TIDMGSCU
RNS Number : 7777H
Great Southern Copper PLC
31 July 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO 596/2014 AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN
(WITHDRAWAL) ACT 2018, AS AMED, ("MAR") AND IS DISCLOSED IN
ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR.
ON PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS CONSIDERED
TO BE IN THE PUBLIC DOMAIN.
31 July 2023
Great Southern Copper plc
("Great Southern Copper ", the "Group" or the "Company")
Full Year Results and Publication of Annual Report
Great Southern Copper plc (LSE: GSCU), the company focused on
copper-gold exploration in Chile, announces its results for the
year ended 31 March 2023.
HIGHLIGHTS
Especularita Project
-- Commenced exploration campaign at Especularita, targeting
porphyry-epithermal style copper-gold ("Cu-Au") mineralisation, and
identified targets for prospect-scale exploration
-- Announced final assay results from the trial rock float
sampling programme at the Victoria prospect, demonstrating
potential for high-grade Cu-Au deposits
-- Exploration concession area increased with 5,704 hectares ("ha") added at Especularita
Especularita post period
-- On 3 April, announced results from mapping and sampling at
the Victoria prospect, showing assay grades in rock chips of up to
6.9% Cu and 1.85g/t Au
-- On 11 July, announced high-grade Cu-Au rock chip samples up
to 5.97% Cu and 13.7g/t Au from the Teresita prospect
-- On 18 July, announced high-grade copper assay results from
rock chip samples up to 3.39% Cu from Abundante prospect
-- Scout drilling programmes planned for the Teresita and Victoria prospects
San Lorenzo Project
-- Announced ground magnetic data that identified multiple
shallow and buried targets for follow-up exploration
-- Completed reconnaissance diamond drilling, which targeted four individual prospect zones
-- Scout drilling results at the Cerro Chinchillon prospect confirm the discovery of a large intrusive-related copper-gold mineralised system
-- Exploration concession area increased, with 2,193 ha added at San Lorenzo
Corporate
-- On 15 May, secured GBP1m in funding to finance on-going
exploration programmes in Chile through a placing and subscription
and a convertible loan facility
-- On 13 July, appointed Martin Page as Chief Financial Officer and member of the board
Sam Garrett, Chief Executive Officer of Great Southern Copper,
said: "This has been a strong year for GSC as we have made
significant progress across both our projects in Chile. The
discovery of an intrusive-related copper-gold system at San
Lorenzo, as well as high-grade copper-gold prospects at
Especularita, has established a strong platform for the Company to
build from in the future.
"The Green transition has underscored the importance of key
strategic minerals such as copper, and this continuing trend is
expected to bolster demand, particularly in light of the supply
shortages foreshadowing this transition. Our exploration work over
the past year has highlighted the significant potential of our
projects, and the Board looks forward to advancing with exploration
campaigns to further understand the numerous promising targets
identified at our two projects."
Annual Report and Accounts
The Company will shortly be publishing its Annual Report and
Accounts. It will be made available on the Company's website at
https://gscplc.com and posted to shareholders.
Enquiries:
Great Southern Copper plc
Sam Garrett, Chief Executive Officer +44 20 4582 3500
--------------------
SI Capital Limited
--------------------
Nick Emerson +44 (0)14 8341 3500
--------------------
Gracechurch Group
--------------------
Harry Chathli, Alexis Gore, Henry
Gamble +44 (0)20 4582 3500
--------------------
About Great Southern Copper
Great Southern Copper is a mineral exploration company focused
on copper-gold deposits in Chile. The Company has the option to
acquire rights to 100% of two projects that are prospective for
large scale copper-gold deposits in the underexplored coastal belt
of Chile, a globally significant mining jurisdiction and the
world's largest copper producer.
The two projects comprise the San Lorenzo Project, northeast of
the coastal town of La Serena in northern Chile, and the
Especularita Project located approximately 170km to the south of
the San Lorenzo project. The two early-stage Cu-Au exploration
projects are within the same coastal metallogenic belt as other
major deposits including Teck's Andacollo copper and gold mine and
Pucobre's El Espino project. Significant historical small-scale and
artisanal workings for both copper and gold are readily evident in
both exploration project areas.
Great Southern Copper is strategically positioned to support the
global market for copper, a key metal in the clean energy
transition around the world. The Company is actively engaged in a
two-year exploration and evaluation work programme targeting both
large tonnage, low to medium grade Cu-Au deposits as well as low
tonnage high-grade Cu-Au deposits.
Further information on the Company is available on the Company's
website: https://gscplc.com
Chairman's Statement
As Chairman of Great Southern Copper plc, ('the Company' and
'GSC'), I am delighted to be able to introduce our second set of
results as a public company for the year ended 31 March 2023 .
In December 2021, Great Southern Copper plc, a mineral
exploration company focused on the discovery of copper-gold
resources in the coastal metallogenic belt of Chile, successfully
listed on the Official List (Standard Segment) of the London Stock
Exchange, at the same time raising some GBP3.5 million. Since that
time the Company has been actively involved in Chile, where it
holds the rights to two exploration projects.
Chile is the world's largest producer and exporter of copper and
is recognised as a jurisdiction for world class deposits. With a
long history of mining and metal processing, the country boasts one
of strongest economies in South America. Not only does it enjoy a
strong mining culture, but the country also benefits from an
experienced and educated mining workforce, first-class
infrastructure and a robust legal framework, which includes
provisions for foreign companies to own 100% of mining assets. In
recent years, the country has moved to redesign its constitution,
and in 2022 elected a new president mandated to effect change.
Although recent moves to enable State participation in Chile's new
lithium strategy have made international headlines, similar changes
that were proposed last year to copper mining rights were not
approved by the country's constitutional assembly. However, Chile's
new royalty proposals, which will increase Government take from
producing miners, are now very close to finalisation, but they have
been modified with the aim of ensuring that Chile remains
internationally competitive and can continue to attract foreign
investment in its mining industry.
In the years leading up to our listing, the business
strategically targeted Chile and specifically its coastal
metallogenic belt, for high quality, large-scale, early-stage
copper-gold exploration assets, where options over the two
projects, San Lorenzo and Especularita, were secured. The Board
believes these provide the Company with significant advantages
compared to many of its peers including low entry cost, a coastal
location with excellent infrastructure, large concession positions
in areas of significant historical mining, limited exploration
activity and the potential to earn 100% of the projects with no
overhanging payments or royalty conditions.
In the last year, the Company has engaged in scout diamond
drilling programmes across four prospect areas in the San Lorenzo
copper-gold project, resulting in the discovery of a potentially
significant intrusive-related copper-gold system. We are fortunate
to have an excellent team in-country and our thanks go to them for
their hard work and dedication . The Company also increased its
concession holding at San Lorenzo during the year and
reconnaissance work programmes are now being planned to allow the
Company to explore the greater area.
Reconnaissance exploration at the Especularita project during
the reporting period has been successful in identifying three
copper-gold prospects that the Company has been actively working up
to drill-ready stage. High-grade epithermal and skarn type copper
and gold has been identified in surface samples at the Victoria,
Teresita and Aurelia prospects and the Company plans to have these
prospects ready for drill testing within the next reporting period.
In addition, regional sampling of streams across the project is
currently ongoing and is designed to deliver additional new
prospects into the exploration pipe-line at Especularita. Our team
at Especularita believes that the project is ideally located at the
centre of a district-scale mineralisation system that includes
porphyry-epithermal copper-gold mineralisation as well as distal
base-metal skarn deposits. The Company's tenement holding at
Especularita has also been significantly increased with the
addition of new strategically located concessions.
Despite global economic headwinds effecting the industry this
year, the overall economic outlook for both copper and gold
continues to look very strong, particularly for copper, where
supply shortages are foreshadowed as a result of the global
transition to green energy technologies. This is reflected in the
copper price which has increased over 60% in the last 3 years.
(Source: www.lme.co/en/metals/non-ferrous ).
The discovery of an intrusive-related copper-gold system at San
Lorenzo, as well as the discovery of high-grade copper-gold
epithermal systems at Especularita, has established a strong
platform from which the Company will progress its exploration
activity over the coming years. Our management team is also working
to identify and secure a third project, which will further enhance
the Company's exploration assets and the potential to deliver
growth opportunities for the Company and our stakeholders well into
the future.
I wish to thank the Board, our management, and particularly our
team in Chile, for their dedicated work in advancing the Company's
exploration efforts and at the same time ensuring that the values,
beliefs and standards of the Company are upheld and promoted.
Charles Bond
28 July 2023
Operations Report
The Company is exploring two projects in northern Chile for
large-scale copper-gold deposits, namely: the San Lorenzo Project
and the Especularita Project.
Both projects are strategically located within the coastal
metallogenic belt which affords the Company significant
infrastructure advantages over explorers who operate in the
high-altitude Andean belt, including access to roads, power, towns
and ports. Both projects are along trend from major deposits and
exhibit significant evidence of historical artisanal mining.
However, the areas are relatively under-explored by comparison with
the Andean regions.
The Company has the option to earn 100% of both projects with no
attaching royalty conditions or overhanging payment
requirements.
To assist with the exploration activity across both projects the
Company has expanded its all-Chilean exploration team with the
addition of a highly experienced Chief Geologist as well as two
graduate geologists.
Exploration activities at the projects for the period to 31
March 2023 are set out below.
San Lorenzo Project
Previous exploration work at the Chinchillon prospect area of
San Lorenzo has determined that large-scale copper-gold
mineralisation occurs within a granodiorite, which in turn is
intruded by dykes, sills and stocks of monzonite and overprinted by
an extensive calc-potassic alteration event. The overprinting
calc-potassic alteration is typically defined by swarms of sheeted
fractures of quartz-actinolite-magnetite-K feldspar-Fe-oxide with
rare evidence of copper oxides(1) . Contact margins of the
monzonite intrusive bodies also exhibit strong evidence of
copper-gold mineralisation typically associated with unidirectional
solidification textures (or UST).
Work at San Lorenzo this year included interpretation of a
ground magnetic survey (completed the previous year(2) )(3) as well
as scout drilling at four prospect sites within the calc-potassic
alteration zone(4) . Managing and maintaining the project's
concession portfolio is on-going and includes the addition of new
concessions to the project(5) .
During the reporting period, a scout diamond drilling programme
comprising 13 holes for a total of 2,958m was completed across 4
prospect areas within the Chinchillon prospect at San Lorenzo. The
programme was designed with the aim to(6) ;
- Target the oxide sheeted fracture-vein systems at depth to
determine if the fracture-vein sets host copper sulphides at depth
below the base of oxidation,
- Target monzonite and UST to evaluate the fertility of the
monzonites to potentially produce a Cu-Au deposit,
- Determine the controls on mineralisation, and
- Identify what exploration tools and methods might be best
employed to vector towards economic deposits.
The results of the drilling have successfully confirmed that the
sheeted fracture system hosts copper sulphide mineralisation and
that copper (and gold+molybdenum) grades are dependent upon both
fracture density and sulphide speciation within the individual
fractures. Assay results indicate that the background copper
content for unaltered-unmineralised granodiorite is very low
(<10-100ppm Cu). However, where the granodiorite is overprinted
by sheeted fracture alteration, the copper content increases
significantly to >300-1000ppm Cu. Drill holes SLD005-009
targeting the fracture-hosted altered granodiorite all intersected
anomalous Cu+Au-Mo on fractures with hole SLD005 recording a best
intercept of 94m of 480ppm Cu from 274m (SLD005)(6) .
Maximum assays for individual samples (2m sample intervals) for
hole SLD005 were 0.21% Cu and 0.11g/t Au. Additional highest assay
results for the other holes over 0.5-2m sample intervals include;
0.68% Cu (SLD006), 869ppm Cu and 1.13g/t Au (SLD007), 0.19% Cu and
0.5g/t Au (SLD008) and 0.37% Cu and 1.78g/t Au (SLD009)(6) . Whilst
these results are not economic, they are significant in
demonstrating that the Chinchillon system is fertile and that a
significant volume of copper (and gold) has been added to the
granodiorite presumably from a large deeper source body, such as
the monzonite. The company will now use this information to target
its next phase of exploration drilling.
Monzonitic dykes, sills and stocks are prevalent invading
throughout the calc-potassic altered granodiorite at Chinchillon.
The monzonites are characterised by UST magmatic textures
(unidirectional solidification textures) which are strongly
indicative of a fertile mineralisation system formed at a low
erosional cupola level. Two monzonite intrusives were targeted with
scout drilling at the Las Hermanas and Cerro Blanco prospects.
Assay results indicate that the monzonite intrusives are highly
elevated (up to 2 orders of magnitude) in copper (>300-1000ppm
Cu), relative to the enclosing granodiorite (<50-100ppm Cu), and
as such they represent a potential progenitor for the Cu+Au
mineralising system at Chinchillon(6) . Best Cu-Au drill intercepts
for holes targeting the monzonite-UST mineralisation include(6)
;
-- SLD010: 5.5m of 0.27% Cu, 0.54g/t Au from 70.7m, including
0.5m of 1.65% Cu, 3.63g/t Au from 70.5m
-- SLD013: 4.0m of 0.2% Cu, 0.1g/t Au from 5m, and
1.0m of 0.37g/t Au from 9m
Analysis of trace element ratios (Al3O(2) /TiO(2) , Sr/Y and
V/Sc ratios) from drill core assay data for the monzonite dykes
also suggests that the monzonite geochemistry falls within the
ranges for fertile Cu and Cu-Au producing intrusives(7) .
The results of the scout drilling programme confirm that GSC has
discovered a large intrusive-related copper-gold system at
Chinchillon. The drilling results are still being fully
evaluated.
The San Lorenzo project is strategically located within the
Coastal metallogenic belt that is host to both porphyry and IOCG
type copper-gold deposits. The location benefits from excellent
infrastructure due to its low altitude and recent discovery
successes in the belt by Hot Chili (ASX:HCH) and Tribeca Resources
(TSX:TRBC) emphasise the exploration potential of the district.
With this in mind GSC has acted to increase its concession-holding
over the year and now holds approximately 28,645 ha (286 km(2) ) of
mining and exploration concessions both granted and in the process
of being granted(5) .
Especularita Project
The Especularita project comprises an extensive district-scale
porphyry-epithermal-skarn mineralisation system located within the
Coastal metallogenic belt and is host to significant small-scale
mines and artisanal workings for copper and gold. The centre of the
mineralised system is identified as a topographically distinct zone
of advanced argillic altered volcanics referred to locally as the
La Colorada lithocap. Initial work by GSC and its predecessor at
Especularita was focussed on reconnaissance exploration as well as
maximising the Company's land position in the district(1) .
Reconnaissance-scale mapping and sampling across the project
during the previous reporting period and into this reporting
period, has led to the discovery of outcropping high-grade
copper-gold mineralisation (up to 7.22% Cu and 13.1g/t Au)(8) in 3
prospect locations, namely; the Teresita, Victoria and Aurelia
prospects. In addition, porphyry style stockwork vein alteration
has been identified in several locations within and marginal to the
La Colorada advanced argillic altered lithocap(7) . Further
exploration is planned to elevated these porphyry areas to
prospect-scale targets.
The Teresita and Victoria prospects represent epithermal style
quartz-carbonate vein-breccia deposits with mineralisation hosted
within quartz-dominant zones of the breccias. Copper assay grades
in surface samples collected from detailed prospect mapping at
Victoria during the reporting period range up 6.9% Cu and 1.85g/t
Au(9) gold up to 13.7g/t Au and up to 13.7g/t Au at Teresita(7) .
Assay results from preliminary prospect-scale mapping and sampling
at the Aurelia prospect are indicative of skarn type mineralisation
with samples from historical small-scale mines ranging up to 7.6%
Cu and 2.9g/t Au(7) . Scout RC drilling programmes are being
planned for both the Teresita and Victoria prospects.
A programme of first-pass stream sediment sampling has also been
implemented across the Especularita project area to provide
geochemical exploration vectors to new target areas particularly
within the lithocap alteration zone(5) . Approximately 500 drainage
samples have been collected during the later half of the reporting
period and assay results for the survey are pending.
The Especularita project is located within a large mineral
district and includes significant historical evidence of artisanal
mining and processing as well as active small-scale Cu-Au mines.
The project is strategically located within a trend that includes
both large porphyry and skarn type copper deposits including
Andacollo (Teck) and El Espino (Pucobre). During the reporting
period, the Company has worked to increase its concession position
within this under-explored district and now holds 18,209 ha (182
km2) of mining and exploration concessions both granted and in the
process of being granted(5) .
Sam Garrett
Chief Executive Officer
28 July 2023
References:
1. Prospectus for Great Southern Copper PLC (06 Dec 2021),
2. RNS 8499X (22 Jan 2022): Ground-based magnetic survey completed at San Lorenzo project,
3. RNS 4007M (23 May 2022): Ground magnetics survey identifies multiple targets at San Lorenzo,
4. RNS 9264R (11 Jul 2022): Diamond drilling commences at San Lorenzo Cu-Au project, Chile,
5. RNS 3666Q (20 Feb 2023): Exploration update at Especularita and San Lorenzo,
6. RNS 4946T (20 Mar 2023): Results for scout drilling programme,
7. RNS 1155A (22 May 2023): Corporate presentation
8. RNS 2146H (22 Nov 2022): Early exploration at Especularita
identifies Cu-Au targets and completion of drilling at San
Lorenzo
9. RNS 0445V (03 April 2023): Rock chip assay grades up to 6.9%
Cu and 1.85g/t Au in outcrop from Victoria prospect
Extract from Strategic Report
The Directors present their Strategic Report on the Group and
Company for the year ended 31 March 2023.
Strategy and Business Review
The Company's strategy is to create value for shareholders by
using the expertise of its management team to successfully explore
for copper-gold (Cu-Au) deposits in Chile and, potentially, to
identify and acquire other mineral exploration projects.
The Company's exploration projects in Chile comprise the San
Lorenzo Cu-Au project north east of the coastal town of La Serena
in northern Chile and the Especularita Cu-Au project located
approximately 170km to the south of the San Lorenzo project. Both
projects are situated in the Coastal Cordillera of Chile with good
access to infrastructure.
The prospectivity of both projects is confirmed by both
significant historical small scale artisanal workings for copper
and gold and the exploration work completed to date. In the past
year, the Company has undertaken geological mapping, trenching and
scout drilling at San Lorenzo. At Especularita, the Company has
carried out geological mapping, stream sediment sampling, rock chip
and float sampling. Exploration is still at an early stage at both
projects and has not yet matured to the stage where a mineral
resource estimate has been defined. Nevertheless, drilling at San
Lorenzo has confirmed the discovery of a large intrusive-related
Cu-Au mineralised system and, at Especularita, results have
identified mineralised vein breccia targets for follow-up work.
In December 2021, GBP3.5 million was raised to fund the
Company's two-year exploration programme at San Lorenzo and
Especularita. In the past financial year, GBP2,136,136 was spent
according to the budget leaving a cash balance of GBP653,940 as at
31 March 2023.
The outlook for copper is positive, given the lack of investment
in new copper discoveries over the last decade, which has lowered
copper production at a time when it needs to ramp up significantly
to enable the transition to clean energy. For copper exploration,
Chile is a prime destination. It is the largest copper producer in
the world and one of South America's most promising investment
destinations. It is a stable and prosperous country with such
impressive mineral endowment, that all the world's major mining
companies operate there.
Details of the Company's results and prospects are set out in
the Chairman's Statement and in the Operations Report.
Subsequent Events
On 15 May 2023, the Company entered into an agreement with
Foreign Dimensions Pty Limited ("FD") whereby FD agreed to provide
the Company with an unsecured interest free convertible loan
facility in the aggregate sum of GBP501,000. The loan is to be made
in two tranches:
-- GBP250,000 on 31 August 2023; and
-- GBP251,000 on 11 September 2023.
Automatic conversion of the loan into Ordinary Shares
("Conversion Shares") in the Company at a price of 1.2p per share,
and the grant of an equivalent number of warrants exercisable at
2.4p, is subject to certain conditions, in particular publication
of a prospectus approved by the FCA in relation to, and authority
being granted by the Company's shareholders for, the allotment and
issue of the Conversion Shares and the grant of the warrants.
In the event that such authority is not granted, any advance
already made is repayable by the Company one year after the date of
such advance.
On 19 May 2023, by way of a private placing, the Company issued
a further 41,749,998 Ordinary Shares at a price 1.2p per share,
raising GBP501,000 before costs, each with the right to a warrant
attached, also to be granted conditional on satisfaction of the
conditions above, and exercisable at 2.4p.
On the same date, the Company made loans of GBP10,000 each to
two of the Directors, Stuart Greene and Nick Briers to enable them
each to subscribe for shares in the abovementioned placing. These
loans, which are interest free, are being repaid from their after
tax salaries. It is envisaged that both loans will be repaid before
30 November 2023.
The Company has announced the appointment of Martin Page as
Finance Director. Mr Page will take up his appointment on 1 August
2023.
Principal Risks
The Directors have identified the following principal risks in
regards to the Company's future. The relative importance of these
risks is likely to evolve over time as the Company executes its
strategy in Chile and as the external economic and market
environment changes.
Strategic Risk
The Company's strategy may not deliver the results anticipated
by the shareholders. The Directors regularly monitor the Company's
progress and will modify the strategy as required, based on
internal and external developments and exploration results. The
strategy is monitored at the Company's regular Board meetings.
Concentration Risk
The Company's activities are currently geographically
concentrated in Chile. As a result of this concentration, the
Company may be disproportionately exposed to the impact of local
delays or interruptions to development of, and future production
from, these locations caused by significant changes to governmental
regulation, interruption to transportation together with capacity
constraints, curtailment of future production, natural disasters,
adverse weather conditions, civil unrest, labour disputes or other
events which impact this area.
Exploration Risk
The Company's projects are regarded as 'early-stage
exploration', are highly speculative in nature, and may not result
in success. There is no guarantee that further mineralisation or
recoverable economic resources will be found.
Whilst the Directors endeavour to apply their skills to assess
the projects, exploration is costly, highly speculative and often
unsuccessful. For instance, factors such as adverse weather
conditions, natural disasters, equipment or services shortages,
procurement delays or difficulties arising from the environmental
and other conditions in the areas where the potential resources are
located, may increase costs and make it uneconomical to advance or
develop the Company's projects. Failure to discover new mineral
resources or maintain existing mineral rights could materially and
adversely affect the Company's results of operations, cash flows,
financial conditions and prospects.
Government Regulation
The concessions and operations of the Company are located in
jurisdictions outside of the UK and there are, therefore, a number
of risks that the Company is unable to control.
Whilst the Company makes every effort to ensure that it has
robust commercial agreements in place, there is a risk that the
Company may be adversely affected by political factors such as
taxes and charges, suspension of licences and changes to the laws
governing mineral exploration and extraction activities.
The current Chilean government's legislative programme includes
a proposal to change the taxation of mining activities in Chile. A
draft bill that would modify the mining royalty regime is under
discussion in Congress. The proposed royalty has a hybrid nature
and combines an ad valorem component that would be applied to
annual sales of copper and a variable element linked to the mining
operating margin. The royalty tax would apply to mining companies
producing over 12,000 tonnes of fine copper per year.
Despite the fact that the Company's operations are currently
limited to exploration activities, the enactment of the
aforementioned bill could considerably increase mining taxes,
potentially affecting the viability of future exploitation projects
in Chile, as well as those of the Company, which could become
uneconomic. The Company will continue to monitor the proposed
changes and the potential adoption of a Mining Royalty Tax, which
may adversely affect potential future operations of the
Company.
Modifications to the Chilean mining code expected to be
introduced in 2023 but now postponed to January 2024, include
extending the duration of an exploration concession from two to
four years but eliminating the possibility of requesting an
extension to an exploration concession given the increased
duration. The Company will continue to monitor the various
modifications to the mining code that are being discussed by
Congress and their potential impact on the Company, including the
impact on the concessions to which the Company has rights at the
time the new laws come into force.
Permitting
The Company's rights to the San Lorenzo and Especularita
projects are defined by option agreements that its subsidiary,
PTRC, has over the exploration and exploitation concessions at
these projects. The option agreements and all of the concessions
are in good standing.
Exploration concessions in Chile last for 2 years, counted since
their constitution by judicial ruling, and are subject to the
payment of annual fees to the Chilean Treasury. If these fees are
not paid in a timely manner, the claim can only be restored to good
standing by paying double the annual fee the following year. At the
end of the two-year period, the exploration concession may i) be
renewed for an additional two years, in which case at least 50% of
the surface area of the exploration concession must be
relinquished, or ii) be converted, totally or partially, into an
exploitation concession.
Exploitation concessions are valid in perpetuity so long as
annual fees are paid to the Chilean government. The process to
incorporate a mining concession is based on the principle that
grants preference to the first petitioner before the local court.
The holder of an exploration concession in good standing has the
preferential right to incorporate an exploitation concession within
the boundaries of its exploration concession. Notwithstanding,
anyone can request the incorporation of a mining concession within
the limits of the exploration concession of a different owner, in
which case the holder has to file a claim opposing the
aforementioned constitution, within 30 days, counted from the date
of publication of the application made by the interested third
party. Exploration and exploitation concessions do not necessarily
imply a right to mine, except on a small scale. However, they give
the owner the right to mine subject to the granting of permits.
There is no guarantee that any of the granted exploration
concessions, or any exploration concessions granted in the future,
will be renewed. Additionally, there is no guarantee that the
exploitation concessions granted or to be granted can be
effectively maintained by payment of the appropriate annual licence
fees or by means of compliance with any new regulation that may
control the granting and maintenance of exploitation concessions in
the future. If these exploration and exploitation concessions are
not renewed or maintained, or if new exploration and exploitation
concessions are applied for and not granted, this could have a
material adverse effect on the Company's business, prospects,
financial conditions and results of operations.
Whilst the Company is satisfied that it has taken reasonable
measures to ensure an unencumbered right to explore its projects in
Chile, the relevant concessions may be subject to undetected
defects. If a defect does exist, it is possible that PTRC may lose
all or part of its interest in one or more of the concessions to
which the defect relates and its exploration and exploitation
rights over the areas related to such concessions and prospects of
commercial production may accordingly be adversely affected.
Exploration concessions, which PTRC has the right to acquire
through option agreements, need to be duly registered in the
Chilean Mining Registrar in order for them to be enforceable. If
PTRC fails to register any option agreement in the Chilean Mining
Registrar, then it may be unable to enforce the benefit of them and
PTRC's title to the exploration concession could be subject to
potential litigation by third parties claiming an interest in them.
PTRC has submitted all option agreements not currently registered
in the Chilean Mining Registrar for registration and has no reason
to believe that any of the option agreements will not be
registered.
Environmental and Other Regulatory Requirements
Currently the Group's environment impact is limited to the
activities associated with exploration and is therefore minimal.
The development of any project into a mining operation will have a
considerable impact on the local landscape and communities. There
may at some point be opposition to mining by some parties and this
may impact the ability of the Company to progress these projects
towards production.
Although the Company believes that its projects are currently in
compliance with all relevant environmental and health and safety
laws and regulations, there can be no guarantee that new laws or
regulations, or amendments to current laws or regulations will not
be introduced and they may have a material impact on the Company
and its projects. The Company will continue to maintain the highest
standards and aim to comply with all appropriate laws and
regulations. The Company will also continue to engage with local
communities and non-governmental and governmental bodies to ensure
any impacts of current and future activities are minimised and
managed appropriately.
Financing
The Company is in the exploration stage of its development and
will only become revenue producing once successful exploration has
been achieved and an operating mine developed. Consequently, the
Company will be dependent on either equity funding or bringing in
partners to finance its operations. The Company may not be
successful in the procurement of the required funds and may
therefore have to adjust its exploration strategy accordingly.
Commodity Prices
The market prices of copper and gold, like many commodities, are
volatile and are affected by numerous factors which are beyond the
Company's control. Sustained downward movements in copper and gold
prices could render less economic, or uneconomic, the mineral
projects that the Company is exploring and could negatively impact
the availability of equity finance to the Company for it to
continue to fund its exploration activities.
Foreign Currency and Exchange Rates
The Company may be exposed to ongoing currency risk, however no
forex sensitivities have been included as they are deemed to be
immaterial. Proceeds of fundraises are expected to be mostly in
Sterling; the Company's financial statements are stated in Sterling
and certain ongoing management costs will be denominated in
Sterling. Its operational costs are largely in Chilean Peso (CLP).
As a result, fluctuations in the exchange rates of these currencies
may adversely affect the Company's exploration budgets, operating
results, cash flows or financial condition to a material
extent.
Market Conditions
The Company cannot predict the extent of periods of slow or
negative economic growth and any resultant weakening of consumer
and business confidence. This might result in difficulties in
raising capital and lower the level of demand for many products
across a wide variety of industries, including those industries for
which commodities in the natural resources sector are an important
raw material. Accordingly, the Company's estimate of the results of
operations, financial conditions and prospects of the Company, and
of any future acquisition targets, will be uncertain and may be
adversely impacted by unfavourable general global, regional and
national macroeconomic conditions.
Dependence on Key Personnel
The Company's success depends to a significant extent on the
quality of its management. The Company's business may be disrupted,
additional cost may be incurred or its future may be jeopardised by
a loss of, or failure to retain, sufficient numbers and quality of
management staff or senior personnel.
To mitigate this risk, measures are in place and are under
review to reward and retain key individuals and to protect the
Company from the impact of staff turnover.
Social, Community and Human Rights
It is the Company's intention to operate for the benefit of all
stakeholders. In this regard, it will ensure that PTRC:
-- Adopts fair, non-discriminatory employment practices;
-- Ensures safe working practices for all employees;
-- Positively engages with local communities and is sensitive to
any concerns that they may have regarding land usage, water
resources, biodiversity, cultural sites and artefacts; and
-- Will treat local suppliers fairly.
Whilst the projects are still at an early stage of exploration,
the Company recognises that for any mine to be developed at the
project sites, it must be able to demonstrate to all stakeholders,
a clear positive benefit that respects social, community and human
rights.
Key Performance Indicators (KPIs)
Given that the Company is at an early stage in its development,
has no turnover and is dependent on raising funds in the equity
market to finance its activities, many of the quantifiable KPIs
that companies in other industries may present are not applicable
here. Nevertheless, management is monitoring key performance
indicators or the process associated with:
-- Company expenses and the cash balance to ensure that the
Company can meet its expected obligations as they fall due and to
inform the required timing of the next fund raising;
-- The progress of the exploration programme and the status and
commitments with regards to the exploration concessions; and
-- Ensuring that PTRC meets its environmental and social obligations in Chile.
The Directors are of the opinion that, for an early-stage
mineral exploration company, the audited accounts, the Chairman's
Statement and the Operations Report are the best means of assessing
the performance of the Company during the year.
Section 172(1) Statement
The Directors believe they have acted in the way that they
consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole
(as required by s172 of the Companies Act 2006), and in doing so
have had regard (amongst other matters) to the following
factors:
-- The likely consequences of any decision in the long term;
-- The interests of the Company's employees;
-- The need to foster the Company's business relationships with suppliers, customers and others;
-- The impact of the Company's operations on the community and the environment;
-- The desirability of the Company maintaining a reputation for
high standards of business conduct; and
-- The need to act fairly as between members of the Company.
The application of the s172 requirements can be demonstrated by
the actions and key decisions of the Company during the year
including:
-- In pursuit of the Company's strategy of creating value for
shareholders via the exploration for copper mineral deposits in
Chile, the Company has, in the past year:
-- carried out exploration and identified copper mineralisation at its two projects in Chile;
-- confirmed the discovery of a large intrusive-related
copper-gold mineralised system at San Lorenzo;
-- identified mineralised vein breccia targets for follow up work; and
-- reviewed a number of new projects that could be brought into
the Company as a 'third' project.
-- In order to pursue the strategy outlined, the Directors are
aware of the importance of developing the skills of its employees
and establishing a good team work ethic where team members work
well together and communicate openly with each other. In pursuit of
this objective, the CEO visited the projects in Chile on four
occasions during the year, working with team members and, together
with the Company's experienced exploration manager, imparting the
benefit of their expertise to more junior team members.
-- In the past year, the Company has acted fairly, in good faith
and without problems with all of the service providers.
-- At this stage of the Company's development, it has no customers.
-- The Directors are very aware of the need to carefully manage
environmental and social matters in Chile in order to ensure that
it has a social licence to explore and, if successful, to
ultimately mine at the project sites. The Company has prepared a
'Sustainability' statement which appears on the Company's website
and has commenced work on an Environmental, Social and Corporate
Governance ("ESG") policy to govern how members of the team manage
these matters and to ensure that the Company operates to the
highest standards.
-- The Company's values of business conduct are described in the Corporate Governance Statement. Additionally, the culture of the Company is illustrated by the following statements that appear on the Company's website:
-- We will be guided by our company values to act with integrity
at all times both within the workplace and within the community
more broadly; and
-- We will communicate transparently and honestly with all stakeholders
-- Retaining investor support is important to the Company and,
therefore, the Directors intend to keep shareholders fully and
equally informed. In the past year, the Company has kept
shareholders informed of progress via news releases, web podcasts,
the Company's website, attending a mining conference and through
direct contact. Moving forward, management will continue to attend
mining conferences where they will be available to meet
shareholders in person.
Extract from the Directors' report
The Directors have pleasure in submitting their report together
with the audited financial statements for Great Southern Copper plc
(the 'Company' and together with its subsidiary, the 'Group') for
the year ended 31 March 2023.
Principal Activities
The Group is currently focussed upon the exploration for copper
and gold in Chile. Further detail is covered in the Chairman's
Statement and also in the Operations Report.
Dividends
No dividends are planned (2022: GBPnil).
Subsequent Events
Further details on subsequent events can be found in note 23 and
in the strategic report on page 21 of the Annual Report.
Going Concern
In common with many other mineral exploration companies, the
Group has raised equity and debt finance for its exploration
activities. The Board recognises that further finance will need to
be raised as and when required to progress its exploration projects
and add shareholder value. The Board also acknowledges that
previous success in raising funds does not necessarily provide any
guarantee that the Group will be able to do so in the future.
As at 31 March 2023, the Group's cash at bank amounted to
GBP653,940; at the date of signing this report, the balance
amounted to GBP534,460 .
The Board has reviewed the Group's cash flow forecast up to 31
July 2024 and are aware that additional funds will likely need to
be sourced in order to continue to advance its exploration
activities and continue as a going concern for a period of at least
12 months from the approval of these financial statements. The
auditors have acknowledged this going concern uncertainty in their
unqualified audit report.
The Directors are confident that they will be able to secure the
necessary funding in order to enable the Group to continue to
advance its projects. The Group recently signed a GBP501,000
unsecured, convertible interest free loan agreement with the
Company's major shareholder, Foreign Dimensions Pty Limited (refer
to the 'Subsequent Events' note in the Strategic Report for
details). The Board continues to closely monitor its cash position,
allocate funds in line with its detailed budget and maintain a
strict control over non-project spend. The Directors remain
confident in the Company's ability to raise additional funds as
required, from existing and/or new investors and therefore consider
it appropriate to continue to adopt the going concern basis of
accounting in preparing these financial statements.
Extracted from Directors' responsibility statement pursuant to
Disclosure and Transparency Rules
Each of the Directors, confirms that to the best of his
knowledge and belief:
-- The financial statements prepared in accordance with
UK-adopted International Accounting Standards and in conformity
with the Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and loss of the Group and
parent company; and
-- The Annual Report and financial statements, including the
Operations Report, includes a fair review of the development and
performance of the business and the position of the Group and
parent company, together with a description of the principal risks
and uncertainties that they face.
Approved by the Board of Directors and signed on behalf of the
Board by:
Charles Bond
Chairman
28 July 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
Note GBP GBP
Continuing operations
Administrative expenses 6 (1,298,711) (1,037,076)
Operating loss (1,298,711) (1,037,076)
------------------------------------------- ------- --------------- --------------
Loss before taxation (1,298,711) (1,037,076)
Taxation 9 - -
------------------------------------------- ------- --------------- --------------
Loss for the year attributable
to the owners of the Company (1,298,711) (1,037,076)
------------------------------------------- ------- --------------- --------------
Other comprehensive income
Items that may be reclassified
subsequently to
profit or loss:
Exchange rate differences on translation
of foreign operations 28,748 (24,178)
------------------------------------------- ------- --------------- --------------
Total comprehensive loss attributable
to the owners of the Company (1,269,963) (1,061,254)
=========================================== ======= =============== ==============
Pence Pence
------------------------------------------- ------- --------------- --------------
Earnings per share - basic and
diluted 10 (0.610) (0.938)
=========================================== ======= =============== ==============
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2023
2023 2022
Note GBP GBP
-------------------------------------------------------- -------- ------------ ------------
Assets
Non-current assets
Intangible assets 11 2,478,738 1,489,379
Property, plant and equipment 12 1,609 -
Total non-current assets 2,480,347 1,489,379
Current assets
Trade and other receivables 14 189,814 333,292
Cash and cash equivalents 15 653,940 2,751,676
-------------------------------------------------------- -------- ------------ ------------
Total current assets 843,754 3,084,968
-------------------------------------------------------- -------- ------------ ------------
Total assets 3,324,101 4,574,347
-------------------------------------------------------- -------- ------------ ------------
Liabilities
Current Liabilities
Trade and other payables 16 (124,733) (223,063)
Total liabilities (124,733) (223,063)
-------------------------------------------------------- -------- ------------ ------------
Net current assets 719,021 2,861,905
-------------------------------------------------------- -------- ------------ ------------
Net assets 3,199,368 4,351,284
======================================================== ======== ============ ============
Equity
Share capital 18 2,133,364 2,124,761
Share premium 20 3,175,962 3,175,962
Share based payment reserve 19 235,903 140,160
Shares to be issued 20 - 6,196
Foreign currency translation reserve 20 4,570 (24,178)
Retained earnings 20 (2,350,431) (1,071,617)
-------------------------------------------------------- -------- ------------ ------------
Total equity attributable to the owners of the Company 3,199,368 4,351,284
======================================================== ======== ============ ============
COMPANY STATEMENT OF FINANCIAL POSITION
Year ended 31 March 2023
2023 2022
Note GBP GBP
------------------------------- --- -------- ------------ ------------
Assets
Non-current assets
Investments 13 3,991,550 2,641,245
Total non-current assets 3,991,550 2,641,245
Current assets
Trade and other receivables 14 132,960 261,842
Cash and cash equivalents 15 650,857 2,325,365
Total current assets 783,817 2,587,207
------------------------------------ -------- ------------ ------------
Total assets 4,775,367 5,228,452
------------------------------------ -------- ------------ ------------
Liabilities
Current liabilities
Trade and other payables 16 (103,541) (195,763)
Total liabilities (103,541) (195,763)
------------------------------------ -------- ------------ ------------
Net current assets 680,276 2,391,444
Net assets 4,671,826 5,032,689
==================================== ======== ============ ============
Equity
Share capital 18 2,133,364 2,124,761
Share premium 20 3,175,962 3,175,962
Share based payments reserve 19 235,903 140,160
Shares to be issued 20 - 6,196
Retained earnings 20 (873,403) (414,390)
------------------------------------ -------- ------------ ------------
Total equity 4,671,826 5,032,689
==================================== ======== ============ ============
The Company has taken advantage of the exemption under section
408 of the Companies Act 2006 by choosing not to present its
individual Statement of Comprehensive Income and related notes that
form part of these approved financial statements. The Company's
loss for the period from operations is GBP478,910 (2022:
GBP379,849)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2023
Foreign
Share currency
Share Share Shares to based translation Retained Total Equity
capital premium be issued payments reserve earnings GBP
GBP GBP GBP GBP GBP GBP
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
As at 1 April
2021 50,000 - - - - (34,541) 15,459
Loss for the
year - - - - - (1,037,076) (1,037,076)
Exchange rate
differences
on
translation
of foreign
operations - - - - (24,178) - (24,178)
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
Total
comprehensive
income for
the year - - - - (24,178) (1,037,076) (1,061,254)
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
Transactions
with
shareholders:
Issue of share
capital, net
of issue
costs 2,074,761 3,175,962 - - - - 5,250,723
Shares to be
issued - - 6,196 - - - 6,196
Share based
payments - - - 140,160 - - 140,160
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
As at 31 March
2022 2,124,761 3,175,962 6,196 140,160 (24,178) (1,071,617) 4,351,284
=============== ============ ============ ============= =========== ============= ============== ==============
Loss for the
year - - - - - (1,298,711) (1,298,711)
Exchange rate
differences
on
translation
of foreign
operations - - - - 28,748 - 28,748
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
Total
comprehensive
income for
the year - - - - 28,748 (1,298,711) (1,269,963)
--------------- ------------ ------------ ------------- ----------- ------------- -------------- --------------
Transactions
with
shareholders:
Issue of share
capital, net
of issue
costs (note
18) 8,603 - (6,196) (22,304) - 19,897 -
Share based
payments - - - 118,047 - - 118,047
As at 31 March
2023 2,133,364 3,175,962 - 235,903 4,570 (2,350,431) 3,199,368
=============== ============ ============ ============= =========== ============= ============== ==============
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2023
Share Share premium Shares to be Share Based Retained earnings Total
capital GBP issued payments GBP equity
GBP GBP GBP GBP
------------------ ----------- -------------- ------------------ ----------------- ------------------ ----------
As at 1 April
2021 50,000 - - - (34,541) 15,459
Loss for the year - - - - (379,849) (379,849)
Total
comprehensive
income for the
year - - - - (379,849) (379,849)
------------------ ----------- -------------- ------------------ ----------------- ------------------ ----------
Transactions with
shareholders:
Issue of shares,
net of issue
costs 2,074,761 3,175,962 - - - 5,250,723
Shares to be
issued - - 6,196 - - 6,196
Share based
payments - - - 140,160 - 140,160
As at 31 March
2022 2,124,761 3,175,962 6,196 140,160 (414,390) 5,032,689
================== =========== ============== ================== ================= ================== ==========
Loss for the year - - - - (478,910) (478,910)
Total comprehensive income for the year - - - - (478,910) (478,910)
----------------------------------------------- ---------- ---------- -------- --------- ---------- ----------
Transactions with shareholders:
Issue of shares, net of issue costs (note 18) 8,603 - (6,196) (22,304) 19,897 -
Share based payments - - - 118,047 - 118,047
As at 31 March 2023 2,133,364 3,175,962 - 235,903 (873,403) 4,671,826
=============================================== ========== ========== ======== ========= ========== ==========
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
------------------------------------ ------- -------- ------------ --------------
Cash flows from operating -
activities
Loss for the year (1,298,711) (1,037,076)
Adjustments for:
Share based payments 118,047 83,796
Depreciation 551 -
Working capital adjustments
Increase in trade and other
receivables 148,353 (155,383)
Increase/(decrease) in trade
and other payables (178,642) (24,214)
Net cash outflow from operations (1,210,402) (1,132,877)
------------------------------------------------------- ------------ --------------
Cash flows from investing
activities
Purchase of subsidiary undertaking - (10,450)
Net cash acquired with subsidiary
undertaking - 2,735
Purchase of intangible assets (923,529) (191,753)
Purchase of plant, property (2,205) -
and equipment
Net cash used in investing
activities (925,734) (199,468)
------------------------------------------------------- ------------ --------------
Cash flows from financing
activities
Issue of ordinary share capital,
net of issue costs - 4,020,976
Net cash generated from financing
activities - 4,020,976
------------------------------------------------------- ------------ --------------
Net (decrease)/increase in
cash and cash equivalents (2,136,136) 2,688,631
Exchange gains on cash and cash
equivalents 38,400 13,045
Cash and cash equivalents brought
forward 2,751,676 50,000
Cash and cash equivalents carried
forward 653,940 2,751,676
============================================= ======== ============ ==============
Significant non-cash transactions from investing and financing
activities are as follows:
Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
----------------------------------------------- ---- ------ -------------- -----------
Equity consideration for business combination - 1,211,111
Share option charge 88,607 83,796
Broker warrants - 56,364
Remuneration settled through issue of shares 29,440 6,196
COMPANY STATEMENT OF CASH FLOWS
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
------------------------------------------------------ ------------ ------------
Net cash flows from operating activities
Loss for the year (478,910) (379,849)
Adjustments for:
Share based payments 118,047 83,796
Working capital adjustments
Increase in long term receivables (1,350,305) (1,419,683)
Decrease/(increase) in trade and other receivables 128,882 (186,841)
(Decrease)/increase in trade and other payables (92,222) 167,417
Net cash used in operations (1,674,508) (1,735,161)
-------------------------------------------------------- ------------ ------------
Cash flows from investing activities
Payments to acquire investments - (10,450)
-------------------------------------------------------- ------------ ------------
Net cash from investing activities - (10,450)
-------------------------------------------------------- ------------ ------------
Cash flows from financing activities
Issue of ordinary share capital - 4,020,976
Net cash generated from financing activities - 4,020,976
-------------------------------------------------------- ------------ ------------
Net (Decrease)/increase in cash and cash equivalents (1,674,508) 2,275,365
Cash and cash equivalents brought forward 2,325,365 50,000
Cash and cash equivalents carried forward 650,857 2,325,365
======================================================== ============ ============
Significant non-cash transactions from investing and financing
activities are as follows:
Year ended Year ended
31 March 31 March
2023 2022
GBP GBP
----------------------------------------------- ---- --- ----------- -----------
Equity consideration for business combination - 1,211,111
Share option charge 88,607 83,796
Broker warrants - 56,364
Remuneration settled through issue of shares 29,440 6,196
NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 March 2023
1. General Information
Great Southern Copper plc ('the Company') and its subsidiaries
(together 'the Group') principal activity is currently focused upon
the exploration for copper and gold in Chile. Further detail is
covered in the Chairman's Statement and also in the Operations
Report.
The Company is a public limited Company, which is listed on the
London Stock Exchange and incorporated and domiciled in England and
Wales. The address of its registered office is Salisbury House,
London Wall, London, United Kingdom, EC2M 5PS.
2. Basis of Preparation
The consolidated Group financial statements and Company
financial statements have been prepared in accordance with United
Kingdom ("UK") adopted International Accounting Standards ('IFRS')
and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The consolidated Group financial statements
and Company financial statements are presented in Sterling and
rounded to the nearest whole pound unless otherwise indicated. The
financial statements are prepared on the historical cost basis,
except for certain financial instruments and share-based payments
that have been measured at fair value.
Going Concern Basis
In common with many other mineral exploration companies, the
Group has raised equity and debt finance for its exploration
activities. The Board recognises that further finance will need to
be raised as and when required to progress its exploration projects
and add shareholder value. The Board also acknowledges that
previous success in raising funds does not necessarily provide any
guarantee that the Group will be able to do so in the future.
As at 31 March 2023, the Group's cash at bank amounted to
GBP653,940; at the date of signing this report, the balance
amounted to GBP534,460.
The Board has reviewed the Group's cash flow forecast up to 31
July 2024 and are aware that additional funds will likely need to
be sourced in order to continue to advance its exploration
activities and continue as a going concern for a period of at least
12 months from the approval of these financial statements. The
auditors have acknowledged this going concern uncertainty in their
unqualified audit report.
The Directors are confident that they will be able to secure the
necessary funding in order to enable the Group to continue to
advance its projects. The Group recently signed a GBP501,000
unsecured, convertible interest free loan agreement with the
Company's major shareholder, Foreign Dimensions Pty Limited (refer
to the 'Subsequent Events' note in the Strategic Report for
details). The Board continues to closely monitor its cash position,
allocate funds in line with its detailed budget and maintain a
strict control over non-project spend. The Directors remain
confident in the Company's ability to raise additional funds as
required, from existing and/or new investors and therefore consider
it appropriate to continue to adopt the going concern basis of
accounting in preparing these financial statements.
3. Accounting Policies
The principal accounting policies adopted are set out below.
Basis of Consolidation
The consolidated financial statements incorporate the assets,
liabilities, income and expenses of the Company and entity
controlled by the Company (its subsidiary) made up to the Company's
accounting reference date. Control is achieved when the Company has
the power over the investee, is exposed or has rights to variable
return from its involvement with the investee and has the ability
to use its power to affect its returns. The Company reassesses
whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three
elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, the results of
subsidiaries acquired or disposed of during the period are included
in the consolidated income statement from the date that the Company
gains control until the date when the Company ceases to control the
subsidiary.
Where necessary, adjustments are made to the financial
statements of a subsidiary to bring the accounting policies used
into line with the Group's accounting policies. All intra Group
assets and liabilities, equity, income, expenses and cash flows,
relating to transactions between the members of the Group, are
eliminated on consolidation.
The results of overseas subsidiaries are translated at the
monthly average rates of exchange during the period and their
statements of financial position at the rates ruling at the
reporting date. Exchange differences arising on translation of the
opening net assets and on foreign currency borrowings or deferred
consideration, to the extent that they hedge the Group's investment
in such subsidiaries, are reported in the statement of
comprehensive income. The financial statements of the subsidiary
are drawn up to 31 December, with management information utilised
to take this out to 31 March in line with the reporting period of
the Group.
Currencies
Presentational Currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which the
ultimate parent undertaking operates which is Sterling (GBP). The
functional currency of the only subsidiary of the group is the
United States Dollar ($).
Transactions and Balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or at an average rate for a period if the rates do not
fluctuate significantly. Foreign exchange gains and losses,
resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies, are recognised in
the income statement. Non-monetary items that are measured in terms
of historical cost in a foreign currency are not retranslated.
Revenue Recognition
Revenue is recognised in the individual company financial
statements in respect of management fees charged to the subsidiary
company. Revenue is recognised in respect of the period that the
service has been completed.
3. Accounting Policies (continued)
Intangible Assets - Exploration and Evaluation Expenditure
Mineral exploration and evaluation expenditure relates to costs
incurred in the exploration and evaluation of potential mineral
resources and includes exploration and mineral licences,
researching and analysing historical exploration data, exploratory
drilling, trenching, sampling and the costs of pre-feasibility
studies.
Exploration and evaluation expenditure for each area of
interest, other than that acquired from another entity, is charged
to profit or loss as incurred except when the expenditure is
expected to be recouped from future exploitation or sale of the
area of interest and it is planned to continue with active and
significant operations in relation to the area, or at the reporting
period end, the activity has not reached a stage which permits a
reasonable assessment of the existence of commercially recoverable
reserves, in which case the expenditure is capitalised. Purchased
exploration and evaluation assets are recognised at their fair
value at acquisition. As the capitalised exploration and evaluation
expenditure asset is not available for use, it is not
depreciated.
Exploration and evaluation assets have an indefinite useful life
and are assessed for impairment when facts and circumstances may
suggest an impairment and circumstances suggest that the carrying
amount of an asset may exceed its recoverable amount. The
assessment is carried out by allocating exploration and evaluation
assets to cash generating units, which are based on specific
projects or geographical areas. IFRS 6 permits impairments of
exploration and evaluation expenditure to be reversed should the
conditions which led to the impairment improve. The Group
continually monitors the position of the projects capitalised and
impaired.
Whenever the exploration for and evaluation of mineral resources
in cash generating units does not lead to the discovery of
commercially viable quantities of mineral resources and the Group
has decided to discontinue such activities of that unit, the
associated expenditures are written off to profit or loss.
Income Tax
The tax expense or credit represents the sum of the tax
currently payable or recoverable and the movement in deferred tax
assets and liabilities.
Current Income Tax
Current tax is based upon taxable income for the year and any
adjustment to tax from previous years. Taxable income differs from
net income in the income statement because it excludes items of
income or expense that are taxable or deductible in other years or
that are never taxable or deductible. The calculation uses the
latest tax rates for the year that have been enacted or
substantively enacted by the reporting date.
Deferred Tax
Deferred tax is calculated at the latest tax rates that have
been substantively enacted by the reporting date that are expected
to apply when settled. It is charged or credited to profit or loss,
except when it relates to items credited or charged directly to
equity, in which case it is also dealt with in equity.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable income and is accounted for using the
liability method. Deferred tax liabilities and assets are not
discounted.
3. Accounting Policies (continued)
Deferred Tax
Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable income
will be available against which the asset can be utilised. Such
assets are reduced to the extent that it is no longer probable that
the asset can be utilised.
Deferred tax assets and liabilities are offset when there is a
right to offset current tax assets and liabilities and when the
deferred tax assets and liabilities relate to taxes levied by the
same taxation authority, on either the same taxable entity or
different taxable entities, where there is an intention to settle
the balances on a net basis.
Payroll Expense and Related Contributions
The Group provides a range of benefits to employees, including
annual bonus arrangements, paid holiday arrangements and defined
contribution pension plans.
Short-term benefits, including holiday pay and other similar
non-monetary benefits, are recognised as an expense in the period
in which the service is received.
Pension Costs
The Group operates a defined contribution pension scheme for
employees. The annual contributions payable are charged to profit
or loss.
Share-Based Compensation
The Group issues share-based payments to certain employees and
Directors. Equity-settled share-based payments are measured at fair
value at the date of grant and expensed on a straight-line basis
over the vesting period, along with a corresponding increase in
equity. The Group has measured share based payments using the Black
Scholes and Monte Carlo option (note 19) models.
At each reporting date, the Group revises its estimate of the
number of equity instruments expected to vest as a result of the
effect of non-market based vesting conditions. The impact of any
revision is recognised in profit or loss, with a corresponding
adjustment to equity reserves.
The fair values of share options are determined using the Monte
Carlo and Black Scholes models, taking into consideration the best
estimate of the expected life of the option and the estimated
number of shares that will eventually vest.
Financial Instruments
Financial assets and financial liabilities are recognised in the
Statement of Financial Position when the Group becomes party to the
contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows from
the financial asset expire or when the contractual rights to those
assets are transferred. Financial liabilities are derecognised when
the obligation specified in the contract is discharged, cancelled
or expired.
3. Accounting Policies (continued)
Impairment of Financial Instruments
The Group recognises an allowance for expected credit losses
('ECLs') for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all
the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate ('EIR'). The
expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to
the contractual terms
IFRS 9.5.5.1 ECLs are recognised in two stages. For credit
exposures for which there has not been a significant increase in
credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the
next 12-months (a 12-month ECL). For those credit exposures for
which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses
expected over the remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).
The Group considers a financial asset in default when
contractual payments are 90 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 and usually
occurs when past due for more than one year and not subject to
enforcement activity.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred.
Property Plant and Equipment
Property, plant and equipment are stated at cost net of
accumulated depreciation and accumulated impairment losses. Cost
comprises purchase cost together with any incidental costs of
acquisition.
Depreciation is provided to write down the cost less the
estimated residual value of all tangible fixed assets by equal
instalments over their estimated useful economic lives on a
straight-line basis. The following rates are applied.
Computer equipment 3 years straight line
The gain or loss arising on the disposal of an asset is
determined as the difference between the sale proceeds and the
carrying value of the asset and is credited or charged to profit or
loss.
Trade and Other Receivables
Trade and other receivables, and amounts owed by Group
undertakings, are classified at amortised cost and recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method (except for short-term
receivables where interest is immaterial) less provisions for
impairment. These assets are held to collect contractual cash flows
being solely the payments of the principal amount and interest.
Provisions for impairment of trade receivables are recognised for
expected lifetime credit losses using the simplified approach.
Impairment reviews of other receivables, including those due from
related parties, use the general approach whereby twelve month
expected losses are provided for and lifetime credit losses are
only recognised where there has been a significant increase in
credit risk, by monitoring the creditworthiness of the other
party.
3. Accounting Policies (continued)
Cash and Cash Equivalents
Cash and cash equivalents are held at amortised cost and consist
of cash on hand, demand deposits and other short-term highly liquid
investments that are readily convertible to a known amount of cash
and are subject to an insignificant risk of changes in value.
Further details are given in note 15.
Trade and Other Payables
Trade and other payables are initially measured at their fair
value and are subsequently measured at their amortised cost using
the effective interest rate method. This method allocates interest
expense over the relevant period by applying the 'effective
interest rate' to the carrying amount of the liability.
Classification As Debt Or Equity
Debt and equity instruments issued by the Group are classified
as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recognised
at the proceeds received, net of direct issue costs.
Accounting Developments
New standards, amendments and interpretations adopted in the
preparation of the financial statements.
The IASB has issued the following standards and amendments,
which have been adopted by the Group in either the current or
comparative period, none of which have had a material impact on the
financial statements.
Standard Impact
Initial Application of IFRS 17 The Group adopted the amendments
and IFRS 9 - Comparative Information References to the Conceptual
Framework for IFRS Standards
for the accounting period commencing
1 April 2022.
---------------------------------------
Deferred Tax related to Assets The Group adopted the amendments
and Liabilities arising from References to the Conceptual
a Single Transaction Framework for IFRS Standards
for the accounting period commencing
1 April 2022.
---------------------------------------
The Group does not expect any standards issued by the IASB, but
not yet effective, to have a material impact on the Group.
4. Critical Accounting Estimates and Judgements
The preparation of these financial statements requires
management to make judgements and estimates that affect the
reported amounts of assets and liabilities at each reporting date
and the reported results. Actual results could differ from these
estimates. Information about such judgements and estimations is
contained in individual accounting policies.
Accounting Estimates and Judgements
The key accounting estimates and judgements used in the
preparation of the financial statements are as follows:
Recognition And Valuation of Exploration Assets
Exploration and evaluation assets include mineral rights and
exploration and evaluation costs, including geophysical,
topographical, geological and similar types of costs. Exploration
and evaluation costs are capitalised if management concludes that
future economic benefits are likely to be realised and determines
that economically viable extraction operation can be established as
a result of exploration activities and internal assessment of
mineral resources. According to 'IFRS 6 Exploration for and
evaluation of mineral resources', the potential indicators of
impairment include: management's plans to discontinue the
exploration activities, lack of further substantial exploration
expenditure planned, expiry of exploration licences in the period
or in the nearest future, or existence of other data indicating the
expenditure capitalised is not recoverable. At the end of each
reporting period, management assesses whether such indicators exist
for the exploration and evaluation assets capitalised, which
requires significant judgement. As of 31 March 2023 total
exploration and evaluation costs capitalised amounted to
GBP2,478,738 (2022 - GBP1,489,379). Refer to note 11 for more
information.
Carrying Value of Investments in Subsidiary Undertakings
Management must consider the carrying value of investments in
subsidiary companies based on the ongoing performance of said
company. The nature of the judgement will impact whether or not
there is deemed to be any indicators of impairment, which could
materially impact the carrying value of those investments. The key
driver of the assessment is linked to the impairment review carried
out in respect of exploration assets.
Share Based Payments
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 is determined
by using either the Monte Carlo or Black-Scholes model taking into
account the terms and conditions upon which the instruments were
granted, see note 19 for further details.
5. Operating Segments
Operating segments are reported in a manner that is consistent
with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been
identified as the Board. The Board is responsible for allocating
resources and assessing performance of operating segments.
The Group has two reportable segments, exploration and
corporate, which are the Group's strategic divisions. For each of
the strategic divisions the Board reviews internal management
reports on a regular basis.
5. Operating Segments (continued)
The Group's reportable segments are:
Exploration: the exploration segment is presented as an
aggregate of all Chile licences held. Expenditure on exploration
activities for each licence is used to measure agreed upon
expenditure targets for each licence to ensure the licence clauses
are met.
Corporate: the corporate segment includes the holding company
costs in respect of managing the group.
Segment result:
2023 2022
GBP GBP
--------------------- --- ------------ ------------
Exploration - Chile (819,801) (657,227)
Corporate - UK (478,910) (379,849)
Loss before tax (1,298,711) (1,037,076)
========================== ============ ============
Taxation - -
Loss after tax (1,298,711) (1,037,076)
========================== ============ ============
Segment assets and liabilities:
Non current assets 2023 2022
GBP GBP
--------------------- --- ---------- -----------
Exploration - Chile 2,480,347 1,489,379
Corporate - UK - -
Total 2,480,347 1,489,379
========================== ========== ===========
Total assets 2023 2022
GBP GBP
--------------------- --- ---------- -----------
Exploration - Chile 2,540,284 1,987,140
Corporate - UK 783,817 2,587,207
-------------------------- ---------- -----------
Total 3,324,101 4,574,347
========================== ========== ===========
Total liabilities 2023 2022
GBP GBP
Exploration - Chile (21,192) (27,300)
Corporate - UK (103,541) (195,763)
-------------------------- ----------- -----------
Total (124,733) (223,063)
========================== =========== ===========
6. Operating Expenses
2023 2022
GBP GBP
---------------------------------------------- ---------- ----------
Staff costs (including share based payments) 494,261 272,738
Foreign exchange (gain)/loss (26,730) (25,036)
Auditor's remuneration 62,500 108,500
Travel expenses 46,421 38,409
IPO Costs - 222,473
Legal, professional & consultancy fees 231,366 230,012
Insurance 32,045 17,326
Subcontracted labour 202,132 28,831
Other administrative expenses 256,716 143,823
Total 1,298,711 1,037,076
----------------------------------------------- ---------- ----------
As per the accounting policy disclosed in note 3 the Group has
made the policy choice to only capitalise specific identifiable
exploration costs as an intangible asset. Related administration
and contractor costs (including staff and labour costs) are
expensed as incurred.
7. Auditor's Remuneration
2023 2022
GBP GBP
------------------------------------------------------------------------------------------- ------- -------
Fees payable to the Company's auditor for the audit of the parent and consolidated annual
accounts 60,000 40,000
Total audit fees 60,000 40,000
============================================================================================ ======= =======
Audit-related assurance services 2,500 68,500
Total non-audit fees 2,500 68,500
============================================================================================ ======= =======
8. Employee Numbers and Costs
The average monthly number of people employed was:
Group Company
2023 2022 2023 2022
Number Number Number Number
------------------------------ ------- ------- ------- -------
Average number of employees:
Directors 4 4 4 4
Administrative staff 5 2 1 1
------------------------------ ------- ------- ------- -------
Total 9 6 5 5
============================== ======= ======= ======= =======
8. Employee Numbers and Costs (continued)
The aggregate remuneration of all employees, including
Directors, comprises:
Group Company
2023 2022 2023 2022
GBP GBP GBP GBP
Wages and salaries 341,076 158,322 242,972 144,359
Social security costs 21,755 23,622 13,998 22,494
Other pension costs 13,382 6,998 13,282 6,998
Share based payments 118,047 83,796 118,047 83,796
Total 494,260 272,738 388,299 257,647
======================= ======== ======== ======== ========
Details of Directors' remuneration and pension entitlements are
disclosed in the Remuneration Report on page 15 of the Annual
Report. Please refer to the Directors Remuneration report and
related party note (note 21) for additional disclosure relating to
key management personnel.
The aggregate amount of gains made by Directors on the exercise
of share options was GBPNil ( 2022: GBPNil).
9. Taxation
2023 2022
GBP GBP
-------------------------------------------------- ----- -----
Current tax
Current period - UK corporation tax - -
Adjustments in respect of prior periods - -
Foreign current tax expense - -
-------------------------------------------------- ----- -----
Total current tax - -
================================================== ===== =====
Deferred tax
Origination and reversal of temporary differences - -
Adjustments in respect of prior periods - -
Impact of change in tax rate - -
-------------------------------------------------- ----- -----
Total deferred tax - -
================================================== ===== =====
Total tax charge - -
================================================== ===== =====
The standard rate of tax applied to reported profit on ordinary
activities is 19% (2022: 19%). The Finance Act 2021, which was
substantively enacted on 24 May 2021, created a 25% main rate, 19%
small profits rate and a marginal rate which is effective from 1
April 2023.
9. Taxation (continued)
The tax charge for the year can be reconciled to the loss per
the income statement as follows:
2023 2022
GBP GBP
-------------------------------------------------------- ------------ ------------
Loss before tax (1,298,711) (1,037,076)
Tax charge at 19.0 % (2022: 19.0%) (246,755) (197,044)
Expenses not deductible for tax 19,169 138,115
Remeasurement of deferred tax for changes in tax rates (22,502) (14,822)
Adjustments to losses 564 -
Difference in overseas tax rates (49,188) (39,434)
Movement in deferred tax not recognised 298,712 113,185
Total tax expense - -
========================================================= ============ ============
Deferred tax in relation to carried forward losses is not
recognised as there is deemed to be uncertainty over when they will
be recoverable.
The Company has tax losses of GBP449,169 (2022: GBP68,296)
carried forward. The Group has tax losses of GBP1,809,391 (2022:
GBP997,083) carried forward.
10. Earnings Per Share
Basic earnings per share is calculated by dividing the net
income for the period attributable to ordinary equity holders by
the weighted average number of ordinary shares outstanding during
the period.
Diluted earnings per share amounts are calculated by dividing
the profit attributable to owners of the parent by the weighted
average number of ordinary shares in issue during the financial
year, adjusted for the effects of potentially dilutive options. The
dilutive effect is calculated on the full exercise of all
potentially dilutive ordinary share options granted by the Group,
including performance-based options which the Group considers to
have been earned
The calculations of earnings per share are based up on the
following:
2023 2022
GBP GBP
--------------------------------------------- ------------ ------------
Loss for the year (1,298,711) (1,037,076)
---------------------------------------------- ------------ ------------
Number Number
--------------------------------------------- ------------ ------------
Weighted average number of shares in issue 212,819,244 110,584,402
Weighted average number of shares - basic 212,819,244 110,584,402
Share options 160,030,082 49,981,998
---------------------------------------------- ------------ ------------
Weighted average number of shares - diluted 372,849,326 160,566,400
---------------------------------------------- ------------ ------------
Pence Pence
--------------------------------------------- ------------ ------------
Earnings per share - basic (0.610) (0.938)
============================================== ============ ============
Earnings per share - diluted (0.610) (0.938)
============================================== ============ ============
In accordance with IAS 33, basic and diluted earnings per share
are identical for the Group as the effect of the exercise of the
share options would be to decrease the loss per share.
11. Intangible Assets
Group Exploration
assets
Cost GBP
-------------------------
As at 1 April 2021 -
Business combinations 1,229,076
Additions 191,753
Exchange difference 68,550
As at 1 April 2022 1,489,379
Additions 923,529
Exchange difference 65,830
As at 31 March 2023 2,478,738
========================= =============
Accumulated Amortisation
-------------------------- ----------
As at 1 April 2021 -
Charge for the period -
As at 1 April 2022 -
Charge for the year -
As at 31 March 2023 -
========================== ==========
Carrying Amount:
As at 31 March 2023 2,478,738
============================ ==========
As at 31 March 2022 1,489,379
============================ ==========
Exploration projects in Chile are at an early stage of
development and there are no JORC (Joint Ore Reserves Committee) or
non-JORC compliant resource estimates available to enable value in
use calculations to be prepared.
In accordance with IFRS 6, the Directors undertook an assessment
of the following areas and circumstances which could indicate the
existence of impairment:
-- The Group's right to explore in an area has expired, or will
expire in the near future without renewal.
-- No further exploration or evaluation is planned or budgeted for.
-- A decision has been taken by the Board to discontinue
exploration and evaluation in an area due to the absence of a
commercial level of reserves.
-- Sufficient data exists to indicate that the book value may
not be fully recovered from future development and production.
Following their assessment, the Directors concluded that no
impairment charge was necessary for the year ended 31 March 2023
(2022: GBPNil).
The Company had no intangible assets at 31 March 2023 or 31
March 2022.
12. Property, Plant and Equipment
Group Computer
equipment
Cost GBP
-----------------------
As at 1 April 2021 -
Additions -
Exchange difference -
As at 1 April 2022 -
Additions 2,205
Exchange difference (59)
As at 31 March 2023 2,146
======================= ============
Accumulated Amortisation
-------------------------- ------
As at 1 April 2021 -
Charge for the period -
As at 1 April 2022 -
Charge for the year (551)
Exchange difference 14
As at 31 March 2023 (537)
============================ ======
Carrying Amount:
As at 31 March 2023 1,609
============================ ======
As at 31 March 2022 -
============================ ======
The Company had no plant, property and equipment at 31 March
2023 or 31 March 2022.
13. Investments
Company Amounts owed by Shares in group undertakings
subsidiary GBP Total
GBP GBP
----------------------------------- -------------------------------------- ----------------------------- ----------
A t 1 April 2022 1,419,684 1,221,561 2,641,245
A dditions 1,350,305 - 1,350,305
Carrying value at end of the year 2,769,989 1,221,561 3,991,550
=================================== ====================================== ============================= ==========
At 31 March 2023 the Company owned the following subsidiary:
Registered Office Holding Proportion of Nature of Business
Voting Rights and Shares
Held
Pacific Trends Resources Mining and
Chile SpA 1 Ordinary Shares 100% exploration
13 . Investments (continued)
1. Avenue El Bosque Central No. 92, 7th floor, Borough of Las
Condes, Metropolitan Region
The credit risk of related parties is estimated based on the
expected recoverable amount, taking into account the
creditworthiness of the other party. Any expected credit loss is
calculated based on the general approach as set out in IFRS 9. The
Directors have determined that there has not been an increased
credit risk within the year and no impairment charge has been
recognised against these balances.
Amounts owed by group undertakings are interest free and are due
on demand. The recoverability of this debt is dependent upon the
liquidity of the subsidiary's intangible assets. More details can
be found in note 11.
14. Trade and Other Receivables
Group
2023 2022
GBP GBP
-------------------------------------- -------- ---------------- -------- --------
Other receivables 49,528 159,337
Prepayments and accrued income 140,286 173,955
-------------------------------------- -------- ---------------- -------- --------
189,814 333,292
====================================== ======== ================ ======== ========
Company
2023 2022
GBP GBP
--------------------------------------- -------- --------------- -------- --------
Other receivables 33,997 157,548
Prepayments and accrued income 98,963 104,296
--------------------------------------- -------- --------------- -------- --------
132,960 261,842
======================================= ======== =============== ======== ========
Other receivables consist of amounts owed in respect of shares
subscribed for as part of the IPO, as well as amounts due in
respect of VAT.
15. Cash and Cash Equivalents
Group
2023 2022
GBP GBP
Cash at bank 653,940 2,751,676
---------------- -------- ----------
Company
2023 2022
GBP GBP
Cash at bank 650,857 2,325,365
================ ======== ==========
In the prior year, cash at bank amounting to GBP2,078,502 was
held on trust by PTR Holdings Limited, a registered Company in
Australia, which is a related party by virtue of common control.
The cash was held in a bank account under the name of PTR Holdings
Limited and was governed by a treasury agreement, specifying that
the cash belonged to the Group and would be used to settle Group
expenses. On the basis that the movement of cash was controlled by
the Group it has been included within these financial statements as
cash and cash equivalents of the Group. All cash held was
transferred to a Group bank account on 1 April 2022.
15. Cash and Cash Equivalents (continued)
Banking facilities utilised by the Group are rated as
follows:
-- Bendigo and Adelaide Bank A- (Fitch)
-- Revolut No rating available
-- Banco Security BBB (Fitch)
16. Trade and Other Payables
Group
2023 2022
GBP GBP
Other payables 54,810 107,277
Accruals 69,772 115,646
Other taxes and social security 151 140
124,733 223,063
================================= ======== ========
Other payables principally consist of amounts outstanding for
trade purchases and ongoing costs. They are non-interest bearing
and are typically settled on 30 to 60 day terms.
The Directors consider that the carrying value of trade and
other payables approximates their fair value. Trade and other
payables are denominated in Sterling. Great Southern Copper plc has
financial risk management policies in place to ensure that all
payables are paid within the credit time frame and no interest has
been charged by any suppliers as a result of late payment of
invoices during the period.
Company
2023 2022
GBP GBP
Other creditors 33,769 80,117
Accruals 69,772 115,646
------------------- ------------- -----------
103,541 195,763
----------------- ------------- -----------
17. Financial Instruments
Principal Financial Instruments
The principal financial instruments used by the Group, from
which financial instrument risk arises, are as follows:
Financial Assets
The Group held the following financial assets at amortised
cost:
Group
2023 2022
GBP GBP
---------------------------------------------------- -------- -------- -------------
Cash and cash equivalents 653,940 2, 751,676
Other receivables (excluding VAT and prepayment) 41,946 81,564
695,886 2,833,239
========= ======== ===========
17. Financial Instruments (continued)
Financial Liabilities
The Group held the following financial liabilities, classified
as other financial liabilities at amortised cost:
Group
2023 2022
GBP GBP
----------------------------- -------- --------
Other payables and accruals 124,582 222,923
124,582 222,923
============================= ======== ========
Financial Assets
The Company held the following financial assets at amortised
cost:
Company
2023 2022
GBP GBP
--------------------------------------------------- ------------ -----------
Cash and cash equivalents 650,857 2,325,365
Other receivables (excluding VAT and prepayments) 26,416 79,774
677,273 2,405,139
=================================================== ============ ===========
Financial Liabilities
The Company held the following financial liabilities, classified
as other financial liabilities at amortised cost:
Company
2023 2022
GBP GBP
----------------------------- ------------- ------------
Other payables and accruals 103,541 195,763
103,541 195,763
============================= ============= ============
The Group's activities expose it to certain financial risks:
market risk, credit risk and liquidity risk. The overall risk
management programme focuses up on the unpredictability of
financial markets and seeks to minimise potential adverse effects
on the Group's financial performance. Risk management is carried
out by the Directors, who identify and evaluate financial risks in
close cooperation with key members of staff.
Market Risk
Market risk is the risk of loss that may arise from changes in
market factors such as interest rates and foreign exchange
rates.
Foreign Currency Risk Management
Currency risk is the risk that the financial results of the
Group will be adversely affected by changes in exchange rates to
which the Group is exposed. No foreign currency sensitivities have
been included as they are deemed to be immaterial. The Group
undertakes certain transactions denominated in foreign currencies.
The majority of the Company's expenditures are denominated in Pound
Sterling, while its exploration expenses are incurred in US
Dollars, accordingly, the result for the year are adversely
impacted by depreciation of the Pound Sterling against the US$
while the Group's assets are positively impacted by appreciation of
the US$ against the Pound. Currency risk is monitored on a regular
basis.
17. Financial Instruments (continued)
The following is a note of the assets and liabilities
denominated at each period end in US Dollars:
Group
2023 2022
$ $
----------------------------- -------- ---- -------- ------------- ---------
Other receivables 19,209 2,348
Cash and cash equivalents 735,765 582,899
Other payables (26,026) (34,891)
-------------------------------------- ---- ---------------- --------- ---------
728,948 550,356
====================================== ==== ================ ========= =========
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. This risk relates
to the Group's prudent liquidity risk management and implies
maintaining sufficient cash. The Directors monitor rolling
forecasts of the Group's liquidity and cash and cash equivalents
based up on expected cash flow.
Credit Risk
Credit risk is the risk that a customer may default or not meet
its obligations to the Group on a timely basis, leading to
financial losses to the Group. Credit risk arises from cash and
deposits kept with banks, advances paid and other receivables. The
maximum exposure to credit risk at the reporting date to recognised
financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements. The
consolidated entity does not hold any collateral.
Generally, other receivables are written off when there is no
reasonable expectation of recovery. Indicators of this include the
failure of a debtor to engage in a repayment plan, no active
enforcement activity and a failure to make contractual payments for
a period greater than 1 year.
Capital Risk Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern, to enable the
Group to continue its exploration and evaluation activities, and to
maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the
Group may adjust the issue of shares or sell assets to reduce
debts.
At 31 March 2023 the Group had borrowings of GBPNil (2022:
GBPNil) and defines capital based on the total equity of the Group.
The Group monitors its level of cash resources available against
future planned exploration and evaluation activities and may issue
new shares in order to raise further funds from time to time.
Fair Value Estimation
The carrying value of other receivables and payables are assumed
to approximate to their fair values because of the short-term
nature of such assets and the effect of discounting liabilities is
negligible.
The Group is exposed to the risks that arise from its financial
instruments. The policies for managing those risks and the methods
to measure them are described earlier in this note.
Maturity Of Financial Assets And Liabilities
All of the Group's non-derivative financial liabilities and its
financial assets at the reporting date are either payable or
receivable within one year.
18. Share Capital
Number of Shares in Issue
2023
Ordinary share capital Number GBP
------------------------------------ ------------ ----------
Authorised, Issued and fully paid:
Ordinary shares of GBP0.01 as at
1 April 2022 212,476,100 2,124,761
Issued during the year 860,311 8,603
------------------------------------ ------------ ----------
Ordinary shares of GBP0.01 as at
31 March 2023 213,336,411 2,133,364
==================================== ============ ==========
Rights of Share Capital
Ordinary shares carry rights to dividends and other
distributions from the Company, as well as carrying voting
rights.
On 29 July 2022, the Company issued ordinary shares of 336,365
with a nominal value per share of GBP0.01 as remuneration for work
performed by key management personnel. The amount of remuneration
in relation to the share issue amounted to GBP14,019.
On 7 November 2022, the Company issued ordinary shares of
232,784 with a nominal value per share of GBP0.01 as remuneration
for work performed by key management personnel. The amount of
remuneration in relation to the share issue amounted to
GBP7,328.
On 27 February 2023, the Company issued ordinary shares of
291,162 with a nominal value per share of GBP0.01 as remuneration
for work performed by key management personnel. The amount of
remuneration in relation to the share issue amounted to
GBP7,154.
19. Share Based Payments
The Group had warrants and share option schemes in place during
the year ended 31 March 2023 and 31 March 2022 as follows:
Warrants
On 7 December 2021 the Company issued 148,327,850 warrants. The
warrants were granted in the following tranches:
1.) 60,555,550 granted to Pacific Trends Resources Pty Ltd
following the acquisition of Pacific Trends Resources Chile
SpA.
2.) 1,407,300 Broker warrants grated as part of the IPO.
3.) 70,365,000 placing warrants granted as part of the IPO.
4.) 16,000,000 conversion warrants granted to Foreign Dimensions
Pty Ltd, the largest individual shareholder.
All warrants with the exception of the Broker Warrants entitle
the holder to subscribe for one ordinary share at a price of
GBP0.10 per share. The warrants became exercisable on admission and
have a maximum life of two years. If the warrants have not been
exercised within that time they will expire. The Broker warrants
have an exercise price of GBP0.05 and a life of three years.
19. Share Based Payments (continued)
During the year, the Company became aware that the terms of the
1,407,300 warrants granted to its broker on the 7 December 2021 did
not correctly reflect the terms set out on 6 October 2020. As a
result, these warrants have been cancelled and regranted. The new
warrants granted during the year have an exercise price of GBP0.05
and a life of three years.
Weighted Weighted
average average
Number exercise Number exercise
of price of warrants price
warrants
2023 2023 2022 2022
---------------------------------------- ---------- -------------- ----------
Outstanding at beginning 148,327,850 -
of the year GBP0.10 -
Exercised during the year - - - -
Granted during the year 1,407,300 GBP0.05 148,327,850 GBP0.10
Cancelled during the year (1,407,300) GBP0.10 - -
Lapsed during the year - - - -
Outstanding at the end
of the year 148,327,850 GBP0.10 148,327,850 GBP0.10
-------------------------- ------------ ---------- -------------- ----------
Exercisable at the end
of the year 148,327,850 148,327,850
========================== ============ ========== ============== ==========
Broker warrants fall within the scope of IFRS 2 - Share Based
Payments as there is an associated service attached to their issue,
whilst the other warrants referred to above do not confer any such
service so have not been subject to valuation. The weighted average
contract length of the warrants is 2 years, whilst the remaining
average contractual life is 8 months (2022: 1 year and 8
months).
Valuation
The warrants were originally valued at 2% of the capital raised
by SI Capital. This totalled GBP Nil (2022: GBP56,364) and has been
debited to share premium.
Share options
On 7 December 2021 the Company issued 11,702,232 options to
directors and key personnel employed within the group as
follows:
1.) 10,105,554 options were granted to directors and a key
employee of Great Southern Copper Plc. These options are split into
2 equal tranches, all carry an exercise price of GBP0.05 per share
and have the following vesting conditions:
a.) 50% vest in 3 tranches, 1/3 on admission, 1/3 on the first
anniversary of admission and 1/3 on the second anniversary of
admission.
b.) 50% vest in 3 tranches, 1/3 when the share price reaches
GBP0.10, 1/3 when the share price reaches GBP0.15 and 1/3 when the
share price reaches GBP0.20.
19. Share Based Payments (continued)
The options must be exercised by the third anniversary of
admission.
2.) 1,596,678 options were granted to other key personnel,
including employees of Pacific Trends Resources Chile SpA. These
options all carry an exercise price of GBP0.01 and vest in 3
tranches, 1/3 on admission, 1/3 on the first anniversary of
admission and 1/3 on the second anniversary of admission.
The options must be exercised by 7 December 2026.
Weighted Weighted
average average
Number of exercise Number exercise
options price of options price
2023 2023 2022 2022
-------------------------------------------- ---------- ------------- ----------
Outstanding at beginning of 11,702,232 -
the year GBP0.04 -
Exercised during the year - - - -
Granted during the year - - 11,702,232 GBP0.04
Lapsed during the year - - - -
Outstanding at the end of
the year 11,702,232 GBP0.04 11,702,232 GBP0.04
------------------------------- ----------- ---------- ------------- ----------
Exercisable at the end of
the year 9,485,747 7,269,262
=============================== =========== ========== ============= ==========
The weighted average contract length on the options was 4 years
(2022: Nil). The remaining average contractual life of the options
was 2 years 8 months (2022: 3 years 8 months).
Valuation
Given the existence of market based vesting conditions in
certain of the options, the valuation exercise has been split into
2 parts with the options including those conditions being valued
using a Monte Carlo option pricing model, whilst the other options
have been valued using the Black Scholes option pricing model.
Options granted in the year to 31 March 2022 - Monte Carlo Model
----------------------------------------------------------------- -----------
Share price at date of grant GBP0.045 5
Fair value at the year end GBP0 .02
Exercise price GBP 0.05
Time to expiry (years) 3 years
Risk-free rate (%) - 3 years 0.46%
Volatility (%) 70.0%
Dividend yield (%) 0%
Employee retention rate (%) 1 00 %
----------------------------------------------------------------- -------------
19. Share Based Payments (continued)
Options granted in the year to 31 March 2022 - Black Scholes Model
-------------------------------------------------------------------- ----------------------------------------------
Share price at date of grant GBP0.04 55
Fair value at the year end - GBP0.01 options GBP0.04
Fair value at the year end - GBP0.05 options GBP0.02
Exercise price GBP0.05; GBP0.01
Time to expiry (years) 3 and 5 years
Risk-free rate (%) - GBP0.01 options 0.46%
Risk-free rate (%) - GBP0.05 options 0.46%
Volatility (%) 70.0%
Dividend yield (%) 0%
Employee retention rate (%) 1 00 % for employees w ith GBP0.01 options ,
1 00 % for employees with GBP0.05 options
-------------------------------------------------------------------- ------------------------------------------------
Volatility is measured using a weekly share price over a period
of 5 years prior to the date of grant.
The risk-free rate is derived using a 3 and 5 year gilt
rate.
The total share-based payment expense in relations to warrants
and options in the year is GBP88,607 (2022: GBP83,796).
During the year, there is a share based payment expense relating
to directors remuneration of GBP29,440 (2022: GBP56,364).
20. Reserves
Share Premium
Consideration received for shares issued above their nominal
value net of transaction costs.
Share Based Payments
The cumulative share-based payment expenses of unvested awards
that have not been exercised.
Shares To Be Issued
Shares to be issued to a director in lieu of cash
remuneration.
Foreign Currency Translation
Cumulative gains and losses in respect of the translation of the
results of overseas subsidiaries into the presentational currency
of the Group.
Retained Earnings
Cumulative profit and loss net of distributions to owners.
21. Related Party Transactions
Remuneration Of Key Personnel - Group
Remuneration of key management personnel, considered to be the
Directors and other senior management of the Group is as
follows:
2023 2022
GBP'000 GBP'000
-------------------------- -------- --------
Short-term remuneration* 256,970 166,853
Other pension costs 13,382 6,998
Share-based payments 93,958 55,930
-------- --------
364,310 229,781
=========================== ======== ========
Reconciliation of short-term remuneration
* As above 256,970 166,853
Less: Employer's National Insurance (13,998) (3,760)
Chief Financial Officer's remuneration (70,270) (30,772)
Add: Remuneration settled through issue of
shares 29,440 6,196
------------------------------------------------ --------- ---------
Total per Directors' Remuneration Report in
the Annual Report 202,142 138,517
================================================ ========= =========
Transactions And Balances With Key Personnel - Group
Balances outstanding to key personnel at year end totalled to
GBP13,357 (2022: GBP489).
During the prior year the majority shareholder provided funding
to the Group, in advance of the IPO, totalling GBP821,668. As part
of the IPO GBP800,000 of this loan was converted into 16,000,000
ordinary shares of the Company. As at 31 March 2023 a balance of
GBP14,150 was owed to the shareholder (2022: GBP21,668).
SI Capital Limited are a related party through common key
management personnel. During the prior year GBP222,274 was paid to
SI Capital Limited for the services relating to the IPO. In
addition to this, SI Capital Limited were issued with broker
warrants (see note 19). The charge in relation to Broker warrants
of GBPNil (2022: GBP56,364) is included within share premium. At 31
March 2023 amounts owed to the Group by SI Capital Limited totalled
GBP25,000 (2022: GBP75,000).
During the year payments were made to third parties in respect
of services provided by two of the Directors. Payments made to
Hillstone Resources and SI Capital Limited totalled GBPNil (2022:
GBP20,617) and GBP25,000 (2022: GBP21,758) respectively. During the
year GBP25,000 (2022: GBPNil) management fees were charged by SI
Capital Limited.
During the year the charge for the services of the Chief
Executive were made through Metal Ventures Inc totalling GBP105,714
(2022: GBP69,984), with GBP12,931 outstanding at year end (2022:
GBP16,209).
The Directors' disclosures have been included in the Directors
Remuneration report.
22. Contingencies and Commitments
The option agreements held by the Company in relation to the San
Lorenzo and Especularita projects give the Company the
discretionary right to acquire the relevant concessions, provided
the annual option fees totalling US$125,000 due by March 2024
specified in such agreements, have been paid in full. There are no
royalty, third party payments, or other obligations in favour of
third parties regarding the option payments or the concessions to
which they relate.
The Company's commitments to meeting and finalising its purchase
of the mineral concessions under the Option Agreements, if it
chooses to do so, are summarised in the following table:
Especularita San Lorenzo
Date Payment Date Payment
------------------------- -------------- ------------------------- --------------
01/03/2024 Final Payment US$ 1,100,000 01/06/2024 US$ 50,000
Extension of final US$ 100,000 01/06/2025 Final Payment US$ 1,610,000
payment to 01/03/2025
Extension of final US$ 100,000 Extension of final US$ 100,000
payment to 01/03/2026 payment to 01/06/2026
Extension of final US$ 100,000
payment to 01/06/2027
To acquire 100% of the Especularita project a total payment of
US$1.5m is required (of which US$400,000 has been paid to date)
with the final payment due before 01/03/2024. The Company may defer
the final payment for a period of 2 years at a cost of US$100,000
per additional year. To acquire 100% of the San Lorenzo project a
total payment of US$2.0m is required (of which US$340,000 has been
paid to date), with a quota of US$50,000 due before 01/06/2024 and
the final payment due before 01/06/2025. The Company may defer the
final payment for a period of 2 years at a cost of US$100,000 per
additional year.
23. Post Balance Sheet Events
On 15 May 2023, the Company entered into an agreement with
Foreign Dimensions Pty Limited ("FD") whereby FD agreed to provide
the Company with a convertible unsecured loan facility in the
aggregate sum of GBP501,000. The loan is to be made in two
tranches:
-- GBP250,000 on 31 August 2023; and
-- GBP251,000 on 11 September 2023.
Automatic conversion of the loan into Ordinary Shares
("Conversion Shares") in the Company at a price of 1.2p per share,
and the grant of an equivalent number of warrants exercisable at
2.4p is subject to certain conditions, in particular publication of
a prospectus approved by the FCA in relation to, and authority
being granted by the Company's shareholders for, the allotment and
issue of the Conversion Shares and the grant of the warrants.
On 19 May 2023, by way of a private placing, the Company issued
a further 41,749,998 Ordinary Shares at a price 1.2p per share,
raising GBP501,000 before costs, each with the right to a warrant
attached, also to be granted conditional on satisfaction of the
conditions above, and exercisable at 2.4p.
23. Post Balance Sheet Events (continued)
On the same date, the Company made loans of GBP10,000 each to
two of the Directors, Stuart Greene and Nick Briers to enable them
each to subscribe for shares in the abovementioned placing. These
loans, which
are interest free, are being repaid from their after tax
salaries. It is envisaged that both loans will be repaid before 30
November 2023.
The Company has announced the appointment of Martin Page as
Finance Director. Mr Page will take up his appointment on 1 August
2023.
24. Ultimate Controlling Party
In the opinion of the Directors, there is considered to be no
ultimate controlling party.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR RBMJTMTAJBRJ
(END) Dow Jones Newswires
July 31, 2023 10:35 ET (14:35 GMT)
Great Southern Copper (LSE:GSCU)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Great Southern Copper (LSE:GSCU)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024
