RMM.L Regulatory News (RMM)

16 May 2022

Rambler Reports Financial Results for the

Year Ended 31 December 2021

London, England; Newfoundland and Labrador, Canada - Rambler Metals and Mining Plc (AIM: RMM) ("Rambler" or the "Company"), a copper and gold producer, explorer, and developer, today reports its audited financial results for the year ended 31 December 2021.

To view the PDF version of the announcement and the Financial Results please click here:

http://www.rns-pdf.londonstockexchange.com/rns/5999L_1-2022-5-16.pdf

2021 Full Year RESULTS

The tables below summarise the key financial metrics for the year ended 31 December 2021. All references to $ are US$.

Dr Toby Bradbury, President and CEO, Rambler Metals & Mining commented:

"These financial results reflect a year in which we have had many challenges but, I am pleased to report, also a year in which we have made substantial progress on the turn-around we had planned for Rambler Metals and Mining. The Company invested US$23.2 million in mine development and equipment in 2021. This has placed the Company in a position to start to deliver on the true potential of its quality ore reserves. At the same time, as we have started to deliver higher quantities of copper, the market for copper has improved dramatically as the world's economy slowly recovers from the Covid pandemic. The long-term trend of electrification of the entire transport network (automobiles, trucks) to take advantage of clean energy, bodes well for sustained demand growth in the copper market. While we foresee a strong future for copper, we recognise that executing on the potential for optimisation of our own operations in the coming months and years will enable the Ming Mine to operate profitably through the commodity cycle and deliver significant returns to shareholders.

"In 2021 Rambler was committed to the sale of 3,600 tonnes of copper at a fixed price of US$7,700/tonne as part of the financing commitment made in 2020. At this price level, Rambler's operations delivered a small positive cash operating margin. This was supplemented by other funds brought in through the year. "A small portion of the fixed price sales contract rolled into 2022 and was fully completed in February 2022. Since then, Rambler's copper sales have been fully exposed to the current buoyant copper price.

"In 2021, the Company raised a total of US$32.2 million including $19.4 million from issuance of shares and warrant exercises (net of transaction costs), $3.0 million from sale of non-core assets and equity investments and $9.8 million from net borrowing. The most significant of these was the introduction of Newgen as a new partner as both a lender and equity holder at the end of the year. The Newgen debt facility of $16.3 million included a roll-over of the West Face $5.0 million loan which demonstrated their confidence in the project.

"We look forward to completing the ramp up of the Ming Mine in 2022 to its design potential of 1,350 tonnes of ore mined and processed per day at a target grade of 2% copper. We have the development in place to support this level of production and we are increasingly improving our operational reliability and execution. We look forward to providing updates in the coming year on our continuing progress."

2022 Business Objectives

The 2022 business objectives for Rambler are:

The full audited financial statements will be available on the Company's website in due course at http://www.ramblermines.com.

Tim Sanford, P.Eng., is the Qualified Person responsible for the technical content of this release and has reviewed and approved it accordingly. Mr. Sanford is an employee of Rambler Metals and Mining Canada Limited. Tonnes referenced are dry metric tonnes unless otherwise indicated.

Abbreviations:

g/t = grammes per tonne

dmt = dry metric tonnes

mtpd = metric tonnes per day

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

ABOUT RAMBLER METALS AND MINING

Rambler is a mining and development company that in November 2012 brought its first mine into commercial production. Rambler has a 100 per cent ownership in the Ming Copper-Gold Mine, a fully operational base and precious metals processing facility and year-round bulk storage and shipping facility; all located on the Baie Verte peninsula, Newfoundland and Labrador, Canada.

Rambler's focus is to regain its production profile at 1,350 metric tonnes per day at a target grade of 2% Cu in the course of 2022 and evaluate expansion opportunities from that base.

Along with the Ming Mine, Rambler also owns 100 per cent of the former producing Little Deer/Whalesback copper mines.

Rambler is listed in London under AIM:RMM.

For further information, please contact:

Website: www.ramblermines.com 

Caution Regarding Forward Looking Statements:

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements regarding copper, gold and silver forecasts, the financial strength of the Company, estimates regarding timing of future development and production and statements concerning possible expansion opportunities for the Company. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis. Such assumptions include, without limitation, the price of and anticipated costs of recovery of, copper concentrate, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, interpretation and implications of drilling and geophysical results; estimates regarding timing of future capital expenditures and costs towards profitable commercial operations. Other factors that could cause actual results, developments or events to differ materially from those anticipated include, among others, increases/decreases in production; volatility in metals prices and demand; currency fluctuations; cash operating margins; cash operating cost per pound sold; costs per ton of ore; variances in ore grade or recovery rates from those assumed in mining plans; reserves and/or resources; the ability to successfully integrate acquired assets; operational risks inherent in mining or development activities and legislative factors relating to prices, taxes, royalties, land use, title and permits, importing and exporting of minerals and environmental protection. Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable security law.

Rambler Metals and Mining Plc

Group Financial Statements

Consolidated Income Statement and Comprehensive Income

For the Year Ended 31 December 2021

Rambler Metals and Mining Plc

Consolidated Statement of Financial Position

As at 31 December 2021

The consolidated financial statements were approved and authorised for issue by the Board and signed on their behalf by:

"Toby Bradbury" "Brad Mills"

____________________________ ____________________________

Toby Bradbury Brad Mills

Director and Chief Executive Officer Director and Chairman

Rambler Metals and Mining Plc

Consolidated Statement of Changes in Equity

Rambler Metals and Mining Plc

Consolidated Statement of Changes in Equity (Continued)

Rambler Metals and Mining Plc

Consolidated Statement of Cash Flows

For the Year Ended 31 December 2021

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements

1. Nature of operation and going concern

Rambler Metals and Mining Plc (the "Company") is a limited company incorporated and domiciled in United Kingdom whose shares are publicly traded. The registered office of the Company is located at 3 Sheen Road, Richmond Upon Thames, Surrey, United Kingdom. The principal activity of the Company and its subsidiaries (collectively "the Group") is the operation, development and exploration of the Ming Copper-Gold Mine ("Ming Mine") located in Baie Verte, Newfoundland and Labrador, Canada.

The Group's business activities, together with the factors likely to affect its future development, performance and position, its financial position, cash flows, liquidity position and borrowing facilities are set out in the Strategic Report. In addition, notes 20 and 28 to the consolidated financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

The Group incurred a net loss before tax of $21.9 million for the year ended 31 December 2021 (2020: $11.8 million). As at 31 December 2021, the Group had a working capital deficiency of $8.8 million (2020: $10.3 million). The Group's ability to continue operating in the normal course of business is dependent upon establishing sufficient operating cash flows from the Ming Mine, and to the extent required, through access to equity and debt markets and proceeds from the exercise of warrants. These factors together with the continued unpredictability of the impact of Covid-19 indicate the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

The Group continually reviews operational results, expenditures and additional financing opportunities in order to ensure adequate liquidity to support its growth strategy while increasing production levels at the Ming Mine. The consolidated financial statements have been prepared on a going concern basis which assumes that the Group will be able to realise its assets and settle its obligations in the normal course of business. Management believes that the Ming Mine will generate sufficient operating cash flows to support the day-to-day activities and future growth requirements of the business. If the production is not ramping up in line with forecasts or lower than forecast copper grade and commodity prices, the Group would be able to obtain additional funding through either equity or debt financing. For the year ended 31 December 2021, the Group successfully obtained debt financing of $18.8 million and equity financing of $18.3 million. Also, the Group completed a gold stream financing of $11.0 million in March 2022.

These financial statements do not give effect to any adjustments which would be necessary should the Group be unable to continue as a going concern and, therefore, be required to realise its assets and discharge its liabilities in other than the normal course of business and at amounts different than those reflected in the financial statements. Such adjustments could be material.

2. Significant accounting policies

(a) Statement of compliance 

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") and their interpretations issued by the International Accounting Standards Board ("IASB"), as adopted by the UK and with IFRS and their interpretations adopted by the IASB. There are no material differences on application to the Group. The consolidated financial statements have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The accounting policies applied are consistent with those adopted and disclosed in the Group financial statements for the year ended 31 December 2021.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(a) Statement of compliance (continue)

An amendment to IFRS 9 and certain other standards, Interest Rate Benchmark Reform and its Effect on Financial Reporting, was issued by the IASB on 27 August 2020 and became effective January 1, 2021. The Group has assessed the impact of the amendment on its adoption effective 1 January 2021 and determined it does not currently have a significant effect on the Company's financial statements.

The new or amended standards that are issued, but not yet effective, up to the date of issuance of the Group's consolidated financial statements are disclosed below. The Group intends to adopt theses new or amended standards, if applicable, when they become effective.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

• What is meant by a right to defer settlement

• That a right to defer must exist at the end of the reporting period

• That classification is unaffected by the likelihood that an entity will exercise its deferral right

• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice.

Reference to the Conceptual Framework - Amendments to IFRS 3

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The amendments are intended to replace a reference to the Framework for the Preparation and Presentation of Financial Statements, issued in 1989, with a reference to the Conceptual Framework for Financial Reporting issued in March 2018 without significantly changing its requirements.

The Board also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential 'day 2'gains or losses arising for liabilities and contingent liabilities that would be within the scope of IAS 37 or IFRIC 21 Levies, if incurred separately.

At the same time, the Board decided to clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Framework for the Preparation and Presentation of Financial Statements.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022 and apply prospectively.

Property, Plant and Equipment: Proceeds before Intended Use - Amendments to IAS 16

In May 2020, the IASB issued Property, Plant and Equipment - Proceeds before Intended Use, which prohibits entities deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(a) Statement of compliance (continue)

Onerous Contracts - Costs of Fulfilling a Contract - Amendments to IAS 37

In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a contract is onerous or loss-making.

The amendments apply a "directly related cost approach". The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.

The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The amendments are not expected to have a material impact on the Group.

IFRS 9 Financial Instruments - Fees in the '10 per cent' test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf. An entity applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted. The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment. The amendments are not expected to have a material impact on the Group.

Amendments to IAS 12, Income Taxes

Amendments to IAS 12, Income Taxes, specify how entities should account for deferred income taxes on transactions such as leases and decommissioning obligations. In specified circumstances, entities are exempt from recognizing deferred income taxes when they recognize assets or liabilities for the first time. The amendments clarify that the exemption does not apply to transactions such as leases and decommissioning obligations and that entities are required to recognize deferred income taxes on such transactions.

The amendment is effective for annual reporting periods beginning on or after 1 January 2023 and the Group is currently evaluating the impacts of adopting these amendments on its financial statements.

(b) Basis of preparation

The consolidated financial statements are presented in United States dollars ("US dollars" or "$"), rounded to the nearest thousand dollars, except the notes to the consolidated financial statements or when otherwise indicated. US dollars is used as the presentation currency in line with industry peers.

The Company has a functional currency of GB pounds and the majority of the Group's operations are carried out by its operating subsidiary which has a functional currency of Canadian dollars. Foreign operations are included in accordance with the policies set out in note 2(d). At 31 December 2021, the closing rate of exchange of CAD to US dollar was 0.7888 (2020: 0.7854), and US dollar to GB pound was 1.3477 (2020: 1.3651). The average rate of exchange of CAD to US dollar was 0.7539 (2020:0.7460), and US dollar to GB pound was 1.3002 (2020: 1.2830). 

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently by Group entities.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(c) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities controlled by the Group. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained.

Generally, there is a presumption that a majority of voting rights results in control. When the Group has less than a majority of the voting, or similar, rights of an investee, it considers all relevant facts and circumstances in assessing whether it has power over an investee. The relevant activities are those which significantly affect the subsidiary's returns. The ability to approve the operating and capital budget of a subsidiary and the ability to appoint key management personnel are decisions that demonstrate that the Group has the existing rights to direct the relevant activities of a subsidiary.

(ii) Transactions eliminated on consolidation 

Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.

(d) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

(ii) Translation into presentation currency

The assets and liabilities of the Group are translated to US dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of the Group are translated to US dollars at rates approximating to the foreign exchange rates ruling at the dates of the transactions.

(iii) Net investment in foreign operations 

Exchange differences arising from the translation of the net investment in foreign operations are taken to translation reserve. They are released into the statement of comprehensive income upon disposal.

(e) Property, plant and equipment

(i) Owned assets

Items of property, plant and equipment is stated at cost, net of accumulated depreciation and/or accumulated impairment losses. The cost of self-constructed assets includes the cost of materials, direct labour and the estimate of the costs of dismantling and removing the items and restoring the site on which they are located, where an obligation to incur such costs exists.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(e) Property, plant and equipment (continued)

(ii) Subsequent costs

The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part of such an item when that cost is incurred if it is probable that the future economic benefits embodied with the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the income statement as an expense as incurred.

(iii) Depreciation

Depreciation is charged to the income statement or capitalised as part of the exploration and evaluation costs or mineral property where appropriate, on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated. Depreciation on assets under construction does not commence until they are complete and available for use. The estimated useful lives are as follows:

· buildings 5 to 10 years

· plant and equipment - others 2 to 10 years

· plant and equipment - mill plant 23 years

· motor vehicles 3 years

· computer equipment 3 years

· fixtures, fittings and equipment 3 years

The estimated useful lives and residual values of the assets are considered annually and restated as required.

(f) Mineral property

Upon transfer of 'Exploration and evaluation costs' into 'Mineral property', all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised within 'Mineral property'. Development expenditure is net of proceeds from all sale of gold and copper concentrate extracted during the development phase and until commercial production is declared.

Mineral property is amortised on a unit of production basis. Future forecast capital expenditure is included in the unit of production amortisation calculation.

(g) Intangible assets

(i) Exploration and evaluation costs

These comprise costs directly incurred in exploration and evaluation. They are capitalised as intangible assets pending determination of the feasibility of the project. When the existence of economically recoverable reserves and the availability of finance are established, the related intangible assets are transferred to Mineral property and amortised over the life of the mine.

Impairment assessment is performed annually. Where a project is abandoned or is determined not to be economically viable, the related costs are written off.

The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to the natural resource sector. These include the extent to which the Group can establish economically recoverable reserves on its properties, the ability of the Group to obtain necessary financing to complete the development of such reserves and future profitable production or proceeds from the disposition thereof.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(g) Intangible assets (continued)

(ii) Impairment of exploration and evaluation costs

Impairment reviews for exploration and evaluation costs are carried out on a project by project basis, with each project representing a potential single cash generating unit. An impairment review is undertaken when indicators of impairment arise but typically when one of the following circumstances apply:

· unexpected geological occurrences that render the resource uneconomic;

· title to the asset is compromised;

· variations in metal prices that render the project uneconomic; and

· variations in the exchange rate for the currency of operation.

(h) Equity investments

Equity investments are recognised at fair value with changes in value recorded in other comprehensive income as they are not held for short-term profit-taking trading under the Company's business model. Subsequent to initial recognition these are stated at fair value. Movements in fair values are recognised in other comprehensive income. Fair values are based on prices quoted in an active market if such a market is available. If an active market is not available, the Company establishes the fair value of financial instruments by using a valuation technique, usually discounted cash flow analysis. When an investment is disposed, any cumulative gains and losses previously recognised in fair value reserve are transferred to Retained profits. 

(i) Inventory 

Stockpiled ore is recorded at the lower of production cost and net realisable value. Production costs include all direct costs plus an allocation of fixed costs associated with the mine site.

Operating supplies are valued at the lower of cost and net realisable value. Cost is determined on an average cost basis.

(j) Trade and other receivables

Trade and other receivables are generally stated at their cost less impairment losses. Receivables in respect of the sale of copper concentrate which contain an embedded derivative linking them to future commodity prices are measured at fair value through profit and loss and are treated as derivative financial assets or liabilities. Receivables with a short duration are not discounted.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(k) Financial instruments

(i) Initial recognition and subsequent measurement

Financial assets are classified, at initial recognition, and subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss. The classification of the financial assets at initial recognition that are debt instruments depends on the business model in which a financial asset is managed and its contractual cash flow characteristics. A financial asset is measured at fair value net of transaction costs that are directly attributable to its acquisition except for financial assets at fair value through profit or loss where transaction costs are expensed. All financial assets not classified and measured at amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss.

On initial recognition of an equity instrument that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income.

The Group's financial assets at amortised cost includes cash and cash equivalents, restricted cash, trade receivables, and other receivables. Derivative financial instruments are measured at fair value through profit or loss, and equity investments quoted in securities are measured at fair value through other comprehensive income.

Financial liabilities are classified, at initial recognition, and subsequently measured at amortised cost or fair value through profit or loss. The classification determines the method by which the financial liabilities are carried on the consolidated statement of financial position subsequent to inception and how changes in value are recorded.

The Group's financial liabilities measured at amortised cost includes trade payables, loan payables and other borrowings. Derivative liabilities consist of Gold Stream (note 24) and copper forward contract (note 26) and are measured at fair value through profit or loss. The Gold Stream is considered a financial liability as the Group purchases the payable gold from the market in order to repay Sandstorm based on actual production in the period (note 24).

(ii) Derecognition

A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired. A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

(iii) Impairment

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognised for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognised in the consolidated income statement for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortised cost decreases, the previously recognised impairment loss is reversed through the consolidated income statement to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognised.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Restricted cash (note 19) is not available for use by the Group and therefore is not considered highly liquid.

(m) Impairment of non-financial assets

The carrying amounts of the Group's assets (except deferred exploration and evaluation costs (see accounting policy (g)(ii)) and deferred tax assets (see accounting policy 2(t)), are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated (see accounting policy 2(m)(i)).

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

(i) Calculation of recoverable amount

The recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

(ii) Reversals of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(n) Convertible loans

Convertible loans are separated into liability and equity components based on the terms of the contract. On issuance of the convertible loans, the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the conversion option is not remeasured in subsequent years. Transaction costs are apportioned between the liability and equity components of the convertible loan, based on the allocation of proceeds to the liability and equity components when the instruments are initially recognised.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(o) Share Warrants

The Group accounts for its share warrants as equity at fair value as of the date of issuance on the Group's consolidated balance sheets and no further adjustments to their valuation are made. Management estimates the fair value of the warrants using option pricing models and assumptions that are based on the individual characteristics of the warrants or instruments on the valuation date, as well as assumptions for future financings, expected volatility, expected life, yield, and risk-free interest rate.

(p) Leases

The Group assesses whether a contract is or contains a lease, at inception of a contract. A right-of-use asset ("ROU asset") and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, are recognised at the commencement of the lease, with the following exceptions: (a) the total lease term is less than or equal to 12 months, or (b) leases of low value. The payments for such leases are recognised in the consolidated income statement on a straight-line basis over the lease term.

The ROU asset is initially measured based on the present value of lease payments, lease payments made at or before the commencement day, and any initial direct costs. They are subsequently measured at cost less accumulated amortisation and impairment losses. The ROU asset is depreciated over the shorter of the lease term

or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator of impairment.

The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. Lease payments include fixed payments less any lease incentives, and any variable lease payments where variability depends on an index or rate. When the lease contains an extension or purchase option that the Group considers reasonably certain to be exercised, the cost of the option is included in the lease payments.

ROU assets are included in plant and equipment, and the lease liability is included in loans and borrowing in the consolidated statement of financial position. Variable lease payments that do not depend on an index or rate are not included in the measurement of the ROU asset and lease liability. The related payments (if any) are recognised as an expense in the period in which the triggering event occurs and are included in the consolidated income statement.

(q) Provisions

The Group records the present value of estimated costs of legal and constructive obligations required to restore mining and other operations in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and tailings dams, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and revegetation of affected areas.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(r) Revenue recognition

The Group is engaged principally in sales of metal concentrate that are stated at their invoiced amount which is net of treatment and refining charges. Revenue for sale of commodity is recorded when control of the commodity passes to the customer. Sales of commodities are provisionally priced such that the price is not settled until a predetermined future date and is based on the market price at that time. These sales are marked to market at each reporting date using the forward price for the period equivalent to that outlined in the contract. Revenue on provisionally priced sales is recognised at the forward market price when control passes to the customer and is classified as revenue from contracts with customers. Subsequent mark-to-market adjustments are recognised in revenue from other sources.

Revenues from the sale of material by-products are recognised within revenue at the point control passes. Where a by-product is not regarded as significant, revenue may be credited against the cost of sales.

(s) Borrowing costs

Borrowing costs are recognised in the income statement where they do not meet the criteria for capitalisation. Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised.

(t) Equity settled share based payments

All share based payments are recognised in the financial statements.

All goods and services received in exchange for the grant of any share-based remuneration are measured at their fair values. Fair values of employee services are determined indirectly by reference to the fair value of the share options awarded. Their value is appraised at the grant dates and excludes the impact of non-market vesting conditions.

All share-based remuneration is ultimately recognised as an expense in the income statement with a corresponding credit to the accumulated losses in the balance sheet.

If vesting periods apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior periods if the number of share options ultimately exercised is different to that estimated on vesting. Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital.

(u) Income tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(u) Income tax (continued)

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for:

· goodwill not deductible for tax purposes,

· the initial recognition of assets or liabilities that affect neither accounting nor taxable profit,

· and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Mining taxes and royalties are treated and disclosed as current and deferred taxes if they have the characteristics of an income tax.

(v) Fair value measurement

A number of assets and liabilities included in the Group's financial statements require measurement at, and/or disclosure of, fair value.

The fair value measurement of the Group's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):

- Level 1: Quoted prices in active markets for identical items (unadjusted)

- Level 2: Observable direct or indirect inputs other than Level 1 inputs

- Level 3: Unobservable inputs (i.e. not derived from market data)

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur. The Group measures a number of items at fair value: 

- Derivative financial asset - Level 2

- Equity investments - Level 1

- Gold Stream - Level 3

- Copper forward contract - Level 2

For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

2. Significant accounting policies (continued)

(w) Government grants and subsidies

Government grants and subsidies are recognised when the Group has complied with the conditions attached to the agreement and obtained reasonable assurance that revenue will be received. The grant is recognised as other income in income statement on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the assistance are intended to compensate.

(x) Restricted share unit

The Group grants restricted share units (the "RSUs") to officers and employees, which vest in three equal instalments, on grant dates and each of the first and second anniversary dates following the respective grant dates. Unvested RSUs are subject to forfeiture if the holder's employment with the Group terminates unless exception is made by the board of directors. Compensation cost for all RSUs expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted share units is determined based on the number of shares granted and the quoted price of the Group's common stock on the date of grant. Such a value is recognised as expense over the service period, net of estimated forfeitures, using the accelerated method.

3. Critical judgements and accounting estimates

(a) Critical judgements in applying the Group's accounting policies

The details of the Group's accounting policies are presented in accordance with International Financial Reporting Standards as set out in note 2 to the financial statements. The preparation of financial statements in conformity with IFRS requires management to make judgements in applying the Group's accounting policies,

Going concern

Judgements are necessary in applying the going concern basis in the preparation of the Group's financial statements in respect of the Group's ability to continue as a going concern for a period of at least 12 months from the date of signing the current period's report (see note 1).

Deferred tax

The Group has incurred losses which will be available for offset against future taxable profits and one of the subsidiaries has tax credits available to offset against future tax liabilities. Following the declaration of commercial production it has been concluded that the Group has sufficient evidence of future taxable profits to justify the recognition of a deferred tax asset. If future taxable profits prove to be insufficient the Group could be required to reduce the deferred tax asset which would result in a reduction in the Group's earnings and net assets.

(b) Key sources of estimation uncertainty

Mineral Property, Property, Plant and Equipment and Exploration and Evaluation Costs 

Management considers these assets for impairment at least annually with reference to the following indicators:

· Reviewing the financial performance compared to forecast;

· Reviewing the key production and milling statistics to forecast;

· Reviewing the commodity price forecasts against assumptions in the previous impairment model; and

· Considering any significant changes to the cost of capital.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

3. Critical judgements and accounting estimates (continued)

(b) Key sources of estimation uncertainty (continued)

Mineral Property, Property, Plant and Equipment and Exploration and Evaluation Costs (continued)

The Group uses estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following estimates are considered by management to be the most critical for investors to understand some of the processes and reasoning that go into the preparation of the Group's financial statements, providing some insight also to uncertainties that could impact the Group's financial results.

The Company assessed whether there are any indicators of impairment in respect of mineral property, property, plant and equipment and exploration and evaluation costs totalling $81.0 million (2020: $66.0 million). In making this assessment they have considered the Group's business plan which includes resource estimates, future processing capacity, future exchange rates, the forward market and longer-term price outlook for copper and gold and assumptions regarding weighted average cost of capital. The Group continues to invest in exploration which has the potential to extend mine life and increase the rate of production. Resource estimates have been based on the most recently filed NI43-101 report and its opportunities economic model which includes resource estimates without conversion of its inferred resources. Management's estimates of these factors are subject to risk and uncertainties affecting the recoverability of the Group's mineral property and exploration and evaluation costs.

Amortisation rate for Property, Plant and Equipment and Depletion rate for Mineral Property

Amortisation expenses are allocated based on the estimated useful life of the asset. Depletion expenses of the Mineral Property is calculated on a unit of production method expected to amortise the cost including future forecast capital expenditure over the expected life of the mine based on the tonnes of ore expected to be extracted. Should the amortization rates and depletion rates differ from the initial estimate, an adjustment would be made in the consolidated income statement on a prospective basis.

Closure costs

The Group has an obligation to restore its properties after the minerals have been mined from the site and has estimated the costs necessary to comply with existing reclamation standards. These estimates are recorded as a liability at their fair values in the periods in which they occur. If the estimate of reclamation costs proves to be inaccurate, the Group could be required to increase the provision for site closure and reclamation costs, which would increase the amount of future reclamation expense, resulting in a reduction in the Group's earnings and net assets.

Share-based payments

The Group calculates the cost of share based payments using the Black-Scholes model. Inputs into the model in respect of the expected option/warrant life and the volatility are subject to management estimate and any changes to these estimates may have a significant effect on the cost. The assumptions used in calculating the cost of share based payments are explained in notes 8 and 20.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

3. Critical judgements and accounting estimates (continued)

(b) Key sources of estimation uncertainty (continued)

Gold Stream

The Group calculates the movement on the fair value of the Gold Stream liability based on estimates of future cash flows arising from the sale of payable gold (see note 24). The cash flows will be dependent on the production of gold and its selling price at the time of delivery which have been estimated in line with the mine plan, future prices of gold and reserve estimates. Management's estimates of these factors are subject to risk and uncertainties affecting the amount of the fair value movement. Any changes to these estimates may result in a significantly different fair value movement recognised in the income statement.

4. Operating segments

The Group's operations relate to the exploration for and development of mineral deposits with support provided from the UK and as such the Group has only one operating segment.

Information about geographical areas

5. Revenue

Information about major customers

All our revenue is from one customer (2021: one customer).

6. Operating loss

The operating loss is after charging:

The Audit Committee reviews the nature and extent of non-audit services to ensure that independence is maintained.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

7. Other income (expenses)

1During the year the Group received CEWS of $3,584,000 out of which $1,547,000 was credited to Mineral Properties and balance $2,037,000 was recognised as other income.

8. Personnel expenses

Salary costs of $24,000 (2020: $14,000) were capitalised as part of property, plant and equipment, and $4,881,000 (2020: $2,111,000) were capitalised as part of the mineral properties during the year.

Number of employees

The average number of employees during the period was as follows:

During the period, the Group granted share options and RSUs to key personnel of the Group. Refer to note 20 for details.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

9. Net finance costs (income)

10. Income tax

Recognised in the income statement

Reconciliation of effective tax rate

A reconciliation between the tax credit and the product of the Group's accounting loss multiplied by the Group's statutory income tax rate is as follows:

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

10. Income tax (continued)

Recognised in other comprehensive income

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

10. Income tax (continued)

Movement in recognised deferred tax assets and liabilities

The Group has incurred losses which will be available for offset against future taxable profits and one of the subsidiaries has tax credits available to offset against future tax liabilities. The Group considers that it has sufficient evidence of future taxable profits to justify the recognition of a deferred tax asset of $29.9 million (2020: $22.6 million).

The Group has recognised a deferred tax asset in respect of mining tax of $0.9 million (2020: $1.2 million) during the year bringing the balance to $3.7 million (2020: recognised deferred tax asset of $2.8 million). The Group considers that with recent increases in the market outlook for copper prices and ramp up in production from 2022 onward, there is sufficient evidence of future mining profits to justify the recognition of this asset.

Rambler Metals and Mining Plc

Notes to the Consolidated Financial Statements (Continued)

11. Intangible assets