Sunrise Res Regulatory News (SRES)

SUNRISE RESOURCES PLC

("the Company")

AIM Announcement 13 December 2022

Audited Results for the year to 30 September 2022

The Board of Sunrise Resources plc, the AIM-traded company, is pleased to announce its audited results for the year ended 30 September 2022. The Company will announce posting of its results which will be published on the Company's website along with the Notice of the AGM in due course.

Operational Highlights for 2022

· Focus continues on development of the fully mine permitted CS natural pozzolan and perlite deposit in Nevada.

· New developments during the year at the Hazen pozzolan and Pioche sepiolite project as Company's business evolves in the industrial minerals sector in Nevada.

· The depth of the Company's project portfolio of industrial mineral and precious metal projects underlined this year with agreements signed with major companies at our Pioche and Jackson's Wash projects.

CS Pozzolan-Perlite Project, Nevada, USA

Pozzolan

· Discussions held with multiple parties aimed at joint development, custom testwork programmes completed by interested parties.

· Board is working on strategies to maximise the value of the project and to demonstrate this value to our shareholders.

· CS Natural Pozzolan has now been conditionally approved by the California Department of Transport ("Caltrans") for use in California State infrastructure projects, having successfully passed compliance testing.

· Industry feedback continues to highlight the use of natural pozzolan in key strategies being employed in the cement and concrete industries towards net-zero CO2 emissions.

Perlite

· Customer testing continues including, most recently, by one of the country's largest consumers of raw perlite.

Hazen Pozzolan Project, Nevada, USA

· Targeting distinct regional markets in northern California and northern Nevada.

· Collaborative arrangement with an existing processor of natural pozzolan for bulk sampling and commercial scale test grind

· 250-ton sample extracted; test grinding in progress, results awaited.

Pioche Sepiolite Project, Nevada, USA

· Option to Purchase granted to US subsidiary of Spanish company Tolsa S.A. ("Tolsa"), the world's largest producer of Sepiolite.

· Option can be exercised by payment of US$1.25 in cash and 3% net revenue royalty for a 25-year period from the commencement of commercial production (20% Finders fees payable to an independent third party).

· Surface mapping programme completed by Tolsa in July has identified multiple sepiolite horizons throughout the project area.

· Trenching programme completed; samples being tested in Spain, results awaited

· Sepiolite, an industrial mineral, has unique characteristics, is scarce, with very few commercial deposits in the world.

Other Projects

Jacksons Wash, Nevada, USA

· Lease/purchase option agreement signed with Kinross early in the reporting period. Active exploration planned for 2023.

Baker's Gold Project, Western Australia

· Mining lease application in progress. Agreement with Native Title holder required prior to grant, and strategy under review.

More detailed information follows.

Further information:

Market Abuse Regulation (MAR) Disclosure

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 which forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via a Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Qualified Person Information:

The information in this release has been compiled and reviewed by Mr. Patrick Cheetham (MIMMM, MAusIMM) who is a qualified person for the purposes of the AIM Note for Mining and Oil & Gas Companies. Mr. Cheetham is a Member of the Institute of Materials, Minerals & Mining and also a member of the Australasian Institute of Mining & Metallurgy.

Chairman's Statement

Dear Shareholders,

I am pleased to present your Annual Report for 2022 which covers the financial year ended 30 September 2022.

Our strategy continues to be to advance our fully mine permitted CS natural pozzolan and perlite deposit in Nevada, whilst new developments during the year at the Hazen pozzolan and Pioche sepiolite projects have seen the Company's business evolve more broadly in the industrial minerals space in Nevada.

In the first half of this year, following successful commercial trials of CS natural pozzolan with a large cement and ready-mix company, our expectations were high that a joint development agreement would be reached with that company. However, we terminated negotiations after they became unnecessarily protracted and have since prioritised discussions with other potential partners. These companies have all required further samples for testing with their own cements and concrete blends. This work has progressed throughout the year and has now been successfully completed in each case confirming CS pozzolan's high quality as a natural pozzolan. The Board is working hard to capitalise this third-party interest and now that additional funds have been secured, the Board is working on strategies to maximise the value of the project and to demonstrate this value to our shareholders.

For example, a significant milestone for the CS Project this year was the conditional approval of the CS natural pozzolan by the California Department of Transport ("Caltrans"), the Government body responsible for the award of State funded infrastructure construction projects in California. Caltrans mandates the use of supplementary cementitious materials ("SCMs") such as natural pozzolan in order to improve the durability and sustainability of their projects and many concrete specifiers also look to this list as an independent endorsement when specifying for a wider range of non-Caltrans projects.

We also continue to advance the testing of the perlite from our CS Project and further details are provided in the Operating Review. Previous testwork has identified a number of potential customers and others are in the process of testing our material including, most recently, one of the largest consumers of raw perlite in the US.

In October I was pleased to announce the start of a collaborative arrangement with an existing processor of natural pozzolan for mining and commercial scale test grinding of a bulk sample from our second pozzolan project at Hazen, Nevada. The CS Project is targeting the cement and concrete markets of southern California and southern Nevada-Las Vegas, whilst our newer Hazen Pozzolan Project is more favourably located for the cement and concrete markets in northern California and northern Nevada. Approximately 250 tons of natural pozzolan have been extracted from Hazen at no cost to Sunrise and is currently being processed. The collaborative partner has the processing facilities and marketing network to commercialise the Hazen deposit in the future.

In May this year we issued an article through RNS Reach that highlighted the key role that natural pozzolan has in cement decarbonisation in the western USA and within multiple CO2 net-zero strategies in the cement and concrete industries, as well as its function in building more durable and sustainable concrete structures. The energy crisis this year has served to reduce the rate of decline of fly ash availability as some coal-fired power stations due to close have been temporarily kept open, but this declining trend is set to continue and our pozzolans are a natural replacement.

The depth of the Company's project portfolio of industrial mineral and precious metal projects was underlined this year with agreements signed with major companies at our Pioche and Jackson's Wash projects.

The Pioche Sepiolite Project has quickly risen to prominence after the world's largest sepiolite producer, the Spanish company Tolsa S.A., took an option to purchase the project. Sepiolite is a rare and valuable clay with unique absorptive and gelling properties and only a handful of commercial deposits around the world.

We have been very encouraged by the rapid start Tolsa has made in its evaluation of the Pioche Project. In the summer, Tolsa completed a thorough programme of surface mapping and evaluation, identifying multiple horizons of sepiolite below our original discovery level and this autumn has completed a programme of trenching to provide further exposures of the mineralisation to enable a better evaluation of the thicknesses and quality of the Pioche sepiolite deposits. Sepiolite samples from the trenching are being tested in Spain and results are eagerly awaited. Tolsa must make an election to continue its option by the end of this December 2022.

Earlier this year we granted a lease/option to purchase our Jackson's Wash claims to global gold producer Kinross Gold U.S.A. Inc. who is actively exploring in the vicinity of our Jackson's Wash claims. If Kinross elect to purchase the claims, we will hold a 2.5% Net Smelter Royalty on production. We continue to hold royalty interests in the Garfield and Stonewall projects in Nevada held by AIM aspirant Golden Metal Resources Ltd, and in the Junction Copper Project held by TSX-V listed VR Resources Limited.

The Company is progressing its mining lease application at the Bakers Gold Project in Western Australia where the mining law requires that the Company reach agreement with the regional Native Title holder for its application to be granted . The Company could face high legal costs to progress this application but is considering options to defer those costs until such time as the project is more advanced. Whilst the Company has yet to progress discussions with the Native Title holder, in view of these potential costs, it has taken the prudent step to impair the value for this project in the Company's accounts until such time as the position is clearer when the impairment could be reversed. Similarly, the value of the Myrtle Project was impaired following the receipt of drilling results from a prior explorer which downgraded the prospectivity of the Company's claim block.

Our activities this year have been funded out of existing cash resources, a modest fund raise of £100,000 in July and the sale of the majority of our shares in Power Metal Resources. After the year end, we closed an up to £480,000 two-year convertible note financing facility with Net Zero Strategies LLC, a US investment fund focused on the green economy. This provides options on the amount we drawdown and the number of shares that may need to be issued under the arrangement will, by-and-large, be based on our future share price performance which was preferable to the prospect of a placing at a discount to the current price.

At our next Annual General Meeting, to be held in London on 17 February 2023, we will be proposing Mr Murphy for re-election and seeking approval for resolutions to allow for the issue of new shares. I urge shareholders to support these resolutions as, without their approval, the Company cannot raise the funds it needs to continue as a going concern. For those who cannot attend the AGM we are encouraging shareholders to appoint the Chairman as their proxy.

With the CS Project, Hazen and Pioche, we now have three key projects moving forward as well as a strong portfolio of royalty interests and wholly owned projects available for joint venture or disposal. There are several potential value catalysts within the Company's project portfolio and your Board believes we can look forward to productive developments in 2023. I look forward to reporting further progress.

Patrick Cheetham

Executive Chairman

9 December 2022

Strategic Report

The Directors of the Company and its subsidiary undertakings (which together comprise "the Group") present their Strategic Report for the year ended 30 September 2022.

The principal activity of the Company is the acquisition, exploration and development of mineral projects, primarily in the western USA.

Our strategy is to develop the CS Pozzolan-Perlite Project and other key projects through to profitable production in order that the Company's activities become self-funding and to unlock the value inherent in its portfolio of mineral projects through sale, joint venture or other arrangements, retaining royalty interests where possible.

The Company's Business Model is to acquire 100% ownership of mineral assets at minimal expense. This usually involves staking claims as was the case for the CS and NewPerl Projects or applying for exploration licences from the relevant authority, as was the case in Australia. In other cases, rights are negotiated with existing project owners for initially low periodic payments that rise over time as confidence in the project value increases and this was the case for the Bay State Silver Project.

The Group currently operates with a low-cost base to maximise the funds that can be spent on value adding exploration and development activities. The Company's administration costs are reduced via a cost sharing Management Services Agreement with Tertiary Minerals plc.

The Strategic Plan is on track although the timeframe for first commercial production from the CS Project has moved out due to delays in customer trials and protracted offtake negotiations. Further details of our progress on the CS Project are given in the Operating Review.

The Company's activities are financed by periodic capital raisings, through private share placings and the issue of other financial instruments. For more advanced projects such as the CS Project the Board will seek to secure additional funding from a range of sources, for example debt funding, pre-financing through offtake agreements and other joint arrangements.

Over the past few years, the Company has established a valuable portfolio of drill-ready precious metal, base metal and industrial mineral projects. Our strategy remains to valorise those projects through sale or other arrangements seeking, wherever possible, free-carried exposure to increases in value and production from the projects. Examples during the year include the agreement with Kinross Gold on the Jacksons Wash Project and the agreement with Tolsa USA Inc. on the Pioche Sepiolite Project as detailed in the Operating Review, both of which include retained royalty interests.

Organisation Overview

The Group's business is directed by the Board and is managed by the Executive Chairman. The Company has a Management Services Agreement with Tertiary Minerals plc ("Tertiary") which was the original parent of the Company. Under this cost sharing agreement, Tertiary provides all of the Company's administration and technical services, including the technical and management services of the Executive Chairman, at cost. Day-to-day activities are managed from Tertiary's offices in Macclesfield in the United Kingdom, but the Group operates in two other countries and the corporate structure of the Group reflects the historical pattern of project acquisition by the Group and the need, where appropriate, for fiscal and other reasons, to have incorporated entities in particular territories.

The Group's exploration activity in Nevada, USA, is undertaken through two local subsidiaries, SR Minerals Inc. and Westgold Inc.

In Australia the Company operates through an Australian subsidiary, Sunrise Minerals Australia Pty Ltd.

The Board of Directors comprises two independent non-executive directors and the Executive Chairman. The Executive Chairman is also Executive Chairman of Tertiary, but otherwise the Board is independent of Tertiary. Tertiary is not a significant shareholder (as defined under the AIM Rules) in the Company.

Financial & Performance Review

The Group is not yet producing minerals and so has no income other than a small amount of bank interest. Consequently, the Group is not expected to report profits until it disposes of or is able to profitably develop or otherwise realise the value of its exploration and development projects.

The Group reports a loss of £478,223 for the year (2021: £335,252) after administration costs of £291,860 (2021: £318,630). The loss includes expensed pre-licence and reconnaissance exploration costs of £5,638 (2021: £17,320), impairment of exploration assets of £194,247 (2021: £30,021) and other income of £13,474. Administration costs include a charge of £1,087 (2021: £19,663) relating to the value of certain share warrants held by employees of Tertiary Minerals Plc and by third parties calculated in accordance with IFRS 2. Cash administration costs were £290,773 (2021: £298,967).

The Financial Statements show that, at 30 September 2022, the Group had net current assets of £155,776 (2021: £399,384). This represents the cash position and receivables, less trade and other payables. These amounts are shown in the Consolidated and Company Statements of Financial Position and are also components of the Net assets of the Group. Net assets also include various "intangible" assets of the Company. As the term suggests, these intangible assets are not cash assets but include some of this year's and previous years' expenditure on mineral projects where that expenditure meets the criteria in Note 1(d) of the accounting policies. The intangible assets total £2,503,812 (2021: £2,133,137) and a breakdown by project is shown in Note 2 to the financial statements. Sterling weakness at the end of the reporting period has had a positive effect on the value of intangible assets denominated in US Dollars in the Company's US subsidiaries.

Details of intangible assets, property, plant and equipment, investments and right of use assets are also set out in Notes 8, 9, 10 and 17 of the financial statements.

Net assets also include the market value at year end of shares in VR Resources Ltd and Power Metal Resources plc which are held as "available for sale" investments as set out in Note 8.

Impairment

Expenditures which do not meet the criteria for capitalisation as exploration and evaluation costs according to Note 1(d), such as pre-licence and reconnaissance costs, are expensed and added to the Company's loss. The loss reported in any year can also include expenditure for specific projects carried forward in previous reporting periods as an intangible asset but which the Board determines is "impaired" in this reporting period.

It is a consequence of the Company's business model that there will be impairments of unsuccessful exploration projects from time to time. The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of the Company's expenditure is preserved.

Biannual reviews are carried out by the Directors as to whether there are any indications of impairment of the Group's assets.

An impairment review of the carrying values of exploration and development projects (and in the Company, the associated intercompany loans) as at 30 September 2022 was undertaken by the Directors under IFRS 6 and IAS 36. As a result of the year-end review it was judged that the Bakers Project and Myrtle Project expenditure were impaired. In the Company, the Sunrise Mineral Australia Pty Ltd loan was also fully provided against. Further information on the reasons for impairment can be found in the Operating Review. Projects which are held for sale or joint venture have not been impaired as it is anticipated that their carrying values will be recovered through sale or through residual joint venture interests in future.

The intangible asset value of a project, shown at cost, should not be confused with the realisable or market value of a particular project which will, in the Directors' opinion, be at least equal in value and often considerably higher. Hence the Company's market capitalisation on the AIM Market is usually in excess of the net asset value of the Group.

The Company finances its activities through periodic capital raisings and asset sales. As the Company's projects become more advanced there may be strategic opportunities to obtain funding for some projects through joint venture, production sharing, royalty and other marketing arrangements.

Key Performance Indicators

The financial statements of a mineral exploration and development company can provide a moment in time snapshot of the financial health of a company but do not provide a reliable guide to the performance of the Company or its Board.

The usual financial key performance indicators ("KPIs") are neither applicable nor appropriate to measurement of the value creation of a company which is involved in mineral exploration and development which currently has no turnover. The Directors consider that the detailed information in the Operating Review is the best guide to the Group's progress and performance during the year.

Company does seek to reduce overhead costs, where practicable, and is reporting administrative costs this financial year of £291,860 (2021: 318,630).

In exploring for valuable mineral deposits, we accept that not all our exploration will be successful but also that the rewards for success can be high. We therefore expect that our shareholders will be invested for the potential for capital growth taking a long-term view of management's track record in mineral discovery and development.

Fundraising

The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of approval of this report. Given the Group's cash position at year end (£96,126), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditure. The successful raising of finance is required based on projections to enable the Group and Company to meet their liabilities as they fall due and continue to operate on a going concern basis.

Operating Review

The Company has continued its operations in Nevada, USA and Western Australia with progress made on three key projects during the year.

Our focus continues to be the development of the CS Pozzolan-Perlite Project but progress has also been made on our Hazen Pozzolan Project and our Pioche Sepiolite Project, and the Company continues to unlock its valuable portfolio of precious and base metal projects that can provide potential additional growth and value accretion opportunities in future.

The CS Project is held in the Company's 100% owned subsidiary, SR Minerals Inc. The Group's other Nevada projects are held through SR Minerals Inc. and Westgold Inc. and its Baker's Gold project in Australia is held through an Australian subsidiary, Sunrise Minerals Australia Pty Ltd.

SR MINERALS INC.

CS Pozzolan-Perlite Project, Nevada

The CS Project is located near Tonopah, in Nevada, USA, and contains deposits of both natural pozzolan and perlite in three separate zones - the Main Zone, the Tuff Zone and the Northeast Exploration Area.

The project is "mine ready" with the key permits required to operate the CS Project in place and with no time constraints on when mining must start, save for periodic renewals of the air quality permit and payment of annual claim fees.

Natural Pozzolan

Natural pozzolan is a cementitious material that is used to partially replace and reduce the use of Portland cement in concrete and mortars, a major source of greenhouse gas. Natural pozzolan takes the place of coal fly ash pozzolans, the supply of which is rapidly declining in the western world due to the closure of coal-fired power stations.

The use of natural pozzolan in cement and concrete mixes requires that the pozzolan be ground to a fine size before use and so the production options being considered by the Company are:

· Direct use of run-of-mine or crushed ore and by-product perlite by cement companies in their grinding facilities.

· Construction of a fixed process plant to grind the crushed natural pozzolan for sale to cement companies and ready-mix concrete companies.

Pozzolan can be crushed, if necessary, using the same mobile plant used for perlite crushing and so the first of these options has the lowest capital and operating cost but a fewer number of potential customers who would need to have their own pozzolan grinding capacity.

Perlite

Perlite is a glassy raw material which expands on heating by up to 20 times in volume into a white or pale coloured low-density material. Expanded perlite is used in various industrial and household applications such as insulation, paint texturing, plaster and concrete fillers, building materials fillers, formed insulation and fire proofing. It also has application as filter aids, insulating industrial cryogenic storage vessels and as a potting medium in gardening and horticulture to aid water retention and aeration of the soil. One of the largest areas of growing demand is for large scale hydroponic farming resultant of the legalisation of cannabis in many states. Perlite is also a natural pozzolan.

According to the United States Geological Survey ("USGS"), 860,000 tons of raw perlite was mined in the USA in 2021, up by 2% on 2020. The consumers of raw perlite are split between independent expanders and downstream integrated mining-perlite expanding companies.

Two production options have been considered for perlite:

· Production of coarse horticultural grade perlite using mobile crushing and screening equipment and use of undersized perlite as natural pozzolan; and

· Construction of a fixed perlite processing plant to produce a range of raw perlite products in coarse, medium and fine grades.

The first of these two options is attractive as production can start quickly at a relatively low capital cost as the mobile plant is available from the quarry industry and can be bought, rented or leased, subject to availability. The Company's air quality permit, which primarily applies to an on-site process plant, is based on the first of these options.

Different grinding technologies, plant capital and operating costs have been considered for the second option of a stand-alone perlite grinding plant.

The Company has permission to construct the onsite fixed perlite processing plant set out in the second option. This option has already been designed and costed. However, it may be preferable to construct this at a more suitable, rail-linked site elsewhere in Nevada.

Customer Trials and Discussions with Potential Customers

Natural pozzolan

The value of the market for pozzolan is substantially larger than that for perlite and so the Company's focus to date has been on securing a partner from within the cement and concrete industry that has existing grinding capacity such that raw pozzolan can be supplied as direct mined ore.

During the first half of the reporting period, and for a protracted period last year, the Company had been working with a large cement and ready-mix company ("CRMC") in providing samples for industrial-scale application testing, holding regular negotiations and discussing terms for a joint development of the CS Natural Pozzolan-Perlite Project. However, in March this year the Company terminated further negotiations with that CRMC as the already extended discussions had failed to reach a satisfactory conclusion.

The Company has since been prioritising discussions with other potential partners for the CS Project including other cement and ready-mix companies, fly ash distributers, building materials companies and a new cement clean-tech company.

Invariably these companies all need to test CS natural pozzolan with their own specific in-house cements, blends and concrete mixes. These tests have been time consuming but are now largely complete and, in all cases, have been successful, confirming CS natural pozzolan as a versatile high quality pozzolan.

Perlite

Due to the focus on natural pozzolan and limited budgets, the Company's work on, the perlite side of the business has been more limited. Customer trials of horticultural grade perlite from the CS Project continue and, following interest from a very large consumer of raw perlite, a specific, tailored, finer grade of raw perlite was produced at SGS Lakefield in Canada from the Company's horticultural fines and supplied to that consumer for testing. Results are awaited.

California Department of Transport ("Caltrans") Certification

A significant development during the year was the conditional approval by the California Department of Transport ("Caltrans") of the use of CS natural pozzolan in California State infrastructure projects after successfully passing Caltrans's own independent compliance testing. As a result, CS natural pozzolan is now listed on the Caltrans List of Approved Materials for Cementitious Materials for use in Concrete.

Caltrans is the Government body responsible for the award of State funded infrastructure construction projects in California. Caltrans Standard Specifications for concrete mandate the use of supplementary cementitious materials ("SCMs") such as natural pozzolan in order to improve the durability and sustainability of its concrete structures.

It has only recently become possible for new sources of construction materials to be approved on a conditional basis. Full approval is conditional until six monthly test results from production runs have been submitted by the Company showing compliance with specifications.

This is good news for the CS Project as California State Infrastructure projects usually specify the use of material from the Approved Materials List and many concrete specifiers look to this list as an independent endorsement when specifying for a wider range of non-Caltrans projects.

Other Developments

The Company's claims at the CS Project include a number of claims that were not a part of the permitted Mine Plan of Operations but which were staked on a speculative basis to cover a deposit of diatomite.

The Company has been approached by an industrial producer of diatomite to sell these claims. If an agreement for sale is reached, it will not affect the existing permits or the ability of the Company to extract and process pozzolan and perlite at the CS Project.

The Company notes that Allegiant Gold Limited is continuing exploration for gold on its claim block that lies immediately south of the Company's CS Project claims and has so far defined a deposit containing resource of 1.1 million ounces and 8.8 million ounces of silver just 380m away from the southern boundary of the Company's CS Project claim block.

NewPerl Perlite Project, Nevada

The NewPerl Project is located approximately 85km from the CS Project in Nevada, USA and contains a number of areas where surface samples have shown excellent test results for production of horticultural grades of perlite. Subject to further testing, this could be suitable for feed into the CS Project in the future.

Drill testing of the NewPerl Project is scheduled for 2023.

Jackson Wash Perlite Project, Nevada

The Jackson Wash Project is located 16km from the NewPerl Project in Nevada and is also a target for horticultural grade perlite.

Earlier in the reporting period the Company granted Kinross Gold U.S.A Inc. a Lease and Option to purchase the Company's 25 Jackson Wash mining claims in Nevada, USA. The Company retains the right to mine perlite on the project claims during the lease/option period.

In addition to hosting large surface occurrences of perlite, the project claims are located adjacent to the historic Montezuma silver, gold and mercury mining centre being explored by Kinross. Kinross produces more than 2 million ounces per year gold (equivalent) on a global basis.

Hazen Pozzolan Project, Nevada

The Hazen Pozzolan Project is located in Churchill County in Northern Nevada, 20 miles by road from the town of Fernley and 24 miles by road from the County town of Fallon. Situated 9km from a rail siding on the arterial east-west Union Pacific line, it is well positioned for rail transport to the regional markets of northern California, points east, as well as the local markets around Reno and northern Nevada.

The Hazen Project is therefore targeting different regional markets to the CS Project.

The Company's mining claims were staked in June 2021 to cover a deposit of glassy pumice targeted as a natural pozzolan. Pumice is currently mined elsewhere in the US as natural pozzolan and at Hazen was mined as a lightweight aggregate from a shallow open pit some decades ago. Further work is required to determine the extent of the Hazen deposit although indications are that the pumice extends several hundred meters beyond the limits of the existing open pit.

Whilst the Hazen Project is less advanced than the CS Project, the Company's laboratory testwork to date has shown that the material present in the pit is of similar high quality to the CS Project pozzolan. It exceeds the specifications of ASTM standard C618 and mitigates the deleterious alkali silica reaction that occurs when concrete is made using reactive aggregates.

During the year a number of companies made field visits and tested samples from Hazen. As a result the Company recently entered into a collaborative arrangement with an existing processor of natural pozzolan for mining and test grinding of a bulk sample from Hazen. Approximately 250 tons of natural pozzolan was extracted and is being processed at no cost to the Company. The owner of the process plant has the processing facilities and marketing network in those regions targeted by the Hazen Project to commercialise the Hazen deposit in the future. Results are awaited.

Pioche Sepiolite Project, Nevada

Despite being a relatively new project for the Company, the Pioche Project is progressing quickly.

Sepiolite is a non-swelling, lightweight, porous clay with outstanding sorption capacity. The largest market globally for sepiolite is for use in lightweight non-clumping pet litters, where it has superior properties compared to other clays used in this application. It is also used extensively in agriculture as a slow-release absorbent and adsorbent carrier for chemicals and pesticides, in animal feeds as a binder and carrier for nutrients and growth promoter. It is also used as a suspending agent in paints, medicines, pharmaceuticals and cosmetics, and in high temperature drilling muds.

Sepiolite is a very uncommon clay and there are very few commercial deposits in the world, and, with one exception, there are no significant sepiolite deposits known in the USA, so a large potential market would exist for any new US producer of sepiolite.

The Pioche claims were staked to cover a historically documented occurrence of sepiolite which was subsequently confirmed by the Company's initial prospecting work. Following a field visit in December 2021, the Company reached an agreement with Spanish company Tolsa S.A., the world's largest producer of sepiolite, granting Tolsa an up to 18-month option to purchase the Pioche Project for $1.25 million and an ongoing payment to Sunrise of a 3% royalty. This option expires in December 2023, but Tolsa must make a payment to Sunrise of $50,000 by 28 December 2022 to continue the exploration beyond this payment date.

Tolsa has completed a detailed mapping and sampling programme at Pioche which has defined multiple beds of sepiolite and this has guided a follow up trenching programme which was recently completed. Samples are now being tested in Spain and results are awaited.

Other SR Minerals Inc. Projects

SR Minerals Inc. continues to hold mining claims at a number of additional projects in Nevada including the Bay State Silver Project, the County Line Diatomite Project and the Ridge Limestone Project. These projects are available for sale or joint venture.

An agreement was reached with the underlying owners of the Bay State Silver Project claims to reduce the annual lease payments to a nominal amount for the next three years.

SR Minerals Inc. also holds a 2% NSR royalty interest from Golden Metal Resources plc ("GMR") on GMR's Garfield Copper-Gold Project. This is a key project for GMR in its plans to list on AIM. The Garfield Project is considered to be prospective for sediment hosted skarn and porphyry-style copper-gold mineralisation.

SR Minerals Inc. also holds a 3% NSR royalty interest in the Junction Copper-Gold-Silver Project held by VR Resources Ltd, although it is understood that no work is currently planned for this Project.

WESTGOLD INC.

Westgold Inc. was set up under the project generator model and currently holds interests in four projects in Nevada - Clayton, Myrtle, Newark and Stonewall.

Clayton Silver-Gold Project, Nevada

The property lies in the Walker Lane Mineral Belt. It is some 19 miles southeast of the producing Mineral Ridge Gold Mine and 19 miles southwest of the major historic mining centre of Goldfield, where a number of large gold-silver deposits are currently under development.

The mineralisation at the Clayton Project was discovered in the 1980s when drilling programmes were conducted by Freeport-McMoRan Gold and Coeur Exploration. Wide intervals of low-grade silver mineralisation were intersected and it was postulated that gold-silver values were under-reporting due to loss of fines from the reverse circulation drilling method. The most promising intersections were not followed up.

This historical drilling loss of silver was corroborated by the Company when a twin diamond drill hole delivered an 84% increase in the silver grade compared to an original Freeport hole.

The Clayton Project is available for joint venture although the Company will consider follow up drilling as resources become available. No exploration was conducted at the Clayton Project in the reporting period.

Newark Gold Project, Nevada

The Newark Gold Project is located at the southern end of the Battle Mountain-Eureka (Cortez) gold trend. It lies 40 km south of, and along the same structural zone as, the past-producing Alligator Ridge Mine, 13 km southwest of the past producing Illipah Gold Mine and 20 km east of the Pan Gold Mine.

The Newark Project was originally targeted for Carlin-style gold mineralisation by Freeport in the 1980s following the discovery of gold anomalous values in silicified rocks in a favourable structural and stratigraphic setting. Carlin-style deposits can be both large (e.g. Goldstrike which contains 39 million ounces gold at a grade of 3.3 g/t) and high-grade (e.g. Barrick's recent Goldrush discovery which contains 21 million ounces gold at a grade of 6.9 g/t).

Freeport drilled a total of 16 holes. Significantly, hole NWK8 intersected 47m of low-level gold (average 0.14 ppm gold) in jasperoid from 75m to the end of the hole at 122m. Drilling is warranted to test this gold bearing jasperoid and to deepen the hole through to about 400m depth to test the underlying Joana Limestone which can be a significant host for Carlin-style gold mineralisation.

The Company will consider a joint venture partner for this project. No exploration was conducted at the Newark Project in the reporting period.

Myrtle Gold Project, Nevada

The Myrtle Gold-Silver Project (the "Project") is located 25km northwest of Hawthorne, the administrative centre for Mineral County, Nevada.

The Project was acquired by claim staking in 2021. Promising assay results have been obtained from reconnaissance field mapping and sampling but recently obtained drill logs from exploration by a previous operator downgraded the potential of Company's claims.

The Company has retained its claims but the carrying value for the Myrtle Project has been fully impaired in this year's accounts.

Stonewall Gold Project, Nevada

Westgold Inc. holds a 2% Net Smelter Return Royalty from GMR in the Stonewall project, also a key project for GMR's AIM listing. Stonewall is prospective for epithermal-style gold-silver mineralisation.

SUNRISE MINERALS AUSTRALIA PTY LTD

Baker's Gold Project

The Baker's Gold Project comprises two adjacent prospecting licences P51/2837 and P51/2884 located 25km southeast of Meekatharra in the Murchison Goldfield of Western Australia.

Since acquiring the Project the Company has carried out soil sampling and a preliminary programme of drilling with significant mineralisation being intersected in drill hole 21SBRC002 (2m interval from 64m down hole grading 14.4 g/t gold including 1m grading 26.5 g/t gold). The Company has recently applied for mining Leases M51/903 and M51/904 to cover this mineralisation and ensure the continuity of tenure before the expiry of the Company's prospecting licences.

Since the Company completed its drill programme the Australian Federal Court determined in favour of the Yugunga-Nya Aboriginal People ("YN PBC") Part A native title claim. The determination of Native Title grants the claimants official title and rights to the land along with government funding to support the right to defend title. 

The Company is required by law to reach agreement with YN PBC on compensation for any loss of native title rights that might result from future mining activities. YN PBC has provided the Company with a Draft Standard Negotiation Protocol. It is open ended with respect of costs to be met by Sunrise with Sunrise having to pay all of YN PBC's fees relating to legal advice, its 10-man negotiating team, in-person negotiations, environmental and technical consultants, etc.

The Company is currently considering if the possible costs of negotiating a Native Title agreement can be justified by the exploration results obtained to date or if these negotiations can be deferred whilst further exploration is carried out.

No discussions have yet been held with YN PBC but as a prudent measure, until the position becomes clearer, the Company has impaired in full the carrying value of the Bakers Project in this year's accounts. This impairment can be reversed if justified by future developments.

The Role Of Natural Pozzolan In CO2 Net-Zero Strategies

The development of the Company's natural pozzolan projects is taking place against a background of fundamental change in the cement and concrete industries; a change which is being driven by climate change targets to achieve net-zero CO2 emissions.

After water, concrete is the most used substance on Earth. Whilst 14 billion cubic metres of concrete were poured globally in 2020, this is forecast to increase to 20 billion cubic metres annually by 2050 with continuing global urbanisation and population growth. This activity is currently responsible for 8% of the world's man-made emissions, half of which comes from the burning of fuel and the other half by direct release of CO2 from burning limestone in the cement clinker making process.

Net-zero CO2 targets are therefore a major challenge for the cement and concrete industries but one they must meet. In the US, as elsewhere around the world, these targets are enshrined in State legislation, industry-body commitments and are increasingly driven by cement and concrete customers and specifiers. In addition, one of the Implementation Priorities in US President Biden's November 2021 Executive Order "Implementation of the $1.2 trillion Infrastructure Investment and Jobs Act" is "building infrastructure that is resilient and that helps combat the crisis of climate change". It seems likely then that priority will be given to greener and more sustainable building materials in contracts awarded under the Infrastructure Bill.

Another significant development which advances the potential of natural pozzolan was the enactment of The Inflation Reduction Act of 2022. This act includes a $5.8 billion package of grants, rebates and loans for decarbonisation of heavy industries like steel and cement. A key element for the transition of large cement companies to a lower carbon footprint is to incorporate SRMs into their cement formulations. The packages introduced by The Inflation Reduction Act of 2022 specifically provide funding for manufacturers that install equipment capable of slashing greenhouse gas emissions.

Southern California is a major target market for the Company's CS Project and California has the largest economy of all the US States. In September 2021, in the first law of its kind in the US, California's Carbon Cap-and-Trade scheme was signed into legislation and directly targets greenhouse gas emissions associated with the cement industry. This Cement Decarbonization legislation is focused on achieving net-zero emissions from the industry by the end of 2045. It works by putting a periodically declining limit on carbon emissions for a given entity, allows those entities to trade unused allowances but imposes fines on any entity exceeding its allowance. Experts believe this will pave the way for similar Federal legislation in the US. 2021 also saw the publication by The US Portland Cement Association of its road map to carbon neutrality. A key component for this road map is the reduction in the quantity of cement used in cement and concrete mixes through the use of supplementary cementitious materials ("SCMs") such as natural pozzolan.

It is important to understand how the cement industry is addressing net-zero carbon targets and how natural pozzolan can play a key role. There are a number of strategies currently being employed in the cement industry, including:

· Use of alternative clean(er) fuels. e.g. biomass, chemical and hazardous waste, and petroleum-based fuels but also natural gas; wind energy; hydroelectric power; solar energy; hydrogen; and nuclear energy.

· Carbon capture and storage. In its most basic form CO2 is captured from the cement kiln where the fuel is burned and where CO2 is released from burnt limestone. The captured CO2 is stored in underground geological reservoirs such as spent oil or gas fields.

· Carbon curing. CO2 is captured at the cement plant then liquified and transported with cement to the concrete ready-mix plant where it is reinjected into the concrete mix in the mixing truck. Here it combines with the concrete mix and becomes locked into the concrete mix and assists in concrete curing.

· Manufacture of so-called "clean-tech" cements. These cement technologies do not produce Ordinary Portland Cement ("OPC") but produce alternative cements by innovative carbon-neutral methods rather than OPC. These cements can be used in partial or full replacement of OPC.

· Production of 1L (limestone) cement. C.10% limestone blended with OPC with clinker. 10% reduction in CO2 emission per ton of cement produced. An easy win for the cement companies as limestone is always available locally as the main source of cement clinker.

· Production of cements containing natural pozzolan or slag, e.g.

· 1P (pozzolan) cement. Up to 30% natural pozzolan blended with OPC. Up to 30% reduction in CO2 emission per ton of cement. Natural pozzolan can replace fly ash pozzolan in cement or concrete. Fly ash supply is declining due to the ongoing closure of coal-fired power stations.

· 1S (slag) cement. Up to 30% blast furnace slag pozzolan blended with OPC. Up to 30% reduction in CO2 emission per ton of cement. Blast furnace slag is restricted in production quantities and locations.

The Role Of Natural Pozzolan In Sustainable Development

In addition to building greener structures, a key part of sustainability in the concrete industry is the building of more durable structures with longer life.

Whereas "Roman concrete" structures made with natural pozzolan have survived for millennia, some concrete structures from parts of the 20th century made with OPC are susceptible to "concrete cancer". This is due to reaction of alkalis in OPC with "reactive" silica in concrete aggregates and results in expansion, cracking and spalling of the concrete (Alkali Silica Reaction or "ASR").

As high-quality aggregate supplies for concrete become scarcer, the concrete industry is having to use more reactive aggregates that can severely impact the quality of the resulting concrete.

The use of high quality SCMs such as natural pozzolan will mitigate ASR by tying up and immobilising the alkalis in cement, preventing their reaction with silica in the aggregates. So much so that the use of pozzolans is often mandated by State Departments of Transport for public infrastructure construction work to ensure more sustainable structures.

Sustainability, and ASR mitigation in particular, is therefore a significant factor in choosing the use of natural pozzolan in net-zero CO2 strategies.

Of all the strategies being adopted by the cement and concrete industries, only the use of SCMs can mitigate ASR and so we expect to see natural pozzolan used in conjunction with other CO2 reduction strategies.

Use Of Natural Pozzolan Is A Win-Win For Cement Companies

In order for cement companies to reduce the embodied carbon in their cements it helps if there is a strong business case for doing so. Cap-and-Trade is a "carrot and stick" approach and customers and specifiers are increasingly looking for greener cements.

The use of 1P cement not only provides for more durable and sustainable concrete with lower embodied carbon but it also allows the cement company to sell more cement per ton of OPC clinker capacity. The production of cement clinker in the cement kiln is often the volume limiting step to cement production at a cement plant.

This is an important consideration particularly as cement companies are currently operating at capacity and are all sold out.

These ongoing developments serve to strengthen the place of natural pozzolans in future cement formulations and the CS and Hazen Projects are well placed, being fully permitted and ready to mine.

Risks & Uncertainties

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

The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed below together with risk mitigation strategies employed by the Board.

Forward-Looking Statements

This Annual Report may contain certain statements and expressions of belief, expectation or opinion which are forward-looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements.

Section 172 (1) Statement

Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. This requires a director to have regard, among other matters, to: the likely consequences of any decision in the long term; the interests of the Company's employees; the need to foster the Company's business relationships with suppliers, clients, joint arrangement partners and others; the impact of the Company's operations on the community and the environment; the desirability of the Company maintaining a reputation for high standards of business conduct; and the need to act fairly with members of the Company.

The Company's directors give careful consideration to these factors in discharging their duties. The stakeholders we consider are our shareholders, employees, suppliers (including consultants and contractors), our joint arrangement partners, the regulatory bodies that we engage with and those that live in the societies and geographical areas in which we operate. The directors recognise that building strong, responsible and sustainable relationships with our stakeholders will help us to deliver our strategy in line with our long-term objectives.

Having regard to:

The likely consequences of any decision in the long-term:

The Company's Aims and Business Model are set out at the head of this Strategic Report and in the Chairman's Statement. The Company's mineral exploration and development business is, by its very nature, long-term and so the decisions of the Board always consider the likely long-term consequences and take into consideration, for example, trends in metal and minerals supply and demand, the long-term political stability of the countries in which the Company operate and the potential impact of its decisions on its stakeholders and the environment. As the Company aims to transition the CS Project into production other projects also become important to the long-term future of the Company and this has framed the Board's decision to allocate a portion of capital to the testing of some of the Company's precious metal projects and to acquiring new projects. The Board's approach to general strategy and long-term risk management are set out in the Corporate Governance Statement (Principle 1) and the section on Risks and Uncertainties.

The interests of the Company's employees:

Other than the Board, the Company has no employees. It relies on the employees of Tertiary Minerals plc who are engaged through a services agreement, but all of these employees have daily access to the Executive Chairman and their views are considered in the Board's decision making. Further details on the Board's employment policies, health and safety policy and employee engagement are given in the Corporate Governance Statement (Principle 8).

The need to foster the Company's business relationships with its stakeholders:

The sustainability of the Company's business long-term is dependent on maintaining strong relationships with its stakeholders. The factors governing the Company's decision making and the details of stakeholder engagement are set out in the Corporate Governance Statement (Principles 2, 3, 8 and 10).

Having regard to the impact of the Company's operations on the community and the environment:

The Company requires a "social licence" to operate sustainably in the mining industry and so the Board makes careful consideration of any potential impacts of its activities on the local community and the environment. The Board strives to maintain good relations with the local communities in which it operates and with local businesses. For example, in permitting the CS Project for production the Board has carried out extensive work and consultation with regulators and the local community representatives to evaluate the benefits and impacts of its CS Project. Further discussion of these activities and Board considerations can be found in the Environmental, Social and Governance ("ESG") Statement and in the Corporate Governance Statement (Principle 3).

The desirability of the Company maintaining a reputation for high standards of business contact:

The Board recognises that its reputation is key to its long-term success and depends on maintaining high standards of corporate governance. It has adopted the QCA Code of Corporate Governance and sets out in detail how it has complied with the 10 key principles of the QCA Code in the Corporate Governance Statement. This contains details of various Company policies designed to maintain high standards of business conduct such as the Share Dealing Policy; ESG Policy; Health and Safety Policy, and Bribery & Anti-Corruption Policy and Code of Conduct.

The need to act fairly between Members of the Company:

The Board ensures that it takes decisions in the interests of the members (shareholders) as a whole and aims to keep shareholders fully informed of significant developments, ensuring that all shareholders receive Company news at the same time. The Executive Chairman devotes time to answering genuine shareholder queries, no individual or group of shareholders is given preferential treatment. Further information is provided in the Corporate Governance Statement (Principles 2 and 10).

This Strategic Report was approved by the Board of Directors on 9 December 2022 and signed on its behalf.

Patrick Cheetham

Executive Chairman

Directors' Responsibilities

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

Company law requires directors to prepare financial statements for a company for each financial year. Under that law the directors have elected to prepare the Group and Company financial statements in accordance with applicable law and UK adopted International Accounting Standards 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 Company and of the profit or loss of the Group for that period. The directors are also required to prepare the financial statements in accordance with the AIM Rules of the London Stock Exchange for companies trading securities on the AIM market.

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

· select suitable accounting policies and then apply them consistently;

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

· state whether they have been prepared in accordance with applicable law and UK adopted International Accounting Standards, subject to any material departures disclosed and explained in the financial statements; and

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

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

They are further responsible for ensuring that the Strategic Report and the Directors' Report and other information included in the Annual Report and financial statements are prepared in accordance with applicable law in the United Kingdom.

Website Publication

The maintenance and integrity of the Sunrise Resources plc website is the responsibility of the directors. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

Information from the Directors' Report

The directors are pleased to submit their Annual Report and audited financial statements for the year ended 30 September 2022.

The Strategic Report contains details of the principal activities of the Company and includes the Operating Review which provides detailed information on the development of the Group's business during the year and indications of likely future developments and events that have occurred after the financial year end.

Going Concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at the year-end of £96,126 (2021: £371,740) these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

Dividend

The directors do not recommend the payment of any dividend.

Financial Instruments and Other Risks

The business of mineral exploration and evaluation has inherent risks. Details of the Group's financial instruments and risk management objectives and of the Group's exposure to risk associated with its financial instruments are given in Note 19 to the financial statements.

Details of risks and uncertainties that affect the Group's business are given in the Strategic Report.

Directors

The directors holding office in the period were:

Mr P L Cheetham - Chairman of the Board and Chairman of the Nomination Committee.

Mr R D Murphy - Chair of the Remuneration Committee and a member of the Nomination and Audit Committees.

Mr J Cole - Chair of the Audit Committee and member of the Nomination and Remuneration Committees

Attendance at Board and Committee Meetings

The Board retains control of the Group with day-to-day operational control delegated to the Executive Chairman. The full Board meets four times a year and on any other occasions it considers necessary.

The directors' shareholdings are shown in Note 16 to the financial statements.

Events After The Year-End

On 29 November 2022 the Company raised £280,000 through a placement of 80,000,000 new ordinary shares and the issue of a £200,000 convertible security. The agreement, with US institutional investor Towards Net Zero LLC, allows the Company to issue a further convertible security within 6 months of the Closing Date, 6 December 2022, to raise a further £200,000 subject to certain conditions precedent.

Shareholders

As at the date of this report the following interests of 3% or more in the issued share capital of the Company appeared in the share register.

Disclosure of Audit Information

Each of the directors has confirmed that so far as they are aware, there is no relevant audit information of which the Company's Auditor is unaware, and that they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Auditor

A resolution to reappoint Crowe U.K. LLP as Auditor of the Company will be proposed at the forthcoming Annual General Meeting.

Charitable and Political Donations

During the year, the Group made no charitable or political donations.

Annual General Meeting

The Company's Annual General Meeting will be held on Friday 17 February 2023 at 10.00 a.m.

Conflicts of Interest

The Companies Act 2006 permits directors of public companies to authorise directors' conflicts and potential conflicts, where appropriate, where the Articles of Association contain a provision to this effect. The Company's Articles contain such a provision. Procedures are in place in order to avoid any conflict of interest between the Company and Tertiary Minerals plc. Tertiary provides corporate and project management services to Sunrise.

Approved by the Board on 9 December 2022 and signed on its behalf.

Patrick Cheetham

Executive Chairman

Board of Directors

The Directors and Officers of the Company during the financial year were:

Patrick Cheetham

Executive Chairman

Key Strengths:

· Founding director

· Mining geologist with 40 years' experience in mineral exploration

· 35 years in public company management

Appointed: March 2005

Committee Memberships: Chairman of the Nomination Committee

External Commitments: Executive Chairman of Tertiary Minerals plc

Roger Murphy

Non-Executive Director

Key Strengths:

· Career focus in capital raising for mining and oil & gas companies

· Former MD, Investment Banking, of Dundee Securities Europe Ltd

· Geologist

Appointed: May 2016

Committee Memberships: Chairman of the Remuneration Committee and Member of Audit and Nomination Committees

External Commitments: Partner and non-executive Director of Maini Minerals, Executive Director of Zamari Minerals Ltd, Sarn Helen Gold Limited and TREO Minerals Ltd.

James Cole

Non-Executive Director

Key Strengths:

· Chartered Accountant with strong commercial background and track record of success in fundraising, mergers, disposals and acquisitions in resource sector

· Previously Finance Director for the Goal Group Limited. Formerly Chief Financial Officer Cominco Resources Ltd, AIM/TSX traded European Minerals Corporation plc and TSX/OSE traded Crew Gold Corporation.

Appointed: May 2021

Committee Memberships: Chairman of the Audit Committee and a Member of the Remuneration and Nomination Committees

External Commitments: Not applicable.

Rod Venables

Company Secretary

Key Strengths:

· Qualified company/commercial solicitor

· Director and Head of Company Secretarial Services at City Group PLC

· Experienced in both Corporate Finance and Corporate Broking

Appointed: July 2019

External Commitments:  Company Secretary for Tertiary Minerals plc and other clients of City Group PLC

Corporate Governance

Chairman's Overview

There is no prescribed corporate governance code for AIM companies and the London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.

The Board considers the corporate governance code published by the Quoted Companies Alliance to be the most suitable code for the Company. Accordingly, the Company has adopted the principles set out in the QCA Corporate Governance Code (the "QCA Code") and applies these principles wherever possible, and where appropriate given its size and available resources. The Company's Corporate Governance Statement was reviewed by the Board on 9 December 2022. The Company has set out on its website and in its Corporate Governance Statement the 10 principles of the QCA Code and details of the Company's compliance.

Patrick Cheetham, in his capacity as Chairman, has overall responsibility for the corporate governance of the Company and the Board is responsible for delivering on our well-defined business strategy having due regard for the associated risks and opportunities.

The Company's corporate governance arrangements now in place are designed to deliver a corporate culture that understands and meets shareholder and stakeholder needs and expectations whilst delivering long-term value for shareholders.

The Board recognises that its principal activity, mineral exploration and development, has potential to impact on the local environment and communities and consequently has adopted an Environmental, Social and Governance ("ESG") Policy to ensure that the Group's activities have minimal environmental and social impact. Where appropriate the Group's contracts with suppliers and contractors legally bind those suppliers and contractors to do the same. The Group's activities, carried out in accordance with the ESG Policy, have had only minimal environmental and social impact at present and this policy is regularly reviewed. Where appropriate, all work is carried out after advance consultation with affected parties.

The Board recognises the benefits that social media engagement can have in helping the Company reach out to shareholders and other stakeholders, but it also recognises that misuse or abuse of social media can bring the Company into disrepute. To facilitate the responsible use of social media the Company has adopted a Social Media Policy.

The Board has also adopted a Share Dealing Code for dealings in shares of the Company by directors and employees and a Bribery & Anti-Corruption Policy and Code of Conduct applicable to employees, suppliers and contractors.

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. The amount shown in the Consolidated and Company Statements of Financial Position in respect of trade payables at the end of the financial year represents 13 days of average daily purchases (2021: 4 days). This amount is calculated by dividing the creditor balance at the year end by the average daily Group spend in the year. 

The Board recognises it has a responsibility to provide strategic leadership and direction in the development of the Group's health and safety strategy in order to protect all of its employees and other stakeholders. The Company has developed a Health and Safety Policy to clearly define roles and responsibilities and in order to identify and manage risk.

Your Board currently comprises three directors of which two are non-executive and considered by the Board to be independent of management. We believe that this balance provides an appropriate level of independent oversight. The Board has the ability to seek independent advice although none was deemed necessary in the year under review. The Board is aware of the need to refresh its membership from time to time and to match its skill set to those required for the development of its mineral interests and will consider appointing additional independent non-executive directors in the future.

Patrick Cheetham

Executive Chairman

Environmental, Social and Governance Statement

Sunrise Resources plc and its subsidiaries ("the Company") practice responsible exploration as reflected in this Environmental, Social and Governance ("ESG") policy statement and as demonstrated by our actions. By doing so we reduce project risk, avoid adverse environmental and social impacts, optimising benefits for all stakeholders while adding value to our projects.

Our business associates, consultants and contractors ("Associated Parties") perform much of our primary activities at our projects and therefore we require that all Associated Parties working on our behalf or for our subsidiaries accept and adhere to the principles set out in this policy. We encourage input from those with local knowledge and we review this policy on a regular basis.

Our ESG policy is guided by the Prospectors & Developers Association of Canada's (PDAC) Framework for Responsible Exploration (known as e3 Plus) which encourages mineral exploration companies to support and improve social, environmental and health and safety performance across all exploration activities around the world.

Adopting Responsible Governance and Management

The Company is committed to environmentally and socially responsible mineral exploration and has developed and implemented policies and procedures for corporate governance and ethics. We ensure that all staff and key Associated Parties are familiar with these and have appropriate level of knowledge of these policies and procedures.

The Company employs persons and engages contractors with the required experience and qualifications relevant to their specific tasks and, where necessary, seeks the advice of specialists to improve the understanding and management of social, environmental, human rights and security, health and safety, and in the application of traditional knowledge.

The Company's Corporate Governance Statement and Bribery & Anti-Corruption policies can be viewed on our website here: https://www.sunriseresourcesplc.com/corporate-governance.

Applying Ethical Business Practices

As well as our shareholders and staff, our stakeholders include local communities and local leadership, local, regional and national government and regulatory authorities, suppliers, contactors and consultants, our local business partners and other interested parties. Our corporate culture and policies require honesty, integrity, transparency and accountability in all aspects of our work and when interacting with all stakeholders.

The Company takes all necessary steps to ensure that activities in the field minimise or mitigate any adverse impacts on both the environment and on local communities.

Commitment to Project Due Diligence and Risk Assessment

We make sure we are informed of the laws, regulations, treaties and standards that are applicable with respect to our activities. We ensure that Associated Parties are informed and prepared before going into the field in order to minimise the risk of miscommunication, unnecessary costs and conflict, and to understand the potential for creating opportunities with local communities where possible.

Engaging Host Communities and Other Affected and Interested Parties

Sunrise is committed to engaging positively with local communities, regulatory authorities, suppliers and other stakeholders in its project locations, and encourages feedback through this engagement. Through this process the Company develops and fosters the relationships on which our business relies for success.

Respecting Human Rights

The exploration activities of Sunrise are carried out in line with applicable laws on human rights in its home jurisdiction and those of the countries in which it works. The Company does not engage in activities that have adverse human rights impacts.

Protecting the Environment

We are committed to ensuring that environmental standards are met or exceeded in the course of our exploration activities. Applicable laws and local guidelines in all project jurisdictions are followed diligently and exploration programmes are only carried out once relevant permits and approvals have been secured from the appropriate regulatory bodies.

In Nevada, USA, most of our exploration is carried out on Federally owned land administered by the Bureau of Land Management (BLM) which requires the submission of financial bonds for reclamation of exploration activities and which holds the Company to account. Provisions are made in the financial statements for reclamation costs in accordance with calculations set by the BLM. When operating on private lands the Company applies the same rigorous standards for reclamation.

In Australia field exploration activity requires prior approval from the Department of Mines, Industry Regulation and Safety which imposes environmental reclamation obligations on any such approvals.

Where our activities create ground disturbance, we ensure that full rehabilitation is carried out in accordance with regulations and we take care to minimise the impact of our activities on local flora and fauna, choosing where possible less impactful exploration methods.

Safeguarding the Health and Safety of Workers and the Local Population

Company activities are carried out in accordance with its Health and Safety Policy which adheres to all applicable laws. It ensures that its Associated Parties are made aware of and follow these policies where relevant.

Corporate Governance Statement

The QCA Code sets out ten principles which should be applied. The principles are set out below with an explanation of how the Company applies each principle, and the reasons for any aspect of non-compliance.

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

The Company has a clearly defined strategy and business model that has been adopted by the Board and is set out in the Strategic Report. Details of the challenges to the execution of the Company's strategy and business model and how those will be addressed can be found in Risks and Uncertainties in the Strategic Report.

Principle Two: Seek to understand and meet shareholder needs and expectations.

The Board is committed to maintaining good communication with its shareholders and investors. The Chairman and members of the Board from time to time meet with shareholders and investors directly or through arrangements with the Company's brokers to understand their investment requirements and expectations and to address their enquiries and concerns.

All shareholders are encouraged to attend the Company's Annual General Meetings where they can meet and directly communicate with the Board. After the close of business at the Annual General Meeting, the Chairman makes an up-to-date corporate presentation and opens the floor to questions from shareholders.

Shareholders are also welcome to contact the Company via email at info@sunriseresourcesplc.com with any specific queries.

The Company also provides regulatory, financial and business news updates through the Regulatory News Service (RNS) and various media channels such as Twitter. Shareholders also have access to information through the Company's website, www.sunriseresourcesplc.com, which is updated on a regular basis and which includes the latest corporate presentation on the Group. Contact details are also provided on the website.

Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. The Board has adopted an Environmental, Social and Governance ("ESG") Policy, which can be found on the Company website and an ESG Statement can be found in this Annual Report. The Company engages positively with local communities, regulatory authorities, suppliers and other stakeholders in its project locations and encourages feedback through this engagement. Through this process the Company identifies the key resources and fosters the relationships on which the business relies.

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

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed in Risks and Uncertainties in the Strategic Report, together with risk mitigation strategies employed by the Board.

Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.

The Board's role is to agree the Group's long-term direction and strategy and monitor achievement of its business objectives. The Board meets formally four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives regular and timely reports for consideration on all significant strategic, operational and financial matters. Relevant information for consideration by the Board is circulated in advance of its meetings.

The Board met eleven times during the year to consider such matters. Further details are provided in the Directors' Report. The Board is supported by the Audit, Remuneration and Nomination Committees.

The Board currently consists of the Executive Chairman (Patrick Cheetham), and two non-executive directors (Roger Murphy and James Cole). The current Board's preference is that independent non-executive directors comprise the majority of Board members. Patrick Cheetham is currently the Chairman and Chief Executive. Patrick Cheetham has a service contract as Chairman of the Company and his services as Chief Executive are provided to the Company, at cost, through a Management Services Agreement with Tertiary Minerals plc ("Tertiary"), in which he is a shareholder and where he is also employed as Chairman. In 2022, Patrick Cheetham dedicated over 62% of his working time to the Company. The combined role of Chairman and Chief Executive results in cost savings and is considered acceptable whilst there is a majority of independent directors on the Board and having regard to the fact that the Company is not yet revenue generating.

The non-executive directors have committed the time necessary to fulfil their roles during the year. The attendance record of the directors at Board and Board Committee meetings are detailed in the Directors' Report.

The current non-executive directors are considered independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement.

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

The Board considers the current balance of sector, financial and public market skills and experience of its directors are relevant to the Company's business and are appropriate for the current size and stage of development of the Company and the Board considers that it has the skills and experience necessary to execute the Company's strategy and business plan and discharge its duties effectively.

The directors maintain their skills through membership of various professional bodies, attendance at mining conferences and through their various external appointments.

All Directors have access to the advice and services of the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed. All directors are able to take independent professional advice, if required, in relation to their duties and at the Company's expense.

Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.

The ultimate measure of the effectiveness of the Board is the Company's progress against the long-term strategy and aims of the business. This progress is reviewed in Board meetings held at least four times a year. The Executive Chairman's performance is regularly reviewed by the rest of the Board.

The Nomination Committee, currently consisting of the Executive Chairman and the two non-executive directors, meets once a year to lead the formal process of rigorous and transparent procedures for Board appointments. During this meeting the Nomination Committee reviews the structure, size and composition of the Board; succession planning; leadership; key strategic and commercial issues; conflicts of interest; time required from non-executive directors to execute their duties effectively; overall effectiveness of the Board and its own terms of reference.

Under the Articles of Association, new directors appointed to the Board must stand for election at the first Annual General Meeting of the Company following their appointment. Under the Articles of Association, existing directors retire by rotation and may offer themselves for re-election.

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

The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The Group is currently managed via a service agreement with Tertiary. It has no employees but encourages Tertiary's employees to understand all aspects of the Group's business and Tertiary seeks to remunerate its employees fairly, being flexible where practicable. In future, the Group will give full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of Tertiary's employees' interests when making decisions, and suggestions from those employees aimed at improving the Group's performance are welcomed.

The corporate culture of the Company is promoted to Tertiary's employees, suppliers and contractors and is underpinned by the implementation and regular review, enforcement and documentation of various policies: Health and Safety Policy; Environmental, Social and Governance ("ESG") Policy; Share Dealing Policy; Bribery & Anti-Corruption Policy & Code of Conduct; Privacy and Cookies Policy and Social Media Policy. These procedures enable the Board to determine that ethical values are recognised and respected.

The Board recognises that its principal activity, mineral exploration and development, has potential to impact on local environments and communities, and as such an ESG Policy was developed with this in mind and this replaces the previous to ensure that, wherever they take place, the Group's activities have minimal environmental and social impact. Where appropriate the Group's contracts with suppliers and contractors legally bind those suppliers and contractors to do the same. The Group's activities carried out in accordance with the ESG Policy have had only minimal environmental and social impact and this policy is regularly reviewed. Where appropriate, all work is carried out after advance consultation with affected parties.

Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board.

The Board has overall responsibility for all aspects of the business. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board's decision-making, and that the non-executive directors are properly briefed on all operational and financial matters. The Chairman has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee. The Chairman has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. Key operational and financial decisions are reserved for the Board through quarterly project reviews, annual budgets, and quarterly budget and cash-flow forecasts and on an ad hoc basis where required.

The two non-executive directors are responsible for bringing independent and objective judgment to Board decisions. The Board has established Audit, Remuneration and Nomination Committees with formally delegated duties and responsibilities. James Cole currently chairs the Audit Committee, Roger Murphy chairs the Remuneration Committee and Patrick Cheetham chairs the Nomination Committee. 

This Corporate Governance statement will be reviewed at least annually to ensure that the Company's corporate governance framework evolves in line with the Company's strategy and business plan.

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

The Company regularly communicates with, and encourages feedback from, its shareholders who are its key stakeholder group. The Company's website is regularly updated and users, including all stakeholders, can register to be alerted via email when material announcements are made. The Company's contact details are on the website should stakeholders wish to make enquiries of management.

The Group's financial reports for at least the past five years can be found here: https://www.sunriseresourcesplc.com/financial-reports and contains past Notices of Annual General Meetings.

The results of voting on all resolutions in general meetings are posted to the Company's website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent votes.

Audit Committee Report

The Audit Committee is a sub-committee of the Board, comprised of the independent non-executive directors and assists the Board in meeting responsibilities in respect of external financial reporting and internal controls. The Audit Committee also keeps under review the scope and results of the audit. It also considers the cost-effectiveness, independence and objectivity of the auditors taking account of any non-audit services provided by them. James Cole is Chair of the Audit Committee.

The specific objectives of the Committee are to:

a) maintain adequate quality and effective scope of the external audit of the Group including its branches where applicable and review the independence and objectivity of the auditors.

b) ensure that the Board of Directors has adequate knowledge of issues discussed with external auditors.

c) ensure the financial information and reports issued by the Company to AIM, shareholders and other recipients are accurate and contain proper disclosure at all times.

d) maintain the integrity of the Group's administrative operating and accounting controls and internal control principles.

e) ensure proper accounting policies are adhered to by the Group.

The Committee has unlimited access to the external auditors, to senior management of the Group and to any external party deemed necessary for the proper discharge of its duties. The Committee may consult independent experts where it considers necessary to perform its duties.

The Audit Committee reviews the financial controls of the Company on a regular basis and is satisfied that the Group's financial controls and reporting procedures are robust and sufficient to ordinarily prevent fraud and ensure that senior management, the Committee and the Board are fully aware of the Company's financial position at all times.

The Audit Committee met three times in the last financial year, on 10 December 2021, 24 May 2022 and 8 August 2022. Significant reporting issues considered during the year included the following:

1. Impairments

The Committee has reviewed the carrying values of the Group projects as at 30 September 2022, and recoverability of loans from the Parent Company to subsidiary undertakings and carried out impairment reviews. The project carrying values are assessed against the IFRS 6 criteria set out in Note 1(k). Loans to subsidiary undertakings are assessed for impairment under IFRS 9.

As a result of this, it was judged that the Bakers and Myrtle Project expenditure should be impaired and that the Group's inter-company loan to Sunrise Minerals Australia Pty Ltd should be fully impaired.

2. Going Concern

The Committee also considered the Going Concern basis on which the accounts have been prepared (see Note 1(b)). The directors are satisfied that the Going Concern basis is appropriate for the preparation of the financial statements.

James Cole

Chair - Audit Committee

Remuneration Committee Report

The Remuneration Committee is a sub-committee of the Board and comprises the independent non-executive directors. Mr Murphy is Chairman of the Remuneration Committee.

The primary objective of the Committee is to review the performance of the executive directors and review the basis of their service agreements and make recommendations to the Board regarding the scale and structure of their remuneration.

However, the Company does not currently remunerate any of the directors other than in their capacity as directors. Whilst the Chairman of the Board, Patrick Cheetham, does have an executive role, his technical and managerial services are provided under a general service agreement with Tertiary Minerals plc and his remuneration is fixed by Tertiary Minerals plc. Nonetheless, it is the role of the Remuneration Committee to ensure that the executive director is appropriately incentivised and rewarded for his services to the Company and this is considered as part of the Committee's review of any Long-Term Incentive Plan.

The Remuneration Committee met once during the financial year under review, on 8 August 2022.

Roger Murphy

Chair - Remuneration Committee

Nomination Committee Report

The Nomination Committee comprises the Chairman and the independent non-executive directors. Patrick Cheetham is Chair of the Nomination Committee.

The primary objective of the Nomination Committee is to lead the formal process of reviewing and making recommendations as to Board appointments and other board changes and to make appropriate recommendations to the Board.

The Committee is required, amongst other things, to:

(a) Review the structure, size and composition (including the skills, knowledge, experience and diversity) of the Board and make recommendations to the Board with regard to Board appointments and any Board changes.

(b) Give full consideration to succession planning for directors and other senior executives in the course of its work, taking into account the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in the future.

(c) Keep under review the leadership needs of the organisation to compete effectively in the marketplace.

(d) Review annually the time required from non-executive directors and non-executive directors. Performance evaluation should be used to assess whether the executive directors and non-executive directors are spending enough time in fulfilling their duties.

(e) Arrange periodic reviews of the Committee's own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

(f) Ensure that prior to the appointment of a director, the proposed appointee should be required to disclose any other business interests that may result in a conflict of interest and be required to report any future business interests that may result in a conflict of interest.

The Committee carries out its duties for the Parent Company, major subsidiary undertakings and the Group as a whole and met twice during the period under review, on 29 April 2022 and 8 August 2022 to review the Terms of Reference for the Committee and to consider their continuing suitability.

The Committee is satisfied that the current Board has a depth of experience and level and range of skills appropriate to the Company at this stage in its development. It is however recognised that the Company is likely to need additional expertise as it moves forward into commercial production and so the composition of the Board will be kept under careful review to ensure that the Board can deliver long-term growth in shareholder value.

Patrick Cheetham

Chair - Nomination Committee

Publication of Statutory Accounts

The financial information set out in this announcement does not constitute the Company's Annual Accounts for the period ended 30 September 2022 or 2021. The financial information for 2021 is derived from the Statutory Accounts for 2021. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies. The Statutory Accounts for 2022 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have reported on the 2022 and 2021 accounts. Neither set of accounts contain a statement under section 498(2) of (3) the Companies Act 2006 and both received an unqualified audit opinion. However, there was an emphasis of matter in relation to a requirement that the Company raise funds in the future to continue as a going concern.

Availability of Financial Statements

The Annual Report containing the full financial statements for the year to 30 September 2022 will be uploaded to the Shareholders Documents section of the Company's website on or around 22 December 2022: https://www.sunriseresourcesplc.com/shareholder-documents.

Consolidated Income Statement

for the year ended 30 September 2022

All amounts relate to continuing activities.

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2022

Consolidated and Company Statements of Financial Position

at 30 September 2022

Company Registration Number: 05363956

The Company reported a loss for the year ended 30 September 2022 of £552,391 (2021: £256,473).

These financial statements were approved and authorised for issue by the Board on 9 December 2022 and were signed on its behalf.

P L Cheetham J Cole

Executive Chairman Director

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated and Company Statements of Cash Flows

for the year ended 30 September 2022

Notes to the Financial Statements

for the year ended 30 September 2022

Background

Sunrise Resources plc (the "Company") is a public company incorporated and domiciled in England. It is traded on the AIM Market of the London Stock Exchange - EPIC: SRES.

The Company is a holding company (together, "the Group") for one company incorporated in Australia, and two companies incorporated in Nevada, in the United States of America. The Group's financial statements are presented in Pounds Sterling (£) which is also the functional currency of the Company.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

1. Accounting policies

(a) Basis of preparation

The financial statements have been prepared on the basis of the recognition and measurement requirements of applicable law and UK adopted International Accounting Standards .

(b) Going concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£96,126), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company's and Group's overheads and planned discretionary project expenditures and to maintain the Company and Group as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group's and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

(c) Basis of consolidation

Investments, including long-term loans, in the subsidiaries are valued at the lower of cost or recoverable amount, with an ongoing review for impairment.

The Group's financial statements consolidate the financial statements of Company and its subsidiary undertakings using the acquisition method and eliminate intercompany balances and transactions.

In accordance with section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own statement of comprehensive income. The amount of the loss for the financial year recorded within the financial statements of the Company is £552,391 (2021: £256,473).

(d) Intangible assets

Exploration and evaluation

Accumulated exploration and evaluation costs incurred in relation to separate areas of interest (which may comprise more than one exploration licence or exploration licence applications) are capitalised and carried forward where:

(1) such costs are expected to be recouped through successful exploration and development of the area, or alternatively by its sale; or

(2) exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to the areas are continuing.

A biannual review is carried out by the directors to consider whether there are any indications of impairment in capitalised exploration and development costs. Full impairment reviews were carried out in order to assess the carrying values of each project as at 31 March 2022 and 30 September 2022. This involved consideration of changes in circumstances and evidence including and exploration results, changes in tenure of mineral rights, economic circumstances such as market prices, opportunities for realisation such as sale or joint ventures and viability, comparing anticipated future costs with expected recoverable value. For each project, based upon the relevant considerations, the directors formed a view regarding the recoverability of capitalised expenditure and continued compliance with the IFRS 6 criteria for recognition and deferral.

Where an indication of impairment is identified, the relevant value is written off to the income statement in the period for which the impairment was identified. An impairment of exploration and development costs may be subsequently reversed in later periods should conditions allow.

Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest which have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred or in which the area was abandoned.

Development

Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On reaching a mining development decision, for example, the commitment of capital to mine development, exploration and evaluation costs are reclassified as development costs and all development costs on a specific area of interest will be amortised over the useful economic life of the projects, once they become income generating and the costs can be recouped.

(e) Trade and other receivables and payables

Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised cost.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or less.

(g) Leases

IFRS 16 requires the recognition of lease commitments as right of use assets and the recognition of a corresponding liability. Lease costs are recognised in the income statement in the form of depreciation of the right of use asset over the lease term and interest charges representing the unwind of the discount on the lease liability.

Short term leases, which fall outside the IFRS 16 requirements, having a duration of 12 months or less, are charged to the income statement on straight line basis.

(h) Deferred taxation

Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax assets are recognised to the extent that they are regarded as recoverable.

(i) Foreign currencies

The Group's consolidated financial statements are presented in Pounds Sterling (£), being the functional currency of the Company, and the currency of the primary economic environment in which the Company operates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.

For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries, associated undertakings and joint arrangements, that have a functional currency different from the Group's presentation currency, are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional currency different from the Group's presentation currency, are translated at exchange rates at the date of transaction. Exchange differences arising on opening reserves are taken to the foreign currency reserve in equity.

(j) Share warrants and share-based payments

The Company issues warrants to employees (including directors) and third parties. The fair value of the warrants is recognised as a charge measured at fair value on the date of grant and determined in accordance with IFRS 9, adopting the Black-Scholes-Merton model. The fair value is recognised on a straight-line basis over the vesting period, with a corresponding adjustment to equity, based on the management's estimate of shares that will eventually vest. The expected life of the warrants is adjusted, based on management's best estimates, for the effects of non-transferability, exercise restrictions and behavioural considerations. The details are shown in Note 15.

The Company also issues shares in order to settle certain liabilities, including payment of fees to directors. The fair value of shares issued is based on the closing mid-market price of the shares traded on the AIM market on the day prior to the date of settlement and it is expensed on the date of settlement with a corresponding increase in equity.

(k) Financial assets designated at fair value through OCI

Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

The Group elected to classify irrevocably its listed equity investments under this category.

(l) Reclamation costs

The Group's mining and exploration activities are subject to various governmental laws and regulations relating to the protection of the environment. The Group records a liability for the estimated future rehabilitation costs and decommissioning of its development projects at the time a constructive obligation is determined.

When provisions for closure and environmental rehabilitation are initially recognised, the corresponding cost is capitalised as an intangible asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of closure and environmental rehabilitation activities is recognised in mining interests and, from the commencement of commercial production, is amortised over the expected useful life of the operation to which it relates. Any change in the value of the estimated expenditure is reflected in an adjustment to the provision and asset.

(m) Standards, amendments and interpretations not yet effective

At the date of authorisation of these financial statements, there are no amended reporting standards and interpretations that impact the Group as they are either not relevant to the Group's activities or require accounting which is consistent with the current accounting policies.

(n) Judgements and estimations in applying accounting policies

In the process of applying the Group's accounting policies above, management has identified the judgemental areas that have the most significant effect on the amounts recognised in the financial statements:

Intangible assets - exploration and evaluation

IFRS 6 "Exploration for and Evaluation of Mineral Resources" requires that exploration and evaluation assets shall be assessed for impairment when facts and circumstances suggest that the carrying amount may exceed recoverable amount.

In practical terms, this requires that project carrying values are regularly monitored and assessed for recoverability whether from future exploitation of resources or realised by sale to a third party.

Where activities have not reached a stage, which permits reasonable confirmation of the existence of mineral reserves, the directors must form a judgement whether future exploration and evaluation should continue. This requires management to use their sector experience, apply their specialist expertise and form a conclusive judgement whether or not, on the balance of evidence that further exploration is justified to determine if an economically viable mining operation can be established in future. Such estimates, judgements and assumptions are likely to change as new information and evidence becomes available. If it becomes apparent, in the judgement of the directors, that recovery of capitalised expenditure is unlikely, the carrying value should be considered as impaired and treated as detailed below.

Impairment

Impairment reviews for deferred exploration and evaluation costs are carried out on a project-by-project basis, with each project representing a potential single cash generating unit. The directors are required to continually monitor and review the carrying values by reference to new developments, stages in the exploration process and new circumstances. Assessment of the potential impairment of assets requires an updated judgement of the probability of adequate future cash flows from the relevant project. It includes consideration of:

(a) The period for which the entity has the right to explore in the specific area and whether this right will expire in the near future, and whether the right is expected to be renewed.

(b) Whether substantive expenditure on further exploration for and evaluation of mineral resources for the specific project is either budgeted or planned.

(c) Whether exploration for and evaluation of mineral resources on the specific project has led to the discovery of commercially viable quantities of mineral resources and whether the entity has decided to discontinue such activities on the project.

(d) Whether sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the carrying amount of the exploration and evaluation asset is likely to be recovered in full from successful development of a mine or by the sale of the project.

The judgements in respect of key projects are as follows;

The CS Project in Nevada is the Group's lead project with a carrying value of £1,505,188. In the judgement of the directors, this is justified as, following the successful grant of various mining and production permits, the focus is on the mine start up and production.

Further exploration at the Bay State Project, Nevada (carrying value £497,398), is budgeted and project leases and claims are being maintained. In the judgement of the directors further evaluation and exploration is justified as, despite some drilling issues, positive drilling results have been obtained so far. In the opinion of the directors this asset is not impaired.

Although there has been no exploration during the reporting period on the County Line Project, Nevada (carrying value £168,990), in the judgement of the directors further evaluation of the production potential is justified in view of its proximity to the CS Project and project synergies. The mining claims have been renewed for a further 12‑month period and the project is not impaired.

Positive drilling results have been obtained from the Clayton Project, Nevada (carrying value of £144,187) and in the opinion of the directors further drilling is justified and the project is not impaired.

The Bakers Project, Australia is impaired (full impairment value of £170,745), pending a decision on negotiations with the regional Native Title holder with whom agreement is required in order to progress the Company's mining lease applications.

The Myrtle Project, Nevada is also impaired (full impairment value of £23,501), as information on historical exploration results has been found that downgrades the prospectivity of the Company's Myrtle mining claims.

Also, in relation to other projects, the exploration rights are being maintained and further exploration and/or drilling is budgeted therefore the directors have reached the conclusion that no other impairments are required.

Going concern

The preparation of financial statements requires an assessment of the validity of the going concern assumption. This in turn is dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption that such finance will become available, the directors believe that the going concern basis is appropriate for these accounts.

Share warrants and share-based payments

The estimates of costs recognised in connection with the fair value of share warrants requires that management selects an appropriate valuation model and make decisions on various inputs into the model including the volatility of its own share price, the probable life of the warrants before exercise, and behavioural consideration of warrant holders.

2. Segmental analysis

The Chief Operating Decision Maker is the Board of Directors. The Board considers the business has one reportable segment, the management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects, no Head Office cost allocations are made to this segment. The Head Office function recognises all other costs.

3. Loss before income tax

4. Directors' emoluments

In the year ended 30 September 2022 the cost of Employer's National Insurance Contributions for directors was £Nil (2021: £Nil).

During the year ended 30 September 2022 the value of non-cash share-based payments in respect of share warrants issued to the directors was £262 (2021: £17,979).

The directors are also the key management personnel. If all benefits are taken into account, the total key management personnel compensation would be £48,262 (2021: £66,337).

5. Staff costs

The Company does not employ any staff directly apart from the directors. The services of technical and administrative staff are provided by Tertiary Minerals plc as part of the Management Services Agreement between the two companies (see Note 16).

The Company issues share warrants to employees of Tertiary Minerals plc from time to time and these non-cash share-based payments resulted in a charge within the financial statements of £157 (2021: £1,686).

Company secretarial services are provided by Mr R. Venables through City Group plc.

6. Loss per share

Loss per share has been calculated using the loss for the year attributable to equity holders of the Company and the weighted average number of shares in issue during the year.

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.

7. Income tax

No liability to corporation tax arises for the year due to the Group recording a taxable loss (2021: £Nil).

The tax credit for the period is lower than the credit resulting from the loss before tax at the standard rate of corporation tax in the UK - 19% (2021: 19%). The differences are explained below.

Factors that may affect future tax charges

The Group has total losses carried forward of £4,158,554 (2021: £3,774,180). This amount would be charged to tax, thereby reducing tax liability, if sufficient profits were made in the future capped to £5m per annum allowance. The deferred tax asset has not been recognised as the future recovery is uncertain given the exploration status of the Group. The carried forward tax loss is adjusted each year for amounts that can no longer be carried forward.

8. Investments

Subsidiary undertakings