Cobra Resource. Regulatory News (COBR)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

31 May 2022

Cobra Resources plc

("Cobra" or the "Company")

Final Results for the Year Ended 31 December 2021

Cobra, a gold, IOCG, and rare earths exploration company focused on the Wudinna Project in South Australia, announces its final results for the year ended 31 December 2021.

Highlights

· Discovered rare earth mineralisation proximal to and above gold mineralisation, with highly desirable grades, mineralogy and intersect widths

· Executed significant and safe field exploration programme including low-cost regional pathfinder drilling, detailed ground geophysics and Reverse Circulation (RC) drilling at the Clarke prospect

o  Programme defined further gold mineralisation outside of existing gold resources and identified clay hosted rare earth mineralisation that is spatially complementary to gold mineralisation

· Carried out detailed ground gravity survey to refine priority, high-value Iron Oxide Copper Gold (IOCG) targets for drilling

· Fulfilled Stage 2 expenditure obligations to increase ownership of the Wudinna Project to 65%

· Strengthened technical competency with appointments of Rupert Verco as CEO and Robert Blythman as Exploration Manager

Post Year End

· Raised £945,000 through a private placement to fund 2022 exploration activities and provide sustaining capital (this will see the Company achieve Stage 3 earn-in to increase ownership of the Wudinna Project to 75%)

· Extended defined rare earth mineralisation footprint through re-analysis of historic drillholes to approximately 4 km2, with mineralisation open in multiple directions

· Granted 536 km2 exploration tenement (100% Cobra) directly east of, and contiguous with, the Wudinna Project - ground considered highly prospective for gold and rare earth mineralisation 

Greg Hancock, Chairman of Cobra, commented: 

"Despite ongoing challenges associated with the COVID-19 pandemic, the Company has delivered a significant field programme that has achieved outstanding exploration success. This success places Cobra in the enviable position of defining an exclusive dual commodity approach as we work towards updating the defined gold mineral resource and providing a maiden rare earth resource estimation. I thank my fellow directors for their contribution throughout the year, Rupert Verco, our CEO, for his commitment, and our shareholders for their continued support. We look forward to the period of significant activity in front of us."

Enquiries:

The person who arranged for the release of this announcement was Rupert Verco, CEO of the Company.

About Cobra

Cobra's Wudinna Project is located in the Gawler Craton which is home to some of the largest IOCG discoveries in Australia including Olympic Dam, as well as Prominent Hill and Carrapateena. Cobra's Wudinna tenements contain extensive orogenic gold mineralisation and are characterised by potentially open-pitable, high-grade gold intersections, with ready access to nearby infrastructure. Recent drilling has discovered Rare Earth Mineralisation proximal to and above gold mineralisation. The grades, style of mineralogy and intercept widths are highly desirable. In addition, Cobra has over 22 orogenic gold prospects, with grades of between 16 g/t up to 37.4 g/t gold outside of the current 211,000 oz JORC Mineral Resource Estimate, as well as one copper-gold prospect, and five IOCG targets.

For more information, visit www.cobraplc.com and follow us on LinkedIn and Twitter.

Chairman's Statement

INTRODUCTION

It is with great pleasure that I report on a year of considerable advancement for Cobra Resources - a year during which we discovered rare earth mineralisation proximal to and above gold mineralisation on our Wudinna Project, with highly desirable grades, mineralogy and intersect widths.

During the year, we took the strategic decision to relocate our technical offices from Perth in Western Australia to Adelaide in South Australia to further advance the Company's primary exploration project.

In the midst of another year of unprecedented global challenges, including the continued disruption caused by the COVID-19 pandemic, the team has executed a significant and safe field exploration programme consisting of low- cost regional pathfinder drilling, detailed ground geophysics and culminating in a Reverse Circulation (RC) drilling programme at the Clarke prospect. This programme has not only defined further gold mineralisation outside of existing gold resources but identified clay hosted rare earth mineralisation that is spatially complementary to gold mineralisation. 

The rare earth discovery comes at a time of critical necessity for global decarbonisation. China produces approximately 90% of the world's rare earth metals and Europe depends on China for 98% of its rare earth magnet supply. Cobra is poised to expand on this discovery and grow a unique and complementary resource base, compelling in its potential to deliver sustainable and economically critical minerals and precious metals from a jurisdiction that has a first rate record of ethical and environmental mineral production.

BACKGROUND

Cobra Resources began life as a publicly listed company with the aim of finding suitable precious, base or other energy metals and minerals projects in Australia or Africa. During 2019, the Board identified several potentially suitable projects, which were reviewed in detail to evaluate their strengths, growth potential and long-term value to shareholders.

The Wudinna Project has been the Company's primary focus since acquiring earn-in rights to the project in 2019 through the negotiation of the "Wudinna Heads of Agreement". The primary objective of the Company's exploration focus to date has been to add to the existing 211,000oz JORC Mineral Resource Estimate. The articulated strategy to achieve this has been through refining resource extension opportunities, and defining near-resource targets through low-cost, high-value geochemical domaining of elemental signatures reflective of existing gold mineralisation.

The 2021 field work proved highly successful, with the Company's staged approach to further progress its pipeline of high-value targets culminating in the November Reverse Circulation (RC) programme that continued the Group's success of defining gold mineralisation outside of the existing mineral resource at the Clarke prospect.

Further defined gold mineralisation outside of the existing mineral resource at the Clarke prospect, including:

CBRC0043: 96m at 0.55 g/t gold from 30m, including 20m at 1.5 g/t gold

CBRC0050: 33m at 1.03 g/t gold from 65m, including 9m at 2.09 g/t gold

CBRC0042: 19m at 0.79 g/t gold from 83m, including 5m at 2.62 g/t gold

These results demonstrate the considerable potential that the Clarke prospect has to contribute to the existing mineral resource estimate. Furthermore, the programme made the unique discovery of Rare Earth Element (REE) clay hosted mineralisation directly above the intercepted gold mineralisation. The rare earth results are exceptionally encouraging with grades and intersection widths comparable to highly valued Ion-Adsorption Clay (IAC) projects.

The occurrence of Rare Earth Oxides (REOs) directly above gold mineralisation is truly unique and provides a compelling growth opportunity for the Company to diversify its mineral resources.

These results demonstrated the strength of Cobra's approach and the potential of the Wudinna Project, providing the Company confidence to drive further shareholder value through continued exploration success and increasing ownership of the project by achieving Stages 1 and 2 and working towards Stage 3 of the "Wudinna Heads of Agreement," taking our project equity to 75%.

The Company has established a team with the core competencies required to deliver on its strategic objectives. During the course of 2021, the Company sought to strengthen its technical competency through two key new appointments:

· Rupert Verco - Chief Executive Officer. Rupert has extensive geological, operational and consulting experience in developing and mining gold assets within the Gawler Craton.

· Robert Blythman - Exploration Manager. Robert has extensive experience in gold exploration, resource development and mining.

OPERATIONAL REVIEW

On the back of the Company's maiden 2020 RC campaign, which demonstrated the potential build on existing gold resources, Cobra focused on:

1. Validating geological interpretations and identifying near resource growth potential;

2. Improving the resolution and understanding of priority structures through low-cost geochemical drilling;

3. Refining and validating exploration models for IOCG targets through geochemical testing and detailed ground gravity surveys; and

4. Expanding the mineralisation footprint of intersected mineralisation and anomalous pathfinder chemistry at the Clarke prospect.

Operational metrics are summarised below:

Calcrete infill sampling multi-element analysis of Barns and White Tank resources:

· Successfully obtained 99 samples at Barns deposit, confirming the orientation of mineralisation

· Executed drilling of 39 holes at White Tank, also confirming orientation of mineralisation

Saprolite Rotary Air Blast (RAB) drilling:

· Drilling of 185 holes (for 2,548m) at Clarke via RAB drilling, confirming the orientation and continuity of mineralisation

· Drilling of 252 holes (for 1,299m) at Baggy Green via sonic/RAB drilling, confirming current geological interpretations at Baggy Green North and South

· Drilling of 130 holes (for 1,963m) at Benaud via aircore, to define priority RC drill targets

· Drilling of 192 holes (for 302.5m) at Barns via aircore, to test east-west calcrete anomaly and define resource extensions

· Drilling of 51 holes (for 453m) at Laker via aircore, to test for granitoid margins, define RC targets and test for anomolus copper

· Drilling of 67 holes (for 766.5m) at IOCGs 1-3 via aircore, to test baseline IOCG geochemistry

In total, 875 drill holes for 7,335m were drilled across eight priority targets where the chemistry of pathfinder elements enabled refinement and prioritisation of RC drilling targets. The results demonstrated at Clarke are attributable to this low-cost exploration technique as follow-up RC drilling in November 2021 focused on testing the anomalous pathfinder trends north of existing mineralisation.

Detailed Ground Gravity Survey

In October, the Company engaged DaishSat Geosurveys to carry out a detailed ground gravity survey aimed at testing three discrete magnetic anomalies that occur proximal to a large Hiltaba Suite granitic intrusion. 276 stations at 250m spacings yielded encouraging results refining the targets summarised below:

IOCG Target 1: High intensity, bulls-eye gravity anomaly, proximal to but not directly associated with a coincident magnetic anomaly. The survey defined a high density contrast (0.69g/cc) supportive of an iron-rich, IOCG gravity signature.

IOCG Target 2: Near coincident gravity anomaly to a highly anomalous magnetic feature (0.22 SI). This anomaly is supported by elevated copper and pathfinder chemistry defined in the saprolite drilling programme.

IOCG Target 3: Moderate gravity anomaly (0.3g/cc density contrast) not directly associated to a magnetic feature located directly south.

The modelled depth to all targets are shallow for IOCG targets and present as compelling, high-value targets that will contribute to future exploration activities.

RC Drilling at the Clarke Prospect

A total of 14 Reverse Circulation drillholes totalling 2,144m were drilled at the Clarke prospect in November. The results intersected gold mineralisation northwest of previous intersections and defined the potential for further mineralisation to the north. Additional to the significant gold intersections, this programme confirmed the occurrence of REEs within the kaolinised clay portion of the saprolite above gold mineralisation, where:

· All 14 drillholes intersected REE's with the average intersection Total Rare Earth Oxides (TREO) being 597 ppm and the average intersection true width being 18.7m

· High-grade intervals exist within the intercepts, where drillhole CBRC0044 intercepted a true width of 9.4m at 1,030 ppm TREO, CBRC0043 intercepted a true width of 4.7m at 1,160 ppm TREO and CBRC0054 intercepted 6m at 1,446 ppm TREO

· The highest 1m intercept grade was 9,024 ppm TREO in CBRC0048

· Intercepts are enriched in high-value rare earths where neodymium/ praseodymium equate to 21.5% of the TREO and dysprosium equates to 2.2%

The rare earths discovery is an exciting addition that complements the Company's growth strategy. High-value minerals such as rare earths are critical to global de-carbonisation and the green energy transition and expose the Company to multiple high-value commodities.

The 2021 exploration activity saw the Stages 1 and 2 earn-in of the "Wudinna Heads of Agreement" being achieved in October, resulting in the Company owning 65% of the Wudinna Project.

ISSUES OF SHARES DURING THE PERIOD

On 11 January 2021, the Company issued a total of 32,383,152 new Ordinary shares pursuant to completion of Stage 1 earn-in of the Wudinna Gold Project, with 31,049,819 shares at 2.4 pence per share being issued in accordance with the acquisition agreement to the vendors of Lady Alice Trust and Lady Alice Mines Pty Ltd, and 1,333,333 shares at 1.5 pence per share issued to the Company's CEO in accordance with the terms of his service agreement.

On 28 January 2021, the Company issued 1,934,800 new Ordinary shares pursuant to the exercise of warrants, with 934,800 shares at a price of 3 pence per share and 1,000,000 shares at a price of 2 pence per share.

On 18 and 19 February 2021, the Company issued 2,333,334 new Ordinary shares and 1,666,667 new Ordinary shares respectively, at 2 pence per share, pursuant to the exercise of warrants.

On 29 April 2021, the Company issued a total of 7,110,053 new Ordinary shares, with 5,664,340 shares being issued at 1 pence per share to the vendors of Lady Alice Trust and Lady Alice Mines Pty Ltd in accordance with the acquisition agreement for the Wudinna Gold Project, and 1,445,713 shares at 2.3 pence per share to a drilling contractor in settlement of a contractual agreement in respect of the provision of services.

On 11 November 2021, the Company issued a total of 31,725,919 new Ordinary shares at 1 pence per share to the vendors of Lady Alice Trust and Lady Alice Mines Pty Ltd in accordance with the acquisition agreement for the Wudinna Gold Project and relating to the completion of Stage 2 of the agreement. A further 2,572,372 remain to be issued pursuant to the Stage 2 milestone.

POST PERIOD END EVENTS

On 16 February 2022, the Company issued a total of 63,000,000 new Ordinary shares when the Company exercised its available headroom to raise capital through a private placement. The shares were issued at a discounted price of 1.5 pence per share to raise £945,000 in order to fund 2022 exploration activities and provide sustaining capital. This will see the Company achieve Stage 3 of the Wudinna Agreement.

COVID-19

The outbreak of the global COVID-19 virus has resulted in business disruption and stock market volatility. The extent of the effect of the virus, including its long-term impact, remains uncertain. Cobra has implemented extensive business continuity procedures and contingency arrangements to ensure that it is able to continue to operate.

CONCLUSION

Despite ongoing challenges associated with the COVID-19 pandemic, the Company has delivered a significant field programme that has achieved outstanding exploration success. This success places Cobra in the enviable position of defining an exclusive dual commodity approach as we work towards updating the defined gold mineral resource and providing a maiden REE resource estimation. I thank my fellow directors for their contribution throughout the year, Rupert Verco, our CEO, for his commitment, and our shareholders for their continued support. We look forward to the period of significant activity in front of us.

Greg Hancock

Chairman

30 May 2022

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

All operations are considered to be continuing.

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2021

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2021

The accompanying notes are an integral part of these financial statements.

These financial statements were approved and authorised for issue by the Board of Directors on 30 May 2022.

Signed on behalf of the Board of Directors

Greg Hancock, Non-Executive Chairman, Company No. 11170056

COMPANY STATEMENT OF FINANCIAL POSITION

31 DECEMBER 2021

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not included its own income statement and statement of comprehensive income in these financial statements. The Company's loss for the period amounted to £1,485,507 (2020: £878,753 loss).

The accompanying notes are an integral part of these financial statements.

These financial statements were approved and authorised for issue by the Board of Directors on 30 May 2022.

Signed on behalf of the Board of Directors

Greg Hancock, Non-Executive Chairman, Company No. 11170056

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

The following describes the nature and purpose of each reserve within equity:

Share capital: Nominal value of shares issued

Share premium: Amount subscribed for share capital in excess of nominal value, less share issue costs

Share based payment reserve: Cumulative fair value of warrants and options granted

Retained losses: Cumulative net gains and losses, recognised in the statement of comprehensive income

Foreign currency reserve: Gains/losses arising on translation of foreign controlled entities into pounds

sterling.

The accompanying notes are an integral part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2021

The following describes the nature and purpose of each reserve within equity:

Share capital: Nominal value of shares issued

Share premium: Amount subscribed for share capital in excess of nominal value, less share issue costs

Share based payment reserve: Cumulative fair value of warrants and options granted

Retained losses: Cumulative net gains and losses, recognised in the statement of comprehensive income

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

· During the year, Shares worth £33,251 were issued to Suppliers in Lieu of cash.

The accompanying notes are an integral part of these financial statements

COMPANY CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

· During the year, Shares worth £33,251 were issued to Suppliers in Lieu of cash.

NOTES TO THE FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES AND BASIS OF PREPARATION

General information

The Company is a public company limited by shares which is incorporated in England. The registered office of the Company is 9th Floor, 107 Cheapside, London, EC2V 6DN, United Kingdom. The registered number of the Company is 11170056.

The principal activity of the Group is to objective is to explore, develop and mine precious and base metal projects.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these Financial Statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.

Accounting policies

Basis of preparation of Financial Statements

The Group and Company Financial Statements have been prepared in accordance with UK-adopted international accounting standards. The Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the United Kingdom applicable to companies under IFRS. The Group and Company Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on an asset acquisition.

The Financial Statements are presented in pounds sterling, which is the functional currency of the Parent Company. The functional currency of Lady Alice Mines Pty Ltd is Australian Dollars.

The preparation of the Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed in Note 1.

Changes in accounting policies

i) New and amended standards adopted by the Group and Company

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 31 December 2021 but did not result in any material changes to the financial statements of the Group or Company.

Of the other IFRS and IFRIC amendments, none are expected to have a material effect on the future Group or Company Financial Statements.

ii) New standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

None are expected to have a material effect on the Group or Company Financial Statements.

Going concern

The Financial Statements have been prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Group and Company, including the current level of resources and the required level of spending on exploration and evaluation activities. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments.

The Group meets its working capital requirements from its cash and cash equivalents. The Company is pre-revenue, and to date the Company has raised finance for its activities through the issue of equity and debt.

The Group has £264,480 of cash and cash equivalents at 31 December 2021, and post year end raised £945,000 before costs through the issue of new Ordinary shares. The Group's and Company's ability to meet operational objectives and general overheads is reliant on raising further capital in the near future.

The Directors are confident that further funds can be raised and it is appropriate to prepare the financial statements on a going concern basis, however there can be no certainty that any fundraise will complete. These conditions indicate existence of a material uncertainty related to events or conditions that may cast significant doubt about the Group's and Company's ability to continue as a going concern, and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. These financial statements do not include the adjustments that would be required if the Group and Company could not continue as a going concern.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Parent Company and companies controlled by the Parent Company, the Subsidiary Companies, drawn up to 31 December each year.

Control is recognised where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities, and is exposed to, or has rights to, variable returns from its involvement in the subsidiary. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, where appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Investments in subsidiaries are accounted for at cost less impairment.

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, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

 The Group's operations are located Australia with the head office located in the United Kingdom. The main tangible assets of the Group, cash and cash equivalents, are held in the United Kingdom and Australia. The Board ensures that adequate amounts are transferred internally to allow all companies to carry out their operational on a timely basis.

 The Directors are of the opinion that the Group is engaged in a single segment of business being the exploration of gold in Australia. The Group currently has two geographical reportable segments - United Kingdom and Australia.

Foreign currencies

For the purposes of the consolidated financial statements, the results and financial position of each Group entity are expressed in pounds sterling, which is the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the reporting date. Exchange differences arising are included in the profit or loss for the period.

For the purposes of preparing consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period. Gains and losses from exchange differences so arising are shown through the Consolidated Statement of Changes in Equity.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates: Office Equipment: 33.33% per annum

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Statement of Comprehensive Income.

Impairment of tangible fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Intangible assets

Exploration and evaluation assets

Exploration and evaluation assets comprises all costs which are directly attributable to the exploration of a project area. The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

Exploration and evaluation assets recorded at fair-value on acquisition

Exploration assets which are acquired are recognised at fair value. When an acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.

Impairment of intangible assets

Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in profit or loss for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Early stage exploration projects are assessed for impairment using the methods specified in IFRS 6.

Financial Assets

Loans and Receivables

(a) Classification and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an instrument level.

The Group's and Company's business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• financial assets at amortised cost (debt instruments);

• financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments);

• financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments); and

• financial assets at fair value through profit or loss.

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group and Company. The Group and Company measure financial assets at amortised cost if both of the following conditions are met:

• the financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured using the effective interest rate ("EIR") method and are subject to impairment. Interest received is recognised as part of finance income in the statement of profit or loss and other comprehensive income. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's and Company's financial assets at amortised cost include trade and other receivables (not subject to provisional pricing) and cash and cash equivalents.

Derecognition

A financial asset is primarily derecognised when:

• the rights to receive cash flows from the asset have expired; or

• the Group and Company have transferred their 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 and Company have transferred substantially all the risks and rewards of the asset, or (b) the Group and Company have 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 and Company recognise an allowance for expected credit losses ("ECLs") for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group and Company expect to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. 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.

Subsequent measurement

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.

Cash and cash equivalents

The Company considers any cash on short-term deposits and other short-term investments to be cash and cash equivalents.

Share capital

The Company's Ordinary shares of nominal value £0.01 each ("Ordinary Shares") are recorded at such nominal value and proceeds received in excess of the nominal value of Ordinary Shares issued, if any, are accounted for as share premium. Both share capital and share premium are classified as equity. Costs incurred directly to the issue of Ordinary Shares are accounted for as a deduction from share premium, otherwise they are charged to the income statement.

Current and deferred income tax

Tax represents income tax and deferred tax. Income tax is based on profit or loss for the year. Taxable profit or loss differs from the loss for the year as reported in the Consolidated Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items of income or expense that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Statement of Financial Position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the 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.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the intention is to settle current tax assets and liabilities on a net basis.

Share based payments

The fair value of services received in exchange for the grant of share warrants is recognised as an expense in share premium or profit or loss, in accordance with the nature of the service provided. A corresponding increase is recognised in equity.

Judgements and key sources of estimation uncertainty

The preparation of the Financial Statements in conformity with IFRS requires the directors to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Accounting estimates and assumptions are made concerning the future and, by their nature, may not accurately reflect the related actual outcome. Share options and warrants are measured at fair value at the date of grant. The fair value is calculated using the Black Scholes method for both options and warrants as the management views the Black Scholes method as providing the most reliable measure of valuation.

Contingent consideration, resulting from business combinations, is valued at fair value at the acquisition date as part of the business combination. The determination of fair value is based on key assumptions involving estimation of the probability of meeting each performance target and the timing thereof. As part of the acquisition of Lady Alice Mines Pty Ltd, contingent consideration with an estimated fair value of £296,536 was recognised at the acquisition date. See note 17 for further details. The Group is required to remeasure the contingent liability at fair value at each reporting date with changes in fair value recognised in accordance with IFRS 9. Therefore, as at 31 December 2021, the contingent consideration reflects an estimated fair value of £187,500.

2. EXPENSES BY NATURE

3. FINANCE COSTS

4. SEGMENT INFORMATION

The Group's prime business segment is mineral exploration. 

The Group operates within two geographical segments, the United Kingdom and Australia. The UK sector consists of the parent company which provides administrative and management services to the subsidiary undertaking based in Australia.

The following tables present expenditure and certain asset information regarding the Group's geographical segments for the years ended 31 December 2021 and 2020:

4. SEGMENT INFORMATION (continued)

5. DIRECTORS' EMOLUMENTS

There were no employees during the period apart from the directors, who are the key management personnel. No directors had benefits accruing under money purchase pension schemes.

· During the year £112,178 (2020: £179,727) was paid to Craig Moulton in respect of Wages & Salaries and Share based payments. The share based payments include £20,000 for 1,333,333 shares per his employment contract.

· During the year £38,422 (2020: £22,167) was paid to Hancock Corporate Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect of Directors fees and consultancy services.

· During the year £24,227 (2020: £13,584) was paid to Dan Maling, in respect of Wages & Salaries and Directors fees.

· During the year £31,066 (2020: £13,667) was paid to The Springton Trust & Queens Road Mines, in which David Clarke is a Trustee, in respect of Directors fees and consultancy services.

· During the year £179,727 (2019: £118,500) was paid to Craig Moulton in respect of Wages & Salaries and Share based payments. The share based payments include £21,188 for 2,118,750 shares in lieu of director fees and £30,000 for 2,000,000 shares per his employment contract.

· During the year £18,121 (2019: £160,300) was paid to RCA Associates Ltd, a company of which Rolf Gerritsen is a director, in respect of Directors fees, consultancy services & share based payments. The share based payments include £12,000 for 1,200,000 shares in lieu of director fees.

· During the year £22,167 (2019: £26,167) was paid to Hancock Corporate Investments Pty Ltd, a company in which Greg Hancock is a Director, in respect of Directors fees and consultancy services.

· During the year £13,584 (2019: £nil) was paid to Dan Maling, in respect of Wages & Salaries and Directors fees.

· During the year £13,667 (2019: £nil) was paid to The Springton Trust, a trust in which David Clarke is a Trustee, in respect of Directors fees and consultancy services.

6. INCOME TAXES

a) Analysis of tax in the period

b) Factors affecting tax charge or credit for the period

The tax assessed on the loss on ordinary activities for the period differs from the standard rate of corporation tax in the UK of 19% (2020: 19%) and Australia of 25% (2020: 26%). The differences are explained below:

The weighted average applicable tax rate of 19.8% (2020: 23.25%) used is a combination of the standard rate of corporation tax rate for entities in the United Kingdom of 19% (2020: 19%), and 25% (2020: 26%)in Australia.

7. EARNINGS PER SHARE

Basic and diluted loss per share is calculated by dividing the loss attributed to ordinary shareholders of £1,677,511 (2020: £1,006,750 loss) by the weighted average number of shares of 360,110,510 (2020: 282,956,585) in issue during the year.

The basic and dilutive loss per share are the same as the effect of the exercise of share warrants and options would be anti-dilutive.

8. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

Investments in Group undertakings are stated at cost less impairment. In 2019 the Company acquired 100% of the issued share capital of Lady Alice Mines Pty Ltd and in turn, 100% of the units in the Lady Alice Trust which is wholly owned by Lady Alice Mines Pty Ltd.

At 31 December 2021 the Company held the following interests in subsidiary undertakings, which are included in the consolidated financial statements and are unlisted.

1Lady Alice Mines Unite Trust is a wholly owned entity of Lady Alice Mines Pty Ltd.

9. INTANGIBLE FIXED ASSETS

Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are all internally generated except for those acquired at fair value as part of a business combination.

9. INTANGIBLE FIXED ASSETS (continued)

The Directors undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

• The Group's right to explore in an area has expired, or will expire in the near future without renewal;

• No further exploration or evaluation is planned or budgeted for;

• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or

• Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

Following their assessment, the Directors concluded that no impairment charge was necessary for the year ended 31 December 2021.

11. TRADE AND OTHER RECEIVABLES

The fair value of trade and other receivables approximates to their book value. Other classes of financial assets included within trade and other receivables do not contain impaired assets.

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

12. CASH AND CASH EQUIVALENTS

The fair value of cash at bank is the same as its carrying value.

The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:

13. TRADE AND OTHER PAYABLES

The fair value of trade and other payables approximates to their book value.

The carrying amounts of the Group and Company's trade and other payables are denominated in the following currencies:

14. CONTINGENT CONSIDERATION

Refer to note 18 for further detail.

During the year 2021, there has been a movement in the Contingent Consideration of £323,912 arising from the issue of a total of 68,440,078 ordinary shares issued to previous Lady Alice Mines unit holders upon achievement of stages 1 and 2 earn-in in the Wudinna Gold Project. The contingent consideration was initially measured at the time of acquisition, and subsequently at each reporting date the value of contingent consideration updated based on a revision to the underlying assumptions used in determining estimated value. The Contingent Consideration as at 31 December 2021 of £187,500, reflects the amount still outstanding.

Refer to note 18 for further detail.

15. SHARE CAPITAL 

On 11 January 2021, 31,049,819 Ordinary shares were issued to former LAM owners at 2.4p each, and 1,333,333 Ordinary shares were issued to CEO Craig Moulton at 1.5p each, upon reaching stage-1 earn-in at the Wudinna Gold Project.

On 28 January 2021, 934,000 Ordinary shares were issued at 3p each, and 1,000,000 Ordinary shares issued at 2p each, pursuant to the exercise of warrants.

On 18 February 2021, 2,333,334 Ordinary shares were issued at 2p each pursuant to the exercise of warrants.

On 21 February 2021, 1,666,667 Ordinary shares were issued at 2p each pursuant to the exercise of warrants.

On 14 April 2021, 1,445,713 Ordinary shares were issued at a price of 2.3p each to a third party supplier for drilling services undertaken.

On 14 April 2021, and 4 May 2021, a total of 5,664,340 Ordinary shares were issued to former LAM owners at 1p each, in settlement of 12 month payment obligations in accordance with the SPA for the LAM Unit Trust.

On 5 May 2021,

On 11 November 2021, 31,725,919 Ordinary shares were issued to former LAM owners at 1.9p each, upon reaching stage-2 earn-in at the Wudinna Gold Project.

As at 31 December 2021 the Company had 67,543,461 warrants outstanding (2020: 127,796,891).

Each Ordinary share is entitled to one vote in any circumstances. Each Ordinary share is entitled pari passu to dividend payments or any other distribution and to participate in a distribution arising from a winding up of the Company.

16. SHARE BASED PAYMENTS

2021

Warrants

At 31 December 2021 the weighted average remaining contractual life of the warrants outstanding was 0.82 years.

2020

Warrants

At 31 December 2020 the weighted average remaining contractual life of the warrants outstanding was 1.39 years.

2021