effects of non--transferability, exercise restrictions, and
behavioural considerations.
All equity--settled share--based payments are ultimately
recognised as an expense in the income statement with a
corresponding credit to "other reserves".
If vesting periods or other non--market vesting conditions
apply, the expense is allocated over the vesting period, based on
the best available estimate of the number of share options expected
to vest. Estimates are subsequently revised if there is any
indication that the number of share options expected to vest
differs from previous estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No adjustment is made
to any expense recognised in prior years if share options
ultimately exercised are different to that estimated on
vesting.
Upon exercise of share options, the proceeds received net of
attributable transaction costs are credited to share capital and,
where appropriate, share premium.
A gain or loss is recognised in profit or loss when a financial
liability is settled through the issuance of the Company's own
equity instruments. The amount of the gain or loss is calculated as
the difference between the carrying value of the financial
liability extinguished and the fair value of the equity instrument
issued.
Financial instruments
Financial assets
The Group's financial assets comprise equity investments held as
financial assets at fair value through profit or loss as required
by IFRS 9, and financial assets at amortised cost, being cash and
cash equivalents and receivables balances. Financial assets are
assigned to the respective categories on initial recognition, based
on the Group's business model for managing financial assets, which
determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both.
Financial assets at amortised cost are non--derivative financial
assets with fixed or determinable payments that are not quoted in
an active market. These assets are initially measured at fair value
plus transaction costs directly attributable to their acquisition
or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment under
the expected credit loss model.
The Group's receivables fall into this category of financial
instruments. Discounting is omitted where the effect of discounting
is immaterial.
Equity investments are held as financial assets at fair value
through profit or loss. These assets are initially recognised at
fair value and subsequently carried in the financial statements at
fair value, with net changes recognised in profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group's consolidated statement
of financial position) when:
-- The rights to receive cash flows from the asset have
expired
Or
-- The Group has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a
'pass-through' arrangement; and either (a) the Group has
transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control
of the asset.
Impairment of financial assets
The Group recognises an allowance for ECLs for all debt
instruments not held at fair value through profit or loss.
The amount of the expected credit loss is measured as the
difference between all contractual cash flows that are due in
accordance with the contract and all the cash flows that are
expected to be received (i.e. all cash shortfalls), discounted at
the original effective interest rate (EIR).
For trade receivables (not subject to provisional pricing) and
other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9.
Therefore, the Group does not track changes in credit risk, but
instead, recognises a loss allowance based on the financial asset's
lifetime ECL at each reporting date.
Financial liabilities
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The Group's financial liabilities include trade and other
payables and are held at amortised cost. After initial recognition,
trade and other payables are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in the
statement of profit or loss and other comprehensive income when the
liabilities are derecognised, as well as through the EIR
amortisation process.
Derecognition
A financial liability is derecognised when the associated
obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in
the respective carrying amounts is recognised in profit or loss and
other comprehensive income.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with IFRSs
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
on--going basis. Revisions to accounting estimates are recognised
in the year in which the estimate is revised if the revision
affects only that year or in the year of the revision and future
years if the revision affects both current and future years.
The most critical accounting policies and estimates in
determining the financial condition and results of the Group and
Company are those requiring the greater degree of subjective or
complete judgement. These relate to:
Capitalisation and recoverability of exploration costs (Note
10):
Capitalised exploration and evaluation costs consist of direct
costs, licence payments and fixed salary/consultant costs,
capitalised in accordance with IFRS 6 "Exploration for and
Evaluation of Mineral Resources". The group and company recognises
expenditure as exploration and evaluation assets when it determines
that those assets will be successful in finding specific mineral
assets. Exploration and evaluation assets are initially measured at
cost. Exploration and evaluation costs are assessed for impairment
when facts and circumstances suggest that the carrying amount of an
asset may exceed its recoverable amount. Any impairment is
recognised directly in profit or loss.
Recoverability of investment in subsidiaries including intra
group receivables (Note 9 and 11)
The recoverability of investments in subsidiaries, including
intra group receivables, is directly linked to the recoverability
of the exploration assets in those entities, which is subject to
the same estimates and judgements as explained above.
3 Operating loss
Year ended
Year ended 30 September
30 September 2020 2019
The operating loss is
stated after charging: GBP GBP
Depreciation of property,
plant and equipment 3,809 1,701
Operating lease expenses 23,768 23,746
Auditors' remuneration
-- fees payable to the
Company's auditor for
the audit of
the parent company and
consolidated financial
statements 25,750 21,500
4 Earnings per share
Year ended 30 September Year ended 30 September
Basic and Diluted 2020 2019
Weighted number of shares
in issue during the year 512,411,527 423,047,928
GBP GBP
Loss from continuing
operations attributable to
owners of the parent (704,413) (757,210)
Loss from discontinued
operations attributable to
owners of the parent (1,986,469) -
Basic earnings per share has been calculated by dividing the
loss attributable to equity holders of the company after taxation
by the weighted average number of shares in issue during the year.
There is no difference between the basic and diluted earnings per
share as the effect on the exercise of options and warrants would
be to decrease the earnings per share.
Details of share options and warrants that could potentially
dilute earnings per share in future periods is set out in Note
1.
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CONTACT:
ECR Minerals plc
SOURCE: ECR Minerals plc
Copyright Business Wire 2021
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