Rockfire Regulatory News (ROCK)

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"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

22 May 2019

Rockfire Resources plc

("ROCK", "Rockfire" or "the Company")

Annual Results for the year ended 31 December 2018

Rockfire Resources plc (LON: ROCK), the gold and base metal-focused resource company, announces its final results for the year ended 31 December 2018.

For further information on the Company, please visit www.rockfireresources.com or contact the following: 

Chairman's Statement

I take pleasure in presenting the Annual Report for Rockfire Resources plc ("Rockfire" or "the Group") for the financial year ended 31 December 2018. The past year has seen many changes for the Group, including a material change in the Board of Directors. The Group's exploration activities in Queensland have been determined, well-targeted and most importantly, successful. Rockfire has accumulated an additional 300 square kilometres of prospective ground-holding in the immediate vicinity of our Lighthouse tenement in Queensland and our projects in Papua New Guinea ("PNG") have undergone reappraisal, resulting in the relinquishment of two exploration licenses on the island of New Britain.

Rockfire now holds six fully-permitted exploration permit for minerals (EPM's) in Queensland and retains only the single 'Tripela' exploration license in PNG, which is pending Ministerial approval for renewal. The Group has excellent tenure over a variety of mineralizing styles ranging from high-level epithermal, mesothermal breccia/vein systems and large-scale porphyry copper targets. Between the prospects, all owned 100% by Rockfire, both open cut and underground extraction potential exists, with opportunity for near-term discovery success.

The gold and copper short to medium-term price outlook remains positive, with price predictions for both commodities varying wildly, particularly for gold. Your Board doesn't attempt to predict the price of gold or copper but remains focused on the delivery of shareholder value through drill-bit discovery and high-growth acquisition opportunities. Throughout the last 12 months, our technical team has completed detailed assessment of nearly two dozen projects throughout the world, however only Copper Dome has proven suitable to meet the very strict internal criteria for the Company's growth ambitions.

The revised Board includes the addition of myself as your new Chairman and Ian Staunton, Patrick Elliott and Nicholas Walley as a Non-executive Directors. On 7 June 2018, the Group announced that Michael Somerset-Leeke, Hugh McCullough and Kieran Harrington had resigned from the Board. All three retiring Directors had an association with the Group since its admission to trading on AIM in March 2012. In my new role as Chairman, I would like to reiterate how grateful the Group is for their contributions during their time leading the Group. I would also like to personally thank Michael for his continuing support in his capacity as one of our largest shareholders.

In August 2018, the Group raised £405,000 through a placement of ordinary shares. This, together with funds raised nearly 12-months prior, Rockfire completed an aggressive exploration program which is detailed in the Review of Operations. In summary, the Group completed:

· Four drilling campaigns at Double Event, Plateau and Marengo projects;

· A geophysical appraisal and target delineation at Copperhead;

· Two geophysical campaigns at Marengo for target delineation;

· Received approval for the Kookaburra exploration permit;

· Ground acquisitions to Rockfire's portfolio immediately surrounding Mt Leyshon Gold Mine, and;

· An option agreement to acquire the potentially large-scale Copper Dome Project.

Annual General Meeting and recommendation

The year ahead is looking particularly prosperous, with much of the administrative matters now complete and having access to so much highly-prospective ground. We welcome you to take the journey with us as we build Rockfire through exploration success and quality asset acquisition.

At a General Meeting of Rockfire on 18 February 2019, the Board received approval from shareholders for discretion to issue £150,000 of Rockfire shares for potential acquisitions and additional working capital if required. The balance of this discretionary issue amount has not been used and lapses on 30 June 2019. Your Board wishes, through Resolutions 7 and 8, to replace and increase this authority to £250,000. The purpose of this is for potential high-impact acquisitions, as well as further working capital as required. Your Board remains committed to prudent use of this authority.

The Board considers that the resolutions to be proposed at the Annual General Meeting are in the best interests of the Company and the Group as a whole and its unanimous recommendation is that shareholders support these proposals as the Directors intend to do in respect of their own holdings. Further details regarding the location and timing of the Company's forthcoming Annual General Meeting will be provided shortly.

Gordon Hart

22 May 2019

Directors' Biographies

Gordon Hart Chairman

Gordon has over 35 years of experience in the equity capital and financial advisory markets. He has spent the last 12 years as Managing Director of Venture Group Equities Pty. Ltd, where he advised on transactions involving over US$300 million of funding. He is a Graduate of the Australian Institute of Company Directors and has a Graduate Diploma in Corporate Governance. Gordon has a wealth of corporate knowledge, equities and finance expertise and emerging company experience to the Group, having developed an expertise in emerging resource and technology companies which will be invaluable in assisting Rockfire's future development.

David William Price CEO and Managing Director

David is an experienced geologist and senior executive with +30 years of experience in the global mining industry and has over 20 years' experience in securing funding for exploration projects. David holds the highest category of membership as a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM) and is a Competent Person for Mineral Exploration under the guidelines of the JORC Code. David has previously held senior roles in both listed and private resource companies including CEO of Golden Tiger Mining Limited, CEO of Convergent Minerals Limited and Managing Director of Millennium Mining Limited.

Ian Staunton Non-executive Director

Ian has worked in the City of London for more than 40 years, in roles including Audit Partner, Corporate Finance Partner and Equity Partner in various accounting firms. Ian is a qualified Chartered Accountant, a Fellow of the Institute of Chartered Accountants in England & Wales and has a Diploma in Corporate Finance. Having worked as Equity Partner and Head of Capital Markets for Chantrey Vellacott DFK LLP and a Senior Equity Partner for Moore Stephens during the last 25 years, Ian provides Rockfire with a strong level of accounting and audit experience. Such high-level accounting, audit and compliance capability fulfils Rockfire's ambition to broaden its corporate skill base and to bring relevant experience from London onto the Board.

Patrick Elliott Non-executive Director

Pat Elliott is an experienced resources and industrial company director. In a career spanning over 45 years, he has held senior executive positions with Consolidated Gold Fields (Australia) Limited and Morgan Grenfell Australia Limited. Pat has an MBA in Mineral Economics from Macquarie University, and a B Comm from the University of New South Wales. He has extensive management experience in a range of fields including manufacturing, mineral exploration and oil and gas exploration. Pat is currently Executive Chairman of Argonaut Resources NL (an ASX-listed copper explorer), Cap-XX Limited and Tamboran Resources Ltd (an unlisted Australian oil and gas explorer). He is also a Non-Executive Director of Ioneer Limited (formerly Global Geoscience, an ASX-listed lithium/boron developer of the Rhyolite Ridge project in Nevada, USA) and Kirrama Resources Limited (an unlisted explorer and developer of chromite and manganese projects in Madagascar).

Nicholas Walley Non-executive Director

Nicholas Walley has a business background spanning multiple industries including agriculture, property, construction, plant hire, food and beverage packaging, leisure and charitable work. Importantly, Nicholas has critical skills in logistics, infrastructure, organisational management and sales. The Board believes Mr Walley's personal success in business and his knowledge and experience with the UK legal requirements will benefit Rockfire in its growth plans.

Strategic report

The Board of Rockfire has a deliberate and determined strategy to achieve growth of the Group and therefore, shareholder value.

Through its subsidiaries (together, "the Group"), Rockfire holds six exploration permit for minerals ("EPM's") in Queensland and one tenement in PNG which awaits approval by the Minister for renewal. The Queensland assets particularly, have the potential for discovery and Rockfire has been and will continue to be aggressive explorers to achieve exploration success. In addition, the Group maintains rigorous and persistent data appraisal of potential new projects which could be acquired by Rockfire to further enhance and accelerate growth of the Group.

Throughout the last 12 months, Rockfire has achieved the following milestones:

· Announced drilling results of the first eleven RC drill holes (2,111m of drilling) at the Plateau Prospect, which succeeded in extending gold and silver mineralization in most holes;

· Applied for and subsequently received granting of the New Leyshon exploration license, which immediately surrounds a deposit of 2.5m ounces of gold and 2.3m ounces of silver;

· Appraised, targeted and subsequently drilled the first fourteen RC drill holes (714m of drilling) at Double Event, in which all holes encountered near-surface, potentially mineable gold widths and grades;

· Received granting of the Monarch exploration license near Charters Towers, which has produced historically at an average grade of +45g/t Au and has over 48 historical gold diggings;

· Identified, mapped and sampled two new intrusion-related systems at Marengo and completed two phases of Induced Polarisation geophysics.

· Subsequently drilled the first ten RC drill holes (940m of drilling) at Marengo, which resulted in the down-grading of one target and the enhancement of the second target, with 4m @ 2.1g/t Au intersected only 11m from surface;

· Identified and modelled an historical resource estimate at Copperhead, which provides a material stepping-stone for the Group to build additional resources of copper;

· Applied for and subsequently received granting of the Kookaburra exploration license, which includes the western extension of the Double Event mineralized structures, as well as the Kookaburra Prospect which has 3m @ 5.13g/t Au in previous drilling;

· Identified and remodelled historical Induced polarisation geophysics at Copperhead which extends prospectivity for copper mineralization towards the northwest of previous drilling;

· Completed a second phase of drilling with twelve RC holes (605m of drilling) at Double Event, with all holes intersecting gold, including 3m @ 10.04g/t Au which was intersected only 27m from surface;

· Signed an option to acquire the Copper Dome Prospect, which is a copper porphyry only 50km from Copperhead. Previous drilling has intersected 15.24m @ 0.88% Cu (including 4.58m @ 2.28% Cu), close to surface;

· Identified and appraised the Native Bee Prospect within the Kookaburra license, which lies 18km from an operating gold processing plant. Previous drilling at Native Bee intersected 16m @ 2.14g/t Au only 35m below surface;

· Completed detailed data appraisal of twenty-three exploration and mining projects globally for potential acquisition. Rockfire has a strict criterion for growth and only one project to date (Copper Dome) has met the criteria set by management.

More detailed information is provided below for each of the prospects owned 100% by Rockfire.

COPPER DOME PROJECT

On 26th November 2018, Rockfire announced that it had entered into an option to acquire the Copper Dome porphyry copper project in Queensland. This project is an excellent fit for the Rockfire portfolio and is situated only 50km from the Copperhead Project. Under its historical name of "Mt Leslie", Copper Dome is listed in the "Global Mineral Resource Assessment", published in 2010 by the US Geological Survey and, in the event the option is exercised, would potentially add material value to Rockfire's porphyry copper portfolio.

The surface expression of copper mineralisation at Copper Dome is over 2km long and 1km wide and the prospect is vastly under-explored. In 1972, Australian Selection Pty. Ltd. ("ASP") drilled three percussion drill holes and six diamond drill holes, totalling 1,297 metres. All the drill holes were drilled vertically and all holes intersected geological/alteration features which the Directors of Rockfire believe could be indicative of a large-scale porphyry deposit. Previous diamond drilling intersected 15m @ 0.9 % Cu (including 4.6m @ 2.3 % Cu), 12m @ 0.6 % Cu (including 3m @ 1.2 % Cu), and 24m @ 0.3 % Cu (including 7m @ 0.4% Cu). Diamond hole QML004 also intersected 51.20m @ 0.20 g/t gold.

Many intervals of visible copper mineralisation in the core and chips remain un-assayed for copper and gold and only sporadic gold analysis has been done, with gold peaking at 1.86 g/t Au in drilling. All previous drilling is vertical, which provides opportunity that mineralisation hosted within vertical to sub-vertical fracture/vein networks may have been missed by previous explorers. Copper mineralisation outcrops at surface, providing low-cost, near-surface exploration, resulting in lower anticipated exploration costs.

THE LIGHTHOUSE TENEMENT

To date, Rockfire has drilled eleven holes at the Plateau Gold Prospect, with results including 22m @ 1.86g/t Au + 22g/t Ag (including 12m @ 2.45g/t Au), 10m @ 1.37g/t Au + 12.4g/t Ag (including 2m @ 4.43g/t Au), 18m @ 1.0g/t Au + 10.5g/t Ag, 10m @ 1.9g/t Au and 9g/t Ag (including 4m @ 3.65g/t Au) and 20m @ 0.50g/t Au (including 9m @ 0.9g/t Au). In addition to this, significant base metal and associated mineralisation was encountered in this drilling including 16m @ 1.1% Zn, 40m @ 3g/t Ag, 43m @ 4g/t Ag, 24m @ 0.5% Zn, 43m @ 2g/t Ag and 20m @ 0.2% Cu from surface.

Drill hole BPL006 returned 20m @ 0.2% Cu from surface, which is the broadest elevated copper zone intersected to date at Plateau. This broad zone of elevated copper in the eastern-most hole sits on the western edge of a surface copper geochemical anomaly which is continuous between Plateau and Split Rock (2.5km north of Plateau). At Split Rock, which lies inside the Lighthouse tenement, historical surface rock samples collected in 2011 returned up to 11.36% Cu, 3.5 g/t Au, 38.1 g/t Ag and 0.4% Co.

Split Rock is a significant surface copper anomaly (2km x 1.5km), which represents another prospective target for Rockfire. This prospect will be included in an Induced polarisation (IP) geophysical survey being planned. This survey will assist in determining if Plateau and Split Rock form part of a much larger mineralised system, which could potentially be connected at depth.

BPL007 and BPL008 were both drilled into the main line of mineralisation with the aim of filling gaps in the historical drilling pattern, close to surface. These holes have confirmed the validity of historical drilling results (from 30 years ago) and have also successfully filled gaps in the drilling density to assist in the aim of delivering a maiden resource.

Two holes (BPL009 and BPL010) were designed as pure exploration holes and were drilled south of the main lode of mineralisation (250m and 650m respectively) with the aim of testing the prospectivity of regional structures. Hole BPL009 drill-tested a NE-striking, semi-regional fault which was barren of mineralisation, as was hole BPL010, which tested a remote, circular magnetic feature.

The final hole (BPL011) was a "scissor hole" drilled north of the main line of mineralisation to test for possible repetitions of mineralisation to the north and to drill back towards the mineralisation and parallel to the mineralisation to ensure holes were targeted in the correct orientation. BPL011 concluded that there is no repetition to the north and confirmed drilling orientation and additionally intersected 1m @ 1g/t Au at 244m downhole.

Drilling results showed significant intersections of gold and base metals for many of the holes drilled.

EPM 25715 - Marengo Project, Queensland

Marengo is a low-sulphidation, epithermal system which saw a gold rush develop during the late 1870's. The project hosts thirty-seven gold diggings within multiple, hornfelsed intrusive events displaying varied composition, alteration and mineralisation. Hand-picked production is recorded as averaging 2oz/t Au (60g/t Au). Historical rock sampling returned highly anomalous results including 17g/t Au, 78g/t Ag and 2.16% Cu. Costeaning by previous explorers returned 12m @ 6.10g/t Au and thirty-nine (39) drill holes have been drilled by previous explorers.

Chalcedonic silica, banded quartz/sulphide epithermal veins and hydrothermal breccias have all been identified and particularly around the One Mile Mountain prospect. Little modern exploration has been undertaken and BGM considers the potential for discovery to be very high at Marengo.

The first company to take out a lease which covered the Marengo Goldfield was St Joseph Phelps Dodge in 1968. Phelps collected 2,200 stream sediment samples throughout the region and completed initial geological mapping. Carpentaria Gold took out the licence over Marengo between 1970 and 1972, followed by Central Coast Exploration, which formed a JV over the licence in 1972 but withdrew shortly after. Esso Exploration acquired the licence in 1975 with little work being completed and AOG Minerals took over the licence in 1976. 

Drilling results showing significant intersections of gold, silver, zinc and copper for each hole drilled.

At the Double Event Gold Prospect, drilling by Battle Mountain Gold Company intersected 2m @ 13.2g/t Au, 2m @ 4.1g/t Au, 1m @ 3.3g/t Au, 2m @ 2,7g/t Au and 1m @ 3.9g/t Au. Subsequent exploration by Rockfire in 2018 to infill the drilling density resulted in an enhancement of the gold lode after drilling intersected 3m @ 2.1g/t Au, 2m @ 4.0g/t Au, 1m @ 4.8g/t Au and 1m @ 6.0g/t Au. Each of these intersections lies within 25m from the surface.

Assay results for all 14 holes drilled at Double Event in June 2018

Battle Mountain also drilled a second section of the 4.5km strike at Double Event, with poor results including 2m @ 0.36g/t Au, 6m @ 0.1g/t Au, 1m @ 0.6g/t Au and a single stand-out intersection of 2m @ 4.65g/t Au. Geological and structural mapping by Rockfire in 2018, along with high-resolution photogrammetry and ground magnetics led the Rockfire geologists to believe the holes drilled by Battle Mountain had been drilled too far to the south and had missed the gold mineralisation. After repositioning the drilling rig further to the north, subsequent drilling by Rockfire intersected 3m @ 10.04g/t Au, 1m @ 5.09g/t Au, 2m @ 3.17g/t Au and 3m @ 2.94g/t Au. These results prove that careful geological observations and tenacity by our geologists are essential in finding gold deposits.

Assay results above 0.1g/t Au for 12 holes drilled at Double Event in November 2018

COPPERHEAD PROJECT

Copperhead is an undeveloped, large-scale porphyry copper target located close to the central Queensland coast and lies within a belt of porphyry copper deposits.

Five diamond drill holes have been drilled at Copperhead by previous explorers, with all five holes encountering visible chalcopyrite and pyrite throughout each hole. Two of these holes are 300m deep, indicating a potentially large mineralised target.

Under its historical name of "Julivon Creek", Copperhead is included in the Global Mineral Resource Assessment by the United States Geological Society (USGS) in its "Porphyry Copper Assessment of Eastern Australia" Technical Paper dated 2014. Copper mineralisation remains open in all directions.

Auger sampling at Copperhead has delineated a 3km x 2km copper anomaly. This zone contains a 2,800m x 800m core, high-grade anomaly, which has a peak result of 0.22% Cu. Subsequent drilling was focussed at the western section of the auger anomaly.

Copperhead was discovered in January 1970, when Cyclone Ada caused severe flooding in the region and the heavy rains washed out dense undergrowth from the tributaries of the Andromache River.

Subsequent work showed that Julivon Creek (the stream draining Copperhead) had a large number of mineralised (chalcopyrite, pyrite, molybdenum) shears for at least half its length. In 1972, Carpentaria Exploration drilled 5 drill holes, with each hole intersecting visible copper minerals.

MARENGO

The Marengo Goldfield was the subject of a gold rush during the late 1870's and the project hosts thirty-seven gold diggings. Limited modern exploration has been undertaken and Rockfire management considers the potential for discovery to be very high. Hand-picked production is recorded as averaging 2oz/t Au (60g/t Au).

No field work has been completed in the Marengo area since 1994 and the bulk of EPM 25715 is vastly under-explored. Potential exists to identify structurally-controlled, intrusion-related copper and gold deposits occurring at the margins of the diorites and granodiorites mapped within the tenement. The proximity of Marengo to a large, regional gravity "low" provides an outstanding target for high-grade vein and breccia-hosted gold/copper deposits originating from the interaction of this vast intrusive complex with the surrounding rocks.

Rockfire completed rock sampling and structural mapping at the One Mile Mountain and Homeward Bound Prospects which form part of the Marengo Gold Project. Sixty-nine (69) surface rock samples were collected, with the maximum assays being 59.4g/t Au, 17.7% Cu and 342g/t Ag. Twenty-eight percent of rocks returned assays above 1.0g/t Au, with an overall average grade of all rocks collected being 3.6g/t Au.

Mapping and sampling also discovered a new area known as Bee Creek. This new target hosts un-mapped and unexplored old mining shafts, with significant copper up to 17.7% and silver to 342g/t Ag.

A total of 20 line km of gradient array and 1.5 line km of dipole-dipole geophysics were completed by geophysical contractor Fender Geophysics with a focus on the One Mile Mountain and Homeward Bound Prospects within the Marengo Project.

The standout anomalies from the survey were at One Mile Mountain, where a significant anomalous zone of 400m x 200m was defined. Previous rockchip sampling at One Mile Mountain returned 30.4 g/t Au, 21 g/t Au and 7.5 g/t Au. Anomalous resistive responses were also recorded at the Homeward Bound Prospect.

Additionally, one line of dipole-dipole IP / resistivity was completed across the gradient array anomalies at One Mile Mountain, which confirmed the zones and highlighted an emerging chargeability high at around 80m depth.

Twelve reverse circulation drill holes were drilled at One Mile Mountain and Homeward Bound to test the buried geophysical targets. From this drilling, the best results included 1m @ 7.8 g/t Au (3 g/t Ag) from 11m vertical, 1m @ 1.9 g/t Au (1 g/t Ag) from 27m vertical, 1m @ 1.2 g/t Au (1 g/t Ag) from 18m vertical and 1m @ 1.6 g/t Au from 33m vertical.

At Homeward Bound, the drilling only tested beneath one of the old workings and intersected gold (+/- copper)-bearing veins at very shallow depths. The Marengo licence incorporates an entire goldfield and future work at Marengo will focus on the numerous historical workings, including more than 30 historical prospects within a 5 square km area.

The blind, chargeable geophysical anomaly at One Mile Mountain was proven not to host significant gold or copper. The induced polarisation geophysics modelled 1-2% sulphides, which is precisely what was intersected at depth. Unfortunately, these sulphides did not host copper or gold.

Table showing results above 0.1 g/t Au, 1000ppm Cu or 1.0 g/t Ag from 480 samples in the 2018 drilling at Marengo.

THE KOOKABURRA TENEMENT

The Kookaburra tenement borders the Group's Lighthouse Project and comprises five separate areas, including Kookaburra, Native Bee, the Brigalow Alluvial Goldfield immediately north of the Lower Lighthouse prospect and the western strike extension of the Double Event Prospect.

More than a dozen historical workings prospective for gold and copper occur inside the tenement including, Upper Lighthouse, Lower Lighthouse (northern lode), Spur, Cameron, Cornishman, Crowes, Native Bee, Kookaburra, Hill 308, Buckles North, the Brigalow alluvial goldfield, Bluff East, Brook, Coolan South, Coolan North Prospects, along with an additional 22 un-named, historical gold workings.

The Kookaburra Prospect has been drilled by previous explorers and robust, high-grade intercepts of gold have been encountered including 12m @ 2.72g/t Au and 3m @ 5.13 g/t Au close to surface.

At the Native Bee Prospect, outstanding past drilling results provides Rockfire with potential to delineate a large gold inventory, adding to the excellent potential offered by the nearby Plateau and Double Event Prospects (6 miles and 18 miles respectively), both within the adjacent "Lighthouse" licence. Drilling in 1990 returned intercepts of 8 m @ 2.18 g/t Au (including 3m @ 5.13 g/t Au) from 26m vertical depth and 16 m @ 2.14 g/t Au from 35m vertical depth.

The exploration potential at Native Bee is considered very high. The Group is targeting a medium- to large-scale, near surface gold resource. High-temperature fluid pathways have already been identified by Rockfire's technical team.

Key Performance Indicators and Risk Management

Key performance indicators

The Board monitors KPIs which it considers appropriate for a group at Rockfire's stage of development.

As a mineral exploration business, an important factor is a steadily improving market perception of the progress and value of the business leading to an improving share price, continued support from shareholders and therefore the ability to raise new equity capital at increasing prices, thus minimising dilution for those early investors who bore significant risk.

The KPIs for the Group are as follows:

Financial KPIs

Shareholder return - the performance of the share price.

The Company was admitted to AIM in March 2012 at a share price of £0.44 and issued further shares in February 2013 at £0.80, in June 2014 at £0.20, in December 2015 at £0.01, in May 2016 at £0.03, in October 2016 at £0.01 per share, October 2017 at £0.0115 per share, in August 2018 at £0.0135 per share and in January 2019 at £0.0085 per share. The share price at 21 May 2019 was £0.0075.

Exploration expenditure - funding and development costs.

The availability of sufficient cash to facilitate continued investment and funding of exploration programmes is essential. The Group monitors the availability of sufficient cash to fund exploration programmes. At 31 December 2018 the Group had cash and cash equivalents of £294,596 (2017: £1,257,194).

Non financial KPIs

Environment management - the Group has environmental policies in place.

The Group is aware of the potential impact that its operations may have on the environment. The Group ensures that, at a minimum, its subsidiaries comply with the local regulatory requirements and industry standard principles for environmental and social risk management. In Australia, the Group has statutory environmental permits granted by the Queensland Government.

Performance against these environmental policies is continuously monitored. The Directors consider that this has served to minimise any negative impact of current exploration activities on the environment.

Operational - exploration success and the addition of quality exploration projects.

Exploration activity during the year has focused heavily on the Lighthouse and Marengo tenements. The Directors are encouraged by the prospectivity of the Group's other exploration licences and work is expected to be done on each of the tenements throughout the year ahead. The Group, through its 100%-owned subsidiary has accumulated exploration ground in Queensland to increase its exposure to highly prospective ground in close proximity to the Lighthouse tenement and also to ensure a "buffer zone" to protect the Lighthouse tenement from rival exploration companies.

Risk management

The Directors consider that assessing and monitoring the inherent risks in the exploration business, as well as other financial risks, is crucial for the success of the Group. Risk assessment is essential in the Group's planning processes. The Board regularly reviews the performance of projects against plans and forecasts. Further detail on management of financial risk is set out in note 15.

Principal risks and uncertainties

The management of the business and the execution of the Board's strategy are subject to a number of risks:

· the success of mineral exploration projects is, by their nature, inherently uncertain, and the availability of new information can significantly change estimates of mineral resources;

· the risk of sovereign, social or political uncertainty in Australia;

· the viability of exploration projects is largely driven by commodity prices and commodity prices can be subject to volatile fluctuations;

· Liquidity, currency and interest rate variations represent risks associated with a group operating in several jurisdictions

The principal risks and the measures taken by the Group in order to mitigate these risks are set out in more detail below.

Exploration and development risk

The Group's business operations are subject to risks and hazards inherent in the exploration industry. The exploration for and the development of mineral deposits involves significant risks which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, it is impossible to ensure that the Group's current exploration programmes will result in a profitable, commercial mining operation.

The Board aims to manage the development of the Group as a successful exploration business by ensuring that additional prospective licences are applied for and granted on a timely basis, or otherwise acquired. To help mitigate exploration risk, the Board also employs qualified and experienced personnel - all of whom have relevant operational experience in Australia and PNG.

Political risk

There is a risk that assets will be lost through expropriation, unrest or war. Rockfire now operates in two jurisdictions with relatively stable political systems, established fiscal and mining codes and a well-established and proven mining industry.

Rockfire further minimizes risk by ensuring that the majority of cash funds are securely held within financial institutions of high standing.

Social and anti-mining disruption is increasing in most jurisdictions globally and there is increasing regulatory pressure for mining companies to engage and include communities and landowners. Rockfire actively communicates with and informs landowners and communities of its expectations and plans for field work and long-term objectives. In Australia, there are clear guidelines set by the Queensland Government for approaching landowner discussions and Rockfire adheres to these guidelines strictly in its efforts to minimize risk from social opposition to exploration and mining.

Commodity risk

Commodities are subject to high levels of volatility in price and demand. The price of commodities depends on a whole range of factors, which are outside the control of the Group. There is the risk the price for minerals will fall to a point where it becomes uneconomic to extract them from the ground. This is an inherent risk of the mining industry, mitigation of which is currently outside of the Group's control whilst it is still in an exploration, rather than extraction, phase.

Liquidity risk

There is a risk of running out of working and investment capital. The Group relies for funding on the issue of share capital. The Group has no borrowing and maintains tight financial and budgetary control to keep its operations cost effective. Although there can be no absolute assurance that adequate funding will be available when required, the Directors are confident that they will secure additional funding when required to do so, as demonstrated by the fundraising in January 2019.

Currency risk

Fluctuations in currency exchange rate can significantly impact cash flows. The Group maintains currency in Sterling, Australian Dollars and PNG Kina to finance its overseas operations. In 2018, the Group had exposure to Sterling, Euro, Australian Dollars and a minimal exposure to PNG Kina. The mix of currencies is such that the Directors believe the Group's exposure is minimal. The Directors do however regularly monitor currency exchange rates and make judgments as to whether to enter into hedging contracts accordingly. Currently no such hedging contracts are in place.

Interest rate risk

The only significant interest-bearing asset within the Group is cash which is largely held in the United Kingdom. The Directors constantly review the interest rate to ensure optimum return on deposits for the Group.

Strategic report signed on behalf of the Board.

David W Price

Chief Executive Officer

22 May 2019

Directors' Report

Principal activities

The principal activities of the Group are the exploration for gold and copper resources in Australia and PNG. The Group's strategy is to explore for and, where the Directors believe that it is commercially feasible, develop deposits of gold and/or copper. The Company strategy includes considering opportunities for project sale at a point when any of the Groups projects become appropriately advanced enough to consider such options.

On 16 October 2017, the Group acquired 100% of the voting rights of BGM Investments Pty Ltd, an Australian-based business, thereby obtaining control. The acquisition was made to expand the Group's geographical exposure to exploration activities.

The Group currently holds one exploration licence renewal application in PNG (which remains subject to Ministerial approval) and six exploration permit for minerals (EPM's) in Queensland, Australia. At the time of writing this Annual Report, Rockfire also has an Option to Acquire the Copper Dome exploration licence, which remains subject to due diligence.

Financial overview

The loss for the year is in line with the Directors' expectations. With funding being raised in August 2018 and January 2019, the Directors are confident that they will be able to secure additional funding when required to do so. The Directors are also of the view that the investment sentiment in the resource sector is improving, to the extent that the exploration success the Company has achieved to date should enable it to raise sufficient additional exploration funding to continue its exploration programmes.

A detailed review of the Group's business, including its targets and strategies is given in the Chairman's Statement and the Review of Operations.

Results and dividends

The results for the year are in line with Directors' expectations. The Directors do not recommend a dividend (2017: nil).

Going concern

The Directors have prepared a cash flow forecast which supports the Directors' expectation that Rockfire Resources plc has adequate resources to continue in operational existence for a period of not less than 12 months from the date of singing these financial statements. This cash flow forecast assumes that the exploration programmes will only continue with additional equity funding secured by the Group. The Directors are confident that additional equity funding will be secured based on past experience, however in the event that no additional funding is received, the Group has the ability to reduce expenditure as required. As such, the financial statements have been prepared assuming the Group will continue as a going concern.

Directors

The Directors in office during the year are listed below. The interests of the Directors in the shares of the Company at the relevant dates were as follows:

*As at 31 December 2018 or at the date of retirement, if earlier.

Patrick Elliot and Nicholas Walley were appointed to the board as non-executive directors on 1 March 2019 and 1 May 2019 respectively.

Substantial shareholdings

As at 20 May 2019, being the latest practical date prior to publication of this document, the Company was aware of the following holdings of 3% or more of the issued share capital of the Company:

Directors' remuneration

Executive and Non-executive Directors received remuneration in 2018. No benefits were paid to Directors in 2018 (2017: nil).

The Group made payments into the private pension scheme of the Chief Executive Officer and Chairman during 2018 in accordance with the Australian Superannuation Act 2005.

There were no share options issued in 2018.

Full details of Directors' emoluments are set out in note 17 of the financial statements.

Environmental policy

The Group's projects are subject to the relevant Australian and PNG laws and regulations relating to environmental matters.

The Group's strategy is to explore for and, where the relevant studies indicate that it is economically viable to do so, to develop and mine mineral deposits. It is the Group's intention to conduct its exploration and investigation activities in a professional and responsible manner, for the benefit of the Company's shareholders, its employees and the national and local communities within which it operates.

The Group aims to, at all times, conduct its operations in an environmentally responsible manner and in accordance with relevant legislation. The Group aims to adopt best practice policies as recommended by the World Bank, the International Council on Mining & Metals ("ICMM") and others where the Group deems that local legislation to be inadequate in terms of environmental protection. The Group has in place a detailed field operations guidelines manual which covers in considerable detail the measures to be taken by field personnel to minimize any negative environmental impact of current exploration activities on the environment.

The Group also recognises the enormous potential of its activities for positive impact on the communities in which it operates and strives to optimise these positive impacts as far as is possible.

Directors' indemnities

The Group has Directors and Officers Indemnity Insurance to cover its Directors and Officers against the costs of defending themselves in legal proceedings taken against them in that capacity and in respect of any damages resulting from those proceedings.

Political contributions

No political donations have been made.

Auditor

The auditor, Grant Thornton, has indicated its willingness to continue in office and a resolution proposing that they be re-appointed will be put to the forthcoming Annual General Meeting.

Statement of disclosure to auditor

The Directors who held office at the date of approval of the Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditor is unaware and each Director has taken all steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Strategic Report, the Director's 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. The Directors are required by the AIM Rules of the London Stock Exchange to prepare group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and have elected to prepare the company financial statements in accordance with IFRS as adopted by the EU.

The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the Group and the Company and the financial performance of the Group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.

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 the Company and of the profit or loss of the Group for that period.

In preparing the Group and Company financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgments and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRSs adopted by the EU;

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company 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 Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Group's Annual Report will be published on the Group's website and in this regard the Directors accept responsibility for the maintenance and integrity of the website.

Annual General Meeting and recommendation

The year ahead is looking particularly prosperous, with much of the administrative matters now complete and having access to so much highly-prospective ground. We welcome you to take the journey with us as we build Rockfire through exploration success and quality asset acquisition.

At a General Meeting of Rockfire on 18 February 2019, the Board received approval from shareholders for discretion to issue £150,000 of Rockfire shares for potential acquisitions and additional working capital if required. The balance of this discretionary issue amount has not been used and lapses on 30 June 2019. Your Board wishes, through Resolutions 7 and 8, to replace and increase this authority to £250,000. The purpose of this is for potential high-impact acquisitions, as well as further working capital as required. Your Board remains committed to prudent use of this authority.

The Board considers that the resolutions to be proposed at the Annual General Meeting are in the best interests of the Company and the Group as a whole and its unanimous recommendation is that shareholders support these proposals as the Directors intend to do in respect of their own holdings. Further details regarding the location and timing of the Company's forthcoming Annual General Meeting will be provided shortly.

The Board considers that the resolutions to be proposed at the Annual General Meeting are in the best interests of the Company and the Group as a whole and its unanimous recommendation is that shareholders support these proposals as the Directors intend to do in respect of their own holdings. Further details regarding the location and timing of the Company's forthcoming Annual General Meeting will be provided shortly.

On behalf of the Board

David W Price

Chief Executive Officer

22 May 2019

Consolidated statement of financial position at 31 December 2018

The financial statements were approved and authorised for issue by the Board of Directors on 22 May 2019 and signed on its behalf by:

David W Price

Chief Executive Officer

Consolidated statement of comprehensive income for the year ended 31 December 2018

Consolidated statement of changes in equity for the year ended 31 December 2018

*For the year ended 31 December 2017 the Company changed its functional currency from U.S. Dollar to Great Britain Pounds (GBP) and adopted the GBP as its reporting currency. The change in functional currency has been applied prospectively and the change in reporting currency has been applied retrospectively. Gains and losses from these translations are recognised in other comprehensive income and included in "Foreign exchange reserve". Please refer to the "foreign currency transactions" accounting policy note for further detail.

Consolidated statement of cash flows for the year ended 31 December 2018

Notes to the financial statements

1 Reporting entity

Rockfire Resources plc is a public limited company, quoted on AIM, and is incorporated and domiciled in England and Wales. The Company's registered office is Salisbury House, London Wall, London EC2M 5PS.

On 18 June 2018, in the Annual General Meeting, a resolution was passed to approve the change in the Company's name, from Papua Mining plc to Rockfire Resources plc.

The Group's main activity is the exploration for gold and copper resources in Australia and PNG.

2 Adoption of new and revised standards

The financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (IASB) and adopted by the EU.

New standards adopted as at 1 January 2018

IFRS 15 'Revenue from Contracts with Customers'

IFRS 15 'Revenue from Contracts with Customers' and the related 'Clarifications to IFRS 15 Revenue from Contracts with Customers' (hereinafter referred to as 'IFRS 15') replace IAS 18 'Revenue', IAS 11 'Construction Contracts', and several revenue-related Interpretations. The new standard has not been applied since the Group does not have revenues during the year and is not expecting to generate revenues in the next 12 months.

IFRS 9 'Financial Instruments'

IFRS 9 replaces IAS 39 'Financial Instruments: Recognition and Measurement'. It makes major changes to the previous guidance on the classification and measurement of financial assets and introduces an 'expected credit loss' model for the impairment of financial assets. The new standard does not have an impact on the Group's financial assets and financial liabilities. The Group's financial assets are cash at bank and other receivables, which are held at amortised cost. The Group's financial liabilities are trade and other payables, which are held at amortised cost.

Standards, amendments and interpretations to existing Standards that are not yet effective and have not been adopted early by the Group

At the date of authorisation of these financial statements, several new, but not yet effective, Standards, amendments to existing Standards, and Interpretations have been published by the IASB. None of these Standards, amendments or Interpretations have been adopted early by the Group.

Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and interpretations neither adopted nor listed below have not been disclosed as they are not expected to have a material impact on the Group's financial statements.

IFRS 16 'Leases'

IFRS 16 will replace IAS 17 'Leases' and three related Interpretations. It completes the IASB's long-running project to overhaul lease accounting. Leases will be recorded in the statement of financial position in the form of a right-of-use asset and a lease liability. There are two important reliefs provided by IFRS 16 for assets of low value and short-term leases of less than 12 months. IFRS 16 is effective from periods beginning on or after 1 January 2019. Early adoption is permitted; however, the Group have decided not to early adopt. The Group does not anticipate that there will be a material impact on the adoption of these standards and interpretations on its financial statements.

3 Basis of preparation and significant accounting policies

a) Basis of preparation

These consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs) and International Financial Reporting Interpretations Committee (IFRIC) interpretations (collectively IFRSs) as adopted for use in the European Union.

The financial statements are prepared on the historical cost basis except for the measurement of certain financial instruments at fair value as described below. The principal accounting policies adopted are set out below.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies

b) Basis of consolidation

Subsidiaries are entities controlled by the Group. Control is achieved when the Group 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. Specifically, the Group controls an investee if, and only if, the Group has:

· Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee);

· Exposure, or rights, to variable returns from its involvement with the investee; and

· The ability to use its power over the investee to affect its returns.

Generally, when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

· The contractual arrangement(s) with the other vote holders of the investee;

· Rights arising from other contractual arrangements; and

· The Group's voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intra-group balances and any unrealised gains or losses or income or expenses arising from intra-group transactions are eliminated in preparing the Group financial statements.

c) Going concern

The Directors have prepared a cash flow forecast which supports the Directors' expectation that Rockfire Resources plc has adequate resources to continue in operational existence for a period of not less than 12 months from the date of singing these financial statements. This cash flow forecast assumes that the exploration programmes will only continue with additional equity funding secured by the Group. The Directors are confident that additional equity funding will be secured based on past experience, however in the event that no additional funding is received, the Group has the ability to reduce expenditure as required. As such, the financial statements have been prepared assuming the Group will continue as a going concern.

d) Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair value.

e) Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

· Expected to be realised or intended to be sold or consumed in the normal operating cycle;

· Held primarily for the purpose of trading;

· Expected to be realised within twelve months after the reporting period; or

· Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

· It is expected to be settled in the normal operating cycle;

· It is held primarily for the purpose of trading;

· It is due to be settled within twelve months after the reporting period; or

· There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current.

f) Intangible assets - exploration and evaluation costs

Exploration and evaluation expenditure costs comprise costs associated with the acquisition of mineral rights and mineral exploration and are capitalised as intangible assets pending the feasibility of the project. They also include certain administrative costs that are allocated to the extent that those costs can be related directly to operational activities.

If an exploration project is deemed successful based on feasibility studies, the related expenditures are transferred to development and production assets and amortised over the estimated useful life of the ore reserves on a unit of production basis. Where a project is abandoned or considered to be no longer economically viable, the related costs are written off to profit or loss.

To date the Group has not progressed to the development and production stage in any areas of operation.

g) Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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. In determining fair value less costs to sell, an appropriate valuation model is used.

Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset. For assets, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group makes an estimate of recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

h) Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described below.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired.

Other receivables: These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of goods and services but also incorporate other types of contractual monetary assets. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Cash and cash equivalents: These include cash in hand, deposits held at call with banks and bank overdrafts.

Classification and subsequent measurement of financial liabilities

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

Financial liabilities are measured subsequently at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance expense or finance income.

The Group classifies its financial liabilities as:

Trade and other payables: These are initially recognised at fair-value and then carried at amortised cost. They arise principally from the receipt of goods and services.

Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Impairment of financial assets

The Group assesses at each end of reporting period whether a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that has occurred since the initial recognition of the asset (an incurred 'loss event') has an impact on the estimated future cash flows of the financial asset or the Group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that the contracted parties or a group of contracted parties is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial assets at amortized cost

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant.  

If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, the asset is included in the group of financial assets with similar credit risk and characteristics, and that group of financial assets is collectively assessed for impairment. Those similar credit risk characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative of the debtor's ability to pay all amounts due according to the contractual terms of the assets being evaluated. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in the collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount of loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original EIR (i.e., the EIR computed at initial recognition). All impairment losses are recorded only through the use of an allowance account. The amount of loss is recognised in the consolidated statement of comprehensive income.

Fair value measurement

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case, management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

i) Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessment of the time value of money and, where appropriate, the risks specific to the liability.

j) Current and deferred tax

The tax expense represents the sum of the current tax expense and deferred tax expense.

Tax payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and further excludes items that are never taxable or deductible. The Group's liability for current tax is measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available, against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or if from the initial liabilities in a transaction that affect either the taxable profit or the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in profit and or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 

k) Pensions

Pension costs charged in the financial statements represent the contributions payable by the Group during the year into defined contribution pension schemes.

l) Foreign currency transactions

Functional and reporting currency

Functional currency - Prior to 31 December 2017, the Group's functional currency was the United States Dollar (USD). The functional currency was revisited by the Group in late 2017 as a result of a significant increase in the level of GBP transactions in the fourth quarter. Upon detailed analysis of all facts and circumstances it was determined based on relevant cash flows and the economic environment that the functional currency had changed from USD to GBP.

Reporting currency - In addition, beginning 1 January 2017 the Group also changed its reporting currency from USD to GBP to provide greater clarity to users of the financial statements. The change in reporting currency was applied retrospectively effective beginning 1 January 2016. Financial statements for all periods presented have been recast into GBP. All monetary assets and liabilities denominated in foreign currencies are translated into GBP using exchange rates in effect as of the reporting date. The GBP translated amounts of nonmonetary assets and liabilities as at 31 December 2016 became the historical accounting basis for those assets and liabilities as of 31 December 2016. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. All resulting exchange differences are recognised within foreign exchange reserve, a separate component of shareholders' equity.

In applying the change in reporting currency, the Group applied the current rate method for presenting the comparative period presented. Under this method all assets and liabilities of the Group's operations were translated from their USD functional currency into GBP using the exchange rates in effect at the reporting date and Shareholders' equity was translated at historical rates. Opening shareholders' equity at 1 January 2016 was translated at the rate on that date and any movements in shareholders' equity during the year from 1 January 2016 to 31 December 2016 were translated using the appropriate historical rate at the date of the respective transaction. All other revenues, expenses and cash flows were translated at the average rates during the reporting periods presented. The resulting translation adjustments are reported in comprehensive income as a separate component of shareholders' equity.

Transactions and balances

Transactions in currencies other than the functional currency of the Group are recorded at the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, as well as from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies, are recognised in the statement of comprehensive income. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated to the respective functional currency of the Group at the rates prevailing on the relevant reporting date.

Foreign operations

In the Group's financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the GBP are translated into GBP upon consolidation. The functional currencies of the entities in the Group has remained unchanged during the reporting period. On consolidation, assets and liabilities have been translated into GBP at the closing rate at the reporting date. Income and expenses have been translated into GBP at the average rate over the reporting period. Exchange differences are charged/credited to other comprehensive income and recognised in the foreign exchange reserve in equity. On disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and are recognised as part of the gain or loss on disposal.

The principal exchange rates used to the GBP in the preparation of the 2018 financial statements are:

m) Investments (Company)

Investments held as non-current assets comprise investments in subsidiary undertakings and are stated at cost less any provision for any impairment.

n) Equity and reserves

Equity and reserves comprises the following:

- "Share capital" is the nominal value of equity shares.

- "Share premium" represents amounts subscribed for share capital in excess of nominal value, net of directly attributable issue costs

- "Share-based payment reserve" represents a reserve arising on the grant of share options to certain Directors and key employees.

- "Other reserves" represents a reserve arising from a group reorganisation in 2011.

- "Retained deficit" comprises cumulative profit and loss to date.

o) Share-based payments

The Group issues equity-settled share-based payments to certain Directors and key employees. Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the number of instruments that will eventually vest with a corresponding adjustment to equity. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted,

based on management's best estimate, for the effect of non-transferability, exercise restrictions, and behavioural considerations.

Non-vesting and market vesting conditions are taken into account when estimating the fair value of the option at grant date. Service and non-market vesting conditions are taken into account by adjusting the number of options expected to vest at each reporting date.

p) Critical accounting estimates and judgements

The Group makes estimates and assumptions concerning the future. The resulting estimates will by definition, seldom equal the actual results. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Certain amounts included in the financial statements involve the use of judgement and/or estimation. These judgments and estimates are based on management's best knowledge of the relevant facts and circumstances, but actual results may differ from the amounts included in the financial statements. The Board has considered the critical accounting estimates and assumptions used in the financial statements and concluded that the areas of judgement that have the most significant effect on the amounts recognised in the financial statements are as set out below.

Recoverability of deferred exploration costs

All costs associated with gold and copper exploration are capitalised on a project basis, pending a decision on the economic feasibility of the project. The capitalisation of such costs gives rise to an intangible asset in the consolidated statement of financial position. Exploration costs are capitalised where it is considered likely that the amount will be recovered by future exploitation, sale or alternatively where the activities have not reached a stage which permits a reasonable assessment of the existence of reserves. This requires management to make estimates and assumptions as to the future events and circumstances, especially in relation to whether an economically viable extraction operation can be established. Such estimates are subject to change and following initial capitalisation, should it become apparent that recovery of the expenditure is unlikely, the relevant capitalised amount will be impaired and written off to the consolidated statement of comprehensive income.

Impairment of goodwill and non-financial assets

Determining whether goodwill and non-financial assets are impaired requires an estimation of the value in use of the cash generating units to which the assets have been allocated. The value in use calculation requires the Directors to estimate the future cash flows to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual cash flows are less than expected, a material impairment may arise.

Provision for impairment of financial assets

Determining whether the carrying value of financial assets has been impaired requires an estimation of the value in use of the investment in subsidiaries and joint venture vehicles. The value in use calculation requires the directors to estimate the future cash flows expected to arrive from these vehicles and a suitable discount rate in order to calculate present value.

p) Critical accounting estimates and judgements (continued)

Allowances for impairment of trade receivables

The Group estimates the allowance for doubtful trade receivables based on assessment of specific accounts where the Group has objective evidence comprising default in payment terms or significant financial difficulty that certain customers are unable to meet their financial obligations. In these cases, judgment used was based on the best available facts and circumstances including but not limited to, the length of relationship.

Deferred tax assets

Deferred tax is recognised based on differences between the carrying value of assets and liabilities and the tax value of assets and liabilities. Deferred tax assets are only recognised to the extent that the Group estimates that future taxable profits will be available to offset them.

Fair value measurement

Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

4 Segmental reporting

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the exploration activities. The Group's reportable segment under IFRS 8 Operating Segments is as follows:

Exploration: Being the exploration activities of gold and copper resources in PNG and Australia. The chief operating decision maker is the Chief Executive Officer.

Information regarding the Group's reportable segment is presented below.

The following is an analysis of the Group's results by reportable segment:

The accounting policies of the reportable segments are the same as the Group's accounting policies described in Note 3. Segment losses represent the losses incurred by each segment without allocation of central administration costs and Directors' salaries, other operating income, interest costs, interest income and income tax expense. This is the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

Other segment information:

In addition to the above, impairment losses of £1,437,449 (2017: NIL) were recognised in respect of intangibles. These impairment losses were attributable exploration costs.

The Group operates in two principal geographical areas: Australia and PNG. The Group's information about its non-current assets* by geographical location are detailed below:

*Non-current assets excluding goodwill, financial instruments and investment in jointly controlled entities.

The management information provided to the chief operating decision maker does not include an analysis by reportable segment of assets and liabilities and accordingly no analysis by reportable segment of total assets or total liabilities is disclosed.

6 Taxation

The Group has UK tax losses of approximately £3,614,594 (2017: £3,275,504) available to carry forward against future trading profits, subject to agreement by HMRC. No provision has been made for a potential deferred tax asset of approximately £722,919 (2017: £630,535) arising from UK tax losses. The Group has not recognised a deferred tax asset on any losses carried forward due to the uncertainty of future profits.

7 Loss per share

Loss per share has been calculated by dividing the loss for the year by the weighted average number of ordinary shares in issue during the year.

Diluted loss per share has been calculated by dividing the loss for the year by the weighted average number of ordinary shares in issue during the year adjusted to assume conversion of all dilutive potential options/warrants. In accordance with the provisions of IAS33, shares under option were not regarded as dilutive in calculating diluted earnings per share.

8 Intangible assets