TIDMRRR
RNS Number : 3787X
Red Rock Resources plc
20 December 2023
Red Rock Resources Plc
("Red Rock" or the "Company")
Final Audited Results for the Year Ended 30 June 2023
20 December 2023
A copy of the Company's annual report and financial statements
for 2023, extracts from which are set out below, is available on
the Company's website www.rrrplc.com .
Chairman's Statement
Dear Shareholders,
We present the Report and Accounts of Red Rock Resources Plc for
the year ending 30th June 2023. This report also gives us an
opportunity to present a broader review of progress up to the date
of publication, and to give an assessment of the year ahead.
Activity During the Year
We conducted two successful drill programmes on a number of our
gold prospects during the course of the year. The first was at the
old Berringa Mine in the Australian state of Victoria, which we
acquired in the course of the year, and the second was at the
recently acquired Bilbale license in Burkina Faso.
At Berringa, a six-hole diamond drill programme tested for down
dip and along strike extensions of the known mineralisation. This
was a well-designed programme, with all six holes encountering
visible gold, and hole two intersecting a 5.2m interval with 2.38
g/t gold, including 0.2m at 34.76 g/t. Hole six encountered 3.5m at
5.43 g/t at 133m (including 0.7m at 23.9 g/t), 4.9m at 1.09 g/t at
140m, and 3.9m at 1.62 g/t at 153.6m (including 0.7m at 7.49 g/t),
with the hole ending in mineralisation. The team's understanding of
structure was confirmed, and we developed new sampling protocols
appropriate for the type of mineralisation. We now understand that
in this environment any result over 0.1 g/t shows we are in the
mineralised area, and accordingly should be followed up.
At Bilbale, a seven-hole reverse circulation drill programme
across two locations in this target-rich license achieved very
promising results from the four holes at Djikologo with
mineralisation also encountered in two of the three holes drilled
at the Bilbale Artisanal Area. At Djikologo, the third drill hole
encountered 20m at 3.19 g/t from 22m depth (including 3m at 8.17
g/t) as well as 8m at 2.28 g/tat 62m, and 2m at 1.25 g/t from 118m
depth to end of hole. This was the first drill campaign carried out
on this property and we now assess the requirement for further
geochemistry and mapping prior to the next drill programme.
Aside from this and other exploration work, we obtained the
grant of some of our remaining license applications in Victoria,
Australia, as well as our first license in Ivory Coast, and we
applied for a new large copper/base metal license in South
Australia.
Environmental Impact Assessments were carried out on Lithium
licenses in Zimbabwe, as part of the mining license process, and in
Kenya as part of the license renewal process.
DRC Arbitration
We looked forward, a year ago, to obtaining an arbitration award
in the Democratic Republic of Congo, in respect of a 50.1% interest
in a copper-cobalt project sold without our knowledge and consent.
$5m had been paid by the purported buyer, and for our share of
this, plus costs and damages, we had sued our minority partner, and
obtained a $2.5m court judgment in our favour.
Another $15m had not yet been paid by the purported buyer, and
for our share of this we went to arbitration. We expect a
favourable arbitration award, but have awaited the arbitration
result for nearly 18 months, a period which has not been without
incident.
This was much longer than expected, but justice is not always
swift.
The assets were sold on to a final buyer by the purported buyer
at the same time as it acquired them, and for amounts larger by an
order of magnitude. We were thus deprived of a very great value
that we believe should have been ours. We have been patient and
methodical in pursuing the amounts already awarded, and if we have
not sought publicity for our case, it was because in our judgment
quiet persistence was the approach that would best serve the
interest of shareholders at this stage.
It is right that at this point I pay tribute to our colleagues
in the DRC: three men and one woman of great integrity who showed
great loyalty to us, variously their partner or client, and
steadiness under pressure. The Government has also showed at times
a concern that investors' interests should not be overridden, and
the Embassy has indicated its concern, met us, and kept a watching
brief.
We continue to remain confident of an early favourable result.
An earlier draft of this report was written on the assumption this
had already happened, but with the Presidential Election now only
days away, everything has been put on hold until after polling day
on 20(th) December and after the preliminary results are announced
most likely 31(st) December, and then final results are released,
which we assume to be early January.
Elephant Oil Listing
We also looked forward last year to the listing of Elephant Oil,
in which we have a small but longstanding shareholding, on the
NASDAQ market in the U.S. It has always been part of our strategy
that we retain some of the listed shares we obtain in the process
of divestment or sale of assets as a liquidity reserve. In general,
the listed assets have been ones we know well and have been
involved with for some time. We still expect Elephant Oil to be
listed after updating its quarterly results with the SEC early in
2024 at a listing price of between US$4.15 and US$5.15 per share,
indicating our holding of 397,874 shares may be valued at US$1.85
million, although subject to a six-month hold period post IPO after
which we would be in a position to realise all or part of this
holding.
Current and Future Developments
We have secured a lithium mining license and have a stockpile of
material in Zimbabwe, and made our first exports during Q4 2023.
Sales of initial exports will occur upon arrival in the destination
port, and further announcements will be made as these occur.
Additional license areas have also been granted. The lithium price
has declined substantially in the last year and exports from
Zimbabwe have become strictly controlled and difficult for most
producers and this provides a good environment for us to tidy up
some other licenses and conclude the grant or transfer processes in
those cases and look at other ways to optimise our long-term
position.
Until the rainy season ends in the Spring in Zimbabwe, our plan
is to continue to export from stockpile and avoid extensive civil
works in muddy and rainy conditions. We are currently funding our
product pipeline from mine to bonded warehouse in the destination
port. The working capital requirement of funding a 2-3 month
pipeline before getting paid for product means that we are starting
on a modest scale, with 200 tonnes of ore. Once we have established
that the pipeline is working efficiently, and that customers trust
our product, we shall aim to sell product before arrival at port
and so shorten our payment cycle and reduce our working capital
requirements.
Potentially significant volumes can be exported and sold by us,
but by the second quarter we will have a better idea of how this
business is likely to develop, with continuing developments in
Government thinking likely to require a flexible and creative
approach, but also possibly offering new opportunities for the
nimble. After careful analysis, we will not be putting up a
flotation plant at this time.
In Burkina Faso we are starting to map and sample key areas on a
grid, and on a larger grid which will cover the whole license. We
will later auger drill the alluvial/colluvial areas, at the same
time as continuing hard rock exploration. We intend to start trial
mining of gold soon, and then to accelerate work to get
semi-mechanised alluvial mining permitted.
We, therefore, have a clear strategy for sales of lithium and
gold from these two countries through 2024. In Kenya, any scaled up
activity awaits gold license renewal, after which we are likely to
seek partners to accelerate the project's development. A similar
approach may be adopted for at least one of our gold licences in
Ivory Coast.
Exploration at our 50.1% subsidiary, Red Rock Australasia Pty
Ltd is focussed on getting to the Indicated Resource stage at
Berringa, after which we can be on a 12-18 month environmental and
licensing pathway to mining. Now that we have opened an old adit at
Berringa, and taken samples which will go off for testing, we will
investigate the safety of accessing level 2 of the old mine via the
adit. A positive answer would probably result in an Indicated
Resource being obtainable at very low cost; otherwise some drilling
from surface will be required. Ajax, our other key project/old
mine, is now permitted but a decision on drill plans will be made
later in the year, depending on availability of internal or
external finance and other priorities.
In Australia as in Africa, our focus is now on the fastest
pathway to positive cash flow for each project. With a gold
Indicated Resource in Australia we could process a mining
application and an environmental study in parallel, with a plan to
process material through a nearby facility eliminating much of the
construction phase.
We continue to expect an early and positive resolution in the
DRC, where our arbitration claim is for $7.5m, and we have a court
judgment against our former partner for $2.5m. The former of these
we could expect to be paid soon after award. If Elephant Oil can
achieve a Q1 listing, this could progressively release funds to us
over the course of the year although we expect the bulk of the
holding to be subject to a six month hold period after listing.
We expect on renewal of Kenya licenses to be able to negotiate
agreements for joint venture, farm in, sale or development as seems
most appropriate for each exploration area. The aim will be to
bring forward as far as possible the date on which we obtain value,
first, for our receivables, and second, put ourselves in a position
to gain from future production, whether by royalty or by
shareholding.
The Company's policy is to retain royalties on all assets
passing through its hands. Royalties are held on iron ore in
Australia, gold in Colombia, multiple gold and metal licences in
Australia, lithium licences in Zimbabwe, gold licences in Kenya,
and gold licences in Burkina Faso and Ivory Coast.
During 2024, we expect a resumption of royalty payments from the
Colombia gold royalty, as Soma Gold, the operator of our historic
El Limon plant and mine, has completed the upgrade of the plant to
275 tons per day, and is projecting production through this
facility of 8,000 oz of gold over the course of the year.
Financial Results
The nature of Red Rock's business currently, as a company not
generating revenue from operations, means that profit and loss is a
metric of less utility than in many other businesses. Pre-tax loss
for the year ended 30 June 2023 was GBP2,953m (2022: loss of
GBP2,800m). This increased loss reflected impairment charges at our
smaller exploration assets in the DRC as well as higher finance
costs and insurance and administrative expenses over the course of
the year. An amount of GBP1.1m is included in debtors in respect of
amounts recoverable from our DRC arbitration being a
reclassification of amounts previously capitalised in respect of
expenditure on the VUP joint venture project.
Conclusion
We expect to generate cash from sales of assets and from court
and arbitration awards over the next few months.
However, we are now in a position to start selling product,
initially from Zimbabwe lithium, and a key task is to ensure that
this item increases during the current year of account to the point
where our sales and profits expectations provide tangible support
for our value.
If proceeds are not received from the DRC arbitration early in
the New Year then the Company will implement some combination of
cost reduction, joint venture or farm ins, asset disposals, and
financing, in order to focus on those activities that can lead to
early cash flow.
Andrew Bell
Chairman and CEO
18 December 2023
Results and Dividends
The Group made a post-tax loss of GBP2.8 million (2022: loss of
GBP2.8 million). The Directors do not recommend the payment of a
dividend. The following financial statements are extracted from the
audited financial statements, which were approved by the Board of
Directors and authorised for issuance on 18 December 2023.
For further information, please contact:
Andrew Bell 0207 747 9990 Chairman Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD
Beaumont Cornish Limited
Jason Robertson 0207 374 2212 Broker First Equity Limited
Bob Roberts 0203 8696081 Joint Broker Clear Capital Corporate
Broking
This announcement contains inside information for the purposes
of Article 7 of Regulation 2014/596/EU, which is part of domestic
UK law pursuant to the Market Abuse (Amendment) (EU Exit)
regulations (SI 2019/310) and is disclosed in accordance with the
Company's obligations under Article 17.
Beaumont Cornish Limited ("Beaumont Cornish") is the Company's
Nominated Adviser and is authorised and regulated by the FCA.
Beaumont Cornish's responsibilities as the Company's Nominated
Adviser, including a responsibility to advise and guide the Company
on its responsibilities under the AIM Rules for Companies and AIM
Rules for Nominated Advisers, are owed solely to the London Stock
Exchange. Beaumont Cornish is not acting for and will not be
responsible to any other persons for providing protections afforded
to customers of Beaumont Cornish nor for advising them in relation
to the proposed arrangements described in this announcement or any
matter referred to in it.
Financial Statements
Independent Auditor's Report
to the Members of Red Rock Resources Plc
Opinion
We have audited the financial statements of Red Rock Resources
Plc (the 'company') and its subsidiaries (the 'group') for the year
ended 30 June 2023 which comprise the Consolidated Statement of
Financial Position, the Consolidated Income Statement and
Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash
Flows, the Company Statement of Financial Position, the Company
Statement of Changes in Equity, the Company Statement of Cash Flows
and notes to the Financial Statements, including significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the parent
company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion, the financial statements:
-- give a true and fair view of the state of the Group's and of
the Company's affairs as at 30 June 2023 and of the Group's loss
for the year then ended;
-- have been properly prepared in accordance with UK-adopted
international accounting standards;
-- the parent company financial statements have been properly
prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the
Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
and Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to note 1.2 in the Financial Statements, which
indicates that the Directors anticipate having to raise funds
within the going concern period, being 12 months from the date of
approval of these financial statements, in order to meet its
liabilities as they fall due, including repayment of loans due
within 12 months from the year end. As stated in note 1.2, these
events or conditions, along with the other matters as set forth in
that note, indicate that a material uncertainty exists that may
cast significant doubt on the Group's and Company's ability to
continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the Financial Statements, we have concluded that the
Director's use of the going concern basis of accounting in the
preparation of the Financial Statements is appropriate. Our
evaluation of the Directors' assessment of the Group's and
Company's ability to continue to adopt the going concern basis of
accounting included:
-- reviewing the cash flow forecasts for the ensuing twelve
months from the date of approval of these financial statements and
critically challenging the key inputs and assumptions used. The
forecasts demonstrated that, after the removal of expected cash
inflows (including asset sales, estimated settlement amounts in
respect of DRC litigation, and anticipated placings), the timing
and amounts of which are uncertain, the Group and Company will
require additional funding in order to meet their liabilities as
and when they fall due, and to fund planned exploration activities
;
-- reviewing management's going concern memorandum and holding
discussions with management regarding future plans and availability
of funding;
-- reviewing the adequacy and completeness of disclosures in the
group financial statements; and
-- reviewing post balance sheet events as they relate to the
group's ability to raise funds and restructure debt.
Our responsibilities and the responsibilities of the Directors,
with respect to going concern, are described in the relevant
sections of this report.
Our Application of Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect
of misstatements, both individually and on the financial statements
as a whole.
Based on our professional judgement, we consider gross assets to
be most significant determinant of the Group's financial
performance and most relevant to investors and shareholders for an
exploration Group with a number of investments and early-stage
projects. We have therefore set Group materiality at 1.5% of gross
assets (2022: 1% of gross assets). Materiality of the Company was
based upon 3% of net assets, capped below group materiality (2022:
1% of gross assets). We considered this an appropriate benchmark as
the Company has significant assets and liabilities on its statement
of financial position.
We also determine a level of performance materiality which we
use to assess the extent of testing needed to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for
the financial statements as a whole. In determining our overall
audit strategy, we assessed the level of uncorrected misstatements
that would be material for the financial statements as a whole.
We determined the Group and Company materiality for the
financial statements as a whole to be GBP287,000 and GBP285,000
(2022: GBP187,000 and GBP168,300), respectively. Performance
materiality was set at 60% of overall materiality for the Group and
Company at GBP172,200 and GBP171,000 (2021: GBP112,200 and
GBP100,980), respectively, whilst the threshold for reporting
unadjusted differences to those charged with governance was set at
GBP14,350 for the Group and GBP14,250 (2021: GBP9,350 and GBP8,415)
for the Company. We also agreed to report differences below that
threshold that, in our view, warranted reporting on qualitative
grounds.
Materiality for other significant components of the group ranged
from GBP8,100 to GBP8,700 calculated as a percentage of gross
assets.
Our Approach to the Audit
In designing our audit, we determined materiality and assessed
the risk of material misstatement in the Financial Statements. In
particular, we looked at areas involving significant accounting
estimates and judgement, including the recoverability of
exploration assets and non-current receivables, by the Directors,
and considered future events that are inherently uncertain. We also
addressed the risk of management override of internal controls,
including among other matters consideration of whether there was
evidence of bias that represented a risk of material misstatement
due to fraud.
The accounting records of the Company and all subsidiary
undertakings are centrally located and audited by us based upon
materiality or risk. The key audit matters, and how these were
addressed, are outlined below.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In addition to
the matter described in the Material uncertainty related to going
concern section, we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter How Our Scope Addressed This
Matter
-------------------------------------------------------------
Recoverability of exploration
assets (see notes 1.5 and 13)
----------------------------------------- -------------------------------------------------------------
Exploration assets have a carrying Our work in this area included
value in the Financial Statements the following:
of GBP13,611,000 at 30 June 2023
(2022: GBP13,265,000). * Obtaining and challenging management's impairment
review, together with evaluating announcements and
There is a risk that this amount progress on the license areas during the year and
is impaired and that the capitalised post-year end, including exploration results and
amounts do not meet the recognition mineral resource estimates;
criteria as adopted by the Group,
or as specified within IFRS 6.
* Holding discussions with management surrounding
The capitalisation of the costs progress at the various projects and future plans,
and determination of the recoverability including rationale for any impairments recorded;
of these assets are subject to
a high degree of management estimation
and judgement and therefore there * Obtaining copies of the exploration licenses to
is a risk this balance is materially ensure good title and ensure, where applicable, that
misstated. any specific terms or conditions therein have been
adequately met;
Due to the level of judgement
required to be exercised by management,
and the magnitude of the balance, * Performing an independent assessment for indicators
we have considered this matter of impairment in accordance with the requirements of
to be a key audit matter. IFRS 6;
* Substantive testing of a sample of additions in the
period to ensure they meet the eligibility criteria
under IFRS 6 and are capitalised in accordance with
the Group's accounting policy; and
* Assessing the appropriateness of the disclosures made
in respect of intangible assets, including any
judgements and sources of estimation.
On the basis of work performed,
we are satisfied that, following
the impairments recorded by management
as at 30 June 2023, exploration
assets are not materially misstated.
We note that the licenses PL 2018-0202
and PL 2018-0203 held by Mid Migori
Mining Company Ltd in respect
of the Migori gold project, with
capitalised exploration assets
of GBP12.9m as at 30 June 2023,
expired post-year end in August
2023. Relevant renewals have been
submitted and this process remains
ongoing. The Directors have confirmed
they do not have any reason to
believe the renewals will not
be forthcoming. I f the licenses
are not renewed, this may result
in an impairment to these assets.
----------------------------------------- -------------------------------------------------------------
Recoverability of non-current
receivables for MFP sales proceeds
(see notes 1.5 and 16)
----------------------------------------- -------------------------------------------------------------
Non-current receivables for MFP Our work in this area included
sales proceeds have a carrying the following:
value in the Financial Statements
of GBP1,410,000 as at 30 June * Obtaining management's workings supporting the
2023 (2022: GBP1,224,000). valuation of the MFP sales proceeds and ensuring
arithmetical accuracy of the workings;
Non-current assets represent
amounts expected to be receivable
through a net smelter royalty, * Evaluating publicly available information on
following the sale of MFP in a production activities at the mine;
previous accounting period. The
asset is measured at fair value
based on the net present value * Reviewing all key inputs and assumptions used within
of future cash flows expected the net present value model and ensuring they are
to be received in respect of the reasonable and appropriate;
royalty proceeds.
We identified an audit risk that * Considering whether management have included all
these assets are not recoverable possible factors which could impact the valuation;
and, therefore, are incorrectly and
valued in the Financial Statements.
This was assessed to be a key * Considering whether there are indications of
audit matter because non-current impairment in the valuation to suggest the balance is
assets are financially significant not recoverable.
and management are required to
use their judgement and estimation
in preparing the net present value
of future cash flows from the
royalty stream.
-------------------------------------------------------------
Key Observations
In reviewing the calculations prepared by management, we noted
the following assumptions as key:
* Estimated production rate;
* Discount rate; and
* Gold price.
Commissioning and initial production at the mine commenced during
2021 with production expected to ramp up to commercial levels
during the forthcoming year. We note that there have been delays
to the previously anticipated production schedule due to priority
being given to the expansion of production and resource at another
site. Management anticipate significant growth rates in production
from Q1 2024 onwards.
We draw to the users attention the disclosure in note 1.5, which
lists the key assumptions in the calculation of fair value of
non-current assets. The recoverability of the balance is dependent
on the ability of MFP to fully realise the potential of the site
through achieving a minimum level of production which in turn
will enable a potential return through the net smelter royalty
agreement.
Other Information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the Group and Company financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are
required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on Which We Are Required to Report by Exception
In the light of the knowledge and understanding of the Group and
the Company and their environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Company financial statements are not in agreement with
the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of directors'
responsibilities, the directors are responsible for the preparation
of the Group and Company financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group and Company financial statements, the
directors are responsible for assessing the Group and the Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
Group or the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
-- We obtained an understanding of the Group and Company and the
sector, in which they operate, to identify laws and regulations
that could reasonably be expected to have a direct effect on the
Financial Statements. We obtained our understanding in this regard
through discussions with management and our cumulative audit
knowledge and experience of the sector.
-- We determined the principal laws and regulations relevant to
the Group and Company in this regard to be those arising from
UK-adopted international accounting standards, the Companies Act
2006 and the local laws and regulations in the jurisdictions in
which the Group operates.
-- We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by
the Group and Company with those laws and regulations. These
procedures included, but were not limited to, enquiries of
management, review of Board minutes and a review of legal or
regulatory correspondence.
-- We also identified the risks of material misstatement of the
Financial Statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the risk of fraud related to
the estimates, judgements and assumptions applied by management in
their assessment of impairment of intangible assets and the
recoverability of non-current receivables. Refer to the Key Audit
Matters section above on how our audit scope addressed these
matters.
-- We addressed the risk of fraud arising from management
override of controls by performing audit procedures which included,
but were not limited to: the testing of journals, reviewing
accounting estimates for evidence of bias, and evaluating the
business rationale of any significant transactions that are unusual
or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk
that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and
transactions reflected in the financial statements, as we will be
less likely to become aware of instances of non-compliance. The
risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities .
This description forms part of our auditor's report.
Use of Our Report
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone, other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Imogen Massey (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
18 December 2023
Consolidated Statement of Financial Position
as at 30 June 2023
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
------------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in associates and joint ventures 12 1,030 1,030
Exploration assets 13 13,358 13,265
Mineral tenements 13 698 511
Financial instruments - fair value through other
comprehensive income (FVTOCI) 14 736 736
PPE 18 -
Non-current receivables 16 2,506 2,320
------------------------------------------------- ----- -------- --------
Total non-current assets 18,346 17,862
------------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 15 155 66
Other receivables 17 670 824
------------------------------------------------- ----- -------- --------
Total current assets 825 890
------------------------------------------------- ----- -------- --------
TOTAL ASSETS 19,171 18,752
------------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital 19 2,960 2,839
Share premium account 32,785 31,077
Other reserves 20 1,751 1,434
Retained earnings (22,477) (19,812)
------------------------------------------------- ----- -------- --------
Total equity attributable to owners of the
Parent 15,019 15,538
------------------------------------------------- ----- -------- --------
Non-controlling interest (687) (420)
------------------------------------------------- ----- -------- --------
Total equity 14,332 15,118
------------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Trade and other payables 18 684 415
Borrowings 18 756 822
------------------------------------------------- ----- -------- --------
Total non-current liabilities 1,440 1,237
------------------------------------------------- ----- -------- --------
Current liabilities
Trade and other payables 18 1,737 1,355
Short-term borrowings 18 1,662 1,042
------------------------------------------------- ----- -------- --------
Total current liabilities 3,399 2,397
------------------------------------------------- ----- -------- --------
TOTAL EQUITY AND LIABILITIES 19,171 18,752
------------------------------------------------- ----- -------- --------
These Financial Statements were approved by the Board of
Directors and authorised for issue on 18 December 2023 and are
signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes form an integral part of these Financial
Statements.
Consolidated Income Statement
for the year ended 30 June 2023
Year to Year to
30 June 30 June
2023 2022
Continuing operations Notes GBP'000 GBP'000
-------------------------------------------- ----- -------- --------
Administrative expenses 4 (1,380) (1,225)
Exploration expenses (318) (256)
Project development 6 (250) (676)
Other project costs 6 (159) (211)
Impairment of E&E assets 13 (259) -
Share based payments (213) (16)
Currency gains 11 (183)
Other gains 5 228 52
Dividend income 5 - -
Finance costs 5 (613) (285)
-------------------------------------------- ----- -------- --------
Profit/(loss) for the year before taxation (2,953) (2,800)
Tax 7 - -
-------------------------------------------- ----- -------- --------
Profit/(loss) for the year (2,953) (2,800)
-------------------------------------------- ----- -------- --------
Profit/(loss) for the year attributable to:
Equity holders of the Parent (2,665) (2,615)
Non-controlling interest (288) (185)
-------------------------------------------- ----- -------- --------
(2,953) (2,800)
-------------------------------------------- ----- -------- --------
Earnings per share attributable to owners
of the Parent:
Basic loss per share, pence 10 (0.19) (0.23)
Diluted loss per share, pence 10 (0.19) (0.23)
-------------------------------------------- ----- -------- --------
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2022
30 June 30 June
2023 2022
GBP'000 GBP'000
--------------------------------------------------- -------- --------
Profit/(loss) for the year (2,953) (2,800)
Other comprehensive income
Items that will not be reclassified to
profit or loss
(Deficit) / surplus on revaluation of FVTOCI
financial assets - 418
Losses and transfer of FVTOCI financial
assets on disposal - (442)
Items that may be reclassified subsequently
to profit or loss
Unrealised foreign currency (loss) / gain
arising upon retranslation of foreign operations 165 (177)
---------------------------------------------------- -------- --------
Total other comprehensive income net of
tax for the year 165 (201)
---------------------------------------------------- -------- --------
Total comprehensive income, net of tax
for the year (2,788) (3,001)
---------------------------------------------------- -------- --------
Total comprehensive income net of tax attributable
to:
Owners of the Parent (2,521) (2,816)
Non-controlling interest (267) (185)
---------------------------------------------------- -------- --------
(2,788) (3,001)
--------------------------------------------------- -------- --------
The accompanying notes form an integral part of these Financial
Statements.
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
The movements in equity during the period were as follows:
Total
attributable
Share to owners
Share premium Retained Other of Non-controlling Total
capital account earnings reserves the Parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
As at 1 July 2021 2,835 30,924 (18,741) 1,627 16,645 (199) 16,446
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Changes in equity for
2021
Loss for the year - - (2,615) - (2,615) (185) (2,800)
Other comprehensive
income for the year
Transfer of FVTOCI reserve
relating to disposals - - - (442) (442) - (442)
Transfer of FVTOCI reserve
relating to impaired
FVTOCI financial assets - - - 418 418 - 418
Losses on sale of FVTOCI
taken directly to reserves - - 1,544 - 1,544 - 1,544
Unrealised foreign currency
(loss) / gain arising
upon retranslation of
foreign operations - - - (177) (177) (36) (213)
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Total comprehensive
income for the year - - (1,071) (201) (1,272) (221) (1,493)
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Transactions with owners
Issue of shares 4 153 - - 157 - 157
Issue of warrants - - - 8 8 - 8
Total transactions
with owners 4 153 - 8 165 - 165
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
As at 30 June 2022 2,839 31,077 (19,812) 1,434 15,538 (420) 15,118
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Changes in equity for
2023
Loss for the year - - (2,665) - (2,665) (288) (2,953)
Other comprehensive
income for the year
Transfer of FVTOCI reserve
relating to disposals - - - - - - -
Transfer of FVTOCI reserve
relating to impaired
FVTOCI financial assets - - - - - - -
Unrealised foreign currency
(loss) / gain arising
upon retranslation of
foreign operations - - - 144 144 21 165
Losses on sale of FVTOCI
taken directly to reserves
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Total comprehensive
income for the year - - (2,665) 144 (2,521) (267) (2,788)
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
Transactions with owners
Issue of shares 121 1,708 - - 1,829 - 1,829
Issue of warrants - - - 173 173 - 173
Total transactions
with owners 121 1,708 - 173 2,002 - 2,002
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
As at 30 June 2023 2,960 32,785 (22,477) 1,751 15,019 (687) 14,332
---------------------------- -------- -------- --------- --------- ------------- --------------- --------
FVTOCI financial Foreign
instruments currency Share-based Total
revaluation translation payment Warrant other
reserve reserve reserve reserve reserves
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------------- ---------------- ------------ ----------- --------- ---------
As at 1 July 2021 426 158 230 813 1,627
Changes in equity for 2021
Other comprehensive income for
the year
Transfer of FVTOCI reserve relating
to disposals (442) - - - (442)
Transfer of FVTOCI reserve relating
to impaired FVTOCI financial assets 418 - - - 418
Unrealised foreign currency gains
on translation of foreign operations - (177) - - (177)
Warrants issued in the year - - - 8 8
-------------------------------------- ---------------- ------------ ----------- --------- ---------
Total comprehensive expense for
the year (24) (177) - 8 (193)
-------------------------------------- ---------------- ------------ ----------- --------- ---------
As at 30 June 2022 402 (19) 230 821 1,434
-------------------------------------- ---------------- ------------ ----------- --------- ---------
Changes in equity for 2023
Other comprehensive income for
the year
Transfer of FVTOCI reserve relating - - -
to disposals - -
Transfer of FVTOCI reserve relating
to revalued FVTOCI financial assets - - - - -
Unrealised foreign currency gains
on translation of foreign operations - 144 - - 144
Warrants issued in the year - - - 173 173
-------------------------------------- ---------------- ------------ ----------- --------- ---------
Total comprehensive income or
the year - 144 - 173 317
-------------------------------------- ---------------- ------------ ----------- --------- ---------
As at 30 June 2023 402 125 230 994 1,751
-------------------------------------- ---------------- ------------ ----------- --------- ---------
See note 20 for a description of each reserve included
above.
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
Year to Year to
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
----------------------------------------------------- ----- -------- --------
Cash flows from operating activities
Profit/(loss) before tax (2,953) (2,800)
Increase in receivables (239) (140)
Increase in payables 612 432
Finance costs 5 613 285
Share-based payments 21 213 8
Foreign exchange gain/loss (10) 179
Equity settled transactions - 90
Impairment of E&E assets 13 253 -
Net cash outflow from operations (1,511) (1,946)
----------------------------------------------------- ----- -------- --------
Corporation tax reclaimed/(paid) - -
----------------------------------------------------- ----- -------- --------
Net cash used in operations (1,511) (1,946)
----------------------------------------------------- ----- -------- --------
Cash flows from investing activities
Proceeds from sale of FVTOCI financial assets 14 - 2,539
Purchase of PPE (18) -
Payments to acquire exploration asset (139) (150)
Payments to increase interest in associate - (141)
Payments for tenements (187) (387)
Net cash (outflow) / inflow from investing
activities (344) 1,861
----------------------------------------------------- ----- -------- --------
Cash flows from financing activities
Proceeds from issue of shares 19 1,112 68
Interest paid 23 - (250)
Proceeds from new borrowings 23 1,237 940
Repayment of borrowings - Non current 23 (38) -
Repayments of borrowings 23 (494) (1,035)
----------------------------------------------------- ----- -------- --------
Net cash inflow / (outflow) from financing
activities 1,817 (277)
----------------------------------------------------- ----- -------- --------
Net (decrease)/increase in cash and cash equivalents (38) (362)
Cash and cash equivalents at the beginning of
period 66 457
Exchange (losses)/gains on cash and cash equivalents 127 (29)
----------------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of period 15 155 66
----------------------------------------------------- ----- -------- --------
Major non-cash transactions are disclosed in note 23 .
The accompanying notes and accounting policies form an integral
part of these Financial Statements.
Company Statement of Financial Position
Red Rock Resources Plc (Registration Number: 05225394) as at 30
June 2023
30 June 30 June
2023 2022
Notes GBP'000 GBP'000
------------------------------------------------- ----- -------- --------
ASSETS
Non-current assets
Investments in subsidiaries 11 76 76
Investments in associates and joint ventures 12 1,111 1,111
Financial instruments - fair value through other
comprehensive income (FVTOCI) 14 736 736
Exploration property 13 12,948 12,948
Exploration assets 13 - 258
PPE 1
Non-current receivables 16 4,978 3,945
Total non-current assets 19,850 19,074
------------------------------------------------- ----- -------- --------
Current assets
Cash and cash equivalents 15 149 31
Loans and other receivables 17 601 456
Total current assets 750 487
------------------------------------------------- ----- -------- --------
TOTAL ASSETS 20,600 19,561
------------------------------------------------- ----- -------- --------
EQUITY AND LIABILITIES
Called up share capital 19 2,961 2,839
Share premium account 32,785 31,078
Other reserves 1,676 1,502
Retained earnings (22,798) (20,827)
------------------------------------------------- ----- -------- --------
Total equity 14,624 14,592
------------------------------------------------- ----- -------- --------
LIABILITIES
Non-current liabilities
Borrowings 18 756 822
------------------------------------------------- ----- -------- --------
Total non-current liabilities 756 822
Current liabilities
Trade and other payables 18 1,602 1,235
Intra-group borrowings 18 2,115 1,890
Short-term external borrowings 18 1,503 1,022
Total current liabilities 5,220 4,147
------------------------------------------------- ----- -------- --------
TOTAL EQUITY AND LIABILITIES 20,600 19,561
------------------------------------------------- ----- -------- --------
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has
not presented its own Income Statement or Statement of
Comprehensive Income. The Company's loss for the financial year was
GBP1.971 million (2022: loss of GBP1.907 million). The Company's
total comprehensive loss for the financial year was GBP1.971
million (2022: loss of GBP1.455 million).
These Financial Statements were approved by the Board of
Directors and authorised for issue on 18 December 2023 and are
signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes and accounting policies form an integral
part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 30 June 2023
The movements in equity during the period were as follows:
Share
Share premium Retained Other Total
capital account earnings reserves equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------ -------- -------- --------- --------- --------
As at 1 July 2021 2,835 30,924 (19,003) 1,043 15,799
------------------------------------ -------- -------- --------- --------- --------
Changes in equity for 2022
Loss for the year - - (1,907) - (1,907)
Other comprehensive income for
the year
Transfer of FVTOCI reserve relating
to impaired FVTOCI financial
assets - - - 518 518
Transfer of FVTOCI reserve relating
to disposals - - - (66) (66)
Losses on sale of FVTOCI taken
directly to reserves - - 83 - 83
------------------------------------ -------- -------- --------- --------- --------
Total comprehensive income for
the year - - (1,824) 452 (1,372)
------------------------------------ -------- -------- --------- --------- --------
Transactions with owners
Issue of shares 4 154 - - 158
Issue of warrants - - - 7 7
Total transactions with owners 4 154 - 7 165
------------------------------------ -------- -------- --------- --------- --------
As at 30 June 2022 2,839 31,078 (20,827) 1,502 14,592
------------------------------------ -------- -------- --------- --------- --------
Changes in equity for 2023
Loss for the year - - (1,971) - (1,971)
Other comprehensive income for
the year
Total comprehensive income for
the year - - (1,971) - (1,971)
------------------------------------ -------- -------- --------- --------- --------
Transactions with owners
Issue of shares 122 1,707 - - 1,829
Issue of warrants - - - 174 174
Total transactions with owners 122 1,707 - 174 2,003
------------------------------------ -------- -------- --------- --------- --------
As at 30 June 2023 2,961 32,785 (22,798) 1,676 14,624
------------------------------------ -------- -------- --------- --------- --------
FVTOCI
financial Share-based Total
assets revaluation payment Warrant other
reserve reserve reserve reserves
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ------------------- ------------- --------- ---------
As at 1 July 2021 - 230 813 1,043
Changes in equity for 2021
Other comprehensive income for the
year
Transfer of FVTOCI reserve relating
to disposals 518 - - 518
Transfer of FVTOCI reserve relating
to impaired FVTOCI financial assets (66) - - (66)
Issue of warrants - - 7 7
------------------- ------------- --------- ---------
Total Other comprehensive income 452 - 7 459
As at 30 June 2022 452 230 820 1,502
------------------------------------- ------------------- ------------- --------- ---------
Changes in equity for 2023
Other comprehensive income for the
year
Issue of warrants - - 174 174
------------------- ------------- --------- ---------
Total Other comprehensive income - - 174 174
As at 30 June 2023 452 230 994 1,676
------------------------------------- ------------------- ------------- --------- ---------
See note 20 for a description of each reserve included
above.
Company Statement of Cash Flows
for the year ended 30 June 2023
30
June 30 June
2023 2022
GBP'000 GBP'000
----------------------------------------------------------- -------- --------
Cash flows from operating activities
Profit/(loss) before taxation (1,971) (1,907)
Increase in receivables (1,178) (990)
Increase in payables 644 859
Finance costs (Note 5) 613 90
Share-based payments (Note 21) 214 7
Equity settled transactions - 90
Change in value in FVTPL financial assets - -
Foreign exchange loss / (gain) (83) 235
Impairment of E&E assets (Note 13) 259 -
Net cash outflow from operations (1,503) (1,616)
----------------------------------------------------------- -------- --------
Corporation tax - -
----------------------------------------------------------- -------- --------
Net cash used in operations (1,503) (1,616)
----------------------------------------------------------- -------- --------
Cash flows from investing activities
Purchase of PPE (1) -
Proceeds from sale of FVTOCI financial assets - 577
Investment in Joint venture projects - (141)
Investment in subsidiaries - (37)
Payments to acquire exploration asset - (91)
Net cash outflow from investing activities (1) 308
----------------------------------------------------------- -------- --------
Cash flows from financing activities
Proceeds from issue of shares 1,112 68
Proceeds from new borrowings (Note 23) 1,078 940
Repayment of borrowings - Non current (Note 23) (38)
Repayment of borrowings (Note 23) (494) (35)
----------------------------------------------------------- -------- --------
Net cash inflow from financing activities 1,659 973
----------------------------------------------------------- -------- --------
Net increase/(decrease) in cash and cash equivalents 155 (335)
Cash and cash equivalents at the beginning of period 31 366
Exchange (losses)/gains on cash and cash equivalents (37) -
----------------------------------------------------------- -------- --------
Cash and cash equivalents at end of period (Note 15) 149 31
----------------------------------------------------------- -------- --------
The accompanying notes and accounting policies form an integral
part of these Financial Statements.
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies
1.1 Corporate Information
Red Rock Resources Plc is a public limited company incorporated
and domiciled in England and Wales. The Company's ordinary shares
are traded on AIM. The principal activities of the Group are the
exploration for and development of mineral resources in multiple
locations globally, principally in Africa and Australia.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with
UK-adopted international accounting standards and with the
requirements of the Companies Act 2006. The Financial Statements
have been prepared on the historical cost basis, except for certain
financial instruments, which are carried as described in the
respective sections in the policies below. The principal accounting
policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the
Company and the Group remains a going concern. At 30 June 2023, the
Group had cash and cash equivalents of GBP0.155 million and
GBP2.418 million of borrowings and, as at 13 December 2023, the
cash balance was cGBP11,000. The Directors anticipate having to
raise additional funding over the course of the current financial
year.
Having considered the prepared cashflow forecasts and the Group
budgets, which includes the possibility of Directors reducing or
foregoing their salaries if required, the progress in activities
post year-end, including the anticipated asset sales of GBP1.5
million over the course of the year and estimated settlement of DRC
litigation of up to GBP6.77 million (gross and before deductions
and expenses and subject to repatriation to the UK), the Directors
consider that they will have access to adequate resources in the 12
months from the date of the signing of these Financial Statements.
As a result, they consider it appropriate to continue to adopt the
going concern basis in the preparation of the Financial Statements.
However, as the amounts and timings of these sources of funding are
currently uncertain, a material uncertainty exists which may result
in the need to raise additional equity or debt funding based on
conditions in existence at the appropriate time. In particular, if
proceeds are not received from the DRC arbitration early in the New
Year then, then in the absence of adequate assets sales, another
fundraising would likely be required.
Should the Group be unable to continue trading as a going
concern, adjustments would have to be made to reduce the value of
the assets to their recoverable amounts, to provide for further
liabilities, which might arise, and to classify non-current assets
as current. The Financial Statements have been prepared on the
going concern basis and do not include the adjustments that would
result if the Group was unable to continue as a going concern.
New Standards, Amendments and Interpretations Not Yet
Adopted
At the date of approval of these Financial Statements, the
following standards and interpretations, which have not been
applied in these Financial Statements were in issue but not yet
effective:
-- Amendments to IAS 1: Classifications of current or
non-current liabilities (effective 1 January 2024);
-- Amendments to IAS 8: Accounting Policies, Changes to
Accounting Estimates and Errors (effective 1 January 2023);
-- Amendments to IAS 12: Income Taxes - Deferred Tax arising
from a Single Transaction (effective 1 January 2023).
-- Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies
(effective 1 January 2023).
The effect of these new and amended standards and
interpretations, which are in issue but not yet mandatorily
effective, is not expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early
in either the current or the preceding financial year.
1.3 Basis of Consolidation
The Consolidated Financial Statements of the Group incorporate
the Financial Statements of the Company and subsidiaries controlled
by the Company made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to
govern the financial and operating policies so as to obtain
economic benefits from their activities. Subsidiaries are
consolidated from the date on which control is obtained, the
acquisition date, up until the date that control ceases.
The acquisition method of accounting is used to account for the
acquisition of subsidiaries by the Group. The cost of an
acquisition is measured as the fair value of the assets given,
equity instruments issued, contingent consideration and liabilities
incurred or assumed at the date of exchange. Costs, directly
attributable to the acquisition, are expensed as incurred.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are initially
measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if
additional information is obtained within one year of the
acquisition date, about facts or circumstances, existing at the
acquisition date. Other changes in provisional fair values are
recognised through profit or loss.
Non-controlling interests in subsidiaries are measured at the
proportionate share of the fair value of their identifiable net
assets.
Intra-group transactions, balances and unrealised gains and
losses on transactions between the Group companies are eliminated
on consolidation, except to the extent that intra-group losses
indicate an impairment.
At 30 June 2023, the Consolidated Financial Statements combine
those of the Company with those of its subsidiaries, Red Rock
Australasia Pty Ltd, New Ballarat Gold Corporation Plc, RRR Coal
Ltd, African Lithium Resources Limited, Lac Minerals Ltd, Lacgold
Resources SARLU, Faso Minerals Ltd, Faso Greenstone Resources
SARLU, Jimano Ltd, Red Rock Resources Congo S.A.U., Red Rock Galaxy
SA, RedRock Kenya Ltd, RRR Kenya Ltd and Red Rock Resources (HK)
Ltd.
The Group's dormant subsidiaries Intrepid Resources Ltd, Red
Rock Resources Inc., Red Rock Cote D'Ivoire SARL and Basse Terre
SARL, have been excluded from consolidation on the basis of the
exemption provided by Section 405(2) of the Companies Act 2006 that
their inclusion is not material for the purpose of giving a true
and fair view.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income
are allocated between the Parent and non-controlling interests,
even if this results in the non-controlling interest having a
deficit balance.
Transactions with non-controlling interests, that do not result
in loss of control, are accounted for as equity transactions. Any
differences between the adjustment for the non-controlling interest
and the fair value of consideration paid or received are recognised
in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Mineral Tenements and Exploration Property
Exploration licence and property acquisition costs are
capitalised in intangible assets. Licence costs, paid in connection
with a right to explore in an existing exploration area, are also
capitalised. Licence and property acquisition costs are reviewed at
each reporting date to confirm that there is no indication that the
carrying amount exceeds the recoverable amount. If no future
activity is planned or the licence has been relinquished or has
expired, the carrying value of the licence and property acquisition
costs are written off through the statement of profit or loss and
other comprehensive income. For assets that move into production
any intangible E&E assets values are amortised on a unit
production basis over the period of production.
1.4.2 Investment in Associates
An associate is an entity over which the Group has the power to
exercise significant influence, but not controlled or jointly
controlled by the Group, through participation in the financial and
operating policy decisions of the investee.
Investments in associates are recognised in the Consolidated
Financial Statements, using the equity method of accounting. The
Group's share of post-acquisition profits or losses is recognised
in profit or loss and its share of post-acquisition movements in
other comprehensive income is recognised directly in other
comprehensive income.
The carrying value of the investment, including goodwill, is
tested for impairment, when there is objective evidence of
impairment. Losses in excess of the Group's interest in those
associates are not recognised, unless the Group has incurred
obligations or made payments on behalf of the associate.
Where the Group transacts with an associate of the Group,
unrealised gains are eliminated to the extent of the Group's
interest in the relevant associate. Unrealised losses are also
eliminated, unless the transaction provides evidence of an
impairment of the asset transferred, in which case appropriate
provision is made for impairment.
In the Company Financial Statements, investments in associates
are recognised and held at cost. The carrying value of the
investment is tested for impairment, when there is objective
evidence of impairment.
1.4.3 Interests in Joint Ventures
The Group recognises its interest in the jointly controlled
entity's assets and liabilities, using the equity method of
accounting. Under the equity method, the interest in the joint
venture is carried in the Statement of Financial Position at cost
plus post-acquisition changes in the Group's share of its net
assets, less distributions received and less any impairment in
value of individual investments. The Group Income Statement
reflects the share of the jointly controlled entity's results after
tax.
Any goodwill, arising on the acquisition of a jointly controlled
entity, is included in the carrying amount of the jointly
controlled entity and is not amortised. To the extent that the net
fair value of the entity's identifiable assets, liabilities and
contingent liabilities is greater than the cost of the investment,
a gain is recognised and added to the Group's share of the entity's
profit or loss in the period in which the investment is
acquired.
Where necessary, adjustments are made to bring the accounting
policies in line with those of the Group's and to reflect
impairment losses where appropriate. Adjustments are also made in
the Group's Financial Statements to eliminate the Group's share of
unrealised gains and losses on transactions between the Group and
its jointly controlled entity. The Group ceases to use the equity
method on the date from which it no longer has joint control over,
or significant influence in, the joint venture.
1.4.4 Taxation
Corporation tax is provided on taxable profits or losses at the
current rate. The tax expense/credit represents the sum of the
current tax expense/credit and deferred tax.
The tax currently payable/receivable is based on taxable profit
or loss for the year. Taxable profit or loss differs from
accounting profit or loss as reported in the Statement of
Comprehensive Income, because it excludes items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is measured using tax rates that
have been enacted or substantively enacted by the reporting
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the Financial Statements and the corresponding tax bases used in
the computation of taxable profit or loss and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that
taxable profits will be available against, which deductible,
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction, which affects neither the taxable
profit or loss nor the accounting profit or loss.
Deferred tax liabilities are recognised for taxable temporary
differences, arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the Group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future.
Deferred tax is calculated at the tax rates that are expected to
apply to the period, when the asset is realised or the liability is
settled, based upon tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except
when it relates to items credited or charged directly to equity, in
which case the deferred tax is also dealt with in equity, or items
charged or credited directly to other comprehensive income, in
which case the deferred tax is also recognised in other
comprehensive income.
Deferred tax assets and liabilities are offset, where there is a
legally enforceable right to offset current tax assets and
liabilities, and the deferred tax relates to income tax levied by
the same tax authorities on either:
-- The same taxable entity; or
-- Different taxable entities, which intend to settle current
tax assets and liabilities on a net basis or to realise and settle
them simultaneously in each future period, when the significant
deferred tax assets and liabilities are expected to be realised or
settled.
1.4.5 Foreign Currencies
Both the functional and presentational currency of Red Rock
Resources Plc is Pounds Sterling ("GBP"). Each Group entity
determines its own functional currency, and items included in the
Financial Statements of each entity are measured using that
functional currency.
The functional currencies of the major foreign subsidiaries are
Australian Dollars ("AUD"), the Congolese Franc ("CFD"), and Kenyan
Shillings ("KES").
Transactions in currencies other than the functional currency of
the relevant entity are initially recorded at the exchange rate,
prevailing on the dates of the transaction. At each reporting date,
monetary assets and liabilities, that are denominated in foreign
currencies, are translated at the exchange rate, prevailing at the
reporting date. Non-monetary assets and liabilities, carried at
fair value that are denominated in foreign currencies, are
translated at the rates, prevailing at the date when the fair value
was determined. Gains and losses, arising on translation, are
included in profit or loss for the period, except for exchange
differences on non-monetary assets and liabilities, which are
recognised directly in other comprehensive income, when the changes
in fair value are recognised directly in other comprehensive
income.
On consolidation, the assets and liabilities of the Group's
overseas operations are translated into the Group's presentational
currency at exchange rates, prevailing at the reporting date.
Income and expense items are translated at the average exchange
rates for the period, unless exchange rates have fluctuated
significantly during the year, in which case the exchange rate at
the date of the transaction is used. All exchange differences
arising, if any, are recognised as other comprehensive income and
are transferred to the Group's foreign currency translation
reserve.
1.4.6 Share-Based Payments
Share Options
The Group operates an equity-settled share-based payment
arrangement, whereby the fair value of services provided is
determined indirectly by reference to the fair value of the
instrument granted.
The fair value of options, granted to Directors and others in
respect of services provided, is recognised as an expense in the
Income Statement, with a corresponding increase in equity reserves
- the share-based payment reserve, until the award has been settled
and then make a transfer to share capital. On exercise or lapse of
share options, the proportion of the share-based payment reserve,
relevant to those options, is transferred to retained earnings. On
exercise, equity is also increased by the amount of the proceeds
received.
The fair value is measured at grant date and charged over the
vesting period, during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes
model, taking into account the terms and conditions upon which the
options were granted. The exercise price is fixed at the date of
grant.
Non-market conditions are performance conditions that are not
related to the market price of the entity's equity instruments.
They are not considered, when estimating the fair value of a
share-based payment. Where the vesting period is linked to a
non-market performance condition, the Group recognises the goods
and services it has acquired during the vesting period, based on
the best available estimate of the number of equity instruments
expected to vest. The estimate is reconsidered at each reporting
date, based on factors such as a shortened vesting period, and the
cumulative expense is "trued up" for both the change in the number
expected to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the
market price of the entity's equity instruments. These conditions
are included in the estimate of the fair value of a share-based
payment. They are not taken into account for the purpose of
estimating the number of equity instruments that will vest. Where
the vesting period is linked to a market performance condition, the
Group estimates the expected vesting period. If the actual vesting
period is shorter than estimated, the charge is accelerated in the
period that the entity delivers the cash or equity instruments to
the counterparty. When the vesting period is longer, the expense is
recognised over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e.
other than share options), fair value is measured on the basis of
an observable market price.
Warrants or options, issued to parties other than employees, are
valued based on the value of the service provided.
Share Incentive Plan
Where shares are granted to employees under the Share Incentive
Plan, the fair value of services provided is determined indirectly
by reference to the fair value of the free, partnership and
matching shares, granted on the grant date. Fair value of shares is
measured on the basis of an observable market price, i.e. share
price as at grant date, and is recognised as an expense in the
Income Statement on the date of the grant. For the partnership
shares, the charge is calculated as the excess of the mid-market
price on the date of grant over the employee's contribution.
1.4.7 Pension
The Group operates a defined contribution pension plan, which
requires contributions to be made to a separately administered
fund. Contributions to the defined contribution scheme are charged
to profit or loss as they become payable.
1.4.8 Exploration Assets
Exploration assets comprise exploration and development costs
incurred on prospects at an exploratory stage. These costs include
the cost of acquisition, exploration, determination of recoverable
reserves, economic feasibility studies and all technical and
administrative overheads directly associated with those projects.
These costs are carried forward in the Statement of Financial
Position as non-current intangible assets less provision for
identified impairments.
Recoverability of exploration costs is dependent upon successful
development and commercial exploitation of each area of interest
and will not be amortised until the existence (or otherwise) of
commercial reserves in the area of interest has been determined.
The Group and the Company currently have no exploration assets,
where production has commenced.
The Group adopts the "area of interest" method of accounting,
whereby all exploration and development costs, relating to an area
of interest, are capitalised and carried forward until abandoned.
In the event that an area of interest is abandoned, or if the
Directors consider the expenditure to be of no value, accumulated
exploration costs are written off in the financial year in which
the decision is made. All expenditure incurred prior to approval of
an application is expensed with the exception of refundable rent,
which is raised as a receivable.
Upon disposal, the difference between the fair value of
consideration receivable for exploration assets and the relevant
cost within non-current assets is recognised in the Income
Statement.
1.4.9 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36
"Impairment of Assets" does not apply, are reviewed at the end of
each reporting period for impairment, when there is an indication
that the assets might be impaired. Impairment is measured by
comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the
assets' fair value less costs to sell and their value-in-use, which
is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated
Statement of Comprehensive Income.
When there is a change in the estimates used to determine the
recoverable amount, a subsequent increase in the recoverable amount
of an asset is treated as a reversal of the previous impairment
loss and is recognised to the extent of the carrying amount of the
asset that would have been determined (net of amortisation and
depreciation) had no impairment loss been recognised. The reversal
is recognised in profit or loss immediately, unless the asset is
carried at its revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues,
using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating
the interest income over the relevant period, using the effective
interest rate, which is the rate that exactly discounts estimated
future cash receipts or re-payments through the expected life of
the financial asset or liability to the net carrying amount of the
financial asset or liability.
1.4.11 Financial Instruments
The Group classifies its financial assets into one of the
categories discussed below, depending on the purpose for which the
asset was acquired. The Group's accounting policy for each category
is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and
out-of-money derivatives, where the time value offsets the negative
intrinsic value. They are carried in the Statement of Financial
Position at fair value, with changes in fair value recognised in
the Consolidated Statement of Comprehensive Income in the finance
income or expense line. Other than derivative financial
instruments, which are not designated as hedging instruments, the
Group does not have any assets held for trading nor does it
voluntarily classify any financial assets as being at fair value
through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the
objective is to hold these assets in order to collect contractual
cash flows and the contractual cash flows are solely payments of
principal and interest. They are initially recognised at fair value
plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised
cost, using the effective interest rate method, less provision for
impairment. Impairment provisions, for current and non-current
trade receivables. are recognised, based on the simplified approach
within IFRS 9, using a provision matrix in the determination of the
lifetime expected credit losses.
During this process, the probability of the non-payment of the
trade receivables is assessed. This probability is then multiplied
by the amount of the expected loss, arising from default to
determine the lifetime expected credit loss for the trade
receivables. For the receivables, which are reported net, such
provisions are recorded in a separate provision account, with the
loss being recognised in the Consolidated Statement of
Comprehensive Income. On confirmation that the receivable will not
be collectable, the gross carrying value of the asset is written
off against the associated provision.
Impairment provisions, for receivables from related parties and
loans to related parties, are recognised, based on a
forward-looking expected credit loss model. The methodology, used
to determine the amount of the provision, is based on whether there
has been a significant increase in credit risk since initial
recognition of the financial asset, based on analysis of internal
or external information. For those where the credit risk has not
increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross
interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses, along
with the gross interest income, are recognised. For those that are
determined to be credit impaired, lifetime expected credit losses,
along with interest income on a net basis, are recognised.
The Group considers a financial asset in default, when
contractual payments are 180 days past due. However, in certain
cases, the Group may also consider a financial asset to be in
default, when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in
full, before taking into account any credit enhancements held by
the Group. A financial asset is written off, when there is no
reasonable expectation of recovering the contractual cash
flows.
The Group's financial assets, measured at amortised cost,
comprise trade and other receivables and cash and cash equivalents
in the Consolidated Statement of Financial Position. Cash and cash
equivalents include cash in hand, deposits held at call with banks,
other short term highly liquid investments with original maturities
of three months or less, and, for the purpose of the Statement of
Cash Flows, bank overdrafts. Bank overdrafts are shown within loans
and borrowings in current liabilities on the Consolidated Statement
of Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group has strategic investments in listed and unlisted
entities, which are not accounted for as subsidiaries, associates
or jointly controlled entities. For those investments, the Group
has made an irrevocable election to classify the investments at
fair value through other comprehensive income rather than through
profit or loss as the Group considers this measurement to be the
most representative of the business model for these assets. They
are carried at fair value, with changes in fair value recognised in
other comprehensive income, and accumulated in the fair value
through other comprehensive income reserve. Upon disposal, any
balance, within fair value through other comprehensive income
reserve, is reclassified directly to retained earnings and is not
reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend
clearly represents a recovery of part of the cost of the
investment, in which case, the full or partial amount of the
dividend is recorded against the associated investments carrying
amount.
Purchases and sales of financial assets, measured at fair value
through other comprehensive income, are recognised on settlement
date with any change in fair value between trade date and
settlement date, being recognised in the fair value through other
comprehensive income reserve.
Fair Value Measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability; or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible
by the Group.
The fair value of an asset or a liability is measured, using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement, of a non-financial asset, takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities, for which fair value is measured or
disclosed in the Financial Statements, are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable; and
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the Financial
Statements on a recurring basis, the Group determines, whether
transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that
is significant to the fair value measurement as a whole) at the end
of each reporting period.
For the purpose of fair value disclosures, the Group has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
Financial Liabilities
The Group classifies its financial liabilities into one of two
categories, depending on the purpose for which the liability was
acquired:
Fair Value through Profit or Loss (FVTPL)
This category comprises out-of-the-money derivatives, where the
time value does not offset the negative intrinsic value or any
liabilities held for trading. They are carried in the consolidated
statement of financial position at fair value with changes in fair
value recognised in the Consolidated Statement of Comprehensive
Income. The Group did not hold any such liabilities at the date of
IFRS 9 adoption or at the end of the reporting year.
Other Financial Liabilities at Amortised Cost
Other financial liabilities include:
-- Borrowings, which are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are subsequently
measured at amortised cost, using the effective interest rate
method, which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability
carried in the Consolidated Statement of Financial Position. For
the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption as
well as any interest or coupon payable while the liability is
outstanding;
-- Liability components of convertible loan notes are measured
as described further below; and
-- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost, using the effective interest method.
1.4.12 Investments
Investments in subsidiaries are classified as non-current assets
and included in the Statement of Financial Position of the Company
at cost at the date of acquisition less any identified
impairments.
For acquisitions of subsidiaries or associates achieved in
stages, the Company re-measures its previously held equity
interests in the acquiree at its acquisition-date fair value and
recognises the resulting gain or loss, if any, in profit or loss.
Any gains or losses, previously recognised in other comprehensive
income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as
non-current assets and included in the Statement of Financial
Position of the Company at cost at the date of acquisition less any
identified impairment.
1.4.13 Dividend Income
Dividends, received from strategic investments, are recognised,
when they become legally receivable. In case of interim dividends,
this is when declared. In case of final dividends, this is when
approved by the shareholders at the Annual General Meeting.
1.4.14 Share Capital
Financial instruments, issued by the Group, are classified as
equity only to the extent that they do not meet the definition of a
financial liability or financial asset. The Group's ordinary shares
are classified as equity instruments.
1.4.15 Convertible Debt
The proceeds, received on issue of the Group's convertible debt,
are allocated into their liability and equity components. The
amount initially attributed to the debt component equals the
discounted cash flows, using a market rate of interest that would
be payable on a similar debt instrument that does not include an
option to convert. Subsequently, the debt component is accounted
for as a financial liability, measured at amortised cost until
extinguished on conversion or maturity of the bond. The remainder
of the proceeds is allocated to the conversion option and is
recognised in the "Convertible debt option reserve" within
shareholders' equity, net of income tax effects.
1.4.16 Warrants
Derivative contracts, that only result in the delivery of a
fixed amount of cash or other financial assets for a fixed number
of an entity's own equity instruments, are classified as equity
instruments. When warrants are issued, attached to specific loan
notes, the Company estimates the fair value of the issued warrants,
using the Black-Scholes pricing model, taking into account the
terms and conditions upon which the warrants were issued, value of
such warrants is deducted from the balance of loan notes, a
directly attributable transaction cost. Warrants, relating to
equity finance and issued together with ordinary shares placement,
are valued by residual method and treated as directly attributable
transaction costs and recorded as a reduction of share premium
account based on the fair value of the warrants. Warrants,
classified as equity instruments, are not subsequently
re-measured.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group's Consolidated Financial
Statements, requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities at the end of the reporting period. However,
uncertainty, about these assumptions and estimates, could result in
outcomes that require a material adjustment to the carrying amount
of the asset or liability affected in future periods.
Significant Judgements in Applying the Accounting Policies
In the process of applying the Group's accounting policies,
management has made the following judgements, which have the most
significant effect on the amounts, recognised in the Consolidated
Financial Statements:
Recognition of Holdings Less Than 20% as an Associate
The Company owns 15% of the issued share capital of Mid Migori
Mining Company Ltd ("MMM"). Andrew Bell is a member of the board of
MMM. In accordance with IAS 28, the Directors of the Company
consider that, the agreements whereby the Company owns the
beneficial interest in the Kenyan assets, and the input of resource
by the Company in respect of drilling and analytical activities, to
provide the Group with significant influence as defined by the
standard. As such, MMM has been recognised as an associate for the
years ended 30 June 2023, 30 June 2022, 30 June 2021, 30 June 2020
and 30 June 2019.
The effect of recognising MMM as an FVTOCI financial asset would
be to increase the profit by GBP5 (2022: increase the profit by
GBP29).
Significant Accounting Estimates and Assumptions
The carrying amounts of certain assets and liabilities are often
determined based on estimates and assumptions of future events. The
key estimates and assumptions, that have a significant risk of
causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period,
include the impairment determinations, the useful lives of
property, plant and equipment, the bad debt provision and the fair
values of our financial assets and liabilities.
Recoverability of VUP Litigation Related Receivable
The directors have reviewed progress as regards the outstanding
litigation relating to the VUP project with a view to assessing the
recoverability of the amounts held within the balance sheet
totalling GBP1,096,256. The directors consider that the carrying
value of this receivables at the current balance sheet date is more
than justified given the potential quantum and likelihood of a
favourable outcome. Whilst the directors believe that this balance
will become realised in the near term, as there remains a level of
uncertainty over the timing of such an event, the directors have
determined it appropriate to carry this balance as non-current so
as to present the liquidity position of the Group on the most
prudent basis. See note 16 for details.
Recoverability of Capitalised Exploration and Evaluation
Costs
Kenya
After the year end the Kenyan exploration licences came due for
renewal, with a 50% relinquishment obligation. Applications for
renewal have now been made and the directors do not anticipate any
issues associated with processing of these renewal applications.
The Directors believe that the Migori gold project remains amongst
the highest quality of comparable Kenyan projects, with
conservative estimations of 844,000 oz gold Resource (formerly
calculated at 1.2m oz), further supported by the strength of the
gold price in local currency. The Directors therefore believe that
it is prudent to retain the current carrying value of the project
in these financial statements.
Australia
The Company has assembled a portfolio of Australian properties
comprising a broad range from exploration targets to near term
appraisal (and hence resource potential targets), all of which
remain largely undeveloped by modern standards of exploration. Two
key former mines, Ajax and the recently acquired Berringa, have
been the focus of recent exploration efforts, including a drilling
campaign at Berringa. A high-grade target with a range reaching
1.2m oz and a most likely 500k oz plus has been identified by this
work at Berringa. The Company believes both mining areas can be
brought into production, with additional value catalysts being
presented by proximity to third party processing plants, currently
operating sub capacity. The JV Partners expect, subject to market
conditions, to accelerate preparations for the listing of the JV
company NBGC, including the intended completion of a Pre-IPO
financing round for NBGC in 2024. The Company has therefore deemed
the carrying value of these assets to remain recoverable, given
high asset quality, low "pegging" costs and the proximity to
underutilised infrastructure.
Fair value of Mineras Four Points Sales Proceeds Receivable
In estimating the fair value of the Company's future gold
royalties from Colombia, the Directors have made assumptions about
the future cash flows, which include the following key
assumptions:
-- Gold price (US$/oz) - US$1,957 (2022: US$1,750);
-- Discount rate - 10% (2022: 10%); and
-- Annual production rate - 8,000oz (2022: 6,500oz)
The directors have reviewed the future gold model provided by
MFP to consider the reasonableness of the assumptions, following
this review the directors deem the assumptions appropriate.
The fair value is directly sensitive to any changes in the key
assumptions. For the overall carrying value (current and
non-current) to fall by a material amount, the above assumptions
would have to change as follows:
-- Gold price (US$/oz) - US$1,000;
-- Discount rate - 17%; or
-- Annual production rate - 6,000oz
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value of share
options is determined using the Black-Scholes model. The model has
its strengths and weaknesses and requires six inputs as a minimum:
1) the share price; 2) the exercise price; 3) the risk-free rate of
return; 4) the expected dividends or dividend yield; 5) the life of
the option; and 6) the volatility of the expected return. The first
three inputs are normally, but not always, straightforward. The
last three involve greater judgement and have the greatest impact
on the fair value.
Fair Value of Financial Assets
A financial asset, or a group of financial assets, is deemed to
be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred
after the initial recognition of the asset (an incurred "loss
event") and that loss event has an impact on the estimated future
cash flows of the financial asset or the group of financial assets
that can be reliably estimated. This determination requires
significant judgement. In making this judgement, the Group
evaluates, among other factors, the duration and extent to which
fair value of an investment is less than its cost.
In the case of equity investments, classified as financial
instruments with fair value movements through other comprehensive
income (FVTOCI), objective evidence would include a significant or
prolonged decline in the fair value of the investment below its
cost. "Significant" is evaluated against the original cost of the
investment and "prolonged" against the period in which the fair
value has been below its original cost. With respect to Elephant
Oil the fair value is based on expected listing in Q1 2024, should
this not happen then the value of the asset may need to be written
down. The directors current expect the listing to go ahead. Mining
share prices typically have more volatility than most other shares
and this is taken into account by management, when considering if a
significant decline in the fair value of its mining investments has
occurred. Management would consider that there is a prolonged
decline in the fair value of an equity investment, when the period
of decline in fair value has extended to beyond the expectation
management have for the equity investment. This expectation will be
influenced particularly by the Company development cycle of the
investment.
Impairment of Non-financial Assets
The Group follows the guidance of IAS 36 to determine, when a
non-financial asset is impaired. The Group assesses, at each
reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset's
recoverable amount. An asset's recoverable amount is the higher of
an asset's or cash-generating unit's (CGU) fair value less costs to
sell and its value in use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
The group has the following Non-Financial Assets; Investments in
associates, investments in subsidiaries and loans extended to
subsidiaries (Company only).
In assessing value in use, the estimated future cash flows are
discounted to their present value, using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less
costs to sell, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or
other available fair value indicators.
The Group bases its impairment calculation on detailed
projections, which are prepared separately for each of the Group's
CGUs to which the individual assets are allocated. These
projections generally cover a period of five years with a terminal
value or salvage value applied.
Impairment losses of continuing operations are recognised in the
Income Statement in expense categories, consistent with the
function of the impaired asset.
For investments in associates and joint ventures, the Group
assesses impairment after the application of the equity method.
2. Segmental Analysis
The Group consider its mining and exploration activities as
separate segments. These are in addition to the investment
activities, which continue to form a significant segment of the
business.
The Group has made a strategic decision to concentrate on
several commodities, ranging from gold to manganese and
copper/cobalt, and as such further segmental analysis by commodity
has not been considered useful or been presented. Transfer prices,
between operating segments, are on an arm's length basis in a
manner similar to transactions with third parties.
Gold Gold Copper Corporate
Exploration Exploration Exploration and
Australia Kenya DRC Investments unallocated Total
Year to 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- ------------ ------------ ------------ ----------- ------------ --------
Exploration expenses - (98) - - (7) (105)
Administration expenses - (5) (4) - (690) (699)
Project development - - (559) - - (559)
Other project costs (138) (40) - - (127) (305)
Share based payments - - - - (350) (350)
Currency gain (9) - - - 43 34
Other income - - - - 290 290
Dividend income - - - 126 - 126
Finance income, net - - - (2) (129) (131)
Net profit/(loss)
before tax from continuing
operations (147) (143) (563) 124 (970) (1,699)
---------------------------- ------------ ------------ ------------ ----------- ------------ --------
Gold Gold Copper Corporate
Exploration Exploration Exploration Other and
Year to 30 June Australia Kenya DRC Projects Investments unallocated Total
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------------- ------------ ------------ --------- ----------- ------------ --------
Exploration expenses - (252) - (66) - - (318)
Administration expenses (383) (3) (13) (5) (1) (975) (1,380)
Project development (14) - (234) (8) - (0) (256)
Other project costs - - - - - (159) (159)
Impairment of E&E
assets - (253) - - - - (253)
Share based payments - - - - - (39) (39)
Currency gain (73) - - - - 84 11
Other income - - - - 228 - 228
Dividend income - - - - - - -
Finance costs, net - - - - - (787) (787)
Net profit/(loss)
before tax from
continuing operations (470) (508) (247) (79) 227 (1,876) (2,953)
------------------------ ---------------- ------------ ------------ --------- ----------- ------------ --------
Information by Geographical Area
Presented below is certain information by the geographical area
of the Group's activities. Revenue, from investment sales and the
sale of exploration assets, is allocated to the location of the
asset sold.
UK Africa Australia Total
Year ended 30 June 2023 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------- -------- -------- --------- --------
Non-current assets
Investments in associates and joint ventures - 1,030 - 1,030
Mineral tenements - 165 533 698
Exploration properties - 12,949 - 12,949
Exploration assets - 410 - 410
FVTOCI financial assets 736 - - 736
PPE 1 17 - 18
Non-current receivables 1,410 1,096 - 2,506
Total segment non-current assets 2,147 15,667 533 18,346
--------------------------------------------- -------- -------- --------- --------
UK Africa Australia Total
Year ended 30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------------- -------- -------- --------- --------
Non-current assets
Investments in associates and joint ventures - 1,030 - 1,030
Mineral tenements - 165 346 511
Exploration properties - 12,949 - 12,949
Exploration assets - 316 - 316
FVTOCI financial assets 736 - - 736
Non-current receivables 1,224 1,096 - 2,320
Total segment non-current assets 1,960 15,556 346 17,862
--------------------------------------------- -------- -------- --------- --------
3. (Loss)/Profit for the Year Before Taxation
(Loss)/profit for the year before taxation is stated after
charging:
2023 2022
GBP'000 GBP'000
------------------------------------------------------ -------- --------
Auditor's remuneration:
- fees payable to the Company's auditor for the audit
of consolidated and Company Financial Statements 39 28
Directors' emoluments (note 9 ) 319 310
* Share Incentive plan - Directors 6 12
- Share Incentive plan - staff 2 4
4. Administrative Expenses
Group Group Company Company
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- -------- ------------ -------- ----------
Staff costs
Payroll 655 562 377 356
Pension 56 47 27 27
Consultants 15 15 15 15
HMRC / PAYE 42 39 42 39
Professional services
Accounting and Audit 112 115 90 98
Legal 22 36 13 23
Marketing 78 45 78 33
Other 12 13 - 5
Regulatory compliance 109 96 106 96
Travel 66 77 66 75
Office and Admin
General 38 37 30 29
IT and Software Costs 45 10 14 10
Rent 86 92 67 72
Insurance 43 41 40 39
-------------------------------------- --------- ------------ -------- --------
Total administrative expenses 1,380 1,225 965 917
-------------------------------------- --------- ------------ -------- --------
5. Finance Income/(Costs), Net
2023 2022
Group GBP'000 GBP'000
------------------------------------------------------- -------- --------
Interest income (other than MFP finance income) - -
Dividend income - -
Interest expense & other finance costs (613) (209)
------------------------------------------------------- -------- --------
Total finance (costs) / income (other than MFP finance
income) (613) (209)
MFP finance (expense) / income - note 16 228 (76)
Total finance (costs) / income (385) (285)
------------------------------------------------------- -------- --------
Other gains - 52
------------------------------------------------------- -------- --------
MFP finance income is reflected within other gains on the
consolidated profit and loss.
Please refer to note 16 and note 17 for more details.
6. Project Development and Other Project Expenses
Project development expenses include costs, incurred during the
assessment and due diligence phases of a project, when material
uncertainties exist regarding whether the project meets the
Company's investment and development criteria and whether, as a
result, the project will be advanced further. Other Project
Expenses include costs associated with current and previous
projects and include remediation and administration expenses.
Group and Company
-----------------------------------------------
2023 2022
GBP'000 GBP'000
----------------------------------- ----------------------- ----------------------
Project development expenses
VUP (Congo) (161) (328)
Galaxy (Congo) - (47)
Other (Congo) (62) (79)
Luanshimba (Congo) (12) (166)
Kinsevere - (2)
Zimbabwe Lithium (64) -
Other 49 (54)
------------------------------------ ----------------------- ----------------------
Total project development expenses (250) (676)
------------------------------------ ----------------------- ----------------------
Other project costs
Mid Migori Mines (Kenya) - (10)
Greenland (159) (68)
Other - (133)
Total other project expenses (159) (211)
------------------------------------ ----------------------- ----------------------
7. Taxation
2023 2022
GBP'000 GBP'000
------------------------------------------------------------- -------- --------
Current period taxation on the Group
UK corporation tax at 19.00% (2022: 19.00%) on profit/(loss) - -
for the period
- -
Deferred tax - -
Origination and reversal of temporary differences - -
Deferred tax assets not recognised - -
------------------------------------------------------------- -------- --------
Tax credit - -
------------------------------------------------------------- -------- --------
Factors affecting the tax charge/(credit) for the
year
Profit/(loss) on ordinary activities before taxation (2,700) (2,800)
-------------------------------------------------------------- -------- --------
Profit/(loss) on ordinary activities at the average
UK standard rate of 19.00% (2020: 19.00%) (519) (532)
Income not taxable - -
Effect of expenditure not deductible 42 20
Losses brought forward utilised in the current period -
Tax losses carried forward 471 512
Tax charge - -
-------------------------------------------------------------- -------- --------
No deferred tax charge has been made due to the availability of
trading losses due to uncertainty surrounding future profitability.
Unutilised tax losses, arising in the UK, amount to GBP4.7 million
(2022: GBP4.4 million).
On 3 March 2021, the UK government announced that it intended to
increase the main rate of corporation tax to 25% for the financial
years beginning 1 April 2023. This new rate was substantively
enacted by Finance Act 2021 on 10 June 2021.
8. Staff Costs
The aggregate employment costs of staff (including Directors)
for the year in respect of the Group was:
2023 2022
GBP'000 GBP'000
------------------------------------ -------- --------
Wages and salaries 648 562
Pension 55 47
Social security costs 42 39
Employee share-based payment charge 40 9
------------------------------------ -------- --------
Total staff costs 785 657
------------------------------------ -------- --------
The average number of Group employees (including Directors)
during the year was:
2023 2022
Number Number
--------------- ------- -------
Executives 4 4
Administration 1 1
Exploration 9 9
--------------- ------- -------
14 14
--------------- ------- -------
The key management personnel are the Directors and their
remuneration is disclosed within note 9 .
11,675,670 free shares were issued to five employees (2022:
1,236,656), including Directors. 4,278,853 partnership and
8,557,706 matching shares, making the total of 24,512,229, were
issued in the year ended 30 June 2023 (2022: 1,267,199 partnership,
2,534,398 matching, 3,801,597 total).
9. Directors' Emoluments
Directors'
fees - Share Social
Directors' discretionary Consultancy Incentive Pension security
fees bonus fees Plan contributions costs Total
2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
Executive Directors
A R M Bell 120 10 15 2 10 17 174
Other Directors
S Kaintz 65 5 - 2 6 9 87
S Quinn 24 2 - 2 2 2 32
A Borrelli 22 - - 2 - 2 26
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
231 17 15 8 18 30 319
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
Directors'
fees - Share Social
Directors' discretionary Consultancy Incentive Pension security
fees bonus, fees Plan contributions costs Total
2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
Executive Directors
A R M Bell 120 - 15 4 10 15 164
Other Directors
S Kaintz 65 - - 3 6 7 81
S Quinn 24 - - 3 2 2 31
A Borrelli 22 - - 2 - 2 26
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
231 - 15 12 18 26 302
-------------------- ---------- -------------- ----------- ---------- -------------- --------- --------
The highest paid director in the current year was Mr A Bell who
was paid total remuneration of GBP174,000 (2022: GBP164,000).
Social security costs have been included in the above figures
for completeness however does not typically form a component of
director's remuneration.
No Directors exercised share options in the year, (2022:
5,670,000). During the year, the Company contributed to a Share
Incentive Plan more fully described in the Directors' Report.
10. Earnings Per Share
The basic earnings/(loss) per share is derived by dividing the
loss for the year, attributable to ordinary shareholders of the
Parent by the weighted average number of shares in issue. Diluted
earnings/(loss) per share is derived by dividing the loss for the
year, attributable to ordinary shareholders of the Parent by the
weighted average number of shares in issue plus the weighted
average number of ordinary shares that would be issued on
conversion of all dilutive potential ordinary shares into ordinary
shares.
2023 2022
---------------------------------------------- ---------------- --------------
(Loss)/profit attributable to equity
holders of the parent company, GBP (2,952,933) (2,799,730)
Adjusted for interest accrued on the - -
convertible notes
---------------- --------------
Adjusted (loss) / profit attributable
to equity holders of the parent company
used for diluted EPS calculation (2,952,933) (2,799,730)
---------------- --------------
Weighted average number of ordinary
shares of GBP0.0001 in issue, used
for basic EPS 1,592,083,739 1,221,091,538
from potential ordinary shares that - -
would have to be issued, if all loan
notes, convertible at the discretion
of the noteholder, converted at the
beginning of the period or at the inception
of the instrument, whichever is later
----------------
Weighted average number of ordinary
shares of GBP0.0001 in issue, including
potential ordinary shares, used for
diluted EPS 1,592,083,739 1,221,091,538
------------------------------------------------- ---------------- --------------
2023 2022
------------------------------------------------- ---------------- --------------
(Loss)/earnings per share - basic (0.19 pence) (0.23 pence)
---------------- --------------
(Loss)/earnings per share - fully (0.19 pence) (0.23 pence)
diluted
---------------------------------------------- ---------------- --------------
At 30 June 2023, the effect of all the instruments (fully vested
and in the money) is anti-dilutive as it would lead to a further
reduction of loss per share, therefore, they were not included into
the diluted loss per share calculation.
Options and warrants, that could potentially dilute basic EPS in
the future, but were not included in the calculation of diluted
EPS for the periods presented:
2023 2022
-------------------------------------------------- ------------ --------------
Share options granted to employees - either
not vested and/or out of the money 21,000,000 50,000,000
Number of warrants given to shareholders
as a part of placing equity instruments
- out of the money 314,178,213 389,430,010
Total number of contingently issuable
shares, that could potentially dilute
basic earnings per share in future, and
anti-dilutive potential ordinary shares,
that were not included into the fully
diluted EPS calculation 335,178,213 439,430,010
----------------------------------------------------- ------------ --------------
There were no ordinary share transactions such as share
capitalisation, share split or bonus issue after 30 June 2023, that
could have changed the EPS calculations significantly, if those
transactions had occurred before the end of the reporting
period.
11. Investments in Subsidiaries
2023 2022
Company GBP'000 GBP'000
--------------------------- -------- --------
Cost
At 1 July 77 40
Investment in subsidiaries - 37
At 30 June 77 77
--------------------------- -------- --------
Impairment
At 1 July (1) (1)
Charge in the year - -
At 30 June (1) (1)
--------------------------- -------- --------
Net book value 76 76
--------------------------- -------- --------
As at 30 June 2023 and 30 June 2022, the Company held interests
in the following subsidiary companies:
Proportion Proportion
Country Held Held
of At 30 At 30
Company registration Class June 2022 June 2021 Nature of business
------------------------------ -------------- --------- ---------- ---------- -------------------
Red Rock Australasia
Pty Ltd Australia Ordinary 50.1% 50.1% Mineral exploration
New Ballarat Gold Corporation
Plc UK Ordinary 50.1% 50.1% Mineral exploration
RedRock Kenya Ltd Kenya Ordinary 87% 87% Mineral exploration
RRR Kenya Ltd Kenya Ordinary 100% 100% Mineral exploration
Red Rock Resources (HK)
Ltd Hong Kong Ordinary 100% 100% Holding company
Red Rock Resources Congo
S.A.U. DRC Ordinary 100% 100% Holding company
African Lithium Resources
PVT Ltd Zimbabwe Ordinary 65% nil Mineral exploration
Lac Minerals Ltd UK Ordinary 100% 100% Mineral exploration
Lacgold Resources SARLU Ivory Coast Ordinary 100% 100% Mineral exploration
Faso Minerals Ltd UK Ordinary 100% 100% Mineral exploration
Faso Greenstone Resources Burkino
SARL Faso Ordinary 100% 100% Mineral exploration
RRR Coal Ltd UK Ordinary 100% 100% Holding company
Jimano Ltd Cyprus Ordinary 100% 100% Royalty Holdings
Red Rock Galaxy SA DRC Ordinary 80% 80% Holding company
------------------------------ -------------- --------- ---------- ---------- -------------------
Red Rock Australasia Pty Ltd registered office is c/o Paragon
Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
New Ballarat Gold Corporation Plc registered office is 201
Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT.
RedRock Kenya Ltd and RRR Kenya Ltd registered office is PO Box
9306 - 003000, Nairobi, Kenya.
Red Rock Resources (HK) Ltd registered office is Suites
1601-1603, Kinwick Centre, 32 Hollywood Road, Central, Hong
Kong.
Red Rock Resources Congo S.A.U. registered office is Boulevard
Du 30 Juin et Avenue Batetela, Immeuble Crown Tower, 5 Eme Niveau,
Local 504, Gombe, Kinshasa.
African Lithium Resources PVT Ltd registered office is 3 Hex
Road, Queensdale, Harrare, Zimbabwe.
Lac Minerals Ltd registered office is Salisbury House, London
Wall, London EC2M 5PS.
Lacgold Resources SARLU registered office is Yamoussoukro Morofe
Lot 420B Ilot 32, BP 1364 Yamoussoukro, Ivory Coast.
Faso Minerals Ltd registered office is Salisbury House, London
Wall, London EC2M 5PS.
Faso Greenstone Resources SARL registered office is Secteur 54,
Quartier Ouaga 2000, Lot 28, Parcelle 18, Section 280, 01 BP 5602
Ouagadougou 01, Burkina Faso.
RRR Coal Ltd registered office is Salisbury House, London Wall,
London EC2M 5PS.
Jimano Ltd registered office Strovolou, 77 Strovolos Center,
4(th) Floor Office 401, Nicosia, Cyprus
Red Rock Galaxy SA office is 1320 Av Meteo 2 Q/Meteo
C/Lumbumbashi, DRC
12. Investments in Associates and Joint Ventures
Group Company
-------------------- -----------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- --------- --------- ----------- ----------
Cost
At 1 July 1,251 1,806 1,114 1,669
Reclassifications to Other Receivables - (696) - (696)
Additions during the year - 141 - 141
At 30 June 1,251 1,251 1,114 1,114
--------------------------------------- --------- --------- ----------- ----------
Impairment
At 1 July (221) (221) (3) (3)
Impairment during the year - - - -
At 30 June (221) (221) (3) (3)
--------------------------------------- --------- --------- ----------- ----------
Net book amount at 30 June 1,030 1,030 1,111 1,111
--------------------------------------- --------- --------- ----------- ----------
The Company, at 30 June 2023 and at 30 June 2022, had
significant influence by virtue other than shareholding over 20%
over Mid Migori Mining Company Ltd.
Class Percentage
Country of of
of shares issued Accounting
Company incorporation held capital year ended
--------------------------------- -------------- -------- ---------- ------------
30 September
Mid Migori Mining Company Limited Kenya Ordinary 15.00% 2022
--------------------------------- -------------- -------- ---------- ------------
Summarised financial information for the Company's associates
and joint ventures, where available, is given below:
For the year as at 30 June 2023:
Revenue Loss Assets Liabilities
Company GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- -----------
Mid Migori Mining Company Limited - - 1,889 (1,917)
---------------------------------- -------- -------- -------- -----------
For the year as at 30 June 2022:
Revenue Profit Assets Liabilities
Company GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- -------- -------- -----------
Mid Migori Mining Company Limited - - 2,110 (2,238)
---------------------------------- -------- -------- -------- -----------
Mid Migori Mining Company Ltd
The Company owns 15% of the issued share capital of Mid Migori
Mining Company Ltd ("MMM"), incorporated in Kenya. The Company has
entered into agreements under which it manages MMM's development
projects and has representation on the MMM board. In accordance
with IAS 28, the involvement with MMM meets the definition of
significant influence and, therefore, has been accounted for as an
associate (note 1.5).
VUP Musonoi Mining SA
On 28 February 2019, Vumilia Pendeza S.A. ("VUP") and Bring
Minerals S.A.U. ("B.Min"), and Red Rock Resources Congo S.A.U.
("RRRC"), a wholly owned local subsidiary of the Company, signed a
"Joint Venture Agreement" and B.Min and RRRC signed the "Statutes
of VUP Musonoi Mining SA" ("VMM S.A."), the joint venture company
(incorporated in the Democratic Republic of Congo) through which
the JV Project was to be pursued. The Statutes were then taken by
the lawyer to procure the signature of the correct officer of VUP.
RRRC owns 50.1% of the Joint Venture and was to own 50.1% of VMM
SA. The Company sent the registration costs of VMM SA twice, but
the lawyer failed to register the company. The governing document
of the joint venture therefore remains an unincorporated joint
venture under the Joint Venture Agreement. The Company announced on
16 November 2021 that it had served an Ordonnance de Saisie
Conservatoire (precautionary attachment) order on VUP and taken
other measures locally to protect its interest in relation to this
joint venture. On 28 December 2021 it obtained an order from the
Tribunal de Commerce de Lubumbashi against VUP in the sum of
US$2.5m in respect of US$5m that had been paid to VUP in relation
to a sale of the JV Project to which the Company had not been a
party (the Unauthorised Sale). Subsequently on 28 June 2022 an
Arbitration was ordered in respect of a further US$15m due to be
paid by the buyer to VUP pursuant to the Unauthorised Sale. The
Company continues to liaise closely with its advisors in country
regarding the expectations for final ruling and settlement of this
matter and expect a conclusion to be arrived at in early 2024.
Due to the above development, the Company reclassified these
amounts recognised in investments in the VUP joint venture
(GBP696,364), along with amounts previously classified as
Exploration Assets (GBP399,892), as a Non-current receivable in the
prior year. These amounts remain recognised as a non-current
receivable associated with the above as at the current year end 30
June 2023.
Mid Migori
Mining
Company VUP Musonoi
Limited Mining SA Total
GBP'000 GBP'000 GBP'000
----------------------------------- ---------- ----------- --------
Cost
At 1 July 2022 1,111 - 1,111
Additions during the year - - -
Reclassified during the year - - -
At 30 June 2023 1,111 - 1,111
------------------------------------ ---------- ----------- --------
Impairment and losses during the
year
----------------------------------- ---------- ----------- --------
At 1 July 2022 (81) - (81)
The Group's share of profit/(loss) - - -
during the year
At 30 June 2023 (81) - (81)
------------------------------------ ---------- ----------- --------
Carrying amount
At 30 June 2022 1,030 - 1,030
------------------------------------ ---------- ----------- --------
At 30 June 2023 1,030 - 1,030
------------------------------------ ---------- ----------- --------
13. Exploration Assets and Mineral Tenements
2023 2022
Group Exploration Assets GBP'000 GBP'000
----------------------------------------------------- -------- --------
At 1 July 13,265 13,515
Additions 139 150
Impairments (259) -
Reclassification to non-current receivables - (400)
Reclassification from other current assets (note 17) 213 -
At 30 June 13,358 13,265
----------------------------------------------------- -------- --------
2023 2022
Group Mineral Tenements GBP'000 GBP'000
------------------------ -------- --------
At 1 July 511 124
Additions 187 387
At 30 June 698 511
------------------------ -------- --------
2023 2022
Company Exploration Assets GBP'000 GBP'000
-------------------------------------------------- -------- --------
At 1 July 13,206 13,515
Additions - 91
Impairments (258) -
Reclassification to non-current receivables (note
16) - (400)
At 30 June 12,948 13,206
-------------------------------------------------- -------- --------
Exploration assets were capitalised:
-- For the Galaxy (DRC) project since 17 October 2018, when
exploration commenced at the project license in the DRC; and
-- For the VUP (DRC) project since 22 November 2018, when the
joint venture agreement was finalised, with all capitalised amounts
having been reclassified as non-current receivables in the prior
year.
-- For the African Lithium Resources Limited project, all
amounts relate to the acquisition of mineral rights in Zimbabwe.
This includes the purchase of the Tin Hill project on 2 February
2022.
-- For the Faso Greenstone project since the acquisition of the
Bilbale licence interest on 24 December 2021.
Under a 2018 agreement with MMM partner Kansai Mining
Corporation Ltd, in the event of a renewal or reissue of licenses,
covering the relevant assets, the Company has within three months
to make further payment of US$2.5 million (GBP2.028 million) to
Kansai Mining Corporation Ltd. For further details of the payments
see note 27.
Impairments in the year relate to the Congo Galaxy project,
which has now been fully impaired, following commercial
determination not to progress the project and, as a consequence,
the discontinuation of meeting mandatory expenditures under the
terms of the licences.
Reclassifications of exploration assets in the prior year relate
to the reclassification of assets held under the VUP project into
non current receivables, following commencement of litigation
regarding this JV and assessment of the Company's recourse through
arbitration.
Reclassifications in the current year relate to expenditures
undertaken on the Kenyan licence areas that had previously been
held as recoverable receivables and have been determined in the
year to now form part of the base cost of the E&E asset.
14. Financial Instruments with Fair Value Through Other
Comprehensive Income (FVTOCI)
Group Company
--------------------------- ----------------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ------------- ------------ ------------- -------------
Opening balance 736 1,755 736 778
Additions - 223 - 223
Disposals - (1,693) - (775)
Change in fair value - 451 - 510
At 30 June 736 736 736 736
--------------------- ------------- ------------ ------------- -------------
Market Value of Investments
The market value as at 30 June of the listed and unlisted
investments was as follows:
Group Company
---------------------------- ----------------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------- ------------- ------------- ------------- -------------
Quoted on London AIM - - - -
Quoted on other foreign stock exchanges - - - -
Unquoted investments at fair value 736 736 736 736
736 736 736 736
---------------------------------------- ------------- ------------- ------------- -------------
Elephant Oil Ltd
Following discussions with the management team of Elephant Oil
Ltd and internal analysis, conducted on the Company's projects and
prospects for onshore oil exploration activities in Benin, and
consideration of the implied value of the company by recent new
subscriptions by investors and the intention to list the Company on
the USA capital markets, the fair value of the investment has been
maintained at GBP736,281 (2022: GBP736,281).
Details of the fair value measurement hierarchy are included in
note 22.
15. Cash and Cash Equivalents
30 June 30 June
2023 2022
Group GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 155 66
155 66
------------------------- -------- --------
For the purpose of the statement of cash flows, cash and cash
equivalents comprise cash at bank and in hand.
30 June 30 June
2023 2022
Company GBP'000 GBP'000
------------------------- -------- --------
Cash in hand and at bank 149 31
149 31
------------------------- -------- --------
Credit Risk
The Group's exposure to credit risk, or the risk of
counterparties defaulting, arises mainly from notes and other
receivables. The Directors manage the Group's exposure to credit
risk by the application of monitoring procedures on an ongoing
basis. For other financial assets (including cash and bank
balances), the Directors minimise credit risk by dealing
exclusively with high credit rating counterparties. The Company
defines default through a framework of qualitative "unlikeliness to
pay" with a more objective 90 days past due timeline. The
qualitative criteria allows the Company to identify exposure early
on in the process, with the 90 day past due limit providing a clear
final metric.
Credit Risk Concentration Profile
The Group's receivables do not have significant credit risk
exposure to any single counterparty or any group of counterparties,
having similar characteristics. The Directors define major credit
risk as exposure to a concentration exceeding 10% of a total class
of such asset.
The Company maintains its cash reserves in Coutts & Co,
which maintains an A-1 credit rating from Standard &
Poor's.
16. Non-Current Receivables
Group Group Company Company
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- -------- -------- -------- --------
Amounts receivable relating to VUP Joint
Venture 1,096 1,096 1,096 1,096
Due from subsidiaries - - 2,472 1,625
MFP sale proceeds 1,410 1,224 1,410 1,224
----------------------------------------- -------- -------- -------- --------
2,506 2,320 4,978 3,945
----------------------------------------- -------- -------- -------- --------
Amounts receivable relating to the VUP joint venture have arisen
due to the reclassification of Joint Venture investment costs and
capitalised exploration asset costs in the prior year. See note 12
for further detail.
The Mineras Four Points ("MFP") sale proceeds represent the fair
value of the non-current portion of the deferred consideration
receivable for the sale of MFP. The fair value was estimated based
on the consideration offered by the buyer adjusted to its present
value based on the timing for which the consideration is expected
to be received. The most significant inputs are the offer price per
tranches, discount rate and estimated royalty stream. The estimated
royalty stream takes into account current production levels,
estimates of future production levels and gold price forecasts.
Changes in the fair value of the receivable at each reporting date
are taken to profit/loss for the year as finance income/expense.
See note 5 for further details.
17. Other Receivables
Group Company
-------------------- ----------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- --------- --------- ---------- ----------
Current trade and other receivables
Prepayments 32 310 32 46
Short-term loan receivable 164 164 164 164
MFP sales proceeds - current element 171 129 171 129
Other receivables 303 221 234 120
------------------------------------- --------- --------- ---------- ----------
Total 670 824 601 459
------------------------------------- --------- --------- ---------- ----------
During the year, amounts held in the group as recoverable
receivables totalling GBP213,000 in Red Rock Kenya relating to
expenditures undertaken on the Kenyan licence areas have been
determined in the year to now form part of the base cost of the
E&E asset and so have been reclassified from other receivables
to intangibles in the current year. See note 13 for further
details.
18. Trade and Other Payables
Group Company
------------------------- ----------------------------
2023 2022 2023 2022
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ------------ ----------- ------------- -------------
Non-current liabilities
Trade and other payables 684 415 - -
Borrowings 756 822 756 822
------------------------------- ------------ ----------- ------------- -------------
Total non-current liabilities 1,440 1,237 756 822
------------------------------- ------------ ----------- ------------- -------------
Current liabilities
Trade payables 1,646 1,149 1,512 1,029
Accruals 91 206 91 206
Total trade and other payables 1,737 1,355 1,602 1,235
------------------------------- ------------ ----------- ------------- -------------
Intra-group borrowings - - 2,115 1,890
Short-term borrowings 1,662 1,042 1,503 1,022
------------------------------- ------------ ----------- ------------- -------------
Total current liabilities 3,399 2,397 5,220 4,147
------------------------------- ------------ ----------- ------------- -------------
During the year, the Company took out the following additional
borrowings:
-- A GBP100,000 working capital loan from Power Metals
Corporation plc, the joint venture partner in Red Rock Australasia
Pty Ltd was advanced to the Company for use in covering pre-IPO
related costs of the New Ballarat Gold Corporation;
-- On 25 July 2022, the Company announced that it had issued
GBP623,000 of convertible loan notes to high-net-worth investors,
with each note convertible into ordinary shares at a price of
GBP0.006 per share over a twelve month period. Each note holder
also received 83,333 warrants for each note subscribed, entitling
the holder to subscribe for shares for 30 months from the date of
issue at a price of GBP0.008 per share. The interest rate of the
notes is 12% per annum, payable upon maturity. These notes were
refinanced after the year end.
-- On 19 August 2022, the Company announced the creation of an
additional GBP50,000 of convertible loan notes, which were
ultimately transferred to a separate loan note with a further net
amount of GBP50,000 added during the year. The notes carry an
interest rate of 0.05% per day, a cash repayment bonus of 25% of
the outstanding principal, and allow the investor to receive one
for one warrants exercisable for two years into RRR shares at an
exercise price of the higher of GBP0.006 or 10% above the VWAP on
the repayment date (or in the event of a placing on the repayment
day, 10% above the placing price). The notes were payable from a
date three weeks following the original drawdown date.
-- On 30 November 2022, the Company entered into a prepayment
agreement for the sum of GBP10,000. The prepayment was to relate to
a placing of shares expected to be completed on or around 8
December 2022, which ultimately did not conclude. The prepayment
amount attracts a cash bonus fee of 25% of the prepayment amount
upon repayment and allows the investor to receive one for one
warrants exercisable for 24 months at the higher of GBP0.006 or 25%
above the closing price on the date of repayment. The notes were
due for repayment three weeks from the prepayment date, and any
delay in repayment will draw interest of 0.5% per day.
-- On 22 Feb 2023 the Company entered into a loan agreement with
a high-net-worth investor with an initial principal amount of
GBP125,000, and an additional GBP80,000 drawn down on this facility
during the course of the year. The note was due for repayment 14
days after the date of the initial agreement. The notes carry a 20%
interest rate per annum, with a 20% redemption fee payable on the
total amount drawn down on the notes at repayment. The investor may
elect to require conversion of all or part of the loan and
redemption fee into shares at a price of GBP0.0025 per share, which
may be reduced to the price, if lower, of any placing that
completes before the loan is repaid.
-- On 5 May 2023, the Company entered into a loan note agreement
with a principal amount of GBP50,000. The note carries an interest
rate of 0.05% per day from 20 May 2023, and a cash repayment bonus
of 30% of the outstanding principal. The notes are due within 3
days of receipt of funds from a settlement in the DRC.
-- On 25 May 2023, the Company entered into a loan note
agreement with a principal amount of GBP50,000. The note carries an
interest rate of 0.05% per day from 20 May 2023, a repayment bonus
of 30% of the outstanding principal. The notes are due within 3
days of receipt of funds from a settlement in the DRC.
-- During the year a convertible loan note facility with
Riverfort Global Opportunities Fund ("RGO") was in place. The
facility was for up to GBP1,000,000 in funding for working capital
purposes, with an initial drawdown of GBP385,000 in principle
(before costs). This loan was repaid through a series of
conversions and cash repayments after the year end.
-- A $955,000 loan note remains payable to Kansai Ltd, which
would complete the acquisition of the Mid Migori Gold project.
Payment of this loan has been mutually agreed with Kansai to be
delayed until the pending Democratic Republic of Congo legal claim
has been resolved.
19. Share Capital of the Company
The share capital of the Group and the Company is as
follows:
2023 2022
Authorized, Issued and fully paid GBP'000 GBP'000
----------------------------------------------- -------- --------
2,480,597,806 (2022: 1,256,147,238) ordinary
shares of GBP0.0001 each 248 126
2,371,116,172 deferred shares of GBP0.0009
each 2,134 2,134
6,033,861,125 A deferred shares of GBP0.000096
each 579 579
----------------------------------------------- -------- --------
As at 30 June 2,961 2,839
----------------------------------------------- -------- --------
Nominal
Movement in ordinary shares Number GBP'000
----------------------------------------------------- ------------- --------
As at 30 June 2021 - ordinary shares of GBP0.0001
each 1,216,708,801 122
----------------------------------------------------- ------------- --------
Issued on 28 Jan 2022 at 0.45 pence per share
(cash - options exercise) 5,670,000 1
Issued on 3 Feb 2022 at 0.45 pence per share
(cash - options exercise) 450,000 -
Issued on 13 May 2022 at 0.425 pence per share
(non-cash, SIP) 5,038,253 -
Issued on 15 Jun 2022 at 0.3791 pence per share
(non-cash, secured shares for convertible facility) 18,464,800 2
Issued on 15 Jun 2022 at 0.39 pence per share
(cash, placing) 9,815,384 1
As at 30 June 2022 - ordinary shares of GBP0.0001
each 1,256,147,238 126
----------------------------------------------------- ------------- --------
Issued on 27 Sep 2022 at 0.4 pence per share
(allotment for cash) 40,000,000 4
Issued on 19 Dec 2022 at 0.1 pence per share
(non-cash) 28,000,000 3
Issued on 19 Dec 2022 at 0.2829 pence per share
(non-cash) 17,000,000 2
Issued on 2 Mar 2023 at 0.25 pence per share
(non-cash) 26,753,616 3
Issued on 13 April 2023 at 0.18 pence per share
(allotment for cash) 56,487,601 6
Issued on 19 April 2023 for 0.1661 pence per
share (non-cash) 123,888,888 12
Issued on 11 May 2023 for 0.15741 pence per
share (non-cash) 15,055,706 2
Issued on 18 May 2023 for 0.1425 pence per
share (allotment for cash) 19,176,965 2
Issued on 18 May 2023 for 0.185 pence per share
(non-cash, SIP) 376,028,070 38
Issued on 18 May 2023 for 0.21 pence per share
(non-cash, SIP) 11,675,670 1
Issued on 31 May 2023 for 0.1298 pence per
share (non-cash) 12,836,559 1
Issued on 5 June 2023 for 0.1425 pence per
share (non-cash) 43,781,746 4
Issued on 5 June 2023 for 0.11 pence per share
(non-cash) 45,964,912 4
Issued on 27 June 2023 for 0.11385 pence per
share (non-cash) 33,237,805 3
Issued on 27 June 2023 for 0.116908 pence per
share (non-cash) 65,876,152 7
Issued on 27 June 2023 for 0.11 pence per share
(non-cash) 23,657,440 2
Issued on 28 June 2023 for 0.1650 pence per
share (allotment for cash) 110,029,423 11
Issued on 27 Sep 2022 at 0.4 pence per share
(allotment for cash) 175,000,000 17
As at 30 June 2023 - ordinary shares of GBP0.0001
each 2,480,597,791 248
----------------------------------------------------- ------------- --------
The total net cash raised from allotments of
shares was GBP1,112,227 for the year.
Ordinary shares represent the Company's basic voting rights and
reflect the equity ownership of the Company. Ordinary shares carry
one vote per share and each share gives equal right to dividends.
These shares also give right to the distribution of the Company's
assets in the event of winding-up or sale.
Subject to the provisions of the Companies Act 2006, the
deferred shares may be cancelled by the Company, or bought back for
GBP1 and then cancelled. The deferred shares are not quoted and
carry no rights whatsoever.
Warrants
At 30 June 2023, the Company had 314,178,213 warrants in issue
(2022: 389,430,010) with a weighted average exercise price of
GBP0.0039 (2022: GBP0.0128). Weighted average remaining life of the
warrants, at 30 June 2023, was 678 days (2022: 293 days). All the
warrants were issued by the Group to its shareholders in the
capacity of shareholders and, therefore, are outside of IFRS 2
scope.
2023 2022
number of number of
Group and Company warrants warrants
------------- -----------
Outstanding at the beginning of the year 389,430,010 380,197,618
Granted during the period 304,945,821 9,232,392
Exercised during the period - -
Cancelled during the period - -
Expired during the period (380,197,618) -
----------------------------------------- ------------- -----------
Outstanding at the end of the year 314,178,213 389,430,010
----------------------------------------- ------------- -----------
During the year ended 30 June 2023, the Company had the
following warrants to subscribe for shares in issue:
Warrant Number of
Grant date Expiry exercise warrants
date price, GBP
---------------- -------------- ------------ ------------
8 Jun 2022 16 Aug 2025 0.005 9,232,392
16 Aug 2022 16 Aug 2025 0.005 41,454,767
16 Aug 2022 16 Feb 2025 0.008 51,916,664
13 April 2023 12 Oct 2024 0.0035 123,888,888
13 April 2023 12 Oct 2024 0.0035 12,388,888
11 May 2023 10 May 2026 0.0014 75,205,614
Total warrants in issue at 30 June 2023 314,178,213
---------------------------------------------- ------------
The aggregate fair value, related to the share warrants granted
during the reporting period, was GBP173,825 (2022: GBP7,578).
Capital Management
Management controls the capital of the Group in order to control
risks, provide the shareholders with adequate returns and ensure
that the Group can fund its operations and continue as a going
concern. The Group's debt and capital includes ordinary share
capital and financial liabilities, supported by financial assets
(note 22 ). There are no externally imposed capital requirements.
Management effectively manages the Group's capital by assessing the
Group's financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to
shareholders and share issues. There have been no changes in the
strategy, adopted by management to control the capital of the Group
since the prior year.
20. Reserves
Share Premium
The share premium account represents the excess of
consideration, received for shares issued above their nominal value
net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses
that have arisen from the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net
of distributions to owners.
Fair Value Through Other Comprehensive Income Financial Assets
Revaluation Reserve
The available for sale trade investments reserve represents the
cumulative revaluation gains and losses in respect of available for
sale trade investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge
for options granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for
warrants granted, still outstanding and not exercised.
21. Share-Based Payments
Employee Share Options
In prior years, the Company established employee share option
plans to enable the issue of options as part of the remuneration of
key management personnel and Directors to enable them to purchase
ordinary shares in the Company. Under IFRS 2 "Share-based
Payments", the Company determines the fair value of the options
issued to Directors and employees as remuneration and recognises
the amount as an expense in the statement of income with a
corresponding increase in equity.
At 30 June 2023, the Company had outstanding options to
subscribe for ordinary shares as follows:
Options issued Options issued Total
on on
24 August 24 August 2020
2020 at 0.2p at 0.25p per
per share, share, expiring
expiring on on
19 August 19 August 2025
2025 Number
Number
Number
----------- -------------- ---------------- ----------
A R M Bell 5,500,000 5,500,000 11,000,000
S Kaintz 2,250,000 2,250,000 4,500,000
Employees 2,750,000 2,750,000 5,500,000
------------ -------------- ---------------- ----------
Total 10,500,000 10,500,000 21,000,000
------------ -------------- ---------------- ----------
Company and Group
--------------------------------
2023 2022
------------------------- ----------------------
Weighted Weighted
average average
Number exercise exercise
of price Number of price
options pence options pence
------------------------------ ------------ ----------- ----------- ---------
Outstanding at the beginning
of the year 50,000,000 1.41 63,320,000 0.46
Options issued in the year - - - -
Options exercised in the year - - (6,120,000) 0.45
Options lapsed in the year (29,000,000) 0.46 (7,200,000) 0.45
Outstanding at the beginning
of the year 21,000,000 2.25 50,000,000 1.41
------------------------------ ------------ ----------- ----------- ---------
Nil share options were granted by the Company in the reporting
year (2022: Nil). The weighted average fair value of each option
granted during the year was GBPnil (2022: Nil). The exercise price
of options, outstanding at 30 June 2023, ranged between GBP0.0025
and GBP0.02 (2022: GBP0.0008 and GBP0.025). Their weighted average
contractual life was 1.63 years (2020: 2.41 years).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share
Incentive Plan, a government approved scheme, the terms of which
provide for an equal reward to every employee, including Directors,
who have served for three months or more at the time of issue. The
terms of the plan provide for:
-- Each employee to be given the right to subscribe any amount
up to GBP150 per month with Trustees, who invest the monies in the
Company's shares ("Partnership Shares");
-- The Company to match the employee's investment by
contributing an amount equal to double the employee's investment
("Matching Shares"); and
-- The Company to award free shares to a maximum of GBP3,600 per
employee per annum ("Free Shares").
The subscriptions remain free of taxation and national insurance
if held for five years.
All such shares are held by Share Incentive Plan Trustees and
the ordinary shares cannot be released to participants until five
years after the date of the award.
During the financial year, a total of 12,836,559 Partnership and
Matching Shares were awarded and 11,675,670 Free Shares (2022:
3,801,597 Partnership and Matching Shares and 1,236,656 Free
Shares) with a fair value of GBP0.0021 for the Partnership and the
Matching Shares and GBP0.00185 for the Free Shares (2022:
GBP0.00425 for the Partnership and the Matching Shares and
GBP0.00425 for the Free Shares), resulting in a share-based payment
charge of GBP39,571 (2022: GBP16,027), included in the
administration expenses line in the Income Statement.
22. Financial Instruments
22.1 Categories of Financial Instruments
The Group and the Company hold a number of financial
instruments, including bank deposits, short-term investments, loans
and receivables, borrowings and trade payables. The carrying
amounts for each category of financial instrument are as
follows:
Group Group Company Company
2023 2022 2023 2022
30 June GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------ -------- -------- -------- --------
Financial assets
Available for sale financial assets
at fair value through OCI
Unquoted equity shares 736 736 736 736
Quoted equity shares - -
------------------------------------------ -------- -------- -------- --------
Total available for sale financial assets
at fair value through OCI
------------------------------------------ -------- -------- -------- --------
Financial assets FVTPL (Para warrants) - - - -
------------------------------------------ -------- -------- -------- --------
Total financial assets carried at fair
value through profit and loss 736 736 736 736
------------------------------------------ -------- -------- -------- --------
Cash and cash equivalents 155 66 149 31
Loans and receivables
Non-current receivables 2,506 2,320 4,978 3,945
Other receivables - current 506 660 601 456
------------------------------------------ -------- -------- -------- --------
Total loans and receivables carried
at amortised cost 3,012 2,980 5,579 4,401
------------------------------------------ -------- -------- -------- --------
Total financial assets 3,903 3,782 6,464 5,168
------------------------------------------ -------- -------- -------- --------
Total current financial assets 661 726 750 487
------------------------------------------ -------- -------- -------- --------
Total non-current financial assets 3,242 3,056 5,714 4,681
------------------------------------------ -------- -------- -------- --------
Financial liabilities
Short-term borrowings, including intra-group 1,662 1,042 3,618 2,912
Long-term borrowings 1,440 1,237 756 822
Trade and other payables, excluding
accruals 1,646 1,149 1,511 1,029
--------------------------------------------- ------- --------- ------ -----
Total current financial liabilities 4,748 3.428 5,885 4,763
--------------------------------------------- ------- --------- ------ -----
Other Receivables and Trade Payables
Management assessed that fair values of other receivables and
trade and other payables approximate their carrying amounts largely
due to the short-term maturities of these instruments.
Non-Current Receivables
Long-term fixed-rate receivables are evaluated by the Group,
based on parameters such as interest rates, recoverability and risk
characteristics of the financed project. Based on this evaluation,
allowances are taken into account for any expected losses on these
receivables.
Loans and Borrowings
The carrying value of interest-bearing loans and borrowings is
determined by calculating present values at the reporting date,
using the issuer's borrowing rate.
The carrying value of current financial liabilities in the
Company is not materially different from that of the Group.
22.2 Fair Values
Financial assets and financial liabilities, measured at fair
value in the Statement of Financial Position, are grouped into
three levels of a fair value hierarchy. The three levels are
defined based on the observability of significant inputs to the
measurement as follows:
-- Level 1: Quoted (unadjusted) market prices in active markets
for identical assets or liabilities;
-- Level 2: Valuation techniques for which the lowest level
input, that is significant to the fair value measurement, is
directly or indirectly observable; and
-- Level 3: Valuation techniques for which the lowest level
input, that is significant to the fair value measurement, is
unobservable.
The carrying amount of the Company's financial assets and
liabilities is not materially different to their fair value. The
fair value of financial assets and liabilities is included at the
amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or
liquidation sale. Where a quoted price in an active market is
available, the fair value is based on the quoted price at the end
of the reporting period. In the absence of a quoted price in an
active market, the Group uses valuation techniques, that are
appropriate in the circumstances, and for which sufficient data are
available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.
The following table provides the fair value measurement
hierarchy of the Group's assets and liabilities.
Group Level 1 Level 2 Level 3 Total
30 June 2023 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- -------- --------
FVTOCI financial assets
- Unquoted equity shares - 736 - 736
- Quoted equity shares - - - -
FVTPL (Para warrants) - - - -
------------------------- --------- -------- -------- --------
Company Level 1 Level 2 Level 3 Total
30 June 2023 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- -------- --------
FVTOCI financial assets
- Unquoted equity shares - 736 - 736
- Quoted equity shares - - - -
FVTPL (Para warrants) - - - -
------------------------- --------- -------- -------- --------
Group Level 1 Level 2 Level 3 Total
30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- -------- --------
FVTOCI financial assets
- Unquoted equity shares - 736 - 736
- Quoted equity shares - - - -
FVTPL (Para warrants) - - - -
------------------------- --------- -------- -------- --------
Company Level 1 Level 2 Level 3 Total
30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- --------- -------- -------- --------
FVTOCI financial assets
- Unquoted equity shares - 736 - 736
- Quoted equity shares - - - -
FVTPL (Para warrants) - - - -
------------------------- --------- -------- -------- --------
22.3 Financial Risk Management Policies
The Directors monitor the Group's financial risk management
policies and exposures and approve financial transactions.
The Directors' overall risk management strategy seeks to assist
the consolidated Group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its
functions include the review of credit risk policies and future
cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks, the Group are exposed to through its financial
instruments, are credit risk and market risk, consisting of
interest rate risk, liquidity risk, equity price risk and foreign
exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises
from the potential non-performance by counterparties of contract
obligations that could lead to a financial loss for the Group.
Credit risk is managed through the maintenance of procedures
(such procedures include the utilisation of systems for the
approval, granting and renewal of credit limits, regular monitoring
of exposures against such limits and monitoring of the financial
liability of significant customers and counterparties), ensuring,
to the extent possible, that customers and counterparties to
transactions are of sound creditworthiness. Such monitoring is used
in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in
financial institutions that maintain a high credit rating, or in
entities that the Directors have otherwise cleared as being
financially sound.
Other receivables, which are neither past due nor impaired, are
considered to be of high credit quality.
The consolidated Group does have a material credit risk exposure
with Mid Migori Mining Company Ltd, an associate of the Company.
See note 1.5 , "Significant accounting judgements, estimates and
assumptions" for further details.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might
encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. The Group manages
this risk through the following mechanisms:
-- Monitoring undrawn credit facilities;
-- Obtaining funding from a variety of sources; and
-- Maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to
finance operations for commercial exploration and development and
that controls over expenditure are carefully managed.
Management intend to meet obligations as they become due through
ongoing revenue streams, the sale of assets, the issuance of new
shares, the collection of debts owed to the Company and the drawing
of additional credit facilities.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate
risk.
Equity Price Risk
Price risk relates to the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market prices largely due to demand and supply factors
for commodities, but also include political, economic, social,
technical, environmental and regulatory factors.
Foreign Currency Risk
The Group's transactions are carried out in a variety of
currencies, including Sterling, Australian Dollar, US Dollar,
Kenyan and Shilling.
To mitigate the Group's exposure to foreign currency risk,
non-Sterling cash flows are monitored. The Group does not enter
into forward exchange contracts to mitigate the exposure to foreign
currency risk as amounts paid and received in specific currencies
are expected to largely offset one another and the currencies most
widely traded in are relatively stable.
The Directors consider the balances, most susceptible to foreign
currency movements, to be financial assets with FVTOCI.
These assets are denominated in the following currencies:
Group GBP AUD USD CAD Other Total
30 June 2023 GBP GBP GBP GBP GBP GBP
Cash and cash equivalents 149 2 - - 4 155
Amortised cost financial assets
- Other receivables 228 10 374 - 58 670
FVTOCI financial assets - - 736 - - 736
Amortised costs financial assets
- Non-current receivables - - 2,506 - - 2,506
Trade and other payables, excluding
accruals 355 42 286 959 4 1,646
Short-term borrowings 1,503 - 159 - - 1,662
Long term borrowings - 684 756 - - 1,440
Group GBP AUD USD CAD Other Total
30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 31 13 16 - 6 66
Amortised cost financial assets
- Other receivables 125 8 332 - 360 825
FVTOCI financial assets - - 736 - - 736
Amortised costs financial assets
- Non-current receivables - - 2,320 - - 2,320
Trade and other payables, excluding
accruals 77 26 166 876 4 1,149
Short-term borrowings 1,042 - - - - 1,042
Long term borrowings - 415 822 - - 1,237
Company GBP AUD USD CAD Other Total
30 June 2023 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 149 - - - - 149
Amortised cost financial assets
- Other receivables 2,700 - 373 - - 3,073
FVTOCI financial assets - - 736 - - 736
Amortised costs financial assets
- Non-current receivables - - 2,506 - - 2,506
Trade and other payables, excluding
accruals 351 - 200 959 1 1,511
Short-term borrowings, including
intra-group 3,618 - - - - 3,618
Long term borrowings - - 756 - - 756
Company GBP AUD USD CAD Other Total
30 June 2022 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents 31 - - - - 31
Amortised cost financial assets
- Other receivables 1,750 - 331 - - 2,081
FVTOCI financial assets - - 736 - - 736
Amortised costs financial assets
- Non-current receivables - - 2,320 - - 2,320
Trade and other payables, excluding
accruals 74 - 79 876 - 1,029
Short-term borrowings, including
intra-group 2,912 - - - - 2,912
Long term borrowings - - 822 - - 822
Exposures to foreign exchange rates vary during the year,
depending on the volume and nature of overseas transactions.
23. Reconciliation of Liabilities Arising from Financing
Activities and Major Non-Cash Transactions
Non-cash
flow
Interest Non-cash
Cash Cash Cash Non-cash and flow
30 flow flow flow flow Non-cash arrangement Introducers 30
June loans principal Interest Forex flow fee fee June
Group 2022 received re-payment paid movement -Conversion accreted accrued 2023
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan from
institutional
investors 577 410 (205) - 18 (903) 103 - -
Convertible
notes 317 47 (190) - - 350 170 - 694
Other loans 100 780 (99) - - (66) 252 - 967
Total 994 1,237 (494) - 18 (619) 525 - 1,661
Cash Cash Cash Non-cash Non-cash Non-cash
30 flow flow flow flow Non-cash flow flow 30
June loans loans Interest Forex flow - Interest arrangement June
Company 2022 received re-payment paid movement Conversion accreted fee accreted 2023
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Loan from
subsidiary 1,889 225 - - - - - - 2,115
Loan from
institutional
investors 577 410 (205) - 18 (903) 103 - -
Convertible
notes 317 47 (190) - - 350 170 - 694
Other loans 100 621 (99) - - (65) 252 - 809
Total 2,883 1,303 (494) - 18 (618) 525 - 3,618
Repayments of borrowings in the year include GBP37,636 paid
against non-current borrowings from Kansai not included in the
above table of current borrowings.
Significant non-cash transactions from financing activities, in
relation to raising new capital, are disclosed in note 18.
24. Significant Agreements and Transactions
The following are the significant agreements and transactions
recently undertaken having an impact in the year under review. For
the sake of completeness and of clarity, some events after the
reporting year may be included here and in note 26.
Financing
A convertible loan note facility was in place with Riverfort
Global Opportunities Fund ("RGO"). The facility is for up to
GBP1,000,000 in funding for working capital purposes, with an
initial drawdown of GBP385,000 in principal (before costs). This
loan was repaid through a series of conversions and cash repayments
after the year end.
On 25 July 2022, the Company announced that it had issued
GBP623,000 of convertible loan notes to high-net-worth investors,
with each note convertible into ordinary shares at a price of
GBP0.006 per share over a twelve-month period. Each note holder
also received 83,333 warrants for each note subscribed, entitling
the holder to subscribe for shares for 30 months from the date of
issue at a price of GBP0.008 per share. The interest rate of the
notes is 12% per annum, payable upon maturity.
On 19 August 2022, the Company announced the creation of an
additional GBP50,000 of convertible loan notes, which were
ultimately transferred to a separate loan note with a further net
amount of GBP50,000 added during the year. The notes carry an
interest rate of 0.05% per day, a cash repayment bonus of 25% of
the outstanding principal, and allow the investor to receive one
for one warrants exercisable for two years into RRR shares at an
exercise price of the higher of GBP0.006 or 10% above the VWAP on
the repayment date (or in the invent of a placing on the repayment
day, 10% above the placing price). The notes were originally
payable from a date three weeks following the original drawdown
date.
On 21 September 2022, the Group announced the placing of
40,000,000 new ordinary shares to institutional investors at 0.4
pence per share, raising gross proceeds of GBP160,000 before costs.
Additionally, 20,000,000 warrants to subscribe to ordinary shares
at 0.8 pence each for a period of 24 months were issued to placees.
The Company further announced that it had appointed OvalX as joint
broker to the Company.
On 30 November 2022, the Company entered into a prepayment
agreement for the sum of GBP10,000. The prepayment was to relate to
a placing of shares expected to be completed on or around 8
December 2022. The prepayment amount attracts a cash bonus fee of
25% of the prepayment amount upon repayment and allows the investor
to receive one for one warrants exercisable for 24 months at the
higher of GBP0.006 or 25% above the closing price on the date of
repayment. The notes were due for repayment three weeks from the
prepayment date, and any delay in repayment will draw interest of
0.5% per day.
On 15 December 2022, the Company announced a fundraising of
US$500,000 by way of a subscription of new ordinary shares with an
ascribed value of US$548,000 by Diversified Metal Holdings LLC.
Following this subscription, the investor may make an additional
advance of US$1,000,000 by way of a further subscription for shares
to an ascribed value of US$1,098,000. Each subscription under the
agreement will be made by way of the subscriber prepaying for
shares to be issued at the subscriber's request, in one or several
tranches. These subscriptions must occur within twenty-four months
of the date of the placing at the subscription price, initially set
at GBP0.007 per share, then after the first month, adjusting to the
average of five VWAPs selected by the investor during a twenty-day
period prior to the date of the subscriber's formal notice, but
subject to a floor price of GBP0.002 per share. The Company will
also have the right (but no obligation) to forego issuing shares in
relation to the subscriber's request for issuance and instead opt
to repay the applicable subscription amount by making a payment to
the subscriber equal to the market value of the shares that would
have otherwise been issued. Concurrent with the subscription, the
Company will issue 28,000,000 of the subscription shares to the
subscriber at par value, reducing the amount to be ultimately
issued under the agreement. In lieu of applying these shares
towards the aggregate number of subscription shares to be issued,
the subscriber may make an additional cash payment to the Company.
The Company will further issue to the subscriber 17,000,000 shares
in satisfaction of an arrangement fee.
On 24 February 2023, the Company announced that following to the
funding of 15 December 2022, that Diversified Metal Holdings LLC
had requested that the Company issue 26,753,616 new ordinary shares
at a price of GBP0.0025 per share, which had been prepaid by the
subscriber at the time of the initial investment. The Company
further agreed with the investor that it could apply in respect of
a further amount of US$274,000 at this same purchase price. The
Company had agreed to a variation fee of US$78,000 payable within
thirty days or by way of an increase in the total amount
outstanding, in relation to agreeing to this modification of the
agreement.
On 22 Feb 2023, the Company entered into a loan agreement with a
high-net-worth investor with an initial principal amount of
GBP125,000, and with an additional GBP80,000 drawn down on this
facility during the course of the year. The note was due for
repayment 14 days after the date of the agreement. The notes carry
a 20% interest rate per annum, with a 20% redemption fee payable on
the total amount drawn down on the notes at repayment. The investor
may elect to require conversion of all or part of the loan and
redemption fee into shares at a price of GBP0.0025 per share, which
may be reduced to the price of any placing in the event of any
issue of new ordinary shares at a lower price before the loan is
repaid.
On 15 March 2023, the Company announced that Diversified Metal
Holdings LLC had subscribed for a further 56,487,601 new ordinary
shares at a price of GBP0.0018 per share. This purchase had been
prepaid by the investor at the time of the original subscription
agreement on 15 December 2022. The total amount of the subscription
outstanding then stood at US$348,000.
On 14 April 2023, the Company announced that it had issued
15,055,706 new ordinary shares of the Company at a price of
GBP0.001661 per share in settlement of GBP25,000 of outstanding
debt owed to Riverfort Global Opportunities PCC Ltd.
On 4 May 2023, the Company announced that it had issued
19,176,965 new ordinary shares of the Company at a price of
GBP0.0015741 per share in settlement of GBP30,186.46 of outstanding
debt owed to Riverfort Global Opportunities PCC Ltd.
On 5 May 2023, the Company entered into a loan note agreement
with a principal amount of GBP50,000. The note carries an interest
rate of 0.05% per day from 20 May 2023, and a cash repayment bonus
of 30% of the outstanding principal. The notes are due within 3
days of receipt of funds from a settlement in the DRC.
On 11 May 2023, the Company announced it had completed a placing
of 376,028,070 new ordinary shares of the Company, which raised
GBP535,840 before expenses at a price of GBP0.001425 per share. A
fee of 7.5% was to be paid to Clear Capital Corporate Broking, and
Clear Capital was to receive GBP107,168 of warrants exercisable for
three years also at a price of GBP0.001425 per warrant.
On 12 May 2023, the Company announced the issuance of 24,512,229
new ordinary shares to employees of the Company under the Company's
Share Incentive Plan for the 2022-23 tax year as agreed by the
Trustees of the plan in their meeting held on 5 April 2023.
On 24 May 2023, the Company announced that it had issued
43,781,746 new ordinary shares of the Company to Riverfort Global
Opportunities PCC LTD at a price of GBP0.0012978 in settlement of
GBP56,819.95 of outstanding debt.
On 25 May 2023, the Company entered into a loan note agreement
with a principal amount of GBP50,000. The note carries an interest
rate of 0.05% per day from 20 June 2023, a repayment bonus of 30%
of the outstanding principal. The notes are due within 3 days of
receipt of funds from a settlement in the DRC.
On 30 May 2023, the Company announced that it had repaid
GBP65,500 of outstanding corporate debt through the issuance of
45,964,912 new ordinary shares of the Company at a price of
GBP0.001425 per share.
On 30 May 2023, the Company announced that had issued
Diversified Metal Holdings LLC 33,237,805 new ordinary shares at a
price of GBP0.0011 per share in satisfaction of GBP36,562 of the
subscription originally announced and prepaid on 15 December
2022.
On 21 June 2023, the Company announced that it had issued
65,876,152 to Riverfort Global Opportunities PCC LTD in repayment
of GBP75,000 of outstanding debt at a price of GBP0.0011385 per
share. It further announced the issuance of 23,657,440 new ordinary
shares at a price of GBP0.0016908 per share to Riverfort Global
Opportunities PCC Ltd in relation to a consent fee of GBP40,000 in
relation to a Deed of Consent executed on 19 January 2023. Lastly
the Company announced the that an issuance of 110,029,438 shares at
a price of GBP0.0011 per share had been issued to Diversified
Metals Holdings LLC in repayment of GBP121,032.38, in full
settlement of the subscription originally prepaid on 15 December
2022. The amount outstanding to Riverfort Global Opportunities PCC
Ltd was approximately GBP60,000 and would be immediately settled in
cash.
On 22 June 2023, the Company announced that CMC Markets UK Plc
had raised the Company GBP288,750 before expenses through the
placing of 175,000,000 new ordinary shares at a price of GBP0.00165
per share.
A $1,000,000 loan note remains payable to Kansai Ltd, which
would complete the acquisition of the Mid Migori Gold project.
Payment of this loan has been mutually agreed with Kansai to be
delayed until a transaction or exit of the project is
completed.
New Ballarat Gold Corporation
On 6 July 2022, the Group announced that it had entered into an
agreement for the acquisition of EL 5535, a 9 block (288 net
hectare) exploration licence south-west of Ballarat containing the
historic Berringa Mine from Balmaine Gold Pty Ltd. Under the terms
of the agreement Balmaine was to transfer license EL 5535 to RRAL
for an initial payment of A$20,000. Pending successful renewal of
the license for five additional years, RRAL has agreed to pay a
further A$130,000 to the vendor. A further payment of A$350,000 was
to be made upon the public release of a mineral resource estimate
of no less than 100,000 of gold in the inferred category as defined
by the JORC code. Finally a net smelter royalty of 1.5% is payable
to the vendor up to a maximum total of A$1,500,000. Completion of
the acquisition was announced on 22 September 2022.
Elephant Oil & Gas
Elephant Oil is currently finalizing an IPO on the Nasdaq
market. This is expected to complete with an up to US$7m funding.
The most recent Elephant Oil pre-IPO funding has valued the price
per share to US$2.25 per share. Given the pricing and the pending
IPO, the Company believes that it would be prudent to hold this
investment at the pre-IPO funding pricing of US$2.25 per share
pending the final listing, now expected in early 2024, when the
holding can be marked to market.
VUP Project - Democratic Republic of Congo
On 6 January 2022, the Company announced that it had obtained an
order Ordonnance No 437/BIL/12/2021 Portant Injonction de Payer
(the "Payment Order") from the Commercial Court in Lubumbashi
instructing VUP SA, the Company's partner in the joint venture, to
pay US$2,505,000 as a principal amount to Red Rock. It further
indicated that an audience took place in Lubumbashi at which the
Company's claim for interest and damages of US$11,000,000 was
heard, with judgment was to be given within eight days. Red Rock
indicated that it continues to investigate additional remedies that
may be available to it in the Congo and elsewhere.
On 19 January 2022, the Company announced that the Commercial
Court of Lubumbashi issued an executory judgment ordering VUP SA,
the Company's partner in the Joint Venture, to pay US$2,000,000 as
damages, with costs. This follows the earlier judgment for payment
of a principal amount of US$2,505,000, representing 50.1% of the
payment already made by a third party to VUP SA.
As of 2023, the Company has been provided with a draft
arbitration result in which it would receive a gross award of
US$7,500,000, in addition to the executory judgement for
US$2,500,000. The Company believes that execution of this agreement
is likely in early 2024.
25. Related Party Transactions
-- Power Metal Resources Plc (POW) are the Company's partner and
holder of 49.9% in the Company's 50.1% owned subsidiary Red Rock
Australasia Pty Ltd ("RRAL"). During the prior year, the Company
entered into an agreement with POW for the provision of a
GBP100,000 working capital loan to the Company. See note 24 for
further details. Amounts drawn under this facility were converted
after the reporting period. See note 26 for further details.
-- Related party receivables and payables are disclosed in notes 17 and 18.
-- The direct and beneficial interests of the Board in the
shares of the Company as at 30 June 2023 and at 30 June 2022 are
shown in the Director's Report.
-- The key management personnel are the board of Directors and
their remuneration is disclosed within note 9 .
26. Significant Events After the Reporting Period
On 3 July 2023, the Company announced that it had been issued of
a Certificate of Registration in relation to the Company's
application through its local subsidiary for a new lithium license
near Bikita, giving the Company a license covering 94 hectares.
Certificates for two small extension applications adding 45
hectares to the core license in this area were also recently
granted. Also near Bikita, adjacent to a purchased areas where
transfer is in progress, registration of two small extension
license areas of 21 and 22ha were recently granted.
On 7 August 2023, the Company announced the extension and
partial conversion of its 12% convertible loan notes. The Company
had agreed with investors to extend the terms of the notes and the
related warrants, including accrued interest by one year to 18 July
2024 and 18 January 2026 respectively. The total amount of the
extended convertible loan notes at the time of the extension was
GBP689,840. The conversion priced of the extended notes had been
adjusted to a price set at a 20% uplift from the 30 day VWAP
starting from 9 July 2023, provided that the conversion price must
fall between GBP0.002 and GBP0.006 per share. The partial
conversion of GBP127,000 of the notes prior to the extension, was
to be settled by the issuance of GBP63,500,000 new shares a price
of GBP0.002 per share. Following this conversion, the residual
balance of the notes due in July 2024 would be GBP562,840 plus any
interest accumulated during this period.
On 22 August 2023, the Company announced that it had received
notice of the conversion of GBP52,509.60 of convertible loan notes
by a high-net-worth investor inclusive of interest at a price of
GBP0.0020196 per share, retiring this note in full.
On 20 September 2023, the Company announced that it had sent
three samples of approximately 2KG each from the pegmatites at the
first permitted area at the Company's African Lithium Resources
lithium project in Zimbabwe, to an ISO accredited laboratory in
Harare.
On 19 October 2023, the Company announced that it had approved
the issuance of up to GBP500,000 of convertible loan notes at a
price of GBP10,000 per note. The notes would attract interest of 6%
+ 0.5% per month from the issue date to the final conversion date
or 23 March 2024. The notes were convertible into new ordinary
shares of the company at a price set at a 15% discount to the price
of any placing conducted during the period that raised a minimum of
GBP200,000 or more, provided that this placing were to take place
prior to 23 March 2024 Default interest of 10% + 1% would be
payable for each month or portion of a month and would accrue from
the date of any default until payment. For every share issued to
the noteholder as part of conversion of any note, or that would
have been issued to the holder had the investor not made an
election to be paid in cash, one warrant will be issued to the
investor with a life of 30 months and set at an exercise price at
50% above the placing price. In the event that a noteholder is
repaid in cash by 23 March 2024, each note will receive 4,500,000
warrants with a life of 30 months and an exercise of GBP0.0025 per
share. The Company further announced that it had raised GBP210,000
before expenses by subscription to 21 of these Notes as a First
Tranche closing of this facility. Additional for every 12 warrants
issued to holders either via conversion or by cash repayment, 1
broker warrant will be issued to First Equity Limited on the same
terms as the relevant note holder warrants.
On 15 November 2023, announced that at the Company's lithium
project in Zimbabwe, 200 tons of lithium ore has been prepared for
export and that the first truck had now left Harare for the
Mozambican port of Beria.
On 28 November 2023, the Company announced that at the Company's
operations in Cote d'Ivoire, a decree had been issued granting a
second license to the Company's subsidiary LacGold Resources SARLU
for an initial term of 4 years. The license covers 380.94 sq km in
the departments of Yamoussoukro and others, and this grant was one
of a total of Red Rock's applications consisting of a total of
1,404,.86 sq km. This decree brought the total of granted licenses
725.55 sq km of prospective gold ground. Each application is
located on a known regional shear zone where gold mines are
currently operating, and each grant has significant artisanal
mining occurring within and around them.
On 11 December 2023, the Company announced that it had placed
GBP110,000 in the form of 100,000,000 new ordinary shares at a
price of GBP0.0011 per share to a high net worth investor in
satisfaction of costs that had been incurred at the Company's
Zimbabwe lithium project and Burkina Faso gold projects
respectively.
On 14 December 2023, the Company announced that it had raised
gross proceeds of GBP500,000 through the issuance of 666,666,667
new ordinary shares at a price of GBP0.00075 per share.
27. Commitments
As at 30 June 2023, the Company had entered into the following
commitments:
-- Exploration commitments: On-going exploration expenditure is
required to maintain title to the Group mineral exploration
permits. No provision has been made in the Financial Statements for
these amounts as the expenditure is expected to be fulfilled in the
normal course of the operations of the Group.
-- On 1 January 2023, the Company extended its existing lease at
We Work, Aldwych House, through to 30 June 2024. Total lease
rentals payable to 30 June 2024 are GBP69,454.
-- On 26 June 2015, the Company announced an agreement with
Kansai Mining Corporation Ltd, pursuant to which Red Rock's farm in
agreement was replaced by agreements, under which any interest in
the Migori Gold Project or the other assets of Mid Migori Mines,
that may be retained or granted to Mid Migori Mines or Red Rock,
would be shared 75% to Red Rock and 25% to Kansai. Kansai's
interest was to be carried up the point of an Indicated Mineral
Resource of 2m oz of gold. Red Rock was to have full management
rights of the operations and of the conduct of legal proceedings on
behalf of both Mid Migori Mines and itself. On 15 June 2018, Red
Rock announced a revision to this agreement. The effect of the
revision is that Kansai exchanged its 25% carried interest under
the 2015 agreement for a US$ 50,000 payment, leaving Red Rock with
a 100% interest. In the event of a renewal or reissue of licenses,
covering the relevant assets, the Company will within three months
make further payments, subject to such renewal or reissue not being
on unduly onerous terms, as follows: (1) US$ 2.5 million payable in
cash; (2) a US$ 1 million promissory note, payable 15 months after
issue; and (3) GBP0.500 million of warrants into Red Rock shares at
a price 20% above their average closing price on the three trading
days prior to issue. This agreement was further amended on 21
December 2020 through agreement with Kansai to pay US$ 1 million,
of which US$ 0.5 million has been paid on 24 December 2020, and to
defer payment of US$ 1.5 million until 29 January 2021, at which
time the balance could be paid in cash or shares at Kansai's
discretion, with any shares to be issued at the closing price of
the Company's shares on the 21 of December 2021. As at the
reporting date, the amount of $1,000,000 remains payable, with
agreement having been arrived at between the parties that payment
shall be deferred until receipt by the Company of any funds awarded
by the court of the DRC.
28. Control
There is considered to be no controlling party.
29. These results are audited, however the information does not
constitute statutory accounts as defined under section 434 of the
Companies Act 2006. The consolidated statement of financial
position at 30 June 2023 and the consolidated income statement,
consolidated statement of comprehensive income, consolidated
statement of changes in equity and the consolidated cash flow
statement for the year then ended have been extracted from the
Group's 2023 statutory financial statements. Their report was
unqualified and contained no statement under sections 498(2) or (3)
of the Companies Act 2006. The financial statements for 2023 will
be delivered to the Registrar of Companies by 31 December 2023.
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END
FR UKORROWUUAUA
(END) Dow Jones Newswires
December 20, 2023 02:00 ET (07:00 GMT)
Red Rock Resources (AQSE:RRR.GB)
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Red Rock Resources (AQSE:RRR.GB)
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