Keras Res Regulatory News (KRS)

6 July 2023

Keras Resources plc ('Keras' or the 'Company')

 Final Results

Keras Resources plc (AIM: KRS) announces its final results for the year ended 31 December 2022.

Highlights

Utah - Diamond Creek Phosphate Mine ("Diamond Creek") - one of the highest-grade organic phosphate mines in the US, a fully integrated mine to market asset

· 4,750 tons of phosphate were mined and delivered to the laydown area at Diamond Creek in 2022

· Total sales of 4,276 tons for the year to 31 December 2022

· Key product developments for the balance of 2023 will include completing research into including liquid organic product(s) with higher phosphate ("P2O5") availability into our portfolio, and finalising the construction of granulator plant to produce blended organic granulates;2023 summer mining season commencing in July

· 100% held subsidiary Falcon Isle Resources LLC ("Falcon Isle") is currently operating profitably at the company level and has commenced repaying loans made to it by Keras

Corporate

· £1,950,000 (before costs) fundraising completed May 2022

· At a general meeting held on 25 July 2022 a resolution was passed consolidating the ordinary share capital on the basis of 1 new ordinary share of 1p for every 100 old ordinary shares of 0.01p. Following the passing of that resolution the number of ordinary shares in issue was reduced to 79,735,731

· Post year end Keras signed an agreement with the Republic of Togo (the "State") relating to the Nayéga Manganese project ("Nayéga"), under which Keras agreed to transfer all its intellectual knowledge on Nayéga to the State and provide advisory and brokerage services to expedite the development of Nayéga and the State paid Keras a cash consideration of $1,700,000 in July 2023

· Board Changes

o  Graham Stacey assumed the role as CEO on 1 June 2022

o  Russell Lamming assumed the role as Non-Executive Chairman from Brian Moritz on 1 September 2022

o  Brian remains a Non-Executive Director and Company Secretary

o  Claire Parry joined the Board as an independent Non-Executive Director on 1 September 2022

o  Also on 1 September 2022 Dave Reeves, who was CEO for many years following the Company's flotation, resigned from the Board to concentrate on his role as managing director of Calidus Resources Ltd in Australia

Graham Stacey, Keras Resources Chief Executive Officer, commented, "Having acquired 100% of Falcon Isle in April, 2022 has been a year of consolidation taking full management control of the business and repositioning ourselves as a mining business in the North American organic agricultural sector. The organic rock phosphate segment space remains a niche component of the vast USA agricultural and produce industry, but research broadly forecasts the segment to grow at a consolidated annual rate in excess of 8% in volume terms and 14% in USD terms which is the underlying reason for our decision to acquire the outstanding 49% shareholding in Falcon Isle.

Reporting a maiden profit for Falcon Isle in our first year of ownership has been an incredibly rewarding result from a small but very focussed team in Utah. We've demonstrated the fundamentals of the business in its current form - producing sized dry products only, but from industry engagements at trade shows and from continuing communication with industry players we've learned that there's a need for us to broaden our product range to include liquid and blended granulated products - liquids to serve the fertigation and hydroponic sectors, and granulates to align with traditional fertilizer value chain in terms of distribution and application. Testwork to produce a high available phosphate organic liquid product is ongoing and we look forward to reporting on developments in that segment. Having taken delivery of our granulator plant at the end of 2021 we took the decision to pause construction at our Spanish Fork site pending negotiations with potential partners to construct the plant to produce specific blended granulates rather than simply phosphate products which again talks to the need for a more diverse product range as we continue to gain traction in the organic market. I look forward to reporting on our granulate strategy in the near future.

From a Group perspective, we believe that putting a line under the uncertainty related to our investment in Togo was a positive move and the cash received from our divestment underpins the strategy of focussing the Group's activities in North America. Our ongoing role in developing the Nayéga Mine with the Togolese State will remain an important source of cash flow for the Group as we continue to optimise and grow Falcon Isle in Utah.

Since the end of the year Kershner Grosso & Co ("Kershner Grosso"), an asset management firm headquartered in Saratoga Springs, NY, acquired a block of 10.03% of the shares in the Company previously owned by First Uranium Corporation, and have since acquired additional shares on the market bringing their shareholding to 13.16%. It has been very pleasing to receive this support from Kershner Grosso as long-term investors recognising the future growth profile in the organic sector and we look forward to building on the strong relationship we have with Chris Grosso and his team going forward and delivering on our shared vision for the sector.

Posting of Annual Report and Notice of AGM and General Meeting

Copies of the Company's full Annual Report and Financial Statements (the "Annual Report") will be made available to download from the Company's website today at  https://kerasplc.com/results-and-reports/ and will also be posted to shareholders on 7 July 2023 along with the notice of its Annual General Meeting ("AGM") to be held at Coveham House, Downside Bridge Road, Cobham KT11 3EP, on the 31st July 2023, a Proxy Form and a letter detailing shareholders' option to receive electronic communication from the Company going forward.

Suspension from trading

Shareholders should note that trading in the Company's ordinary shares will remain suspended pending the publication of the Annual Report and Accounts for the year ended 31 December 2022 on the Company's website.

The Company will apply to have trading in its ordinary shares lifted immediately once the Annual Report and Accounts have been made available on the Company's website.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of Graham Stacey, Chief Executive Officer. This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

**ENDS**

For further information please visit www.kerasplc.com, follow us on Twitter @kerasplc or contact the following:

Notes:

Keras Resources (AIM: KRS) wholly owns the Diamond Creek organic phosphate mine in Utah, US. Diamond Creek is one of the highest-grade organic phosphate deposits in the US and is a fully integrated mine to market operation with in-house mining and processing facilities. The operation produces a variety of organic phosphate products that can be tailored to customer organic fertiliser requirements.

The Company is focused on continuing to build market share in the fast-growing US organic fertiliser market and build Diamond Creek into the premier organic phosphate producer in the US.

chairman's statement

I am pleased to provide an update on our progress since the last report and to set out our outlook for the business going forward.

The main activity of the Group is now in progressing our organic phosphate business in Utah, USA, where Keras increased its ownership from 51% to 100% on 30 March 2022.

The Diamond Creek phosphate mine

The Diamond Creek phosphate mine, which is believed to be one of the highest grade organic rock phosphate deposits in the US, comprises an opencast operation located on an 840 acre Federal Lease, and the Spanish Fork Processing Facility; both owned and operated by Falcon Isle Resources LLC and Falcon Isle Holdings LLC (collectively 'Falcon Isle'). Prior to the acquisition of the 49% outside interest on 30 March 2022, Falcon Isle was a 51% subsidiary of Keras during 2021, since which it has been a wholly owned subsidiary. Keras now has full management control with Graham Stacey also being appointed CEO of Falcon Isle where he can focus his efforts on the development of that business.

Diamond Creek is located approximately 80km south-east of Salt Lake City, and our focus going forward is to build the operation into the premier high-grade organic phosphate producer in the US. Our focus and target market is in supporting sustainable agriculture and we are strong advocates for the benefits of enhancing soil health and reducing the impact that synthetic fertilisers have on water resources. Our organic phosphate fertilizer products help farmers realise better crop growth and yields, and reduce the soil degradation seen when farmers use chemically manufactured fertilisers, while at the same time reducing the carbon footprint associated with growing their crops.

The mine is fully permitted, and the Spanish Fork processing plant is close to infrastructure and ideally located to take advantage of Salt Lake City's resources including labour, supplies, industrial engineering and financial services. The integrated mining and processing operation has compelling economics with a low capex, low-intensity seasonal mining operation and our in-house processing plant has flexibility to process a variety of organic rock phosphate products throughout the year. The mined material requires crushing, milling and bagging before being sold as high-grade organic rock phosphate fertiliser - a 23% total phosphorus pentoxide ('P205') premium product and importantly with minimum 12% available P205 which is significantly higher than our competitors in the US. Falcon Isle is currently investigating ways to expand its product offering and potential customer base by offering both granulated and liquidised fertilizers.

The mine has a pre-stripped area with production drilling information delineating approximately 2 years of planned production still in-situ. However, we believe there is significant scope to increase the current life of mine at Diamond Creek with historic "surface mineable resources" representing in excess of 60 years of production.

In 2022, 4,750 tons of phosphate were mined and delivered to the laydown area at Diamond Creek. Sales totalled 4,276 tons of phosphate for the year. Since Keras took control of the marketing function and with both the mining and processing facilities now operating as planned developing market share will be our primary focus for the next two years. Production rhythm is key to the supply of both consistent quantity and quality products which Keras's operational control has now enabled.

A key component of our marketing effort will be growth tests across a range of crops and soil types. This process is planned to run for the balance of 2023 and will provide focussed market feedback to support of our product use across crop types, regions and planting seasons.

We are now looking forward to commencing our mining season at Diamond Creek which takes place during the summer season from July to October 2023, while the mine site is free of snow.

Falcon Isle is currently operating profitably at the company level and has commenced repaying loans made to it by Keras.

Nayéga manganese mine / Togo

The Group's interests in Togo are accounted for at 31 December 2022 as assets held for sale. Keras holds an 85% interest in Société Générale de Mines ("SGM"), which owns the Research Permits for the Nayéga manganese project ("Nayéga") in the Republic of Togo ("State").

On 17 May 2023 an agreement was signed between Keras and the State whereby it was agreed that Nayéga is a Togolese strategic asset and the exploitation permit will be awarded to Société Togolaise de Manganèse, a Togolese incorporated company 100% owned by the State ("STM") and Keras will no longer pursue the Nayéga exploitation permit. Keras will transfer all its intellectual knowledge on Nayéga to the State and provide advisory and brokerage services to fast track the development of Nayéga. 

The State agreed to pay Keras a cash consideration of US$1.7m, which amount has now been received by Keras, and thereafter Keras will be paid advisory fees of 1.5% of gross revenue for 3 years and brokerage fees of 6.0% of gross revenue for the lesser of 3.5 years or 900,000 tonnes of beneficiated manganese ore produced and sold from Nayéga.

Financial review

The Consolidated Statement of Comprehensive Income for the year shows a loss of £847,000 (15 months to 31 December 2021 - loss £1,948,000).

The loss for the year includes costs relating to Togo. The carrying value of assets relating to the Nayéga mine at 31 December 2022 is materially equal to their estimated initial disposal value amounting to $1.7m, after allowing for costs of the sale. No amount is included in respect of the value of future income receivable from Nayéga.

Also included in the consolidated loss is a severance payment of $340,000 payable to the previous CEO of Falcon Isle.

In May 2022 Keras raised £1,950,000 (before costs) by an issue of new ordinary shares. These funds were used for the first tranche of US$800,000 of the cost of acquiring the former minority interest in Falcon Isle, including loans owed to the vendor, and for general working capital. The second tranche of $800,000, plus $240,000 of the severance payment referred to above, has been paid from the $1.7m received from the Republic of Togo. As the payment was made after 1 July 2023 there was a technical default for late payment, which default has been remedied within the 30 day period provided for in the agreement.

At a general meeting held on 25 July 2022 a resolution was passed consolidating the ordinary share capital on the basis of 1 new ordinary share of 1p for every 100 old ordinary shares of 0.01p. Following the passing of that resolution the number of ordinary shares in issue was reduced to 79,735,731.

Directors and Management

On 1 June 2022 Graham Stacey took over the role of Chief Executive Officer from me, and I moved into the role of Non-Executive Director.

On 1 September 2022, I took over from Brian Moritz as Non-Executive Chairman. Brian remains a Non-Executive Director and Company Secretary, and will continue to provide valuable oversight of the Company's finances.

At the same date Claire Parry joined the Board as an independent non-executive director. I would like to welcome Claire on behalf of myself and my colleagues.

Also on 1 September 2022 Dave Reeves, who was CEO for many years following the Company's flotation, resigned from the Board to concentrate on his role as managing director of Calidus Resources Ltd in Australia. I would like to thank Dave for his dedicated work over the years and wish him well for the future.

Outlook

With the securing of 100% ownership of our high-grade organic phosphate Diamond Creek mine, drawing a line under the uncertainty related to Nayéga and securing an agreement with the Togolese State whereby the $1.7m cash payment and ongoing cashflows for the next 3 years will further underpin the cashflow generative Diamond creek operation, we believe the Company is excellently positioned to deliver into the growing North American organic agricultural sector. This sector is underpinned by the macro-economic tailwinds of the global fertiliser markets, and we remain bullish on our premium phosphate product and our position as we continue to build market share.

Plans for expansion to broaden our product mix are underway and we continue to negotiate new offtake agreements with our repeat customers. The construction of a downstream granulator plant is planned for 2023 to allow us to further expand the range of our products from five sized dry products to include two sized blend granulates which will attract a price premium in markets that we are not currently supplying. Now that we are fully in charge of operations the Directors are confident that Falcon Isle will be an increasingly profitable and valuable asset for the Group, and we look forward to updating our shareholders on our progress as we continue to ramp up production and build our position and market share of the fast-growing US organic phosphate market.

Finally, I would like to take this opportunity to thank my colleagues on the Board and our management team for their hard work, and shareholders for their continuing support.

Russell Lamming

Chairman

5 July 2023

STRATEGIC REPORT

Having acquired 51% in Falcon Isle Resources LLC in December 2020, we reported on the acquisition of the remaining 49% in Falcon Isle on 30 March 2022 - a firm commitment to the Company's strategy of delivering growth from Falcon Isle's Diamond Creek Mine and downstream processing assets and, in time, from other assets in the US which we will look to evaluate in terms of their synergies with commodities contributing to a sustainable future.

The year to 31 December 2022 was therefore one of consolidation - building on existing client relationships and introducing our PhosAgri brand to prospective clients at trade shows. To this end we attended the Organic Growers Summit in Monterey on California's west coast and the World Ag Expo in Tulare California, both pivotal to the agricultural sector in California's Central Valley. Two key take aways from these events revolved around the sector's demand for both liquid and granular organic products, each aimed directly at improving phosphate availability from organic rock phosphate and therefore improved return on organic fertilizer purchase for organic growers. While sales of our existing range of dry sized products improved markedly from 2021 (2,197t) to 2022 (4,276t), we recognise that granulates and solubilised products will represent a material component of the organic sector demand going forward.

To this end, having acquired and taken delivery of a granulator plant to our Spanish Fork facility during 2022 we are in discussions with two potential partners to construct the plant off-site which will give us and our partner the ability to produce a range of bespoke granulated organic fertiliser blends rather than simply a phosphate granule which would limit our market options. A site selection decision is expected during the second half of 2023 as the feasibility of the sites are evaluated in terms of bulk infrastructure supply (power, water and natural gas), zoning to support long-term production and proximity to source materials and downstream markets.

With regard to producing liquid products, we have four testwork processes underway to progress the solubilising and/or microbial/bacterial digestion of our finer 100# or 350# products into liquid products which can be used in liquid blends in fertigation (drip fed irrigation) and hydroponic applications. The application of liquid organic products at higher available phosphate (P2O5) (testwork presented to date suggests potential for >20% from our micronized 350# product) ensures quicker absorption, provides for tighter quality control, reduces losses in the application processes and provides us access to a rapidly growing indoor controlled environment agricultural ('CEA') sector.

These opportunities are exciting developments for us and as a historically mineral resources/mining business we look forward to researching additional product augmentation opportunities as we learn more about the organic agricultural sector. Each product development will broaden our market reach, to grow annual sales to enforce our strategy to enhance shareholder value through broadening our product mix and building market share for our products within the North American organic fertilizer market.

Another meaningful operational improvement has been the centralisation of all our Falcon Isle crushing and milling operations at our Spanish Fork site. This will continue to reduce operating costs by eliminating unnecessary ore transport between sites previously established for different crushing and/or milling operations. Value engineering initiatives will continue to streamline operations and rationalise costs to ensure consistent product quality and volumes, all aimed at increasing margins.

 In the longer-term, enhancing value of that asset will involve both organic expansion as well as identifying value-accretive projects/businesses with natural synergies to increase scale and to add value to the Company, ultimately to build the operation into the premier organic phosphate producer in the US.

Additional future value enhancements include developing opportunities around carbon sequestration and the associated carbon credits. Diamond Creek's organic phosphate products have the potential to tap directly into this rapidly growing market and the Company is looking at developing and enhancing the value of this aspect of its portfolio and in-turn generate greater returns for shareholders.

The business model has established the Company as an increasingly efficient, high-quality and low-cost producer direct into the North American fertiliser market.

As noted in the Chairman's Statement our Togolese asset, which was being held for sale as at 31 December 2022, was sold on 18 May 2023, although we expect to generate income in Togo for at least the next three years. From the Company's point of view disposing of SGM is consistent with our strategy to deliver shareholder value by concentrating our efforts in the US.

In exploring and developing mines to exploit mineral deposits, the Group accepts that not all its exploration will be successful but also that the rewards for success can be high. It therefore expects that its shareholders will be invested for potential capital growth, taking a long-term view of management's good track record in mineral discovery and development. The Directors have continued to invest in the Company and currently hold approximately 9.04% of the issued shares in Keras, after allowing for the substantial fund raisings since the period end. We believe this stake provides further evidence of the Board's belief in and commitment to its strategy.

To date, the Group has financed its activities through equity raisings. As the Group's projects become more advanced, the Board will seek mining and/or offtake finance and may also investigate strategic opportunities to obtain funding for projects from future customers via pre-payments, royalties, and other marketing arrangements.

Mining projects

United States

Keras acquired an interest in Falcon Isle, holder of the Diamond Creek phosphate mine, in July 2020, and increased its interest to 51% in December 2020. Keras acquired the outstanding 49% in March 2022. The mine is situated approximately 80km SSE of Salt Lake City, Utah. Diamond Creek is a fully permitted, high-grade direct shipping ore ('DSO'), low capex organic phosphate mine, which has significant historical estimated in-situ tonnage (mineral resources have not been classified according to modern International Reporting Standards) with sufficient phosphate ore exposed in-situ to provide for the 2023 and 2024 mining seasons before any overburden stripping is required. The phosphate mineralisation is concentrated in the sedimentary shale beds of the Meade Peak Member of the Phosphoria Formation. The mineralised zone is c.3m thick and averages 23% total P2O5 with guaranteed available P2O5 of 12%. Historic reports vary with "surface mineable resources" ranging from 3.10Mt to 4.60Mt. At an internally estimated peak production rate of 23.5ktpa, the opencast resources alone represent a significant mine life.

The 2022 mining campaign was completed in October 2022 with a total of 4,750 ore tons extracted from the mine. Primary crushing during the reporting period was undertaken using a contrctor-operated mobile crusher on the mine site, with downstream processing conducted through a combination of contractor toll-milling (producing 10mesh and -50mesh products) and Falcon Isle owned milling plant comprising front-end feed, primary crush, milling, ultra-fine dust extraction, 50lb and 1ton bagging circuits to produce -100 mesh and -350 mesh powders. As noted previously a granulation plant was procured and delivered to our Spanish Fork site during the fourth quarter of 2021 with construction and commissioning initially planned for the second half of 2022. Pending discussions with potential partners in development of the granulation side of our business, construction has been postponed to enable us to conclude agreements relating to the feasibility of proposed sites for the granulator plant. The construction phase of the plant will be approximately 3 months post conclusion of the feasibility assessment which is estimated to be concluded during the fourth quarter of 2023. Our initial intention to construct the granulator plant in a building adjacent to our milling plant in Spanish Fork, however as we've established ourselves in the organic agricultural sector it became apparent that we could extract greater value from a blended granulate incorporating nitrogen, phosphate, potassium as well as other minor valuable fertiliser constituents. We therefore elected to investigate opportunities to collaborate with partners to select sites to achieve this. These discussions remain ongoing and we look forward to reporting on finailisation of these discussions and construction progress.

Our products have received Organic Certification by all three key certification agencies in the USA - California ('CDFA'), Washington State ('WSDA') and the federal Organic Materials Review Institute ('OMRI'). As a Direct Shipping Ore ('DSO') it requires no chemical/synthetic upgrade processes which is the basis for our organic certification. Our rock phosphate contains low heavy metal impurities, significantly higher available P2O5 than any other organic rock phosphate in North America, and a calcium content of >25%.

West Africa

Through the Company's 85% interest in the Nayéga manganese project in Togo, Keras developed the asset through exploration, and definitive feasibility study ('DFS') culminating in successful trial mining during the first quarter of 2019. During the final quarter of 2022 Keras was notified that the Togolese State had intended to declare manganese, among other metals and minerals, as strategic state assets and that a process would be implemented to investigate how the State would take greater ownership and participate in the development and operation of these assets.

Considering the investment made by Keras between 2012 and 2019 this clearly represented a departure from Togolese Mining Law as well as the Mining Convention drafted between the parties as to how the State would benefit from the Nayéga Mine. However, the Company remained in ongoing discussions with the State to understand how this State declaration would pan out. As was recently announced on 18 May 2023, Keras and the State entered into an agreement in terms of which Keras would no longer pursue the granting of an Exploitation Permit and that the State would establish a wholly owned manganese holding vehicle - STM which would be responsible for the development of all manganese assets within Togo.

Given the circumstances, Keras negotiated the disposal of all historical Nayéga technical studies commissioned and funded by Keras to the State. While it was not the ideal outcome for the Company, the State acknowledged that the newly formed STM would require a period of technical information and skills transfer. Keras therefore entered into the agreement in good faith in the knowledge that there would be an ongoing revenue stream for a three year period post re-commencement of the mine. This in addition to a USD1.7m cash payment for the technical studies will provide Keras with an initial compensation for development expenditures as well as an ongoing revenue stream for advisory and brokerage services provided to STM meaning that Keras is not walking away from the project and the State values Keras's institutional knowledge.

Keras is therefore satisfied with the outcome and will continue to provide routine technical advisory and product sale brokerage services to STM.

Sustainability

Keras is committed to responsible mining and upholding ESG best practice across our business. We are similarly committed to our stakeholders and are focused on looking to create value and benefits for all whilst seeking to manage and mitigate the potential impacts that our operations may have. We are focussed on mining an essential resource that can contribute to a more sustainable future and importantly sustainable and regenerative agriculture. With the Diamond Creek mine we are running a simple operation with only crushing & milling requirements and will look to maintain our low carbon footprint. We are focused on meeting our commitments across the ESG space and will continue to be proactive in this area as we look to develop and sustain a positive legacy.

Risk Management

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development are:

Market Risk

Unlike marketing globally traded, indexed commodities into international markets, growing market share within the niche organic fertiliser market within North America presents risk in terms of pricing and volume.

The Group has employed a head of marketing to develop and implement a marketing strategy which will be a key focus area to build market share. The business has a range of existing customers, three of which are anchor clients having provided commitments to purchase a pleasing base load of our planned annual production. Our marketing strategy rollout will include presence at industry trade exhibitions and conferences, as well as regular regional direct contact visits with a comprehensive schedule of contacts within the wholesale and distribution segments of the organic fertiliser market. Our business model will largely be driven by uptake from co-operative type clients with wide distribution networks, rather than selling directly to farmers themselves.

Exploration Risk

The Group's business has been primarily mineral exploration and evaluation which are speculative activities and whilst the Directors are satisfied that good progress is being made, there is no certainty that the Group will be successful in the definition of economic mineral resources, nor that it will proceed to the development of any of its projects or otherwise realise their value.

The Group aims to mitigate this risk when evaluating new business opportunities by targeting areas of potential where there is at least some historical drilling or geological data available.

Resource Risk

All mineral projects carry risk associated with defined grade and continuity. Mineral resources and reserves are calculated by the Group in accordance with accepted industry standards and codes but are always subject to uncertainties in the underlying assumptions which include geological projection and commodity price assumptions.

The Group reports exploration targets, mineral resources and ore reserves in accordance with internationally approved codes where our operations/projects are located, which set minimum standards for public reporting of mineral exploration results, mineral resources and ore reserves.

Development Risk

Delays in permitting, financing and commissioning a project may result in delays to the Group meeting development and/or production targets. Changes in commodity prices can affect the economic viability of mining projects and affect decisions on continuing exploration activity

Mining and Processing Technical Risk

Notwithstanding the completion of metallurgical testwork, trial mining and pilot studies indicating the technical viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, ground water conditions and other geological conditions may still render a mining and processing operation economically or technically non-viable.

The Group has a small team of mining professionals experienced in geological evaluation, exploration, financing and development of mining projects. To mitigate development risk, the Group supplements this from time to time with engagement of external expert consultants and contractors.

Environmental Risk

Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in production unforeseen events can give rise to environmental liabilities.

As Keras undertakes mining operations, any disturbance to the environment during this phase is required to be rehabilitated, with specific requirements for closure and closure funding in accordance with the prevailing regulations of the countries in which we operate as well as to international best-practice.

Given the Group's size and scale it is not considered practical or cost effective to collect and report data on carbon emissions.

Financing & Liquidity Risk

The Group has had an ongoing requirement to fund its activities through the equity markets and may in future need obtain finance for further project development. There is no certainty such funds will be available when needed. To date, Keras has managed to raise funds primarily through equity placements despite the very difficult markets that currently exist for raising funding in the junior mining industry.

Political Risk

All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social permitting risks, risks of strikes and changes to taxation whereas less developed countries can have, in addition, risks associated with changes to the legal framework, civil unrest and government expropriation of assets.

Partner Risk

Whilst there has been no past evidence of this, the Group can be adversely affected if joint venture or equity partners are unable or unwilling to perform their obligations or fund their share of future developments. Keras no longer operates with either equity or joint venture partners having secured 100% of the Diamond Creek project.

Bribery Risk

The Group has adopted an anti-corruption and bribery policy and whistle blowing policy under the Bribery Act 2010. Notwithstanding this, the Group may be held liable for offences under that Act committed by its employees or subcontractors, whether or not the Group or the Directors had knowledge of the commission of such offences.

Financial Instruments

Details of risks associated with the Group's financial instruments are given in Note 29 to the financial statements. Keras does not utilise any complex or derivative financial instruments.

COVID-19

Travel and shipping restrictions in place globally during 2021 had a direct impact on timing and cost of delivery of plant and equipment to the USA. However, given recent developments the Directors do not believe that Covid 19 will have a material effect on the Company or its operations going forward.

Insurance Coverage

The Group maintains a suite of insurance coverage that is appropriate for the Group and Company. This is arranged via a specialist mining insurance broker and coverage includes public and products liability, travel, property and medical coverage and assistance while Group employees and consultants are travelling on Group business. This is reviewed at least annually and adapted as the Group's scale and nature of activities changes. Keras also has Directors and Officers insurance in place.

Internal Controls and Risk Management

The Directors are responsible for the Group's system of internal financial control. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Group's system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

In carrying out their responsibilities, the Directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible. The Directors review the effectiveness of internal financial control at least annually.

The Board, subject to delegated authority, reviews capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

The Board takes account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group's development the Board has not adopted a specific policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of Keras' stakeholders through individual policies and through ethical and transparent actions.

The Group has adopted an anti-corruption and bribery policy and a whistle blowing policy as stated previously.

Shareholders

The Directors are always prepared, where practicable and subject to confidentiality under the AIM Rules, to enter into dialogue with shareholders to promote a mutual understanding of objectives. The Annual General Meeting provides the Board with an opportunity to informally meet and communicate directly with investors.

Employees

The Group operates primarily through contractors. Notwithstanding this, the Group engages its contract employees to understand all aspects of the Group's business and seeks to remunerate them fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Group takes account of employees' interests when making decisions and welcomes suggestions from employees aimed at improving the Group's performance.

The Group currently operates in the USA and Togo. It recruits locally as many of its employees and contractors as practicable.

The Company has four directors, three are male and one is female.

Suppliers and Contractors

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. Contractors are appointed based on a detailed assessment of their capabilities, capacity and track record.

Health and Safety

The Board recognises that it has a responsibility to provide strategic leadership and direction in the development of the Group's health and safety strategy in order to protect all of its stakeholders. The Group does not have a formal health and safety policy at this time. This is re-evaluated as and when the Group's nature and scale of activities expand.

Section 172 statement

The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

· Consider the likely consequences of any decision in the long-term;

· Act fairly between the members of the Company;

· Maintain a reputation for high standards of business conduct;

· Consider the interests of the Company's employees;

· Foster the Company's relationships with suppliers, customers and others; and

· Consider the impact of the Company's operations on the community and the environment.

The Company's operations and strategic aims are set out throughout the Strategic Report and in the Chairman's Statement, and relationships with stakeholders are also dealt with in the Corporate Governance Statement.

Graham Stacey

Director

This Strategic Report was approved by the Board of Directors on 5 July 2023

THE BOARD

RUSSELL LAMMING

Non-Executive Chairman

Russell Lamming is a qualified geologist with an honours degree in geology from the University of the Witwatersrand and a Bachelor of Commerce in Economics from the University of Natal. Russell has a broad range of experience including directorship of a South African mining consultancy and precious metals analyst for a leading international broker and was the CEO of AIM listed Chromex Mining and Goldplat Plc. He has strong relationships in London and internationally and has raised considerable funds for resource companies over the years.

GRAHAM STACEY

Chief Executive Officer

Graham holds an honours degree in Mining Engineering from WITS University in Johannesburg (1995), and an MBA from the WITS Business School (2004) and a Mine Manager's Certificate of Competency (2001). Graham has over 25 years' experience across a range of commodities in the resources sector, including direct operational management in the coal, PGE and chrome businesses in South Africa, manganese in Togo and rock phosphate in the USA, as well in a technical consulting role (2004-2008). He is a Competent Person and Competent Valuator as a longstanding member of the South African Institute of Mining and Metallurgy (SAIMM), and has wide ranging experience in mine design, project execution, operations and mineral resource management. He was previously a director of AIM listed Chromex Mining. Following the acquisition of 100% of Falcon Isle he has been appointed as CEO of that company.

BRIAN MORITZ

Non-Executive Director

Brian is a Chartered Accountant and former Senior Partner of Grant Thornton, London. He formed Grant Thornton's Capital Markets Team which floated over 100 companies on AIM under his chairmanship. In 2004 he retired from Grant Thornton to concentrate on bringing new companies to the market as a director. He concentrates on mining companies, primarily in Africa, and was formerly chairman of African Platinum PLC (Afplats) and Metal Bulletin PLC as well as currently being chairman of several junior mining companies.

CLAIRE PARRY

Non-Executive Director

Claire is a Chartered Accountant and a partner in the Canterbury office of Azets, a top 10 UK accounting firm. With over 20 years in the industry she specialises in the application of IFRS and accounting and financial control generally for smaller quoted companies, primarily in the natural resources sector.

CORPORATE GOVERNANCE STATEMENT

To the extent applicable, and to the extent able (given the current size and structure of the Company and the Board), the Company has adopted the Quoted Companies Alliance Corporate Governance Code. Details of how the Company complies with the principles contained in the Code are set out below.

No key governance matters have arisen since the publication of the last Annual Report.

Taking account of the Company's size and nature, the Board considers that the current Board is a cost effective and practical method of directing and managing the Company. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of additional corporate governance policies and structures will be reviewed. Further disclosures under the Code are included on the Company's website.

Principle 1: Establish a strategy and business model which promote long term value for shareholders.

The Company's strategy is to identify mining projects which can be developed to create value and income for shareholders. In June 2017 this strategy was successfully demonstrated when the Company's Australian gold exploration assets were floated on the Australian Securities Exchange (ASX) with the name Calidus Resources Limited. In November 2019 the Company's shares in Calidus were demerged and transferred to the Company's shareholders by way of a capital reduction.

The demerger has permitted the Board to examine other projects, and in particular the Diamond Creek phosphate mine in Utah, USA, where the Company has completed the staged acquisition of 100% equity interest in March 2022. This is now the Company's main project.

The Company had, for some years, been seeking to convert the Research Permits held by its 85% owned subsidiary, Société Générale de Mines SA, over the Nayéga manganese project in Togo, to an Exploitation Permit. Since 31 December 2022 the Company has sold its intellectual property and other assets relating to Nayéga to a newly formed parastatal company, so that it no longer operates in Togo but will continue to provide advisory and brokerage services to the Togolese State.

Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

The risks facing the Company are detailed in the Strategic Report. The Board seeks to mitigate such risks so far as it is able to do, but certain important risks cannot be controlled by the Board.

In particular, products the Company is seeking to identify and mine are traded globally at prices reflecting supply and demand rather than the cost of production. So far as the Company is concerned, the substantial decline in the price of iron ore rendered two previous projects non-viable, both of which had appeared to have substantial value on a discounted cash flow basis, and they were abandoned.

While the Company will only invest in exploration projects where there is a legal right to convert an initial exploration licence to a mining licence, in practice it may be difficult to obtain such conversion for political reasons. There is no legal way that the Company can protect itself against this possibility.

Principle 5: Maintain the Board as well-functioning, balanced team led by the chair.

The Board has been substantially changed during the year under review, both as regards its composition and as regards the roles of the individual directors. Brief CVs of the current directors are set out separately in this Annual Report.

Previously the board comprised four founder directors, none of whom qualified as independent as all had material shareholdings resulting largely from their support of previous fund raisings.

Dave Reeves, who is resident in Western Australia, retired as a non-executive director on 1 September 2022. He was replaced by Claire Parry, who is considered to be an independent non-executive director.

Graham Stacey, the CEO since 1 June 2022, works full time for the Company, with primary responsibility for the Diamond Creek phosphate mine in Utah, USA. The other directors, Russell Lamming (CEO until 1 June 2022 and non-executive chairman from 1 September 2022), Brian Moritz (non-executive chairman until 1 September 2022) and Claire Parry are non-executive directors. As Utah is in a time zone 7 hours different from the UK, Board meetings are normally conducted by video conference or by telephone, supplemented by physical meeting when Graham Stacey is in the UK.

The CEO is in regular touch with the Directors. He also holds frequent informal discussions with other directors. Throughout the year such discussions average approximately two per week.

Non-executive directors are committed to devote 30 days per annum to the Company, but they are likely to exceed that required time commitment. Standard director's fees are currently £48,000 per annum for the Chairman and £24,000 per annum for each non-executive director, below the median for AIM companies. Brian Moritz also acts as Company Secretary and has board responsibility for accounting matters and receives an extra £12,000 per annum in respect of those responsibilities. No further amounts are paid for serving on Board committees.

Principle 6: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.

Brief CVs of the directors are disclosed elsewhere in this Annual Report.

Each of the directors maintains up to date skills by a combination of technical journals, courses, conferences and trade shows.

As an exploration and mining Company the Board requires skills in the area of geology and mining. Russell Lamming is a qualified geologist and Graham Stacey is a qualified mining engineer. Each has a long history of achievement in this area. Importantly, each of them has been in charge of the construction and operation of mines.

Brian Moritz and Claire Parry are Chartered Accountants. In addition to his financial skills, Brian Moritz has previously been registered as a Nominated Adviser and has wide experience of corporate transactions.

The advice of Azets, a top 10 UK accounting firm in which Claire Parry is a partner, is sought on technical accounting matters, in particular in relation to compliance with IFRS.

Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement.

Recently the Board has successfully achieved a major objective by acquiring a phosphate mine in Utah, USA, constructing a processing plant and commencing production. The next stage for this mine is to expand its product range and client base.

The Board will concentrate on achieving profitable production and positive cash flow from its existing project while continuing to seek other mining projects.

Given the current state of the Company's development the directors believe that the Board operates efficiently and cost effectively and that the cost of an external review process is not justified.

Principle 8: Promote a corporate culture that is based on ethical values and behaviours.

So far as possible the Company recruits locally for staff and sub-contractors.

In Utah, the Group's product is a natural organic fertilizer which plays its part in reducing reliance on artificial manufactured fertilizers.

Company has adopted a comprehensive anti-corruption and whistle blowing policy and an ethical policy which is strictly applied.

Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

The Board communicates with its stakeholders through social media and webcasts, as well as by announcements on RNS. It welcomes the ability to meet and engage with shareholders at general meetings.

The audit committee normally meets twice per annum, on its own to consider and approve the interim results, and with the auditors to consider the annual report and matters raised by the auditors based on their audit. So far as possible recommendations by the auditors are immediately implemented. As the CEO is also present as an observer at such meetings, no further report is submitted to the Board. 

The remuneration committee meets on an ad hoc basis when required. Fees paid to the non-executive directors are settled by the Chief Executive Officer, as the non-executive directors comprise the remuneration committee.

Brian Moritz

DIRECTORS' REPORT

The Directors present their report together with the audited financial statements of the Group for the year ended 31 December 2022.

The Group's projects are set out in the Strategic Report.

Review of business and financial performance

Further details on the financial position and development of the Group are set out in the Chairman's Statement, the Strategic Report and the annexed financial statements.

Results

The Group reports a loss for the year of £997,000 (15 months to 31 December 2021 - loss £2,014,000).

Major events after the balance sheet date

Since the end of the year the Company has agreed to transfer its interests in the Nayéga manganese project to the Republic of Togo on the terms set out in Note 31.

Dividends

The Directors do not recommend payment of a dividend for the year ended 31 December 2022 (15 months to 31 December 2021 - £nil).

Political donations

There were no political donations during the year (15 months to 31 December 2021 - £nil).

Going concern

The Directors continue to adopt the going concern basis in preparing the financial statements as further explained in Note 2 to the financial statements.

Directors' indemnities

The Group maintains Directors and Officers liability insurance providing appropriate cover for any legal action brought against its Directors and/or officers.

Audit Committee

The Audit Committee, which currently comprises B Moritz and C Parry, and is chaired by B Moritz, is responsible for ensuring the financial performance, position and prospects of the Group are properly monitored and reported on and for meeting the auditors and reviewing their reports relating to accounts and internal controls. Meetings of the Audit Committee are held at least twice a year, at appropriate times in the reporting and audit cycle. The Audit Committee reports to the Board on its proceedings after each meeting on all matters for which it has responsibility. The members of the Audit Committee are subject to annual re-election by the Board.

Remuneration Committee

The Remuneration Committee, which comprises B Moritz and C Parry and which is chaired by B Moritz, reviews the performance of the executive directors and sets their remuneration, determines the payment of bonuses to executive directors and considers the future allocation of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time to Directors and employees. Meetings of the Remuneration Committee are held on an ad hoc basis as required. The Remuneration Committee reports to the Board on its proceedings on all matters for which it has responsibility. The members of the Remuneration Committee are subject to annual re-election by the Board.

Directors

The following Directors held office throughout the period:

B Moritz

D Reeves (resigned 1 September 2022)

R Lamming

G Stacey

C Parry (appointed 1 September 2022)

Directors' interests

The beneficial interests of the Directors holding office on 31 December 2022 in the issued share capital of the Company, including spouses of Directors, were as follows:

On 26 April 2022 B Moritz, and R Lamming subscribed for 35,000,000 and 45,000,000 Ordinary Shares of 0.01p each respectively at 0.12p per share. Each share subscribed received a warrant to subscribe for 1 new Ordinary Share at any time up to 31 May 2024, at an exercise price of 0.18p per share.

On 25 July 2022 every 100 existing ordinary shares of 0.01p each were consolidated into 1 ordinary share of 1p each. The figures presented in the 31 December 2022 column above are shown after the consolidation.

Since 31 December 2022 there have been no changes in these shareholdings.

Directors' remuneration and service contracts

Details of remuneration payable to Directors as disclosed in note 11 to these financial statements:

Statement of Directors' responsibilities

The Directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group financial statements in accordance with UK-adopted International Accounting Standards ("UK-adopted IAS")  in conformity with the requirements of the Companies Act 2006 and the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 "Reduced Disclosure Framework", and applicable law).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period. 

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether the consolidated financial statements comply with UK-adopted IAS and the parent company financial statements are prepared in accordance with UK GAAP/FRS 101 in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Company is compliant with AIM Rule 26 regarding the Company's website.

Statement of disclosure to auditor

Each Director at the date of approval of this report confirms that;

So far as they are aware,

· there is no relevant audit information of which the Company's auditor is unaware; and

· they have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Auditor

A resolution to re-appoint PKF Littlejohn LLP as auditor will be proposed at the Annual General Meeting. PKF Littlejohn LLP has indicated its willingness to continue in office.

By order of the Board

Brian Moritz

Director

5 July 2023

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF KERAS RESOURCES PLC

Opinion

We have audited the financial statements of Keras Resources Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice) and 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 31 December 2022 and of the group's loss for the period then ended;

· the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

· the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' 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 group's and parent company's ability to continue to adopt the going concern basis of accounting included reviewing cashflow forecasts covering a period of 12 months from the date of approval of these financial statements, considering the levels of discretionary and non-discretionary expenditure forecasted, challenging and conducting sensitivity analysis using the key inputs and assumptions underpinning said forecasts, ascertaining the group and parent company's current cash position and reviewing the group and parent company's performance since the period end. Whilst the group made a significant loss in the period and has forecasted significant growth in revenues over the going concern period, the group and parent company has notable cash reserves and a notable proportion of the costs forecasted are discretionary therefore if forecasted growth targets are not met, discretionary costs could be reduced or deferred accordingly. 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Our application of materiality

For the purposes of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the financial statements, would be changed, or influenced. We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.

Materiality for the group financial statements as a whole was set as £121,000 (2021: £109,000). This was calculated based upon 2% of gross assets (2021: 2% of gross assets) due to the group's significant capitalised exploration costs, assets held for sale and cash reserves being key balances of interest within the financial statements and the fact that though generating revenues, the group is not yet profit generating. Performance materiality and the triviality threshold for the consolidated financial statements was set at £84,700 (2021: £76,300) and £6,050 (£5,450) respectively due to the assessed risk and our accumulated knowledge of the group.

Materiality for the parent company financial statements as a whole was set as £105,000 (2021: £43,700). This was calculated based upon 2% of gross assets (2021: 5% of loss before tax) due to the focus on the investment in and loans due from Falcon Isle Resources LLC. Performance materiality and the triviality threshold for the parent company was set at £73,500 (2021: £30,600) and £5,250 (2021: £2,185) respectively due to the assessed risk and our accumulated knowledge of the Company.

We also agreed to report to those charged with governance any other audit misstatements below the triviality thresholds established above which we believe warranted reporting on qualitative grounds.

Our approach to the audit

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing, and extent of our audit procedures.

In designing our audit, we considered areas involving significant accounting estimates and judgements by the directors as well as future events that are inherently uncertain. These included the recoverable value of the parent company's investment in its subsidiary and the amounts due to the parent company by its subsidiaries and the recoverable value of capitalised exploration costs. We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We performed an audit of the financial information of the group's four components in order to obtain the assurance required for the group audit opinion. All of the components were assessed as being significant due to their results for the year, the value of their assets, liabilities and capital and reserves as at 31 December 2022 and the assessed risks in respect of their results for the year and their assets, liabilities and capital and reserves.

Of the four reporting components of the group, two are located in the United Kingdom, one is located in the United States of America and one is located in Togo. PKF Littlejohn LLP audited the ultimate parent company, situated in the United Kingdom, and its subsidiaries, situated in the United Kingdom, United States of America and Togo. The Engagement Partner conducted audit work in the United Kingdom but interacted regularly with the Management team in the United States of America and Togo during all stages of the audit and was responsible for the scope and direction of the audit process. This, in conjunction with additional procedures performed, gave us appropriate evidence for our opinion on the group financial statements.

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. 

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 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 period for which the financial statements are prepared is consistent with the financial statements; and

· the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

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

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

· the parent company financial statements are not in agreement with the accounting records and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

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 they operate 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, industry research and our cumulative audit knowledge and experience of the sector.

· We determined the principal laws and regulations currently relevant to the group and parent company in this regard to be those arising from UK Company Law, rules applicable to issuers on AIM, UK and US employment law and local mining, environmental and health and safety laws in the US.

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

o  Discussions with management regarding compliance with laws and regulations by the parent company and components;

o  Review of board minutes; and

o  Review of regulatory news announcements made throughout and post period-end.

· We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential for management bias exists in relation to the carrying value of intangible assets, the carrying value of investments in and loans due from subsidiaries and the carrying value of assets held for sale and we addressed these by challenging the assumptions and judgements made by management when auditing these significant accounting estimates and judgements.

· 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; discussing with management as to whether there were any instances or suspicions of fraud since 1 January 2022 within the parent company or components 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.

Daniel Hutson (Senior Statutory Auditor) 15 Westferry CircusFor and on behalf of PKF Littlejohn LLP Canary WharfStatutory Auditor London E14 4HD

5 July 2023

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

The financial statements were approved by the Board of Directors and authorised for issue on 5 July 2023. They were signed on its behalf by:

Brian Moritz

Director

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

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

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