Corcel Regulatory News (CRCL)

Corcel PLC

("Corcel" or the "Company")

Final Audited Results

for the Year Ended 30 June 2021 and Notice of Annual General Meeting

07 December 2021

The Company's Annual Report and Financial Statements for 2021, extracts from which are set out below, together with the Notice of the Company's Annual General Meeting (AGM) will be published to shareholders on Wednesday, 8 December 2021 and a copy of the documents will be available on the Company's website at www.corcelplc.com.

The AGM is to be held at We Work, 3 Waterhouse Square, 138-142 Holborn, London, EC1N 2SW at 1:00p.m. on Friday, 31 December 2021.

Given the continuing concerns regarding COVID-19, Shareholders, whilst able to attend the AGM in person this year, are requested to consider their safety carefully prior to attending the meeting. The Company will continue to monitor the guidelines set by the Government and any changes to attendance of the meeting will be communicated via RNS.

Chairman and CEO Statement

Overview

During the twelve-month period to 30 June 2021, which marked my second year as Chairman at Corcel Plc (the "Company", "Corcel"), we have continued building the core Net Asset Value (NAV) in our portfolio, which spans the exciting intersection of battery metals mining and their end use in both energy storage and the electric vehicle revolution. Despite the varied challenges of the global pandemic, this progress has included three asset acquisitions: the Tring Road peaker plant acquired during the year in review; secondly, the Avonmouth peaker plant in the UK; and thirdly, Wowo Gap Nickel / Cobalt asset acquired after the period end in PNG. The year has also included operational progress at Mambare, where we secured the environmental permit - a critical step on the route to a Mining Lease. Progress was also made at the Dempster Vanadium project, where operational results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking.

It is my firm belief that our strategy, leveraged to battery metals across both the upstream and downstream, is very much the right strategy as global economies continue their drive towards electrification. I remain very excited about this space and see Corcel continuing to position its business strategically in anticipation of the inevitable structural price hikes in battery metals.

The Board and I want to thank our shareholders for their support during 2021, which we know has not always been easy. We are amongst the first movers in this space in the micro-cap sector and we believe that our shareholders will, in due course, see significant rewards from the hard miles we have covered building the foundations to support this strategic positioning. Our commitment to transforming your company into a substantial value generating business remains absolute.

We therefore are pleased to present the Annual Report and Accounts for the year to 30 June 2021.

Battery Metals Exploration : PNG and Canada

A key element of the Company's strategy is to increase its exposure to critical battery metal positions (through both acquisitions of new deposits and advanced development at Mambare) prior to the widely expected supply crunch and associated structural price rise. Of particular focus for the Company is nickel and cobalt, which are both core battery metals with supply deficits widely expected in the mid-2020s as the electric vehicle revolution and economic decarbonisation gains pace.

The Company has again made good progress at its legacy Mambare nickel-cobalt project in Papua New Guinea, where it has focused on securing a mining lease covering the project where it holds a 41% position. Various critical milestones in this process have now been secured, with a positive outcome at the Warden's Hearing in July 2020 and the grant of the environmental permit in May 2021 being particularly significant. This positions the Company and its Joint Venture partners to secure the mining lease in the near term opening up opportunities ranging from a transaction to fast tracking DSO production.

In early 2020, the Company began the process of acquiring a second PNG nickel-cobalt project through the acquisition of the AUD 4,761,087 corporate debt of Resource Mining Corporation Pty Ltd (ASX: RMI) ("RMI"), the 100% owner of the Wowo Gap nickel-cobalt project. The debt was acquired, in two stages in April 2020 and October 2020, for a highly attractive 65% discount from the face value. The Wowo Gap project, potentially highly complementary to Mambare, is located 200km from the Papua New Guinea Capital of Port Moresby and some 150km southeast of the Company's existing Mambare asset. The Project is held through one tenement in Papua New Guinea, EL 1165, which expired on 28 February 2020 and (as is common in PNG) is currently under reapplication for a further 2-year period.

Subsequent to the year end, in August 2021, the Company signed a binding but conditional share purchase agreement with RMI to acquire 100% of the issued share capital in Australian-registered Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project. As consideration for the acquisition, the Company released all liabilities and obligations in connection with its AUD 4,761,087 senior debt position in RMI. I am delighted to report that, following a successful shareholder vote at RMI in October 2021, the Company became 100% owner of the Wowo Gap project on 18 October 2021.

The Company sees significant synergies between the two PNG battery metal projects and sees this acquisition as a significant step in its evolution towards building a leading regional battery metal and nickel /cobalt business with material scale.

The Company also successfully completed its 2020 exploration programme at the Dempster Vanadium project in Yukon, Canada. Vanadium is another battery metal, where supply is not expected to be able to grow sufficiently to support forthcoming demand. The results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking. Preparation work is underway for a drill programme as part of a broader vanadium focused exploration programme in 2022.

The interests and potential combination of the Mambare and Wowo Gap assets provide a strong regional nickel-cobalt platform of scale, which is expected, together with the Dempster Vanadium exposure, to provide material upside to shareholders as global electric vehicle growth fuels increasing demand for nickel, cobalt and vanadium. The Company continues to explore further acquisitions in the battery metals space designed to broaden the Company's current exposure to substantially all of the key battery metals going forward.

Flexible Grid Solutions

Alongside the battery metals portfolio, the Company is also materially growing its UK based energy generation and storage portfolio.

The Company owns 100% of a 50MW battery storage project at Burwell, Cambridgeshire. In November 2021, the Company was informed by UK Power Networks of an extension of its 100MW grid connection offer at Burwell beyond December 2021 and also an extension of the Company's obligation to make any payment at that date. This extension in part reflects anticipated grid upgrade works that may be undertaken in the Burwell area, which, if confirmed, would affect all projects in the area and likely delay the connection date of the Burwell site and other such sites. The Company awaits further details regarding any works required and the revised connection date and associated payment schedule and the impact that may have on the Company's previously indicated target of 2022 for the project to become operational. Meanwhile, the Company continues to explore access to land and potential partnership arrangements for the project, including with the new site landowner.

In addition to its existing Burwell project, the Company announced in May 2021 the acquisition of a 40% interest in the "shovel ready" Tring Road 50MW gas peaking project outside of Aylesbury, approximately 40 miles northwest of London. The project has a 50MW grid connection already secured, allowing primarily export of electricity alongside a binding option to lease and planning permission. The consideration for the purchase was £400,000, which was satisfied by £150,000 cash and 12,026,168 new ordinary shares.

Also in May 2021, the Company announced the acquisition of exclusive rights over the "shovel ready" Avonmouth 50MW gas peaking project approximately 7 miles Northwest of Bristol. The greenfield site is located within an established industrial estate and comprising a total of 4.36 acres. Similar to the Tring Road project, the project has a 50MW grid connection, gas connection, planning permission and land rights. The Company has executed a Heads of Terms with FPC Electric Land and has committed to paying £72,000 in historic costs of the project at the time of execution of the Agreement for Lease over the site. If the project were to reach financial close, then a further £72,000 of historic costs would be payable out of the proceeds of the project funding that would then be in place.

The addition of the "shovel ready" Tring Road and Avonmouth projects to the existing Burwell project dramatically bolsters the Company's position in the increasingly competitive UK flexible energy space. We believe that gas peaking assets of this nature are essential to assist the transition to renewables and will provide significant trading margins given the variability of renewable energy production and the inherent volatility of UK energy demands, as repeatedly demonstrated in Q3 and Q4 2021. 

The Company has been working since May 2021 to fund these peaker projects, which are seen as critical to the UK's transitional energy strategy, providing flexible energy supply to support the inherent volatility of the growing UK renewables supply, particularly wind and solar. It was announced after the year-end, in October and November 2021 that, following a comprehensive marketing process, Corcel is now in advanced discussions with select investors to fund both Tring Road and Avonmouth. This, if successful, would be hugely accretive for shareholders and validate the Company's flexible grid solutions strategy and the prospects for projects currently at early stages of development.

These energy storage and production projects, with their low-risk near-term cash flow potential, will offer Corcel investors an attractive balance to the significant blue-sky upside of the Company's battery metals projects and align Corcel with one of the most significant global energy trends in the world today.

Finances

On 26 October 2020, the Company announced that it had raised £750,000 at a price of £0.01 per share. Subsequently, on 18 February 2021, the Company announced it had agreed a funding package of equity and debt, raising £300,000 from the issuance of 24,000,000 shares a price of £0.0125 per share. The Company also issued 48,000,000 two-year warrants exercisable at £0.02 per share. The debt element of the funding included a £300,000 unsecured loan facility to be drawn in 5 tranches. The loan plus a fixed coupon was repayable on 28 December 2021 and was repaid in full on 12 May 2021.

Also on 12 May 2021, the Company announced that it had agreed a new loan note to provide £500,000 through an unsecured loan facility to be drawn down in 5 tranches. The loan plus a fixed coupon of 8% was to be payable upon maturity, which is 31 April 2022.

Discussion of Results

The Group incurred a loss of £1.227 million in the period ended 31 June 2021. Finance costs over the year fell to £0.065 million, reflecting interest and finance fees (2020: £0.247million). Overall, administrative costs increased slightly for the year to £1.014 million (2020: £0.838 million).

Prospects 

After a successful year with progress on all fronts we look forward to both further execution on our strategy and enhanced recognition of the compelling opportunities our portfolio of key battery metals and transitional energy production and storage assets offers investors.

Corcel remains committed to playing its role in the decarbonisation and electrification of the global economy, seeking to both create value for stakeholders, while enabling development of the clean energy economy.

James Parsons Scott Kaintz

Executive Chairman Chief Executive Officer

Results and Dividends

The Group made a loss after taxation of £1.227 million (2020: £1.482 million). The Directors do not recommend the payment of a dividend.  The following financial statements are extracted from the audited financial statements, which were approved by the Board of Directors and authorised for issuance on 05 December 2021.

For further information, please contact:

Scott Kaintz 020 7747 9960 Corcel Plc CEO 

James Joyce / Andrew de Andrade 0207 220 1666 WH Ireland Ltd NOMAD & Broker

Simon Woods 0207 3900 230 Vigo Consulting IR 

This announcement contains inside information under Article 7 of Regulation (EU) 596/2014.

Independent Auditor's Report

to the members of Corcel Plc

Opinion

We have audited the Financial Statements of Corcel Plc (the "Parent Company") and its subsidiaries (the "Group") for the year ended 30 June 2021, which comprise the Consolidated and Parent Company Statements of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006 and as regards the Parent Company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

· the Financial Statements give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 30 June 2021 and of the Group's loss for the year then ended;

· the Group Financial Statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006;

· the Parent Company Financial Statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and as applied in accordance with the provisions of the Companies Act 2006; and

· the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report. We are independent of the Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the Financial Statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1.2 in the Financial Statements, which indicates that the Group is reliant on securing further financing to meet committed expenditure requirements and working capital needs as they fall due. As stated in Note 1.2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the Financial Statements, we have concluded that the Director's use of the going concern basis of accounting in the preparation of the Financial Statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included a review of cash flow projections for a period up to 31 December 2022, providing challenge to key assumptions used.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. 

Emphasis of Matter

We draw attention to Note 14, which discloses the debt instrument in Resource Mining Corporation Limited, purchased by the Company during the current and previous years and valued at £987,000 within the Financial Statements. The license relating to the Wowo Gap project, Resource Mining Corporation Limited's key project, remains under renewal as at the year end. The good standing of this licence is critical for project development and subsequent value extraction, which is key to the recoverability of the debt. Should the license not be renewed, an impairment may be required to the value of the debt as at 30 June 2021.

Our Application of Materiality

The materiality applied to the group Financial Statements was £122,000 (2021: £98,000), based on a percentage of net assets, as it is from these net assets that the Group seeks to deliver returns for shareholders, in particular the value of exploration and development projects the Group is interested in through its associates and joint ventures. Headline materiality for the Parent Company Financial Statements was set at £120,000 (2020: £97,500), based on a percentage of net assets. Performance materiality has been set at 80% (2020: 70%) of headline materiality, and the threshold for which we communicate errors to management has been set at 5%.

We apply the concept of materiality in both planning and performing the audit, and in evaluating the effect of misstatements. At the planning stage, materiality is used to determine the Financial Statement areas that are included within the scope of the audit and the extent of the sample sizes during the audit. Materiality has been reassessed during the fieldwork and closing stages of the audit, taking into consideration new information, which arose. No alterations were made to materiality either during or at the conclusion of the audit.

Our Approach to the Audit

In designing our audit, we looked at areas which deemed to involve significant judgement and estimation by the Directors, such as the key audit matter surrounding the carrying value of investments in joint ventures and associates, and receivables from other Group Companies. Other judgemental areas are the accounting treatment and valuation of financial assets, including the debt instrument purchased during the year, as well as the valuation of share-based payment transactions. We also addressed the risk of management override of controls, including consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Work on all significant components of the Group has been performed by us as Group auditor.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Other Information

The other information comprises the information included in the annual report, other than the Financial Statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the Group and Parent Company Financial Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on Other Matters Prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

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

· the Strategic Report and the Directors' report have been prepared in accordance with applicable legal requirements.

Matters on Which We Are Required to Report by Exception

In the light of the knowledge and understanding of the Group and Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

· the 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 statement of Directors Responsibilities, 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 the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

· We obtained an understanding of the Group and Parent Company and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the Financial Statements. We obtained our understanding in this regard through discussions with management. We also selected a specific audit team based on experience with auditing entities within this industry facing similar audit and business risks.

· We determined the principal laws and regulations relevant to the Group and Parent Company in this regard to be those arising from:

o AIM Rules

o UK employment law

o Local environmental and mining regulations

· We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the Group and Parent Company with those laws and regulations. These procedures included, but were not limited to:

o Making enquiries of management;

o A review of Board minutes;

o A review of legal ledger accounts; and

o A review of RNS announcements.

· We also identified the risks of material misstatement of the Financial Statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls, we did not identify any significant fraud risks.

· As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures, which included, but were not limited to: the testing of journals, reviewing accounting estimates for evidence of bias and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the Financial Statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the Financial Statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of Our Report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus

For and on behalf of PKF Littlejohn LLP Canary Wharf

Statutory Auditor London E14 4HD  

05 December 2021

Financial Statements

Consolidated Statement of Financial Position

as at 30 June 2021

The accompanying notes form an integral part of these Financial Statements.

These Financial Statements, were approved by the Board of Directors and authorised for issue on 05 December 2021 and are signed on its behalf by:

James ParsonsExecutive Chairman

Consolidated Income Statement

for the year ended 30 June 2021

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2021

All of the Group's operations are considered to be continuing.

The accompanying notes form an integral part of these Financial Statements.

Consolidated Statement of Changes in Equity

for the year ended 30 June 2021

The movements in equity during the year were as follows:

See Note 16 for a description of each reserve included above.

See Note 16 for a description of each reserve included above.

Consolidated Statement of Cash Flows

for the year ended 30 June 2021

Major non-cash transactions are disclosed in Note 21.

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Company Statement of Financial Position

Corcel Plc (Registration Number: 05227458)

as at 30 June 2021

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £1,366,448 (2020: loss of £1,949,687). The Company's Total comprehensive loss for the financial year was £1,363,300 (2020: loss £1,991,647).

These Financial Statements were approved by the Board of Directors and authorised for issue on 05 December 2021 and are signed on its behalf by:

James Parsons

Executive Chairman

The accompanying notes form an integral part of these Financial Statements.

Company Statement of Changes in Equity

for the year ended 30 June 2021

The movements in reserves during the year were as follows:

See Note 16 for a description of each reserve included above.

Company Statement of Cash Flows

for the year ended 30 June 2020

Major non-cash transactions are disclosed in Note 21.

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Notes to Financial Statements

1. Principal Accounting Policies

1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS

The Group Financial Statements of Corcel Plc (the "Company", "Corcel" or the "Parent Company"), for the year ended 30 June 2021, were authorised for issue by the Board on 05 December 2021 and signed on the Board's behalf by James Parsons. Corcel Plc is a public limited company, incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.

1.2 Basis of Preparation

The Financial Statements have been prepared in accordance with international accounting standards ('IFRS') in conformity with the requirements of the Companies Act 2006. They are presented in thousand Pounds Sterling (£'000), unless stated otherwise.

The principal accounting policies adopted are set out below.

Going Concern

It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2021, the Group had cash and cash equivalents of £0.392 million and £0.818 million of borrowings and, as at the date of signing these Financial Statements, the cash balance was £0.341 million. Current borrowings of £729,000 of principal are due 23 December 2021 and at time of publication of this report are in the process of being refinanced to December 2022. The Directors anticipate having to raise additional funding over the course of the financial year.

Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors reducing or foregoing their salaries if required, the progress in activities post year-end, including the anticipated fundraising of £390,000, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial Statements, with the understanding that there is no certainty that required fundraisings during the year will be successful.

Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current. The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group was unable to continue as a going concern. Due to the factors described above, a material uncertainty exits, which may cast significant doubt on the Group and the Company's ability to act as a going concern. The auditors have made reference to this within their Audit Report.

The auditors have made reference to going concern within their audit report by way of a material uncertainty.

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £1.366 million (2020: loss of £1.949 million). The Company's other comprehensive loss for the financial year was £1.363 million (2020: loss £1.991 million).

New Standards, Amendments and Interpretations

The Group and Parent Company have adopted all of the new and amended standards and interpretations issued by the International Accounting Standards Board that are relevant to its operations and effective for accounting periods commencing on or after 1 July 2020.

The following new IFRS standards and / or amendments to IFRS standards were adopted for the first time during the year, none of which had a material impact on the financial statements:

· Amendments to IFRS 3: Business Combinations (effective 1 January 2020);

· Amendments to IAS 1 and IAS 8: Definition of Material (effective 1 January 2020);

· Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform (effective 1 January 2020).

No standards or Interpretations, that came into effect for the first time for the financial year beginning 1 July 2020, have had an impact on the Group or Company.

New Standards, Amendments and Interpretations Not Yet Adopted

At the date of approval of these Financial Statements, the following standards and interpretations, which have not been applied in these Financial Statements were in issue but not yet effective:

· Amendments to IAS 1: Presentation of Financial Statements - Classification of Liabilities as Current or Non-current (effective date not yet confirmed);

· Amendments to IFRS 3: Business Combinations - Reference to Conceptual Framework (effective 1 January 2022);

· Amendments to IAS 16: Property, Plant and Equipment (effective 1 January 2022);

· Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1 January 2022);

· Annual Improvements to IFRS Standards 2018-2020 Cycle (effective 1 January 2022);

· Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective date not yet confirmed);

· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a Single Transaction (effective date not yet confirmed).

The effect of these new and amended Standards and Interpretations, which are in issue but not yet mandatorily effective, is not expected to be material.

Standards Adopted Early by the Group

The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.

1.3 Basis of Consolidation

The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.

Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases. They are deconsolidated from the date on which control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs, directly attributable to the acquisition, are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.

Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.

Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated Statement of Comprehensive Income. Any impairment recognised for goodwill is not reversed.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

· derecognises the assets (including goodwill) and liabilities of the subsidiary;

· derecognises the carrying amount of any non-controlling interest;

· derecognises the cumulative translation differences recorded in equity;

· recognises the fair value of the consideration received;

· recognises the fair value of any investment retained;

· recognises any surplus or deficit in profit or loss; and

· reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Non-Controlling Interests

Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests, even if this results in the non-controlling interest having a deficit balance.

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions. Any differences between the adjustment for the non-controlling interest and the fair value of consideration paid or received are recognised in equity.

1.4 Summary of Significant Accounting Policies

1.4.1 Investment in Associates

An associate is an entity over which the Company is in a position to exercise significant influence, but not control or jointly control, through participation in the financial and operating policy decisions of the investee.

Investments in associates are recognised in the Consolidated Financial Statements, using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised unless the Group has incurred obligations or made payments on behalf of the associate.

Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds received for the dilutive share issue and the value of the Company's effective disposal.

In the Company accounts investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment, when there is objective evidence of impairment. Impairment charges are included in the Company Statement of Comprehensive Income.

1.4.2 Interests in Joint Ventures

A joint venture is a joint arrangement, whereby the partners, who have joint control of the arrangement, have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of the parties sharing control. The Group recognises its interest in the entity's assets and liabilities, using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax.

Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.

Financial Statements of the jointly controlled entity will be prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's Financial Statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.

At 30 June 2021, the Group had following contractual arrangements, which were classified as investments in associates and joint ventures:

· Oro Nickel Ltd, a contractual arrangement with Battery Metals Pty Ltd, which represents a joint venture established through an interest in a jointly controlled entity, in order to develop and exploit the Mambare nickel project;

· DVY196 Holdings Corp ("DVY"), 50% interest in a North American vanadium project;

· ARL 021 Limited, a 40% interest in the Tring Road 50MW gas peaker project.

1.4.3 Taxation

Corporation tax payable is provided on taxable profits at the prevailing UK tax rate. The tax expense represents the sum of the current tax expense and deferred tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit 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. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are 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 goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction, which affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:

· the same taxable entity; or

· different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period when the significant deferred tax assets and liabilities are expected to be realised or settled.

1.4.4 Property, Plant and Equipment

Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:

Office furniture, fixtures and fittings - 33% per annum

Leasehold improvements - 5% per annum

1.4.5 Foreign Currencies

Both the functional and presentational currency of Corcel Plc is Sterling (£). Each Group entity determines its own functional currency and items included in the Financial Statements of each entity are measured using that functional currency.

The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG") and the US Dollar ("USD").

Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date, when the fair value was determined. Gains and losses arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are recognised directly in other comprehensive income.

On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates have fluctuated significantly during the year, in which case, the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.

1.4.6 Exploration Assets

Exploration assets comprise exploration and evaluation costs, incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments. Costs associated with an exploration activity will only be capitalised if, in management's opinion, the results from that activity led to a material increase in the market value of the exploration asset, which is determined by management to be following the economic feasibility stage. Generally, costs associated with non-drilling activities, such as geophysical and geochemical surveys, are not capitalised.

Recoupment of exploration and development costs is dependent upon successful development and commercial exploitation of each area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and the Company currently have no exploration assets, where production has commenced.

The Group adopts the "area of interest" method of accounting whereby all exploration and development costs, relating to an area of interest, are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval of an application is expensed, with the exception of refundable rent, which is raised as a receivable.

Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.

1.4.7 Impairment of Non-Financial Assets

The carrying values of assets, other than those to which IAS 36 "Impairment of Assets" does not apply, are reviewed at the end of each reporting period for impairment, when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.

When there is a change in the estimates, used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.4.8 Share-Based Payments

Share Options

The Group operates equity-settled share-based payment arrangements, whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.

The fair value of options granted to Directors and others, in respect of services provided, is recognised as an expense in the Income Statement with a corresponding increase in equity reserves - the share-based payment reserve until the award has been settled and then make a transfer to share capital. On exercise or lapse of share options, the proportion of the share-based payment reserve, relevant to those options is transferred to retained earnings. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and charged over the vesting period during which the option becomes unconditional.

The fair value of options is calculated using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted. The exercise price is fixed at the date of grant.

Non-market conditions are performance conditions that are not related to the market price of the entity's equity instruments. They are not considered, when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market performance condition, the Group recognises the goods and services it has acquired during the vesting period, based on the best available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened vesting period, and the cumulative expense is "trued up" for both the change in the number expected to vest and any change in the expected vesting period.

Market conditions are performance conditions that relate to the market price of the entity's equity instruments. These conditions are included in the estimate of the fair value of a share-based payment. They are not taken into account for the purpose of estimating the number of equity instruments that will vest. Where the vesting period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over the originally estimated vesting period.

For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on the basis of an observable market price.

Share Incentive Plan

Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is determined indirectly by reference to the fair value of the free, partnership and matching shares granted on the grant date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares, the charge is calculated as the excess of the mid-market price on the date of grant over the employee's contribution.

1.4.9 Pension

The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.

1.4.10 Finance Income/Expense

Finance income and expense is recognised as interest accrues, using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period, using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.

1.4.11 Financial Instruments

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows:

Fair Value through Profit or Loss (FVTPL)

This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets the negative intrinsic value. They are carried in the Statement of Financial Position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Amortised Cost

These assets comprise the types of financial assets, where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised, based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision account, with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions, for receivables from related parties and loans to related parties, are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those, where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the Consolidated Statement of Financial Position.

Fair Value through Other Comprehensive Income (FVTOCI)

The Group held a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.

Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount.

Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.

Financial Liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:

Other Financial Liabilities

Other financial liabilities include:

· Borrowings, which are initially recognised at fair value net of any transaction costs, directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Consolidated Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption as well as any interest or coupon payable, while the liability is outstanding.

· Liability components of convertible loan notes are measured as described further below.

· Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

· In the principal market for the asset or liability; or

· In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured, using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

· Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

· Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

· Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

More information is disclosed in Note 20.

1.4.12 Investments in the Company Accounts

Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.

For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to profit and loss.

Investments in associates and joint ventures are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairment.

1.4.13 Share Capital

Financial instruments, issued by the Group, are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.

1.4.14 Convertible Debt

The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount, initially attributed to the debt component, equals the discounted cash flows, using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.

1.4.15 Warrants

Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity's own equity instruments, are classified as equity instruments. Warrants, relating to equity finance and issued together with ordinary shares placement, are valued by residual method and treated as directly attributable transaction costs and recorded as a reduction of share premium account, based on the fair value of the warrants. Warrants, classified as equity instruments, are not subsequently re-measured (i.e., subsequent changes in fair value are not recognised).

1.4.16 Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting, provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment non-current assets. For this purpose, all non-current assets are allocated to reportable segments.

1.4.17 Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

· Leases of low value assets; and

· Leases with a duration of 12 months or less.

IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.

On initial recognition, the carrying value of the lease liability also includes:

· amounts expected to be payable under any residual value guarantee;

· the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option;

· any penalties payable for terminating the lease if the term of the lease has been estimated on the basis of termination option being exercised.

Lease liabilities are subsequently measured at the present value of the contractual payments due to the lessor over the lease term.

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received and increased for:

· lease payments made at or before commencement of the lease;

· initial direct costs incurred; and

· the amount of any provision recognised, where the Group is contractually required to dismantle, remove or restore the leased asset.

1.5 Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Group's Consolidated Financial Statements, requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Significant Judgements and Accounting Estimates

In the process of applying the Group's accounting policies, management has made the following judgements and estimates, which have the most significant effect on the amounts recognised in the Consolidated Financial Statements:

Impairment of Investments in Associates and Joint Ventures

The carrying amount of investments in joint ventures is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable.

The continued progress at the Mambare nickel/cobalt project during the year, when considered alongside the increases in nickel prices, have encouraged the Board to continue to hold the value of its stake in the Mambare joint venture at the previous valuation of £1.77 million alongside a £1.3 million receivable.

The Company believes that the carrying values reflect the sizeable JORC resource and work done to date as well as the potential to progress the project to a mining license and Direct Shipping Ore "DSO" production in 2021 and beyond. During the year, the JV had a successful Warden's Hearing over the mining plans and was awarded the environmental permit, both key metrics prior to the award of a Mining Lease. The Company has assessed the viability of the project, given current and expected nickel prices and the anticipated cost of a DSO operation, and believes the project can be successfully taken into production in the mid-term. The Board further believes that the likelihood of recovery of the receivable has also increased over the past 12-24 months due to the progress made on the JV, and that full repayment of this figure is likely through either a disposal and trade sale prior to production or through dividends once the project begins shipping ore.

The Company, following a successful exploration season at the Dempster Vanadium project in Canada in 2020, believes it is prudent to hold this asset at cost pending decisions to conduct a follow-on exploration programme that may include a significant drill campaign.

At year-end the Company owned AUD 4.7m of senior debt in Resource Mining Corporation Limited ("RMI"), the purchase of which was completed on 17 November 2020. The cost of the acquisition of this position was £987,000 or AUD 1.8m. After the year-end on 12 August 2021, the Company announced that it had agreed to acquire a 100% interest in the Australian registered Niugini Nickel Pty Ltd ("Niugini Nickel"), which owned 100% of the Wowo Gap nickel-cobalt project in Papua New Guinea. As consideration for this acquisition, the Company released all liabilities and obligations in connection with its AUD 4.7m senior debt position. On 18 October 2021, the Company announced that it had completed the share purchase agreement with RMI to acquire the 100% interest in Niugini Nickel. As such, the Company believes that holding the cost of the debt at year end at the cost of acquisition is appropriate at this time and will ultimately reflect the fair value of the Wowo Gap project.

More information is disclosed in Note 11.

The Company acquired a 40% interest in ARL 021, which gave it partial ownership of the Tring Road gas peaker plant, immediately before the year end. Given the very short period of time prior to the year and the progress on funding Tring Road subsequent to the year end, the Company feels it is appropriate to retain the carrying value of this asset at cost. The Company has further decided to write-off its existing investment in Weirs Drove Development, owner of the Burwell Energy Storage project, as the project is currently working through potential delays relating to grid congestion and potential upgrades in the area. While the Burwell project may successfully progress to financial close, there remains uncertainty around the timeframe in which this is likely to occur.

The Company has also made judgements in respect of the success of licence renewals on the core projects.

Share-Based Payment Transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model and the estimates used within this model are disclosed in Note 18.

Valuation of a receivable from Oro Nickel JV

The Directors believe that the receivable from the Oro Nickel Joint Venture will be fully recoverable in light of the project's ongoing progress towards a mining lease, supporting a shipping ore operation at the site. Substantial progress has been made on the mining lease application during the course of the year end, including a successful Warden's Hearing and the award of the critical Environmental Permit. While the existing exploration licenses remain under renewal at the year-end, the Company and the joint venture partners believe there remains a high likelihood of renewal, given ongoing dialogue with the PNG authorities, and would expect to have these renewed independently of any outcome of the mining lease application.

2. Segmental Analysis

Once the Group's main focus of operations becomes production of battery metal mineral resources or flexible production and storage of energy, the nature of management information, examined by the Board, will alter to reflect the need to monitor revenues, margins, overheads and trade balances as well as cash.

IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity and the countries in which revenue is earned regardless of whether this information is used in by management in making operating decisions. Management determined that the most useful presentation of revenues and expenses came from an analysis by operational type as opposed to geographic representation due to the similar nature of the revenues and expenses when grouped in these categories.

Information by Geographical Area

Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.

3. Loss on Ordinary Activities Before Taxation

As declared in Note 8, Directors are remunerated in part by third parties with whom the Company and Group have contractual arrangements.

4. Administrative Expenses

5. Finance Costs, Net

6. Taxation

Deferred tax amounting to £nil (2020: £nil), relating to the Group's investments was recognised in the Statement of Comprehensive Income. No deferred tax charge has been recognised due to uncertainty as to the timing of future profitability of the Group. Unutilised trading losses are estimated at circa £3,281 thousand (2020: £3,085) and capital losses estimated circa £nil (2020: £nil).

7. Staff Costs

The aggregate employment costs of staff for the Group (including Directors) for the year was:

The average number of Group employees (including Directors) during the year was:

During the year, for all Directors and employees, who have been employed for more than three months, the Company contributed to a defined contributions pension scheme as described under Directors' remuneration in the Directors' Report and a Share Incentive Plan ("SIP") as described under Management incentives in the Directors' Report.

All emoluments presented for current and comparative years, except for pension, are short-term in nature.

8. Directors' Emoluments

* Includes 8% pension contribution paid in cash as a part of gross salary.

The number of Directors, who exercised share options in year, was nil (2020: nil).

During the year, the Company contributed to a Share Incentive Plan, more fully described in the Directors' Report where shares were issued to each employee, including Directors, making a total of 14,717,790 (2020: 14,717,790) partnership and matching shares. Those shares were issued in relation to services provided by those employees during the reporting year.

9. Earnings per Share

The basic earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue. Diluted earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.

There were no ordinary share transactions after 30 June 2021, that that could have changed the EPS calculations significantly if those transactions had occurred before the end of the reporting period.

10. Investments in Subsidiaries and Goodwill