ALS.L Regulatory News (ALS)

Altus Strategies Plc

Steven Poulton, Chief Executive

Tel: +44 (0) 1235 511 767

E: info@altus-strategies.com

SP Angel (Nominated Adviser)

Richard Morrison / Soltan Tagiev

Tel: +44 (0) 20 3470 0470

SP Angel (Broker)

Elizabeth Johnson / Richard Parlons

Tel: +44 (0) 20 3470 0471

Blytheweigh (Financial PR)

Tim Blythe / Camilla Horsfall / Nick Elwes

Tel: +44 (0) 20 7138 3204

INDEPENDENT AUDITOR'S REPORT

Opinion

We have audited the financial statements of Altus Strategies plc (the parent company) and its subsidiaries (the group) for the year ended 31 December 2017 which comprise the Group Statement of Comprehensive Income, the Group and Parent Company Statement of Financial Position, the Group and Parent Company Statement of Changes in Equity, the Group and Parent Company Statement 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 applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

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.

In our opinion:

· The financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2017 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 IFRSs as adopted by the European Union;

· The parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union 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.

Our application of materiality

The materiality applied to the Group financial statements was £120,000, based on thresholds for net assets and the loss before tax. The performance materiality was £84,000.

An overview of the scope of the audit

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the directors and considered future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

The accounting records of the parent company and all subsidiary undertakings are centrally located and audited by us based upon Group materiality or risk 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 year 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.

We have determined the following key audit matters and set out our findings:

Other information

The other information comprises the information included in the Annual Report, other than the Group and Parent Company's 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 our audit:

· the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

· the 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 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 where 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 and 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 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: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

David Thompson (Senior Statutory Auditor)

for and on behalf of PKF Littlejohn LLP

Statutory Auditor

1 Westferry Circus

Canary Wharf

London

E14 4HD

GROUP STATEMENT OF COMPREHENSIVE INCOME

2017

2016

Notes

£

£

Continuing operations

Management fees and costs recovered from joint venture partners

4

401,228

455,475

Administrative expenses

6

(1,497,498)

(920,620)

Exploration costs expensed

7

(556,447)

(512,636)

IPO and acquisition related costs

(371,753)

-

Loss from operations

(2,024,470)

(977,781)

Investment revenues

12

61

165

Other operating income

33,588

7,080

Fair value gain on investments

13

129,142

287,639

Gain on disposal of discontinued operations

8

-

29,405

Loss before taxation

(1,861,679)

(653,492)

Taxation

14

(1,126)

(174)

Loss and total comprehensive income for the year

(1,862,805)

(653,666)

Loss for the year attributable to:

- Owners of the parent company

(1,860,145)

(649,091)

- Non-controlling interest

(2,660)

(4,575)

(1,862,805)

(653,666)

Total comprehensive income for the year attributable to:

- Owners of the parent company

(1,860,145)

(649,091)

- Non-controlling interest

(2,660)

(4,575)

(1,862,805)

(653,666)

Note

2017

2016

£

£

Earnings per share (pence) attributable to the owners of the parent

15

Continuing operations

(1.84)

(0.81)

Discontinued operations

-

0.03

(1.84)

(0.78)

_______________

___________________

GROUP STATEMENT OF FINANCIAL POSITION

2017

2016

Notes

£

£

Non-current assets

Intangible assets

16

151,875

105,640

Property, plant and equipment

17

2,386

2,065

Investments

19

601,536

472,394

755,797

580,099

Current assets

Trade and other receivables

21

110,669

254,479

Cash and cash equivalents

523,344

415,914

634,013

670,393

Total assets

1,389,810

1,250,492

Current liabilities

Trade and other payables

22

298,055

323,863

Current tax liabilities

-

4,018

Provisions

23

15,000

15,000

Total liabilities

313,055

342,881

Net current assets

320,958

327,512

Net assets

1,076,755

907,611

Equity

Share capital

29

1,076,808

104,526

Share premium

30

999,000

5,770,590

Other reserves

5,727,614

(92,323)

Retained earnings

(6,656,664)

(4,807,839)

Total equity attributable to owners of the parent

1,146,758

974,954

Non-controlling interest

(70,003)

(67,343)

Total equity

1,076,755

907,611

Mr R Milroy

Mr M Grainger

Director

Director

COMPANY STATEMENT OF FINANCIAL POSITION

2017

Notes

£

Non-current assets

Investments

19

965,808

Current assets

Trade and other receivables

21

527,913

Cash and cash equivalents

291,087

819,000

Total assets

1,784,808

Current liabilities

Trade and other payables

22

91,662

Total liabilities

91,662

Net current assets

727,338

Net assets

1,693,146

Equity

Called up share capital

29

1,076,808

Share premium account

30

999,000

Retained earnings

(382,662)

Total equity

1,693,146

As permitted by section 408 of the Companies Act 2006, the Company has not presented its own statement of comprehensive income and relates notes. The Company's loss for the year was £382,662.

The financial statements were approved by the board of directors and authorised for issue on 30 April 2018 and are signed on its behalf by:

Mr R Milroy

Mr M Grainger

Director

Director

GROUP STATEMENT OF CHANGES IN EQUITY

Share capital

Sharepremiumaccount

Other reserves

Retained earnings

Total equity

Non-controlling interest

Total

Notes

£

£

£

£

£

£

£

Balance at 1 January 2016

116,396

5,748,597

4,279

(4,158,748)

1,710,524

(62,768)

1,647,756

Year ended 31 December 2016:

Loss and total comprehensive income for the year

-

-

-

(649,091)

(649,091)

(4,575)

(653,666)

Issue of share capital

29 & 30

353

21,993

-

-

22,346

-

22,346

Reduction of shares

(12,223)

-

-

-

(12,223)

-

(12,223)

Transfers

-

-

(96,602)

-

(96,602)

-

(96,602)

Total transactions with owners, recognised directly in equity

(11,870)

21,993

(96,602)

-

(86,479)

-

(86,479)

Balance at 31 December 2016

104,526

5,770,590

(92,323)

(4,807,839)

974,954

(67,343)

907,611

Year ended 31 December 2017

Loss and total comprehensive income for the year

-

-

-

(1,860,145)

(1,860,145)

(2,660)

(1,862,805)

Issue of share capital

29 & 30

127,200

1,901,106

-

-

2,028,306

-

2,028,306

Issue of warrants

-

-

3,643

-

3,643

-

3,643

Capital reorganisation

845,082

(6,672,696)

5,827,614

-

-

-

-

Share options exercised

-

-

(11,320)

11,320

-

-

-

Total transactions with owners, recognised directly in equity

972,282

(4,771,590)

5,819,937

11,320

2,031,949

-

2,031,949

Balance at 31 December 2017

 1,076,808

 999,000

 5,727,614

(6,656,664)

1,146,758 

 (70,003)

1,076,755 

COMPANY STATEMENT OF CHANGES IN EQUITY

Share capital

Share premium account

Retained earnings

Total

Notes

£

£

£

£

Year ended 31 December 2017:

Loss and total comprehensive income for the year

-

-

(382,662)

(382,662)

Issue of share capital

29 & 30 30

1,076,808

999,000

-

2,075,808

Total transactions with owners, recognised directly in equity

1,076,808

999,000

-

2,075,808

Balance at 31 December 2017

1,076,808

999,000

(382,662)

1,693,146

GROUP STATEMENT OF CASH FLOWS

2017

2016

Notes

£

£

£

£

Cash flows from operating activities

Cash generated from/ (used in) operations

36

(1,523,505)

(495,629)

Income taxes paid

-

(174)

Net cash outflow from operating activities

(1,523,505)

(495,803)

Investing activities

Purchase of intangible assets

(1,734)

(15,371)

Purchase of property, plant and equipment

(46,235)

(405)

Distribution in specie

-

(100,000)

Other investments and loans made

-

(1,092,191)

Proceeds from other investments and loans

-

1,104,480

Interest received

61

307

Net cash used in investing activities

(47,908)

(103,180)

Financing activities

Proceeds from issue of shares

1,678,843

-

Net cash generated from financing activities

1,678,843

-

Net increase/(decrease) in cash and cash equivalents

107,430

(598,983)

Cash and cash equivalents at beginning of year

415,914

1,014,897

Cash and cash equivalents at end of year

523,344

415,914

COMPANY STATEMENT OF CASH FLOWS

2017

Notes

£

£

Cash flows from operating activities

Cash used in operations

37

(818,913)

Net cash used in operating activities

(818,913)

Financing activities

Proceeds from issue of shares

1,110,000

Net cash generated from financing activities

1,110,000

Net increase in cash and cash equivalents

291,087

Cash and cash equivalents at beginning of year

-

Cash and cash equivalents at end of year

291,087

Non-cash transactions

During the year the Company issued 96,580,812 ordinary shares to acquire Altus Exploration Management Limited by way of a share for share exchange.

1

Accounting policies

Company information

Altus Strategies plc is a public company limited by shares incorporated in England and Wales. The registered office is 14 Station Road, Didcot, Oxfordshire, OX11 7LL.

The Group consists of Altus Strategies plc and all of its subsidiaries, as listed in note 20.

1.1

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS interpretations committee (IFRS IC) interpretations as adopted for use in the European Union and with IFRS and their interpretations issued by the IASB. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, (except as otherwise stated).

The financial statements have been prepared on the historical cost basis, except for the valuation of investments at fair value through profit or loss. The principal accounting policies adopted are set out below.

The financial statements are prepared in British Pounds Sterling (£), which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest whole pound.

As permitted by section 408 of the Companies Act 2006, the Company has not presented its own statement of comprehensive income and relates notes. The Company's loss for the year was £382,662.

1.2

Basis of consolidation

The consolidated financial statements comprise the financial statements of Altus Strategies plc and its subsidiaries as at 31 December 2017.

Altus Strategies plc was incorporated on 28 April 2017. On 14 June 2017, Altus Strategies plc acquired the entire share capital of Altus Exploration Management Limited by way of a share for share exchange. The transaction has been treated as a group reconstruction and has been accounted for using the reverse merger accounting method. Accordingly, the financial information for the current year and comparatives have been presented as if Altus Exploration Management Limited has been owned by Altus Strategies plc throughout the current and prior years.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls and investee if, and only if, the Group has:

· power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

· Exposure, or rights, to variable returns from its involvement with the investee

· The ability to use its power over the investee to affect its future

1

Accounting policies (continued)

Generally, there is a presumption that a majority of the voting rights results in control. To support this presumption and when the Group has less than a majority of the voting rights or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has the power over an investee, including:

· The contractual arrangements with the other vote holders of the investee

· Rights arising from other contractual arrangements

· The Group's voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

"Joint ventures" as referred to in the financial statements refer to agreements with exploration partners and not joint ventures as defined within IFRS 11.

Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent company of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

All inter- group assets and liabilities, equity income, expense and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

1.3

Going concern

The Directors have at the time of approving the financial statements, a reasonable expectation that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. In common with many junior resource investment and exploration companies, the Group and Company raise funds in discrete tranches from existing shareholders and /or new investors. The Directors and management are using funds for the evaluation of resource investment and exploration opportunities. The current funds are forecast to provide sufficient working capital through the next financial year and additional funds will be raised as and when required. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.

1

Accounting policies (continued)

1.4

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, which is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

1.5

Exceptional items

Exceptional items are disclosed separately in the financial statements where it is necessary to do so, to provide further understanding of the financial performance of the Group. They are material items of income of expense that have been shown separately due to the significance of their nature or amount. IPO and acquisition related costs are included as exceptional items in profit or loss.

1.6

Fair value measurement

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the Group uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.

1.7

Intangible assets - Deferred exploration costs

Expenditure on exploration activities is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following basis.

Deferred exploration costs: Not amortised

Deferred exploration costs comprise of exploration licence fees capitalised in accordance with IFRS 6 "Exploration for and Evaluation of Mineral Resources." Licences are initially measured at cost. At each reporting date, the Group reviews the carrying amount in line with the accounting policy for impairment. When a project is considered no longer viable, the associated licence cost is written off to the income statement.

1

Accounting policies (continued)

1.8

Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings

4 years straight line

Computers

2 years straight line

Plant and Machinery

4 years straight line

Motor vehicles

2 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in profit or loss.

1.9

Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

1.10

Impairment of non-current assets

At each reporting end date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11

Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12

Financial assets

Financial assets are recognised in the statement of financial position when the Group or Company becomes party to the contractual provisions of the instrument.

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Financial assets are initially measured at fair value plus transaction costs, other than those classified as fair value through profit and loss, which are measured at fair value. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

Loans and receivables

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. The Group's and Company's loans and receivables comprise trade and other receivables and cash and cash equivalents.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at each reporting end date. For loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1

Accounting policies (continued)

1.13

Financial liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company's obligations are discharged, cancelled, or they expire.

1.14

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

1.15

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

Current tax is based on taxable profit or loss for the year. Taxable profit or loss differs from net profit or loss as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1

Accounting policies (continued)

1.16

Provisions

Provisions are recognised when the Group or Company has a legal or constructive present obligation as a result of a past event and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.

Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

1.17

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18

Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1

Accounting policies (continued)

1.20

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Rentals payable under operating leases, less any lease incentives received, are charged to income on a straight-line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease asset are consumed.

1.21

Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the Statement of Comprehensive Income for the period.

1.22

Liquidity risk

The company seeks to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs and invest cash assets safely and profitable.

2

Adoption of new and revised standards and changes in accounting policies

Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective.

New and amended standards adopted by the company

There are no IFRSs or IFRIC interpretations that were effective for the first time for the financial year beginning 1 January 2017 that had a material impact on the Group or Company.

New and revised IFRSs in issue but not yet effective

The Group and Company have not applied the following new and revised Standards and Interpretations that have been issued but are not yet effective:

* Subject to EU endorsement

The Group is evaluating the impact of the new and amended standards above. The directors believe that these new and amended standards are not expected to have a material impact on the company's results or shareholders' funds. There is not expected to be any significant impact form the introductions of IFRS 15 as the Group does not have any revenue from contracts with customers.

Based on an analysis of the Group's financial assets and financial liabilities as at 31 December 2017 on the basis of the facts and circumstances that exist at that date, the Directors of the Company do not expect there to be a significant impact on the adoption of IFRS 9.

3

Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are shown below.

Share based payments

Estimating fair value for share based payment transactions require determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. The estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For measurement of the fair value of equity settles transactions with employees at the grant date, the Company used the Black Scholes model. The assumptions and model for estimating fair value for share based payments are disclosed in note 27.

Impairment of Deferred Exploration Costs

At the reporting date, deferred exploration costs had a carrying value of £151,875 (2016 - £105,640). Management tests annually whether deferred exploration costs have a carrying value in accordance with the accounting policy stated in note 1.7 each exploration cost us subject to an annual review either by a consultant or a senior geologist to determine if the exploration results have returned to date, warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes in to consideration long term metal prices, anticipated resource volumes and grades, permitting and infrastructure as well as the likelihood of on-going funding from joint venture partners. In the event that a project does not represent an economic exploration target and results indicate that there is no additional upside, or that future funding from joint venture partners is unlikely, a decision will be made to discontinue exploration. The Directors have reviewed the estimated value of each project prepared by management and do not consider any impairment necessary.

4

Segmental Analysis

2017

2016

£

£

Management fees and costs recovered from joint venture partners

401,228

455,475

Other operating income

33,588

-

Interest income

61

165

33,649

165

Segmental analysis

UK

Africa

Total

2016

2016

2016

£

£

£

Management fees and costs recovered from joint venture partners

4,943

450,587

455,530

Loss from operations

(890,575)

(87,206)

(977,781)

Reportable segment assets

1,059,433

191,059

1,250,492

Reportable segment liabilities

298,106

44,775

342,881

UK

Africa

Total

2017

2017

2017

£

£

£

Management fees and costs recovered from joint venture partners

-

401,228

401,228

Loss from operations

(1,829,925)

(194,545)

(2,024,470)

Reportable segment assets

1,075,825

313,985

1,389,810

Reportable segment liabilities

(241,062)

(71,993)

(313,055)

5

Operating loss

2017

2016

£

£

Operating loss for the year is stated after charging/(crediting):

Exchange losses/(gains)

(14,318)

(38,605)

Exploration and development costs

556,447

512,636

IPO and acquisition related costs

371,753

-

Depreciation

1,413

2,375

Share-based payments

3,643

3,398

Operating lease charges

350,846

23,046

6

Administrative expenses

2017

2016

£

£

Administrative expenses include the following balances

Employee costs (note 10)

1,091,773

699,477

Costs incurred on behalf of joint venture partners

195,196

115,958

Legal and professional expenses

140,045

46,122

Travel expenses

29,079

20,342

Exchange gains

(14,318)

(38,605)

Depreciation of property, plant and equipment

1,413

2,375

Other expenses

54,310

74,951

1,497,498

920,620

7

Exploration and development costs

Location and licence

Administrative expenses

Operational expenses

Travel expenses

Total

2017

2017

2017

2017

£

£

£

£

Morocco - Agdz

447

7,975

6,615

15,037

Morocco - Takzim

457

571

38

1,066

Morocco - General

77,262

10,524

3,899

91,685

Ethiopia - Tigray-Afar

24,281

44,508

16,379

85,168

Ethiopia - General

79,788

4,405

7,345

91,538

Cameroon - Laboum

63,390

47,803

33,151

144,344

Cameroon - Birsok & Mandoum

1,032

189

-

1,221

Cameroon - Bikoula & Ndjele

1,715

3,162

1,692

6,569

Cameroon - General

68,989

(345)

970

69,614

Liberia - Bella Yella

9,418

4,575

24

14,017

Liberia - Zolowo

23,564

-

-

23,564

Liberia - Other

153

-

-

153

Other

4,275

4,479

3,717

12,471

Total

354,771

127,846

73,830

556,447

7

Exploration and development costs

(continued)

Location and licence

Administrative expenses

Operational expenses

Travel expenses

Total

2016

2016

2016

2016

£

£

£

£

Morocco - Agdz

52,448

9,703

9,265

71,416

Morocco - Takzim

36

2,610

867

3,513

Morocco - General

2,813

9,484

2,610

14,907

Ethiopia - Tigray-Afar

44,578

70,053

16,477

131,108

Ethiopia - General

65,274

2,441

4,865

72,580

Cameroon - Laboum

26,172

44,815

24,333

95,320

Cameroon - Birsok & Mandoum

5,176

1,170

1,652

7,998

Cameroon - Bikoula & Ndjele

7,336

4,114

2,306

13,756

Cameroon - General

86,083

619

2,675

89,377

Liberia - Bella Yella

8,810

1,005

1,179

10,994

Liberia - Zolowo

-

-

-

-

Liberia - Other

138

789

740

1,667

Other

-

-

-

-

Total

 298,864

 146,803

66,969

 512,636

8

Discontinued operations

2016

Revenue

55

Gross profit

55

Other operating income

600

Administrative expenses

(2,578)

Operating loss

(1,923)

Investment revenues

142

Other gains and losses

6,594

Profit/(loss) on disposal of operations:

- Gain on disposal of discontinued operations

-

24,592

Profit before taxation

29,405

Taxation

-

Total comprehensive income for the year

29,405

8

Discontinued operations

(continued)

In the year ended 31 December 2016, the group disposed of four of its subsidiaries by way of a distribution in specie. The purpose of the distribution was for the group to focus on developing its mineral exploration business. The subsidiaries whose activities were divested were that of FCA regulated fund management, consultancy services and turn around investment opportunities. The distribution in specie allowed for two distinct areas of activity to be segregated whilst allowing the existing shareholders to retain full and pro rata ownership of the divested subsidiaries.

Upon distribution, net assets of the subsidiaries disposed amounted to £75,408. The distribution made amounted to £100,000 resulting in a profit to the group of £24,592. A merger reserve equal to the value of the distribution was created upon disposal.

9

Auditor's remuneration

2017

2016

Fees payable to the company's auditor and associates:

£

£

For audit services

Audit of the financial statements of the group and company

20,500

8,000

20,500

8,000

10

Employees

Group

Company

2017

2016

2017

2016

Number

Number

Number

Number

Directors

4

4

-

-

Employee

20

24

-

-

24

28

-

-

The remuneration comprised:

Group

Company

2017

2016

2017

2016

£

£

£

£

Wages and salaries

924,005

521,356

-

-

Social security costs

94,617

50,664

-

-

Pension costs

73,151

127,457

-

-

1,091,773

699,477

-

-

11

Directors remuneration

2017

2016

£

£

Remuneration for qualifying services

315,444

229,400

Company pension contributions to defined contribution schemes

49,138

58,562

364,582

287,962

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2016 - 2)

Remuneration disclosed above includes the following amounts paid to the highest paid director:

2017

2016

£

£

Remuneration for qualifying services

201,523

90,000

Company pension contributions to defined contribution schemes

44,669

29,281

246,192

119,281

12

Investment income

2017

2016