Kodal Minerals Regulatory News (KOD)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK Market Abuse Regulations

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

19 July 2022

Kodal Minerals plc

("Kodal" or the "Company" and together with its subsidiaries, the "Group")

Final Results

Kodal Minerals, the mineral exploration, and development company focused on lithium and gold assets in West Africa, announces its final results for the year ended 31 March 2022.

The Company's Annual Report and Accounts will be made available on the Company's website www.kodalminerals.com shortly. The Company will confirm in due course when the Annual Report has been posted to shareholders and will provide information about the date and location of the Annual General Meeting.

Financial and Corporate Highlights

· Group loss before other comprehensive income for the year of £903,000 (2021: £623,000)

· 370% increase in exploration and evaluation expenditure of £2,547,000 (2021: £542,000)

· 63% increase in the value of the gold projects in Mail and Mali and Cote d'Ivoire to £2,411,000 (2021: £1,476,000)

· 20% increase in value of the Bougouni lithium project in Mali to £9,031.000 (2021: £7,488,000)

· Cash balance of £1,046,000 as at 31 March 2022 (2021: £2,433,000)

· Post period end, the Company successfully raised £3 million (before expenses)

· Cash balance of £3,333,000 as at 8 July 2022

Operational Highlights

Bougouni Lithium Project, Mali ("Bougouni" or the Project")

· Mining Licence granted - the Project is now fully permitted for development and construction

· Achieved 100% ownership of all concessions following the acquisition of minority interests held by the original vendors (prior to formation of the new mining company in which the Mali Government will have an interest of between 10% and 20%)

· Initiated a six-month work programme focussed on updating the original Feasibility Study

· Ongoing community engagement, consultation, and evaluation of the impact of the proposed mining sites

· Robust economics confirmed by the updated Project Feasibility Study announced post period end

o  NPV7% of US$760 million (US$567 million post-tax) compared to US$293 million (US$201 million post tax) in the original Feasibility Study.

o  Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on an average sell price of US$1,060 per tonne (FOB basis).

o  C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate ("SC6"), and costs of US$474 per tonne including transportation and other selling costs.

o  Total SC6 production of 2,024,000 tonnes with an annual average production of 238,000 tonnes.

o  Development based on unchanged operating assumptions of open cut truck and shovel contractor mining operation, feeding 2Mtpa of lithium ore to the flotation processing plant, utilising a conventional flotation circuit to maximise spodumene recovery.

o  Capital cost of the Project increased approximately 20% to US$154 million reflecting increased raw material and fuel costs

Fatou and Nielle and Dabakala Gold projects

· Significant exploration programmes at Fatou and Nielle gold projects yielded positive results and identified wide gold intersections and high-grade gold mineralised areas

· Infill geochemical sampling at Dakabala returned high-grade surface samples at new discovery zones

Commenting on the results, Bernard Aylward, CEO of Kodal Minerals said:

"We are in the enviable position of owning 100% of the concessions of what I believe will become one of the most significant lithium spodumene producing projects in West Africa, and the first in Mali. The prices of lithium spodumene have risen exponentially as global demand for this critical mineral shows no sign of abating driven by the green agenda and the EV (electric vehicle) revolution.

"The work carried out by our team on the ground resulted in the successful receipt of our Mining Licence at Bougouni and initiated a six-month work programme to update the original feasibility study carried out in 2020. The results have further enhanced the Project's already robust economic fundamentals with an IRR of 91%, a payback period of eight months and a life of mine revenue of approximately US$2.14 billion, nearly a 50% increase on our original feasibility study estimate. 

"Looking ahead, we will continue to invest in exploration at our gold projects following the excellent results from our reverse core drilling campaign. However, our priority is to de-risk the Bougouni Project, by further reducing expected operating costs whilst advancing discussions with potential partners on funding for construction with the view of bringing the Project into production."

* C1 cash cost includes all mining, processing and all general and administration costs per tonne sold, and additional to that the costs of transport to port and associated selling costs.

Chairman's Statement  

I am pleased to present the Annual Report of Kodal Minerals plc for the year ended 31 March 2022.

Kodal continues to make excellent progress towards achieving its overarching objective of bringing its flagship lithium project in Bougouni, Mali, ("Bougouni Lithium Project" or "the Project") to fruition. During this financial year, and continuing in subsequent months, Kodal has taken the necessary steps to lay the technical and commercial foundations of the Project, together with the mandatory permitting obligations, and we are now tantalisingly close to pushing forward into financing and construction.

Indeed, the backdrop of the lithium market over recent months has provided a significant tailwind, supporting our commercial and financing discussions. The Company is continuing to review and discuss potential opportunities for collaboration with third parties, including major mining groups, to support the development of the Project providing Kodal with multiple routes through which to capitalise on the inherent value of Bougouni.

Lithium prices continue to make headlines, with major producers such as ASX listed Pilbara Minerals Limited achieving record sales prices for 5.5% Li2O spodumene concentrate of US$6,350/t FOB. When compared with our initial selling price input of US$680/t SC6 reported in the original feasibility study in 2020, it is apparent just how far the industry has moved on over the past 24 months. 

This pricing environment has been driven by the global appetite and awareness for electric vehicles and efficient battery storage, together with concerns from key decision makers about the security of lithium supply, along with other critical minerals, from stable jurisdictions. Whilst some commentators have recently asserted that these price rises are unsustainable in the long-term, it remains widely accepted that demand is going to continue to increase rapidly over the next decade, and new sources of supply may not materialise within this critical timeframe. While a market like copper typically grows by 2%-4% a year, providing producers and developers with a degree of confidence as to the demand fundamentals, lithium analysts are anticipating annual demand growth of more than 20% between 2021 and 2025. This presents late-stage developers and pre-production companies such as Kodal with a unique advantage, with the ability and agility to rapidly move projects through the construction phase and into production in order to fulfil this potential supply deficit. 

With this in mind, the Board of Kodal is resolute in its objective to assemble the requisite components to support Bougouni's successful transition into production, including technical delivery, permitting approvals, environmental, social and governance frameworks and commercial commitments. 

Following the grant of the Mining Licence for Bougouni in November 2021, the Company initiated a six-month work programme focussed on updating the Feasibility Study. This was completed in June 2022 and demonstrated to the market that the shift in market conditions have further enhanced the Project's already robust economic fundamentals. Indeed, the updated feasibility study highlighted an IRR of 91% and a payback period of only eight months. With life of mine revenue anticipated to be in excess of US$2.14 billion, nearly 50% more than our original feasibility study estimate, our conversations with potential partners have intensified with a view to reaching the optimum route for delivery in as short timeframe as practicable. Further details of this Feasibility Study update are included in the Operating Review.

Whilst simultaneously pushing closer to development at Bougouni, our exploration team has also made solid progress across our gold portfolio. Work has centred primarily on the Fatou Gold project in Mali, and the Nielle Gold project in Cote d'Ivoire, both discoveries which we believe have significant resource potential. Earlier stage but no less exciting is the Dabakala Gold project in Cote d'Ivoire where geochemical sampling has confirmed the continuity of high-grade gold anomalism extending for over 11km and surface width up to 3km. I am confident that our gold portfolio has the potential to yield new large gold deposits, and I look forward to reporting on what the next field season delivers.

The next 12 months will be a pivotal time for Kodal as we seek to advance both our gold portfolio and, more importantly, our flagship Bougouni Lithium Project, supported by strategic investors and within a market environment which remains very buoyant for quality near-term lithium assets. I look forward to updating shareholders on a regular basis with updates on our operational and corporate advancements.

Robert Wooldridge

Non-executive Chairman

18 July 2022 

OPERATIONAL REVIEW

Kodal has maintained its sizeable tenure in Mali and Cote d'Ivoire, whilst completing the acquisition of minority interests to become the 100% holder of the flagship Bougouni Lithium Project located in Western Mali. Kodal's management has continued to ensure that all government compliance, reporting and fees are kept up to date and all concessions are retained in good standing.

Mining Licence and Exploration Concession Review

Kodal's Bougouni and Bougouni West lithium exploration projects are located in southern Mali, with the rights and concessions held by subsidiary company Future Minerals SARL ("Future Minerals"), a Malian registered company owned 100% by the Group. In November 2021, Kodal acquired the minority shareholdings of Bougouni from the original vendors of the Project and as a result, Kodal through Future Minerals, now holds 100% interest in all concessions of the Bougouni Lithium Project.

Bougouni Lithium Project - Mining Licence details:

Following the Company agreed-upon modifications to the Foulaboula, Sogola Nord and Fariedele concessions which were changed to ensure all areas of mineralisation, mining infrastructure and processing plant are included within the one licence area, Kodal was granted the Foulaboula Permis d'Exploitation number No2021-0774/PM-RM ("Mining Licence") in November 2021. This covered the proposed open-pit mining and processing operation at Bougouni, making the Project fully permitted for development and construction.

The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are mined. The Mining Licence is granted under the 2019 Mining Code and extends over a 97.2 square km area that will be a focus for Kodal's exploration programme to ensure further resources are delineated to prolong the Bougouni Lithium Project mine life.

Table of Concessions - Kodal lithium Concessions in Mali:

The Bougouni Lithium Project concessions surround the Foulaboula mining licence and will be explored for additional pegmatite hosted resources that can be added to the mining area through agreement with the Mali Government as required. The concessions are all in good standing, and exploration completed to date by Kodal has indicated priority sites for additional exploration within the concessions.

The Bougouni West concessions remain in good standing with Kodal having completed all obligations under the Option to Purchase agreement and now are the beneficial holders of 80% of the licences. Kodal intends to undertake future exploration in the concession areas.

Table of Concessions - Kodal Gold Concessions in West Africa:

Bougouni Lithium Project Status

Kodal Minerals was granted an Environmental Permit over the Project in November 2019. The original Feasibility Study ("FS") was completed by Kodal Minerals in January 2020, culminating in the granting of a large-scale Mining Licence in November 2021 to the Company's Mali subsidiary company, Future Minerals. The Mining Licence is valid for an initial 12-year term and renewable in ten-year blocks until all resources are mined. The Mining Licence is granted under the 2019 Mining Code and extends over 97.2 square kilometres covering the proposed open-pit mining and processing operation at Bougouni (refer to announcement of 8 November 2021).

The original Bougouni Lithium Project Feasibility study was completed in January 2020 and following the grant of the mining licence, Kodal commenced work on updating the study focussing on the engineering, process recovery and capital cost for the Project as these key areas had undergone substantial change over the previous 2 years. The results of the updated study were announced on 15 June 2022.

The June 2022 Bougouni Project Feasibility Study update confirms a very robust project with key metric highlights including:

· NPV7% of US$760M (US$567M post-tax) compared to US$293M (US$201M post tax) in the original Feasibility Study.

· Life of mine (8.5 years) revenue exceeding US$2,145,000,000 based on an average sell price of US$1,060 per tonne (FOB basis).

· C1* cash costs of US$362 per tonne of 6% Li2O spodumene concentrate ("SC6"), and costs of US$474 per tonne including transportation and other selling costs.

· Total SC6** production of 2,024,000 tonnes with an annual average production of 238,000 tonnes.

· Bougouni Lithium Project development based on unchanged operating assumptions of open cut truck and shovel contractor mining operation, feeding 2Mtpa of lithium ore to the flotation processing plant, utilising a conventional flotation circuit to maximise spodumene recovery.

· Capital cost of the Project increased approximately 20% to US$154M reflecting increased raw material and fuel costs.

* C1 cash cost includes all mining, processing and all general and administration costs per tonne sold, and additional to that the costs of transport to port and associated selling costs

Kodal completed a technical site visit to Bougouni in January 2022 to continue the development programme. A detailed LIDAR survey has been completed for the Project area and is being used to provide detailed topographical information to assist in the final planning of the processing plant and associated infrastructure. 

In addition, community engagement, consultation, and evaluation of the impact of the proposed mining sites is continuing with our Environmental Consultants, Digby Wells. This is a key component of Kodal's continuing engagement with the Bougouni community and is fundamental to the Company achieving the development of its mining operation and ensuring that it enjoys the support of and returns benefits to these communities.

Kodal has continued its engineering work programme to optimise the capital cost estimate for the development of the Project and complete a detailed assessment to confirm the operating costs of the Project, including the review of the proposed transport costs (details of which were previously announced on 27 January 2020), ahead of securing funding for mine development and construction. This engineering work programme is continuing with a focus on the process plant design and capital cost estimate, improvements in metallurgical recovery and an update of the open pit optimisation of the defined minerals resources.

Suay Chin and Off-take arrangement Update

Kodal has been informed that there has been a restructuring of the ownership of Suay Chin International Pte Ltd ('Suay Chin'). Suay Chin is the Company's major shareholder with 14.18% of the issued share capital.

Suay Chin is now indirectly controlled by Zhejiang Kanglongda Special Protection Technology Co., Ltd ("Kanglongda") which is listed on the Shanghai Stock Exchange. Kanglongda's previous business focus was in the area of functional labour protection gloves, but it has recently developed a new strategy of investment in the lithium industry.

Kodal confirms that the binding term sheet (the "Off-take Term Sheet") entered into between Kodal and Suay Chin in March 2017 remains in place. The Off-take Term Sheet contemplates that the parties will negotiate an extended off-take agreement for between 80% and 100% of the spodumene product produced at the Project for a period of three years. The Off-take Term Sheet sets out certain agreed off-take principles that are to be included in the off-take agreement including the parties agreeing to buy and sell the contract quantity as well as the formal agreement including a right to match any third party off-take terms agreed for a period of three years following the expiry of the formal agreement. Whilst a formal agreement has not been entered into, Suay Chin retains the first right of refusal for a period of three years from first production of product from the Project whereby Kodal may not enter into any agreement with a third party to sell more than 20% of future production from the Project without having first offered to sell the production to Suay Chin on the terms offered by the third party. There can be no guarantee on the timing of completion of a formal off-take agreement or if any such agreement will ultimately be agreed.

Gold Exploration Projects and Exploration Programme

In addition to the progress made at the Bougouni Lithium Project, the Company has also made strong progress at its various gold projects situated across West Africa.

At the Nielle project in northern Cote d'Ivoire, Kodal has completed a 1,000m reverse core ("RC") drilling programme which has returned wide intersections of gold mineralisation and includes zones of high-grade gold mineralisation including results such as 13m at 5.7g/t from 12m. The Company has also completed the 5,000m aircore drill programme which has confirmed a 4.5km gold mineralised trench with an extension of up to 1.5km south and over 1km north.

At the Dabakala project also in Cote d'Ivoire, infill geochemical sampling has continued to return high-grade surface samples at new discovery zone with the new assay results confirming up to 1.97g/t gold with further results confirming continuity of high-grade gold anomalism extending for over 11km and surface width up to 3km.

At the Fatou project in Mali, Kodal has completed the initial RC drilling programme of 1,242m and has returned results including 23m at 1.63 g/t gold from 82m. The completion of the campaign has confirmed multiple mineralised zones and highlights extensions to the north and south requiring additional drilling to test the Fatou prospect.

Future Activity

Kodal is focussed on the advancement and development of its Bougouni Lithium Project. The Company is continuing to undertake engineering studies to investigate opportunities to decrease capital costs and future operating costs. These studies will be pursued in more detail during the coming year as the Company advances the Project to development stage.

Key areas that have the potential to enhance the Bougouni Lithium Project include:

· Resource growth and increase of head grade from further exploration in the highly prospective areas contained within existing exploration leases;

· Reduction in capital cost through further optimisation of the flowsheet and engaging with experienced Chinese and other manufacturers;

· Investigate more favourable power supply solutions to reduce operating costs, which is currently under way on the basis of connecting to the future high-voltage grid approximately 15km from the site (the new Bougouni substation is being constructed presently under the 225 kV Sikasso-Bougouni-Sanankoroba-Bamako Transmission line project by the Mali power authority - Energies de Mali);

· Optimisation of mine scheduling and drill and blast strategy; and

· Cost savings relating to the construction of the tailings storage facility ("TSF"). Currently the design of Stage 1 is based on 24 months of capacity to combat potential for adverse climatic conditions. Potentially this could be reduced to about 18 months' capacity if the sequencing of construction is favourable with respect to maximising construction in the dry season.

As Kodal focusses on the technical planning, engineering and optimisation of the proposed development, the Company will be seeking to finalise financial options for the construction of the Bougouni mining and processing operation. It is looking to move to production as quickly as possible to take advantage of the current high prices of its Lithium Spodumene product in a rising demand cycle.

I look forward to reporting on our advances during the year.

Bernard Aylward

Chief Executive Officer

18 July 2022

FINANCE REVIEW

Results of operations

For the year ended 31 March 2022, the Group reported a loss before other comprehensive income for the year of £903,000, including share based payment costs of £343,000 (2021: £78,000), compared to a loss of £623,000 in the previous year. Administrative expenses have remained broadly in line with last year as the Group has continued to review the development opportunity presented by the Bougouni Project and run the offices in Mali and Côte d'Ivoire, but significant additional exploration activity for both gold and lithium was undertaken during the year. Further information is provided in the Operational Review above.

During the year, the Group invested £2,547,000 (2021: £542,000) in exploration and evaluation expenditure on its various projects. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from £8,964,000 to £11,442,000 after taking account of the effects of foreign exchange rates. At 31 March 2022, after taking account of the effects of foreign exchange rates, the carrying value of the gold projects in Mali and Cote d'Ivoire was £2,411,000 (2021: £1,476,000) and of the lithium projects in Mali was £9,031.000 (2021: £7,488,000).

Cash balances as at 31 March 2022 were £1,046,000, a decrease of £1,387,000 on the previous year's level of £2,433,000. Net assets of the Group at the year-end were £12,091,000 (2021: £12,636,000).

Financing

The Group did not undertake any fundraisings in the year although £1.8m of proceeds were received in April 2021 relating to a fundraising which took place in late March 2021.

Subsequent to the year end, on 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses) via a subscription for 130,142,857 shares and an oversubscribed placing of 941,285,712 shares at a price of 0.28 pence per Placing Share (the 'Placing'). The funds raised will support Kodal in the continuing development and preparation for financing and construction of its flagship Bougouni Lithium Project in Mali.

Going concern and funding

The Group has not earned revenue during the year to 31 March 2022 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new ordinary shares and other equity linked instruments.

The Directors have prepared cash flow forecasts for the period ending 30 September 2023. The forecasts include payments for the ongoing review of the development opportunity presented by the Bougouni mining licence, additional exploration activity for both gold and lithium as well as covering ongoing overheads.

On 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses). Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been prepared on a going concern basis.

Utilising key performance indicators ("KPIs")

The following KPIs are used by the Group to assist it in monitoring its cash position and assessing costs and exploration and development activities:

The directors have provided more information on the state of the Group's financing and operational activity above.

a. 'Cash and cash equivalents' is used to measure the Group's financial liquidity. Cash and cash equivalents have decreased by of £1.4 million in the year.

b. 'Administrative expenses' is used to measure the Group's administrative costs and operating results. Administrative expenses for the year were £541,000, broadly in line with £513,000 in the previous year as the Group has continued to review the development opportunity presented by the Bougouni Project and run the offices in Mali and Côte d'Ivoire

c. 'Exploration and evaluation expenditure' is used to measure expenditure on the Group's gold and lithium projects. Exploration and evaluation expenditure in the year was £2.5 million higher than prior year as significant additional exploration activity for both gold and lithium was undertaken during the year following the lifting of Covid-19 restriction.

Financial risk management objectives and policies

The Group's principal financial instruments comprise cash and trade and other payables. It is, and has been throughout the year under review, the Group's policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group's financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group's exploration and operating activities. Management prepares and monitors forecasts of the Group's cash flows and cash balances monthly and ensures that the Group maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches to provide sufficient cash resources to manage the activities through to revenue generation.

Price risk

The Group is exposed to fluctuating prices of commodities, including gold and lithium, and the existence and quality of these commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as development of the projects continues and will consider how this risk can be mitigated closer to the commencement of mining.

Foreign exchange risk

The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling, CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to keep this under review. The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2021

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2022

The Company's loss for the year ended 31 March 2022 was £651,696 (2021: £518,711).

The financial statements were approved and authorised for issue by the board of directors on 18 July 2022 and signed on its behalf by

Charles Joseland

Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2022

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2021

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS  FOR THE YEAR ENDED 31 MARCH 2021

Cash and cash equivalents comprise cash on hand and bank balances.

PRINCIPAL ACCCOUNTING POLICIES FOR THE YEAR ENDED 31 MARCH 2022

The Group has adopted the accounting policies set out below in the preparation of the financial statements. All of these policies have been applied consistently throughout the period unless otherwise stated.

The Company is incorporated in England and Wales with registered number 07220790. The Company's registered office is at Prince Frederick House, 35-39 Maddox Street, London W1S 2PP.

Financial Information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2022 or 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Annual Report and Accounts and Annual General Meeting

The 2022 Annual Report and Accounts will be published on the Group's website at www.kodalminerals.com shortly. The Company will confirm in due course when the Annual Report has been posted to shareholders and will provide information about the date and location of the Annual General Meeting.

Basis of preparation

The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in accordance with UK-adopted International Accounting Standards. The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.

In accordance with the exemption allowed by Section 408(3) of the Companies Act 2006, the Company has not presented its own income statement or statement of comprehensive income.

Going concern

The Group has not earned revenue during the year to 31 March 2022 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new shares and other equity linked instruments.

At 31 March 2022, the Group held cash balances of £1,046,000 (2021: £2,433,000). The Group's cash balances at 8 July 2022 were £3,333,000.

The Directors have prepared cash flow forecasts for the period ending 30 September 2023. The forecasts include payments for the ongoing review of the development opportunity presented by the Bougouni mining licence, additional exploration activity for both gold and lithium as well as covering ongoing overheads.

On 4 May 2022 the Company announced that it has raised £3,000,000 (before expenses). Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been prepared on a going concern basis.

Basis of consolidation

The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to the statement of financial position date. Subsidiary undertakings are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. The Group obtains and exercises control through voting rights.

Unrealised gains on transactions between the Company and its subsidiaries are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Foreign currency translation

Items included in the Group's consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The financial statements are presented in pounds sterling ("£"), which is the functional and presentational currency of the Parent Company and the presentational currency of the Group. End of year balances in the Group's West African subsidiary undertakings were converted using an end of year rate of XOF 1 : £0.00129 (2021: XOF 1 : £0.00130).

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the reporting date and the gains or losses on translation are included in profit and loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the original transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation, which is included in administrative expenses, is charged so as to write off the costs of assets down to their residual value, over their estimated useful lives, using the straight-line method, on the following basis:

Plant and machinery 4 years

Motor vehicles 4 years

Fixtures, fittings and equipment 4 years

Where property, plant and equipment are used in exploration and evaluation activities, the depreciation of the assets is capitalised as part of the cost of exploration and evaluation assets. The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment. Where the recoverable amount of the investment is less than the carrying amount, an impairment is recognised.

Exploration and evaluation expenditure

In accordance with IFRS 6 (Exploration for and Evaluation of Mineral Resources), exploration and evaluation costs incurred before the Group obtains legal rights to explore in a specific area (a "project area") are taken to profit or loss.

Upon obtaining legal rights to explore in a project area, the fair value of the consideration paid for acquiring those rights and subsequent exploration and evaluation costs are capitalised as exploration and evaluation assets. The costs of exploring for and evaluating mineral resources are accumulated with reference to appropriate cost centres being project areas or groups of project areas.

Upon the technical feasibility and commercial viability of extracting the relevant mineral resources becoming demonstrable, the Group ceases further capitalisation of costs under IFRS 6.

Exploration and evaluation assets are not amortised prior to the conclusion of appraisal activities, but are carried at cost less impairment, where the impairment tests are detailed below.

Exploration and evaluation assets are carried forward until the existence (or otherwise) of commercial reserves is determined:

· where commercial reserves have been discovered, the carrying value of the exploration and evaluation assets are reclassified as development and production assets and amortised on an expected unit of production basis; or

· where a project area is abandoned, or a decision is made to perform no further work, the exploration and evaluation assets are written off in full to profit or loss.

Exploration and evaluation assets - impairment

Project areas, or groups of project areas, are determined to be cash generating units for the purposes of assessment of impairment.

With reference to a project area or group of project areas, the exploration and evaluation assets (along with associated production and development assets) are assessed for impairment when such facts and circumstances suggest that the carrying amount of the assets may exceed the recoverable amount.

Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 and include the point at which a determination is made as to whether or not commercial reserves exist.

The aggregate carrying value is compared against the expected recoverable amount, generally by reference to the present value of the future net cash flows expected to be derived from production of the commercial reserves. Where the carrying amount exceeds the recoverable amount, an impairment is recognised in profit or loss.

Intangible assets and impairment

Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives. Amortisation, which is included in administrative expenses, is charged so as to write off the costs of intangible assets, over their estimated useful lives, using the straight-line method, on the following basis:

Software 3 years

Deferred taxation

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax is realised, or the deferred liability is settled.

Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the temporary differences can be utilised.

Financial instruments

Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument.

IFRS 7 (Financial Instruments: Disclosures) requires information to be disclosed about the impact of financial instruments on the Group's risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are being managed. The required disclosures have been made in Note 14 to the financial statements.

The Group's policies include that no trading in derivative financial instruments shall be undertaken.

Cash and cash equivalents

Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand.

Other receivables

Other receivables are carried at amortised cost less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is an expected credit loss on amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in profit or loss.

Trade and other payables

Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. These amounts are carried at amortised cost. The amounts are unsecured and are usually paid within 30 days of recognition.

Provisions

A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the amount of the obligation.

When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value amount arising from the passage of time is included in profit or loss.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.

Equity settled transactions (Share based payments)

The Group has issued shares as consideration for services received. Equity settled share-based payments are measured at fair value at the date of issue.

The Group has also granted equity settled options and warrants. The cost of equity settled transactions is measured by reference to the fair value at the date on which they were granted and is recognised as an expense over the vesting period, which ends on the date the recipient becomes fully entitled to the award. Fair value is determined by using the Black-Scholes option pricing model.

In valuing equity settled transactions, no account is taken of any service and performance conditions (vesting conditions), other than performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are required to be met in order for the recipients to become fully entitled to an award are considered to be non-vesting conditions. Market performance conditions and non-vesting conditions are taken into account in determining the grant value.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or non-vesting condition, which are vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance or service conditions are satisfied.

At each reporting date before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has expired and management's best estimate of the number of equity instruments that will ultimately vest. The movement in the cumulative expense since the previous reporting date is recognised in profit and loss, with a corresponding entry in equity.

Where the terms of the equity-settled award are modified, or a new award is designated as replacing a cancelled or settled award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if the difference is negative.

Where an equity-based award is cancelled (including when a non-vesting condition within the control of the entity or employee is not met), it is treated as if it had vested on the date of the cancellation, and the cost not yet recognised in profit and loss for the award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors, which has been identified as the Chief Operating Decision Maker. The Board of Directors is responsible for allocating resources and assessing performance of the operating segments in line with the strategic direction of the Company.

Critical accounting judgements and estimates

The preparation of these consolidated financial statements in accordance with UK-adopted International Accounting Standards ("IFRS") requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year are addressed below.

Exploration and evaluation expenditure

In accordance with the Group's accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation assets.

The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that the carrying value of the assets may exceed the recoverable amount.

The directors have assessed the Group's gold Projects in Mali and Côte d'Ivoire that are not part of the joint venture agreements and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been conducted on these assets.

The directors have assessed the Group's Bougouni Lithium Project in Mali, taking into account the Preliminary Feasibility Study and the recently announced Study Update. This project continues to be evaluated and has not yet entered into development; there is no indication of impairment. Accordingly, no impairment review has been conducted on these assets.

The Group's exploration activities and future development opportunities are dependent upon maintaining the necessary licences and permits to operate, which typically require periodic renewal or extension. In Mali and Côte d'Ivoire, the process of renewal or extension of a licence can only be initiated on expiry of the previous term and takes time to be processed by the relevant government authority. Until formal notification is received there is a risk that renewal or extension will not be granted.

As detailed in the Operational Review, at the date of these financial statements, the Group's key exploration licences are current. As detailed in note 7, the total carrying value of the exploration and evaluation assets at 31 March 2022 was £11.4 million (2021: £9.0 million). The Group complies with the prevailing laws and regulations relating to these licences and ensures that the regulatory reporting and government compliance requirements for each licence are met.

Valuation of warrants and share options

In accordance with the Group's accounting policy for equity settled transactions, all equity settled share-based payments are measured at fair value at the date of issue. Fair value is determined by using the Black-Scholes option pricing model based on the terms of the options and warrants, the Company's share price at the time and assumptions for volatility and exercise date. The assumptions used to value the options and warrants are detailed in note 5.

For options awarded to the directors, the award has been considered to be in relation to their overall contribution to the Group and, accordingly, the charge has been included within operating costs in the Consolidated Statement of Comprehensive Income rather than treated as an exploration and evaluation cost and capitalised against specific projects. For the award of warrants associated with the raising of funds through the issue of new shares, the charge has been treated as a share issue expense and offset against the share premium account.

Recoverability of Intercompany Balances to Subsidiary Undertakings

The Company has outstanding intercompany balances from its directly held subsidiaries resulting from the primary method of financing the activity of those subsidiaries. The balances are shown in the Company Statement of Financial Position. However, there is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances, including the project being put into operation, the project being sold and the project collapsing. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, the reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets and the reduced risk of project collapse following the granting of the mining license. At 31 March 2022 a credit loss provision of £681,000 is held against amounts due from subsidiaries (2021: £877,000).

Adoption of New and Revised Standards

The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the International Accounting Standards Board ("IASB") that are mandatory and relevant to the Group's activities for the current reporting period.

New standards and interpretations not applied

At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective and have not been adopted early by the Group. These are listed below. The Board anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. The amendments to the standards noted below are not expected to have a material impact on the Group's consolidated financial statements.

There are other standards and amendments in issue but not yet effective, which are not likely to be relevant to the Group which have therefore not been listed.

 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

1. SEGMENTAL REPORTING

The operations and assets of the Group in the year ended 31 March 2022 are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had three operating segments being the West African Gold projects, the West African Lithium projects and the UK administration operations. The Parent Company acts as a holding company. At 31 March 2022, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.

2. LOSS BEFORE TAX

The loss before tax from continuing activities is stated after charging:

Amounts payable to RSM UK Audit LLP and its associates in respect of audit services are as follows:

3. EMPLOYEES' AND DIRECTORS' REMUNERATION

The average number of people employed in the Company and the Group is as follows:

The remuneration expense for directors of the Company is as follows:

In addition to the amounts included above, £79,469 (2021: £62,496) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure.