TIDMALBA
RNS Number : 4976Y
Alba Mineral Resources PLC
05 May 2023
Alba Mineral Resources plc
("Alba" or the "Company")
Final Results
Alba Mineral Resources plc (AIM: ALBA) is pleased to announce
its Final Results for the year ended 30 November 2022.
OVERVIEW
Positive outlook for Clogau-St David's Gold Mine
-- Submitted updated version of Report to Inform a Habitat
Regulations Assessment ('HRA'), renewed applications for a water
discharge permit, and a European Protected Species licence ('EPSL')
to Natural Resources Wales ('NRW').
-- Most recently, received narrow set of comments from NRW on
EPSL, including relating to noise mitigation and biosecurity.
Following generation of further baseline data, that dataset and a
full set of responses have now been submitted to the regulator.
-- Remain hopeful that NRW will decide shortly on the grant of
the permits so that dewatering activities at the primary target
within the Lower Llechfraith workings may proceed as soon as
possible.
-- Anticipate that the HRA will provide a framework for a more
streamlined and efficient process for future permitting
applications.
-- Encouraging site visit assisted by local member of the UK Parliament, Liz Savile Roberts MP.
Developing plans to excavate further from Clogau's historic
Waste Tip
-- Current estimations of the higher-grade portion of the Waste
Tip indicate up to 4,000 tonnes of fine material could be available
for processing for gold.
-- Intend to push forward with permitting and technical
activities as soon as the Lower Llechfraith dewatering permitting
has been secured.
Laying groundwork at Gwynfynydd Gold Mine & Dolgellau Gold
Exploration Project
-- Advancing plans for more exploration work to define resources in previously unmined areas.
-- Plans to fly a high-resolution UAV aeromagnetic geophysical
survey in July to refine targets for follow up groundwork.
Surrendered Limerick Base Metals Project
-- Exploration drilling could not be progressed during 2022 as
planned due to landowner access issues.
Investee company GreenRoc Mining plc fast-tracking development
of advanced graphite and ilmenite projects
-- Near threefold increase in the Resource for the key Amitsoq
Island Deposit, with the total graphite content rising from 1.63Mt
to 4.71Mt.
-- Confirmed that graphite concentrate from Amitsoq is "very
suitable" for the processes by which spherical graphite is produced
for the EV sector.
-- Further ecological and other studies in the field at the
Thule Black Sands Ilmenite Project, which will feed into the
development of an EIA for the project.
-- Appointed Danish geologist and Greenland expert Stefan Bernstein as CEO.
-- Feasibility studies underway at Amitsoq as GreenRoc moves
towards a Mining Licence application and seeks to progress
discussions with interested industry and offtake partners in the
coming months.
Ongoing advances at Horse Hill Developments Ltd investee
company
-- Formal consent for the recompletion of the Horse Hill-2z well into a water reinjection well.
-- Plans for a 3D seismic survey and possible drilling of a new
well in a proposed new farm-in arrangement.
Notable corporate activities
-- Chairman increased holding to +48 million ordinary shares in
Alba and indicated plan to make further investments in the coming
year.
-- Appointed gold supply chain expert, Vivien Johnston Glass, to
maximise the commercial opportunities presented by exceptional
Welsh gold project.
-- Completed the acquisition of the remaining 10% of the Clogau
Project not owned by Alba, taking ownership to 100%.
-- Successful placing in November 2022, raising GBP500,000 before issue costs.
-- Remain focused on securing one or more additional
complementary assets to help drive serious value and growth for
shareholders into the future.
CHAIRMAN'S STATEMENT
Our overall objective is to unearth hidden value from previously
drilled or mined projects and to this end we are advancing multiple
projects in the UK including the Clogau-St David's Gold Mine
("Clogau" or the "Clogau Project"), the Gwynfynydd Gold Mine and
the Dolgellau Gold Exploration Project. Additionally, we hold
significant stakes in two investee companies: GreenRoc Mining plc
("GreenRoc"), a Greenland-dedicated listed vehicle, spun out of
Alba to fast-track the development of its advanced graphite and
ilmenite projects; and Horse Hill Developments Ltd ('Horse Hill'),
a UK based oil producer.
Our share price performance this year has certainly been hit by
the ongoing delays in securing the environmental permits we need at
Clogau so that we can proceed with our planned work activities at
our primary exploration and development target in the Lower
Llechfraith workings. We first applied for these permits in early
2021, and so it is inevitable that a delay of now more than two
years would cause some disquiet in the market.
After we took Clogau over in 2018, we had a very good run for
two to three years of securing on a timely basis the ongoing
permits required for our exploration work. This enabled us to
undertake substantial drilling programmes both from surface and
underground, to roll out extensive regional exploration programmes
over several miles of the Dolgellau Gold Field and to carry out two
successful pitting and sampling campaigns over the historic waste
tip at Clogau. Unfortunately, since then our exploration
activities, the objective of which has always been to discover
sufficient resources of gold to justify making a decision to reopen
Clogau for commercial production, have been on hold as the
competent regulator has determined that a full Habitat Regulations
Assessment (or "HRA") of the entire mining project at Clogau would
be required before any further permits could be considered.
However, we hope that we are now entering the final straight of
this process and that we will be able to get on with our work
activities again in the near future.
In January 2022, I purchased over 10 million ordinary shares in
the Company on market at an average price of 0.1475p, paying
consideration of around GBP15,000. Following these purchases, which
were made into an ISA, I now hold over 48 million ordinary shares
in Alba, representing around 0.68 per cent of its issued share
capital. Although Alba management's ability to invest in Alba
shares is restricted for large parts of the year by the prevalence
of "close periods" for share dealings, I hope to be able to make
further investments in the coming year to demonstrate my steadfast
belief in the inherent value of the Company's assets and
prospects.
This year we have continued to focus on Clogau, where our
objective remains to identify sufficient grades and quantities of
gold to support the restart of commercial operations at the mine
and take advantage of the strong gold price. Welsh gold occupies a
unique place in the gold market, putting us in a good position to
pursue commercialisation opportunities such as entering into a
joint venture with a luxury international brand for the production
of bespoke or high-end jewellery products or producing Welsh gold
coins or bars for the investment market. To that end, we have been
working with a gold supply chain expert, Vivien Johnston Glass, as
we seek to maximise the commercial opportunities presented by this
exceptional project. Vivien has a strong commitment to ethics and
sustainability and a great deal of experience in the establishment
of a robust chain of custody. These elements will be key to our
ability to prove the unique provenance of our gold and thereby
justify the high prices we expect to be able to secure for our
products.
During the year, we completed the acquisition of the remaining
10% of the Clogau Project not owned by Alba, taking our ownership
to 100%. This is a measure of our confidence in the long-term
prospects for Clogau. The 10% minority stake had been free carried
to commercial production and the vendors also held a 4% net smelter
return royalty over the Project, so acquiring both the free carried
interest as well as buying back 75% of the royalty greatly improves
the economic viability of the project for Alba.
Since mid-2018, we have undertaken circa 3,500 metres drilling
from surface and underground at Clogau resulting in the
identification of several high-priority development targets. New
discoveries include the Upper Lode in the Llechfraith Payshoot and
the New Branch Lode in the Main Lode System. As shareholders will
be aware, the competent regulator Natural Resources Wales ('NRW')
turned down our permit applications in 2021 which sought permission
to dewater the Llechfraith Shaft and associated workings.
Considerable ecological work by our technical team and ecological
advisers has continued during 2022 both to address ongoing issues
raised by NRW during its review of our applications and to feed
into the overarching HRA for Clogau, which NRW notified us in 2021
that it wished to undertake.
With the kind assistance of our local member of the UK
Parliament, Liz Savile Roberts MP, we held a site visit at the mine
in September 2022. This was attended by Liz along with our Welsh
Parliament (Senedd Cymru) representative, Mabon ap Gwynfor MS, a
number of representatives from NRW as well as local Councillors and
other interested parties. Following that very positive meeting, in
October 2022 we submitted to NRW an updated version of our Report
to Inform a Habitat Regulations Assessment, together with renewed
applications for a water discharge permit and a European Protected
Species licence ("EPSL") in respect of the proposed dewatering
exercise and subsequent safety and exploratory works at the
Company's primary target within the Lower Llechfraith workings at
Clogau. As reported in late March, the Company received comments
from NRW covering a relatively narrow set of points relating to the
EPSL including noise mitigation measures, biosecurity and the
duration of the proposed exclusion measures for bats. Following the
generation of some further
baseline data in respect of noise, we have now submitted that
data and a full set of responses to NRW's comments. The Company is
hopeful, therefore, that NRW will be able to proceed to a decision
shortly on the grant of the permits so that our dewatering
activities may proceed as soon as possible.
At the same time, we are developing plans to excavate further
from Clogau's historic waste tip (the "Waste Tip"). The Phase 2
programme at the Waste Tip achieved strong concentrate grades of up
to 1,000 g/t, with an average across the five pits of 503 g/t. What
is more, independent assaying has confirmed that the overall head
grade of the fine material taken from the Waste Tip averages 1.7
g/t, which is a significant upgrade on the average grade achieved
from sampling the same material prior to the processing stage. This
is unsurprising given what we know about the nuggety effect of the
gold at Clogau, and it bodes well for the commercial viability of
mining the Waste Tip. Current estimations of the higher-grade
portion of the Waste Tip indicate an in-situ tonnage of
approximately 11,000 tonnes, of which up to 4,000 tonnes of fine
material (<20mm) could be available for processing for gold. As
reported in March, as soon as the Lower Llechfraith dewatering
permitting has been secured and the HRA completed, we intend to
push forward with our permitting and technical activities in
relation to the Waste Tip.
At our other exploration licences, which host the Gwynfynyndd
Gold Mine located north of Clogau and the wider 188 km(2) Dolgellau
Gold Exploration Project ("DGEP"), we are laying the groundwork to
advance plans for more exploration work to define resources in
previously unmined areas. These include the new high-grade regional
gold target, Hafod Owen, which we identified in July 2021, with
grab samples grading up to 24 g/t.
We plan to fly a high-resolution UAV (unmanned aerial vehicle)
aeromagnetic geophysical survey over key targets within the DGEP to
pinpoint the bedrock sources of geochemical anomalies and refine
targets for follow up groundwork, including drilling. The timing
for the survey was delayed in 2022 due to a backlog of applications
to the Civil Aviation Authority ("CAA"). At the time of writing,
the latest estimated timetable from our contractor UAVE Ltd is that
they are hopeful the CAA approvals will be through in time for the
carrying out of the survey operations in July of this year.
Just after the year end, we surrendered our Limerick Base Metals
Project. Located in the Irish Ore Field, targets identified for
exploration drilling could not be progressed during 2022 as
planned, due to landowner access issues. Alternative drill collar
locations proved not to be economically viable and, as the Group
could not progress its exploration activities further, under the
terms of the licence we were obliged to surrender the licence.
In late 2021 we successfully spun out our portfolio of
Greenlandic assets into GreenRoc Mining plc, a new AIM-quoted
company which raised a gross amount of GBP5.1 million on its IPO
and which now owns 100% of those Greenland assets. Our strategy of
creating a Greenland-focused vehicle has been validated by the
excellent progress made by GreenRoc throughout 2022. Highlights
have included:
- A highly successful follow-up drilling campaign in the summer
of 2022, which culminated in the announcement of a near threefold
increase in the Resource for the Amitsoq Island Deposit, with the
total graphite content rising from 1.63Mt to 4.71Mt.
- A revised average Resource grade of 20.41% C(g) that puts
Amitsoq in a very select group of just two advanced graphite
projects globally which have average grades of more than 20% C(g),
the other one being the Vittangi deposit owned by Talga Group (ASX:
TLG), which has a market cap of circa GBP360 million.
- The completion of advanced test work by specialist consultants
which confirmed that graphite concentrate from Amitsoq is "very
suitable" for micronisation and spheronisation, those being the
processes by which spherical graphite is produced for the electric
vehicle (or "EV") sector.
- At the Thule Black Sands ("TBS") Ilmenite Project, the
completion of further ecological and other studies in the field
which will feed into the development of an Environmental Impact
Assessment ("EIA") for the project, a key component for a future
Mining Licence application.
- The appointment of Stefan Bernstein as GreenRoc's CEO. A
Danish geologist with a comprehensive understanding of the
Greenland's geological landscape and decades-long experience in
Greenland's mining sector, Stefan is ideally equipped to drive
GreenRoc forward and to achieve its goal of achieving commercial
production from one of more of its assets, with the focus very much
being on GreenRoc's flagship asset, Amitsoq.
The substantially upgraded Resource for Amitsoq will underpin
the feasibility studies GreenRoc will be carrying out this year as
it moves towards a Mining Licence application and seeks to progress
discussions with interested industry and offtake partners in the
coming months.
At the year end, Alba had a 54% stake in GreenRoc such that
GreenRoc is fully consolidated in these results. Since year end,
funding requirements to push the Amitsoq project forward have meant
a dilution in Alba's stake in GreenRoc to 44.67%, but we remain by
some distance the largest shareholder and remain heavily involved
in the strategic direction and development of the company.
News from the Horse Hill oil field, in which we have an
investment of 11.675% via our holding in Horse Hill Developments
Limited ("HHDL"), included formal consent for the recompletion
(i.e., conversion) of the Horse Hill-2z well into a water
reinjection well. More recently, plans have been announced for a 3D
seismic survey, and possible drilling of a new well, at Horse Hill
in a proposed new farm-in arrangement. The proposed transaction is
stated to be subject to the satisfaction of a number of conditions,
including the consent of all HHDL's shareholders, including Alba,
and as such we intend to consider closely the merits of the
proposed transaction for Alba and its shareholders.
At the balance sheet date, we reviewed the valuation of Alba's
investment in HHDL and judged that the asset value should be
written down to GBP2.6 million, which aligns with the valuation
attributed to its own interest by HHDL's majority shareholder.
Financial Review
The results as reported for 2022 include both Alba Mineral
Resources plc and GreenRoc Mining plc, as Alba's 54% shareholding
at the year end requires that company to be consolidated as part of
the Alba Group. GreenRoc Mining plc reports separately on its own
financial results, which can be found on its website
www.greenrocmining.com .
We achieved a successful placing in November 2022, raising
GBP500,000 before issue costs. For a detailed financial review, see
the Strategic Report which follows this statement.
Outlook
We continue to be very bullish about the prospects for our 100%
owned Welsh gold assets. Although the ongoing hiatus in the planned
in-mine work activities at Clogau has been frustrating, we believe
that we are finally approaching a conclusion to the current
ecological permitting process and that the HRA, once concluded, can
provide a framework for a more streamlined and efficient process
for future permitting applications.
In terms of our non-operating assets, most importantly our
investment in GreenRoc, substantial progress has been made at the
flagship Amitsoq graphite project over the past 12 months which is
shaping up to be a truly world-class asset. I can personally
testify to the immense interest in it from potential international
strategic investors and industry partners with whom I have engaged
in my capacity as GreenRoc Chairman over the past several months.
In this way, our decision to spin out our Greenland assets into a
new, Greenland-focused listed vehicle has already shown its worth,
and all that is needed now is for the market to properly recognise
what, to me, is a greatly undervalued asset.
At the same time as developing our existing assets and
supporting our investee companies, we are also focused on securing
one or more additional complementary assets for Alba which will
help drive serious value and growth for shareholders into the
future.
Finally, I would like to take this opportunity to thank the
Board and our management team for their continued hard work and
dedication over the course of the year and to thank our
shareholders for their ongoing support. I look forward to
continuing our work in the year ahead and delivering on our
overriding objective, which is to generate significant value for
all our shareholders.
George Frangeskides
Executive Chairman
4 May 2023
EXTRACTS FROM THE STRATEGIC REPORT
FINANCIAL REVIEW
Income Statement
Group operating losses of GBP1,623,000 (before impairments)
compared to GBP1,067,000 in 2021 reflects a full year of admin
expenses for GreenRoc Mining plc, meaning that Alba Group results
show the costs of two AIM-listed companies, with their necessary
costs - fees, professional advisers and Boards. Alba company's
operating loss remained at a similar level of GBP800,000 year on
year.
GreenRoc Mining plc publishes its own Report and Accounts,
available on their website and via RNS, with further detail. The
impairment charge for the year relates to the Greenlandic project
Inglefield Land (GBP199,000) plus the write down of the Company's
investment in Horse Hill Developments Limited by GBP785,000.
Balance sheet
Group net assets have decreased from GBP12.9 million to GBP11.3
million. The drop reflects the impairment of Inglefield Land by
GBP0.2m, the investment in HHDL by GBP0.8m and the relative
increase in costs in the income statement of GBP0.6 million.
The increase in group intangible assets from GBP6.1 million to
GBP8.5 million is direct cash spend on projects of GBP2.4
million.
CONSOLIDATED INCOME STATEMENT
FOR THE YEARED 30 NOVEMBER 2022
Note 2022 2021
GBP'000 GBP'000
Other income - 23
Administrative expenses 4 (1,623) (1,067)
Impairment expense (984) -
Operating loss (2,607) (1,044)
Revaluation of financial liability 16 2 (180)
Revaluation of investment 11 - (615)
Finance costs - (1)
------- -------
Loss for the year before tax (2,605) (1,840)
Taxation 7 - -
Loss for the year (2,605) (1,840)
======= =======
Attributable to:
Equity holders of the parent (2,039) (1,699)
Non-controlling interests (566) (141)
------- -------
(2,605) (1,840)
======= =======
Earnings per ordinary share
Basic and diluted (pence) 8 (0.031) (0.027)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 NOVEMBER 2022
2022 2021
GBP'000 GBP'000
Loss after tax (2,605) (1,840)
Items that may subsequently be reclassified
to profit or loss:
* Foreign exchange movements - (1)
Total comprehensive income (2,605) (1,841)
======= =======
Total comprehensive income attributable
to:
Equity holders of the parent (2,039) (1,700)
Non-controlling interests (566) (141)
(2,605) (1,841)
============================================ ======= =======
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 NOVEMBER 2022
Note 2022 2021
GBP'000 GBP'000
Non-current assets
Property, plant and equipment 9 150 137
Intangible fixed assets 10 8,450 6,110
Investments - Horse Hill Developments
Limited 11 2,600 3,385
Total non-current assets 11,200 9,632
------- -------
Current assets
Trade and other receivables 13 129 178
Cash and cash equivalents 14 456 3,948
------- -------
Total current assets 585 4,126
------- -------
Current liabilities
Trade and other payables 15 (464) (671)
Financial liabilities 16 - (221)
Total current liabilities (464) (892)
------- -------
Net current assets 121 3,234
------- -------
Net assets 11,321 12,866
======= =======
Capital and reserves
Share capital 17 5,076 5,005
Share premium 10,461 9,877
Warrant reserve 1,187 1,425
Dilution of ownership reserve 5 991 991
Other reserves 136 89
Retained losses (8,929) (7,421)
Foreign currency reserve 168 168
------- -------
Equity attributable to equity holders
of the parent 9,090 10,134
Non-controlling interests 18 2,231 2,732
Total equity 11,321 12,866
======= =======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 NOVEMBER 2022
Share Share Warrant Warrants Dilution Other Retained Foreign Attributable Non-controlling Total
to be of currency to
capital premium reserve issued ownership reserves losses reserve equity interests
reserve reserve holders
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
At 30 November
2020 4,984 9,360 1,287 416 - - (6,153) 169 10,063 (16) 10,047
Loss for the
year - - - - - - (1,699) - (1,699) (141) (1,840)
Other
comprehensive
income - - - - - - - (1) (1) - (1)
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
comprehensive
income for the
year - - - - - - (1,699) (1) (1,700) (141) (1,841)
Shares and
warrants
issued 7 162 416 (416) - - - - 169 - 169
Shares issued
in exchange
for ownership
interests (not
resulting in
change in
control) 14 355 - - - - - - 369 7 376
Equity settled
share-based
payments - - 153 - - - - - 153 - 153
Transfer on
exercise or
expiry of
warrants - - (431) - - - 431 - - - -
Dilution of
ownership (not
resulting in
change in
control) - - - - 991 - - - 991 2,806 3,797
Subsidiary
equity settled
share-based
payments - - - - - 89 - - 89 76 165
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
transactions
with owners 21 517 138 (416) 991 89 431 - 1,771 2,889 4,660
At 30 November
2021 5,005 9,877 1,425 - 991 89 (7,421) 168 10,134 2,732 12,866
Loss for the
year - - - - - - (2,039) - (2,039) (566) (2,605)
Other - - - - - - - - - - -
comprehensive
income
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
comprehensive
income for the
year - - - - - - (2,039) - (2,039) (566) (2,605)
Shares and
warrants
issued 71 584 176 - - - - - 831 - 831
Equity settled
share-based
payments - - 87 - - - - - 87 - 87
Transfer on
exercise or
expiry of
warrants - - (501) - - - 501 - - - -
Subsidiary
equity settled
share-based
payments - - - - - 47 30 - 77 65 142
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
Total
transactions
with owners 71 584 (238) - - 47 531 - 995 65 1,060
At 30 November
2022 5,076 10,461 1,187 - 991 136 (8,929) 168 9,090 2,231 11,321
------- ------- ------- -------- --------- -------- -------- -------- ------------ --------------- -------
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 30 NOVEMBER 2022
Note 2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (2,607) (1,044)
Depreciation 9 7 5
Fees settled in shares - 32
Impairment 984 -
Loss on disposal of oil & gas asset - 9
Share based payment charges 228 237
Foreign exchange revaluation adjustment - (1)
(Decrease)/increase in creditors (208) 386
Decrease/(increase) in debtors 13 49 (110)
Net cash used in operating activities (1,547) (486)
------- -------
Cash flows from investing activities
Payments for exploration expenditure (2,417) (2,544)
Payments for tangible fixed assets (20) (31)
Net cash used in investing activities (2,437) (2,575)
------- -------
Cash flows from financing activities
Proceeds from the issue of shares and exercise of warrants 522 1,295
Costs of issue (30) (72)
Proceeds from the issue of shares and warrants - GreenRoc - 5,075
IPO transaction costs - (800)
Finance expense - (1)
Net cash generated from financing activities 492 5,497
------- -------
Net increase/(decrease) in cash and cash equivalents (3,492) 2,436
Cash and cash equivalents at beginning of period 3,948 1,512
Cash and cash equivalents at end of year 14 456 3,948
======= =======
Significant non-cash transactions in the period not reflected
above are:
Consideration of GBP339,000 in shares and warrants for the
exercise of a put-and-call option over the 10% of Clogau Gold
Project not owned by the Group (a financial instrument valued at
GBP214,000) plus the purchase of part of a royalty attached to the
project and settlement of some historic debts. See Note 5 for
details.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 NOVEMBER 2022
Note 2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Operating loss (1,341) (265)
Fees settled in shares - 32
Impairment expense 785
Loss on disposal of oil & gas asset 5 - 9
Share based payment charge 87 153
Movement in the expected credit loss provision for loans to subsidiaries 15 (454)
Foreign exchange revaluation adjustment - 62
(Decrease)/increase in creditors (2) (98)
Decrease/(increase) in debtors (7) (72)
Net cash used in operating activities (463) (633)
------- -------
Cash flows from investing activities
Loans granted to subsidiaries 12 (370) (1,925)
Loan repayments received from subsidiaries - 500
Net cash used in investing activities (370) (1,425)
------- -------
Cash flows from financing activities
Proceeds from the issue of shares and exercise of warrants 522 1,295
Costs of issue (30) (72)
Net cash generated from financing activities 492 1,223
------- -------
Net increase/(decrease) in cash and cash equivalents (341) (835)
Cash and cash equivalents at beginning of period 663 1,498
Cash and cash equivalents at end of year 14 322 663
======= =======
Significant non-cash transactions in the period not reflected
above are:
Consideration of GBP339,000 in shares and warrants for the
exercise of a put-and-call option over the 10% of Clogau Gold
Project not owned by the Group (see Note 5 for more details).
The Accounting Policies and Notes on pages 34 to 58 form part of
these financial statements.
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION
Alba Mineral Resources plc is a public limited company
incorporated and domiciled in England & Wales, whose shares are
publicly traded on the AIM market of the London Stock Exchange plc.
The registered office address is 6(th) Floor 60 Gracechurch Street,
London, United Kingdom, EC3V 0HR. The principal accounting policies
applied in the preparation of these financial statements are set
out below. These policies have been applied consistently to all the
years presented.
a. Basis of preparation
These consolidated financial statements of Alba Mineral
Resources plc have been prepared in accordance with UK-adopted
international accounting standards ("IFRSs") as they apply to the
Group for the year ended 30 November 2022 and with the Companies
Act 2006. Numbers have been rounded to GBP'000.
The consolidated financial statements have been prepared on the
historical cost basis, save for the revaluation of certain
financial assets and liabilities at fair value.
The preparation of financial statements requires the use of
certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the group's
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements, are
disclosed in Note 2.
New or amended Standards and interpretations that became
effective during the year ended 30 November 2022 had no impact on
the Group accounts.
New standards, amendments, and interpretations not yet
effective
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 November 2022 reporting
periods and have not been early adopted by the Group. These
standards include:
-- Amendments to IAS 1 Presentation of Financial Statements
(effective 1 Jan 2023) - Disclosure of Accounting Policies
-- Amendments to IAS 1 Presentation of Financial Statements
(effective 1 Jan 2024) - Classification of Liabilities as Current
or Noncurrent
-- Amendments to IAS 8 Accounting Policies (effective 1 Jan
2023) - Definition of Accounting Estimates
-- Amendments to IAS 12 Income Taxes (effective 1 Jan 2023) -
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
-- Amendments to IAS 16 Property, Plant and Equipment (effective
1 Jan 2022) - Proceeds before intended use
-- Amendments to IFRS 16 Leases (effective 1 Jan 2024) - Lease
liability in a sale and leaseback
-- IFRS 17 and Amendments Insurance contracts (effective 1 Jan 2023)
-- Amendments to IAS 37 Onerous Contracts (effective 1 Jan 2022)
- Cost of Fulfilling a Contract
The Directors do not anticipate that the adoption of these
standards or amendments will have a material impact on the
financial statements of the Company and the Group in the period of
initial application or in future reporting periods. Other
amendments, standards and interpretations are in issue, both
endorsed and not yet endorsed, but they are not relevant to the
Group and as such they are not commented on.
b. Going concern
Based on financial projections prepared by the Directors, the
Group's current cash resources are insufficient to enable the Group
to meet its recurring outgoings and projected exploration
expenditure for the entirety of the next twelve months. The
Directors have prepared cash flow forecasts to 30 November 2024
which take into account planned exploration spend, costs and
external funding. The need for external funding is a material
uncertainty that may cast doubt on the Group's ability to continue
as a going concern. At this stage as an explorer the Group does not
have a steady income stream and is reliant on external funding
sources such as capital raisings or asset transactions to fund
activities. The nature of these is ad-hoc and as such the Group
does not carry a cash balance sufficient for 12 months of
expenditure. However, the Board has a reasonable expectation that
the Group will continue to be able to meet its commitments for the
foreseeable future by raising funds when required from the equity
capital markets and based on the following:
-- The Group has a strong track record in sourcing external funding.
-- Forecasts contain a level of discretionary spend such that in
the event that cash flow becomes constrained action can be taken to
enable the Group to operate within available funding. The Group
demonstrated this during the Covid-19 pandemic when sourcing
capital was uncertain.
-- The Group and Company may also consider future joint venture
funding arrangements in order to share the costs of the development
of its exploration assets, or to consider divesting of certain of
its assets and realising cash proceeds in that way in order to
support the balance of its exploration and investment
portfolio.
For these reasons the Directors continue to adopt the going
concern basis of accounting in preparing the financial
statements.
c. Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and companies controlled by the Company,
the Subsidiary Companies, drawn up to 30 November each year.
Control is recognised where the Company has the power to govern
the financial and operating policies of an investee entity so as to
obtain benefits from its activities. Subsidiaries are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control ceases.
The results of subsidiaries acquired or disposed of during the year
are included in the consolidated income statement from the
effective date of acquisition or up to the effective date of
disposal, where appropriate. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group. All
intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group's equity
therein.
Changes in ownership interests in subsidiaries without change of
control
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions - that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity within the
dilution of ownership reserve.
Non-controlling interests consist of the amounts of those
interests at the date of the original business combination and the
minority's share of changes in equity since the date of the
combination.
d. Foreign currency
For the purposes of the consolidated financial statements, the
results and financial position of each Group entity are expressed
in pounds sterling, which is the presentation currency for the
consolidated financial statements.
In preparing the financial statements of the individual
entities, transactions in currencies other than the entity's
functional currency (foreign currencies) are recorded at the rates
of exchange prevailing at the dates of the transactions. At each
reporting date, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at the reporting date.
Exchange differences arising are included in profit or loss for the
period.
For the purposes of preparing consolidated financial statements,
the assets and liabilities of the Group's foreign operations are
translated at exchange rates prevailing on the reporting date.
Income and expense items are translated at the average exchange
rates for the period. Gains and losses from exchange differences so
arising are shown through the Consolidated Statement of Changes in
Equity.
e. Share based payments
Share-based compensation benefits are made on an ad-hoc basis on
the recommendations of the Remuneration Committee or via the
Enterprise Management Incentive Scheme where the employee meets the
qualifying conditions. The fair value of warrants or options
granted is recognised as an employee benefits expense, with a
corresponding increase in the warrant reserve. The total amount to
be expensed is determined by reference to the fair value of the
options granted:
o including any market performance conditions (eg the entity's
share price)
o excluding the impact of any service and non-market performance
vesting conditions (eg profitability, sales growth targets and
remaining an employee of the entity over a specified time period),
and
o including the impact of any non-vesting conditions (eg the
requirement for employees to save or hold shares for a specific
period of time).
The total expense is recognised over the vesting period, which
is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises
its estimates of the number of options that are expected to vest
based on the non-market vesting and service conditions. It
recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to the
warrant reserve.
f. Non-current assets
Intangible assets: Deferred exploration and evaluation costs
Pre-licence costs are expensed in the period in which they are
incurred. Expenditure on licence renewals and new licence
applications covering an area previously under licence are
capitalised in accordance with the policy set out below.
Once the legal right to explore has been acquired, exploration
costs and evaluation costs arising are capitalised on a
project-by-project basis, pending determination of the technical
feasibility and commercial viability of the project. Costs include
appropriate technical and administrative expenses. If a project is
successful, the related expenditures will be reclassified as
development and production assets and amortised over the estimated
life of the commercial reserves. Prior to this, no amortisation is
recognised in respect of such costs. When all licences comprising a
project are relinquished, a project abandoned, or is considered to
be of no further commercial value to the Company, the related costs
will be written off to administrative expense within profit or
loss. Deferred exploration costs are carried at historical cost
less any impairment losses recognised.
Where the Group has entered into a farm out agreement, the Group
does not record any expenditure made by the farmee on its account.
It also does not recognise any gain or loss on its exploration and
evaluation farm-out arrangements but redesignates any costs
previously capitalised in relation to the whole interest as
relating to the partial interest retained. Any cash consideration
received directly from the farmee is credited against costs
previously capitalised in relation to the whole interest with any
excess accounted for as a gain on disposal.
Where the Group enters into a farm in agreement, the Group
recognises all expenditure which it incurs under that agreement,
with the expenditure being either capitalised or expensed in
accordance with the policy detailed above.
Property, plant and equipment
Land is shown at cost and is not depreciated as it is not a
wasting asset. The land owned by the Group is an integral part of
access to one of the Group's projects and as such its value is
reviewed annually as part of the impairment review of that project
value as a whole.
Plant and equipment is stated at historical cost less
accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the
items.
Depreciation is calculated on a straight-line basis to write off
the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
o Plant and vehicles - 10 years
o Computer equipment - 3 years
The residual values, useful lives and depreciation methods are
reviewed, and adjusted if appropriate, at each reporting date. An
item of property, plant and equipment is derecognised upon disposal
or when there is no future economic benefit to the consolidated
entity. Gains and losses between the carrying amount and the
disposal proceeds are taken to profit or loss. Any revaluation
surplus reserve relating to the item disposed of is transferred
directly to retained profits.
Investment in subsidiaries: Investment in subsidiaries,
comprising equity instruments and capital contributions, are
recognised initially at cost less any provision for impairment.
g. Financial instruments
Financial assets and financial liabilities are recognised in the
statement of financial position when the Group becomes a party to
the contractual provisions of the instrument. The classification is
dependent on the business model adopted for managing the financial
assets and the contractual terms of the cash flows expected to be
derived from the assets.
The Group classifies its financial instruments as follows:
Financial assets
Trade and other receivables Amortised cost
Loans to subsidiaries (Company only) Amortised cost
Investments At fair value through profit
or loss (FVPL)
Financial liabilities
Trade and other payables Amortised cost
Borrowings Amortised cost
Other borrowings Amortised cost
Derivative financial instrument At fair value through profit
or loss (FVPL)
Trade and other receivables: Trade and other receivables are
held for the collection of contractual cash flows and are
classified as being measured at amortised cost. They are recognised
initially at fair value and subsequently measured at amortised cost
using the effective interest method less provision for
impairment.
Loans to subsidiaries: Long-term loans to subsidiaries, other
than capital contributions, are held for the collection of
contractual cash flows and are classified as being measured at
amortised cost, net of provision for impairment. Impairment is
initially based on the expected lifetime credit loss as applied to
the portfolio of loans. The loans are interest free and have no
fixed repayment terms. As such the loans are assessed as being
credit impaired on inception and lifetime expected credit losses
are recognised with the amount of provision being recognised in the
profit or loss.
A loan will be subject to impairment review if there is an
indicator of impairment, such as the impairment of the value of the
deferred exploration intangible asset within the relevant
subsidiary. A loan is fully impaired when the relevant subsidiary
recognises an impairment of its deferred exploration expenditure,
such that the subsidiary is not expected to be able to repay the
loan from its existing assets.
Investments: Investments in unlisted equity instruments whose
fair value cannot be reliably measured are recognised initially at
investment cost. Any shareholder loans made are included in the
investment cost. Where a value can be reliably measured the
investment is subsequently recognised at fair value through profit
and loss. Information about the methods and assumptions used in
determining fair value is provided in Note 11.
Trade and other payables: Trade and other payables are not
interest bearing and are recognised initially at fair value and
subsequently measured at amortised cost.
Derivative financial instrument
A derivative financial instrument is recognised for the 10% call
option over the remaining shares in the Clogau gold project not
owned by the Group. This has been valued based on management's best
estimate and classified as fair value through profit and loss so
that any future change in the valuation of the liability will be
recognised through the profit and loss account. See Note 16 to the
Accounts.
A 4% net smelter return royalty was also agreed as part of the
consideration. The Company has a buy-back right in respect of any
proposed sale of the royalty. No value has been attributed to this
right in these accounts as it cannot be quantified due to
uncertainty in reaching commercial production and what the
resulting royalty quantum would be likely to be
Borrowings: I nitially recognised at fair value net of any
transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are then subsequently
measured at amortised cost using the effective interest rate
method. Interest expense includes initial transaction costs and any
premium payable on redemption, as well as any interest or coupon
payable while the liability is outstanding.
Liability components of convertible loan notes are measured as
described further below.
Other borrowings: recognised initially at fair value and
subsequently measured at amortised cost.
Leases: The Group does not have any leases within the scope of
IFRS16.
h. Equity
Share capital represents the nominal value of equity shares,
both ordinary and preference.
Share premium represents the excess over nominal value of the
fair value of consideration received for equity shares, net
of expenses of the share issue.
Warrant reserve represents proceeds from the issue of extant
warrants.
Warrants to be issued reserve held proceeds from the issue of
warrants announced on 25 November 2020 but issued post-year end, on
1 December 2020.
Dilution of ownership reserve represents the difference between
the fair value of any consideration paid and the relevant share of
the fair value of net assets acquired in a dilutive transaction
where control is retained.
Other reserves represents the proceeds from the issue of
warrants by GreenRoc Mining plc attributable to the equity holders
of the group.
Foreign currency reserve holds gains/losses arising on
retranslating the net assets of the Group into pounds sterling.
i. Taxation
The charge for taxation is based on the profit or loss for the
year and takes into account deferred tax . The tax expense for the
period comprises current and deferred tax. Tax is recognised in the
income statement, except to the extent that it relates to items
recognised directly in equity. In this case the tax is also
recognised directly in other comprehensive income or directly in
equity, respectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company operates and
generates taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit or loss, and is accounted for
using the liability method.
Deferred tax assets are only recognised to the extent that it is
probable that future taxable profit will be available in the
foreseeable future against which the temporary differences can be
utilised.
Deferred income tax is recognised, using the liability method,
on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements. However, the deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a
transaction other than a business combination that, at the time of
the transaction, affects neither accounting nor taxable profit or
loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted, or substantially enacted, by the end of the
reporting period and are expected to apply when the related
deferred income tax asset is realised, or the deferred income tax
liability is settled.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities, and when the deferred income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a
net basis.
j. Segmental information
An operating segment is a distinguishable component of the Group
which is subject to risks and rewards that are different from those
of other segments. In the Group's current portfolio, the
geographical location of exploration projects provides the basis
for grouping into segments.
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors of the
Company.
2 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial statements in conformity with
generally accepted accounting practice requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities as well as the disclosure of contingent
assets and liabilities at the reporting date and the reported
amounts of revenues and expenses during the reporting period.
Actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. The areas of judgement that have the most
significant effect on the amounts recognised in the financial
statements are as follows:
i) JUDGEMENTS
Capitalisation of exploration and evaluation costs -
GBP2,417,000
The capitalisation of exploration costs relating to the
exploration and evaluation phase requires management to make
judgements as to the future events and circumstances of a project,
especially in relation to whether an economically viable extraction
operation can be established. In making such judgements, the
Directors take comfort from the findings from exploration
activities undertaken, the fact the Group intends to continue these
activities and that the Company expects to be able to raise
additional funding to enable it to continue the exploration
activities.
Impairment assessment of exploration and evaluation costs -
GBP8,450,000
At each reporting date, management make a judgment as to whether
circumstances have changed following the initial capitalisation and
whether there are indicators of impairment. If there are such
indicators, an impairment review will be performed which could
result in the relevant capitalised amount being written off to the
income statement. For further details see Note 10 "Intangible
Assets".
This balance includes GBP3,084,000 relating to the Clogau Gold
Project. Despite the delays in obtaining permissions for planned
exploration on the Clogau Gold Project, management do not judge the
Exploration and Evaluation costs associated with that project to be
impaired at 30 November 2022. Exploration is planned and budgeted
for in 2023, the option is valid until February 2025 and the Group
has no data at this point that suggests that the asset value is
unlikely to be recovered from successful development.
Accounting for investment in Horse Hill Developments Limited -
GBP2,600,000
The Group and Company's investment in Horse Hill Developments
Limited ("HHDL") is in the form of equity and a shareholder loan.
However, the Directors judge that the loan is in substance part of
the equity investment as governed by the HHDL investment agreement.
As such the loan element of the investment is accounted for at fair
value with movements in fair value being taken to profit or loss
(FVTPL).
The Group and Company's shareholding in HHDL is less than 20%. A
director of the Company is also a director of HHDL but does not act
in an executive capacity. At the balance sheet date HHDL had a
majority shareholder with a 77.9% shareholding. The Directors judge
that the Company does not have significant influence over HHDL and
that it should not be equity accounted for as an associate.
Company only - Impairment assessment of investment in and loans
to subsidiaries - GBP8,505,000
In preparing the parent company financial statements, the
Directors apply judgement to decide if any, or all of the company's
investments in (and where applicable loans to) each of GreenRoc
Mining plc, Aurum Mineral Resources Limited, Dragonfire Mining
Limited group and GMOW Gwynfynydd Limited are impaired or not.
These companies have no source of funds other than their
shareholders and the ability of the companies to repay their
inter-company debt and for the Company to gain value from its
investments in the companies is dependent on the future success of
the companies' exploration activities. In undertaking their review,
the Directors consider the outcome of their impairment assessment
of the relevant licences as detailed above.
The Directors have used the Expected Credit Loss model to make a
general provision against intercompany loans receivable based on
historic credit losses and current data. In applying the expected
credit loss model, the directors have judged that the loans to the
subsidiaries were credit impaired on inception. See Note 12 for
further details.
ii) ESTIMATES
Carrying value of investment in Horse Hill Developments Limited
- GBP2,600,000
The Company's investment in Horse Hill Developments Limited is
carried at fair value, as, in the judgement of the Directors, it
has been possible to estimate a reliable fair value for the
investment. For further details of the valuation see Note 11.
The Directors believe that the intrinsic value of the oil field
has not been diminished during the year but recognise that the
majority owner's impairment of part of that asset during 2022 is an
indicator of impairment of the Group's investment in HHDL and has
performed an impairment review. As the majority owner has access to
more information for valuation purposes than the Group, management
has revalued the fair value at 30 November 2022 to align with the
fair value applied by the majority owner.
3. ANALYSIS OF SEGMENTAL INFORMATION
The Group currently only has one primary reporting business
segment, exploration and development. The Board of the Company
evaluates the business on a sector basis, the two sectors being
mining and oil and gas. The group exploration assets and
investments along with capital expenditures are presented on this
basis below:
2022 2021
GBP'000 GBP'000
------- -------
Total assets
Exploration and development 8,600 6,247
Oil and gas 2,600 3,385
Current assets 585 4,126
------- -------
11,785 13,758
======= =======
Capital expenditure
Exploration and plant 2,436 2,615
======= =======
The Group's primary business activities operate in three
different geographical areas (and the Group has an investment in a
fourth area) and the group exploration assets and investments along
with capital expenditures are presented on the basis of
geographical segments below:
2022 2021
GBP'000 GBP'000
------- -------
Total assets
Republic of Ireland (fully impaired) - -
Greenland 5,343 3,451
England & Wales 6,442 10,307
------- -------
11,785 13,758
======= =======
2022 2021
GBP'000 GBP'000
Capital expenditure
Greenland 2,091 1,763
England & Wales 345 852
2,436 2,615
======= =======
The administrative expenditure in the income statement primarily
relates to central costs or exploration costs that cannot be
capitalised.
4. EXPENSES BY NATURE AND AUDITOR REMUNERATION
Auditor's remuneration:
Alba and subsidiaries GreenRoc 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ---------- --------- -------
Current auditor (PKF Littlejohn
LLP)
- Group audit services 39 35 74 35
- Subsidiary audit services - - - 32
- Taxation advice 3 9 12 6
- Corporate finance services
relating to IPO (costs
in equity) - - - 60
- Taxation advise relating
to IPO (costs in equity) - - - 12
----------------------- ----------
42 44 86 145
--------- -------
Tax and corporate finance services in the prior period relating
to the IPO were shared with the minority shareholders of GreenRoc
Mining plc and respective shares of these costs are included within
the Company's investment in GreenRoc Mining plc and the NCI share
of assets.
Expenses by nature:
Alba and
subsidiaries GreenRoc 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
Staff costs (note 6) 427 534 961 628
Professional fees and insurances 174 217 391 260
Consultancy not capitalised 45 9 54 108
Office, travel, PR, other 120 107 227 90
Forex (17) - (17) 7
Depreciation 7 - 7 5
Settlement of historic claims - - - (31)
--------------- ---------- --------- -------
Administrative expenses 756 867 1,623 1,067
========= =======
2022 2021
GBP'000 GBP'000
--------- -------
Other income
Government grants - 7
Services provided - 16
- 23
========= =======
5. ACQUISITIONS
Exercise of put-and-call option over 10% of Clogau Gold Project
plus buyback of Royalty
On 1 September 2022 Alba completed the acquisition of the
remaining 10% of the Clogau Gold Project by exercising a
put-and-call option over that 10%, taking its total ownership of
the Project to 100%. At the same time, Alba bought back a 3% net
smelter return royalty owned by the vendor, reducing the royalty to
1%, as well as settling a residual GBP72,000 of loans held by the
vendor.
Total consideration payable was the issue of 200 million Alba
ordinary shares plus 81,930,830 two-year share warrants with an
exercise price of 0.4p per share, valued at GBP39,000 via a Black
Scholes formula. On the date of issue, the share price was 0.15
pence and therefore the effective consideration was GBP300,000.
The carrying value of the 10% put-and-call option was
GBP214,000. No carrying value had been attributed to the
Royalty.
6. DIRECTORS' EMOLUMENTS AND STAFF COSTS
During the period the Group had on average 11.3 (2021: 10.1)
employees each month, being the Directors (who are the key
management personnel) plus finance, geological and local site
staff. Where eligible, Directors and other staff accrue benefits
under a money purchase auto-enrolment scheme held in NEST.
Costs incurred by: 2022 Costs incurred by: 2021
Alba Mineral GreenRoc Total Alba Mineral GreenRoc Total Group
Resources Mining Group Resources Mining plc
plc plc plc
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ -------- ------- ------------ ----------- -----------
Directors' fees,
salaries and pension
(see table below) 185 54 239 220 54 274
Directors' share
based payments 56 69 125 114 16 130
Directors' social
security costs 16 7 23 19 4 23
Staff costs
Salaries and wages 221 295 516 247 71 318
Share based payment
charges 31 72 103 31 23 54
Social security
costs 25 27 52 26 7 33
Defined contribution
pension scheme 5 10 15 5 1 6
Fees classified
as consultancy (33) - (33) (39) - (39)
Costs recharged
to projects (79) - (79) (161) - (161)
------------ -------- ------- ------------ ----------- -----------
Staff costs reported
in administrative
expenses (Note 4) 427 534 961 462 166 628
============ ======== ======= ============ =========== ===========
Average number of
employees 7.3 6 11.3* 10.1 6** 10.9*
============ ======== ======= ============ =========== ===========
** Average based on two months only.
*Two employees of Alba are also employees of GreenRoc.
Directors' remuneration:
2022 2021
Fees Salaries Pension FV of Total Fees Salaries Pension Bonus FV of Total
options options
vesting vesting
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- -------- ------- --------- ------- ------- -------- ------- ------- ---------- -------
G.F. 36 115 1 56 208 43 115 1 56 215
Fees
capitalised (15) - - - (15) (15) - - - (15)
M.C.N 6 18 - - 24 6 18 - 8 32
E.H. 6 18 - - 24 - 23 1 25 49
M.L. - - - - - 5 2 - - - 7
L.B. - - - - - - 19 2 25 46
------- -------
241 334
G.F.
GreenRoc - 54 - 69 123 - 9 - 20 16 45
L.B.
GreenRoc* n/a n/a n/a n/a n/a - 5 - 10 - 15
Total 33 205 1 125 364 39 191 2 32 130 394
------- -------- ------- --------- ------- ------- -------- ------- ------- ---------- -------
* LB resigned from the Board of Alba in 2021 so his 2022
remuneration from GreenRoc does not need separate disclosure here -
see GreenRoc Report and Accounts for the year ended 30 November
2022.
GF: George Frangeskides, MCN: Michael Nott, EH: Elizabeth
Henson, ML: Manuel Lamboley, LB: Lars Brünner
Note 24 gives further details of transactions with the
Directors.
Warrants and options
During the year no warrants or options were granted to the
Directors. Charges in the tables above relate to historic grants
vesting.
In 2021 warrants were issued to Mr Brünner (resigned) and Ms
Henson with an exercise price of 0.5 pence per share. The warrants
vested as follows: 4,000,000 each on 8 June 2021 and 8 December
2021 and can be exercised until 7 December 2023. Mr Brünner waived
the rights to his warrants when he stepped down from the Board. The
total estimated value of those warrants was GBP50,000. These values
were derived from a Black Scholes model as described in Note 17.
The warrants were granted when the share price was 0.41 pence per
share and the warrants were valued at 0.031 pence. The warrant
value was high as a proportion of market price due to the historic
share price volatility.
7. INCOME TAXES
The UK corporation tax rate has been applied throughout the
workings below as substantially all of the losses during the year
(and historic losses in retained earnings) have been incurred by
the parent or other companies resident in the UK for tax purposes.
Using a weighted average rate would not change the effective tax
rate.
a) Analysis of charge in the period
2022 2021
GBP'000 GBP'000
-------- --------
United Kingdom corporation tax at 19% (2021:
19%) - -
Deferred taxation - -
======== ========
b) Factors affecting tax charge for the period
The tax assessed on the loss for the year before tax differs
from the standard rate of corporation tax in the UK which is 19%
(2021: 19%). The differences are explained below:
2022 2021
GBP'000 GBP'000
------- -------
Loss before tax (2,605) (1,840)
======= =======
Loss multiplied by standard rate of tax (495) (350)
Effects of:
Expenses not deductible 235 201
Deferred tax assets not recognised/capital allowances
not claimed 260 149
- -
======= =======
A deferred tax asset has not been recognised in respect of
timing differences relating to tax losses and accelerated capital
allowances, due to uncertainty that the potential asset will be
recovered. The aggregated losses in each of the Group companies
being Alba Mineral Resources plc and its subsidiaries as listed in
Note 12 amounted to GBP8,501,000 before adjustments required by
local tax rules and excluding losses on intra-group transactions
(2021: GBP6,436,000).
8. EARNINGS PER SHARE
The calculation of the basic loss per share is calculated by
dividing the consolidated loss attributable to the equity holders
of the Company by the weighted average number of ordinary shares in
issue during the year. The diluted earnings per share is the same
as the basic earnings per share, as warrants/options are not
dilutive due to the loss for the year.
2022 2021
GBP'000 GBP'000
Loss attributable to group shareholders (2,039) (1,699)
------------- -------------
Weighted average number of ordinary shares for
calculating basic loss per share 6,476,717,573 6,303,890,811
------------- -------------
Loss per share (pence) (0.031) (0.027)
============= =============
9. PROPERTY, PLANT AND EQUIPMENT
Group Land Plant, equipment Total
and vehicles
GBP'000 GBP'000 GBP'000
------- ---------------- -------
Cost
At 1 December 2020 85 26 111
Additions - 31 31
------- ---------------- -------
At 30 November 2021 85 57 142
Additions - 20 20
------- ---------------- -------
At 30 November 2022 85 77 162
======= ================ =======
Accumulated Depreciation
At 30 November 2020 and at 1 December
2021 - - -
Charge for the year - (5) (5)
------- ---------------- -------
At 30 November 2021 - (5) (5)
Charge for the year - (7) (7)
------- ---------------- -------
At 30 November 2022 - (12) (12)
======= ================ =======
Net Book Value at 30 November 2022 85 65 150
======= ================ =======
Net Book Value at 30 November 2021 85 52 137
======= ================ =======
The land is part of the Clogau gold project. At the year end the
land is held at cost . No depreciation is charged as it is not a
wasting asset. Plant is part of the Clogau gold project.
10. INTANGIBLE FIXED ASSETS
Exploration Development
Group and evaluation and production Total
GBP'000 GBP'000 GBP'000
--------------- --------------- -------
Cost
As 30 November 2020 4,261 374 4,635
Additions 2,584 - 2,584
Disposals - (374) (374)
As 30 November 2021 6,845 - 6,845
Additions 2,539 - 2,539
--------------- --------------- -------
At 30 November 2022 9,384 - 9,384
--------------- --------------- -------
Amortisation and impairment
At 30 November 2020 (735) (374) (1,109)
Disposals - 374 374
--------------- --------------- -------
At 30 November 2021 (735) - (735)
Impairment charge 2022 (199) - (199)
--------------- --------------- -------
At 30 November 2022 (934) - (934)
--------------- --------------- -------
Net book value
At 30 November 2022 8,450 - 8,450
=============== =============== =======
At 30 November 2021 6,110 - 6,110
=============== =============== =======
The Group's intangible fixed assets relate to the Welsh gold
projects (Clogau, Dolgellau Gold and Gwynfynydd) (GBP3,107,000),
and the Greenland projects held by GreenRoc Mining plc
(GBP5,343,000).
Although there are delays in obtaining permissions for planned
exploration on the Clogau Gold Project, management do not judge the
Exploration and Evaluation costs associated with that project to be
impaired at 30 November 2022. Exploration is planned and budgeted
for in 2023, the option is valid until February 2025 and the Group
has no data at this point that suggests that the asset value is
unlikely to be recovered from successful development.
During the period GreenRoc Mining plc impaired all capitalised
costs in respect of the Inglefield project on the basis of that
Company's decision to discontinue activity at that permit. The
impairment charge arising GBP199,000.
At the year end the amount of liabilities (being creditors and
accruals) relating to the exploration and evaluation assets was
GBP265,000.
11. INVESTMENTS
Group and Company GBP'000
At 30 November 2020 4,000
Revaluation of investment (615)
-------
At 30 November 2021 3,385
Revaluation of investment (785)
-------
2,600
=======
The above investment represents an investment in 18.1%* (2020:
18.1%) of the issued share capital of Horse Hill Developments
Limited ("HHDL") and associated loans to that company accruing
interest at variable rates linked to the Bank of England base rate.
Those loans and interest are treated as part of the overall
investment and as such are classified as fair value through the
profit and loss. Any interest due is subsumed within the overall
investment valuation (see Note 22).
HHDL is a private company with no stock quote. There have been
no share transactions in HHDL stock nor transactions in licence
interests in the past two years to provide any basis for
valuation.
The majority owner and operator of HHDL, UK Oil & Gas plc
(UKOG) recently announced its results for year ended 30 September
2022 including an impairment of the HH1 well based on net present
value calculations (utilising an internally generated depletion
curve that was independently reviewed). Costs were based on current
costs less any anticipated savings. A long-term Brent oil price of
US$81/bbl was used being the spot rate at the time of assessment,
with a discount rate of 3.86% used being the weighted average costs
of capital of Horse Hill Developments Ltd, the holding company of
the producing well HH-1). There is inherent uncertainty in any oil
field valuation due to the uncertainty of future oil price
movements.
The Directors believe that the intrinsic value of the oil field
has not been diminished but recognise that UKOG's impairment of the
HH1 asset is an indicator of impairment of the Group's investment
in HHDL. That investment value has been reviewed for impairment.
With reference to UKOG's recent results, where that company has
access to more information for valuation purposes than the Group,
management has revalued the 18.1% investment in HHDL to align with
the value of HHDL in UKOG's balance sheet (comprising an investment
in HHDL and shareholder loans to HHDL).
This revised valuation is a Level 3 valuation under the IFRS 9
hierarchy, as was the valuation in prior year, as defined in Note
22.
The registered office of HHDL is: The Broadgate Tower, 8th
Floor, 20 Primrose Street, London, EC2A 2EW.
*In a prior period the Company elected not to contribute its
share of a cash call. As a result the Company's shareholding could
be diluted but the impact would be minimal, the reduction being
less than 0.1% of the total issued share capital of HHDL.
12. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments Capital Contributions Loans Total
Notes GBP'000 GBP'000 GBP'000 GBP'000
----------- --------------------- ------- -------
Company
At 30 November 2020 298 1,116 1,341 2,755
Additions - purchase
of minorities 5 370 - - 370
Additions - expenditure - - 1,965 1,965
Repayments - - (500) (500)
Disposals to another
group company (668) - (2,003) (2,671)
Additional holding in
subsidiary as consideration,
net of costs 5,500 - - 5,500
Foreign exchange movements - - (49) (49)
Adjustment to Expected
Credit Loss provision - - 417 417
Impairment of intercompany
loan - - 24 24
----------- --------------------- ------- -------
At 30 November 2021 5,500 1,116 1,195 7,811
Additions - purchase
of minority and royalty - 339 - 339
Additions - expenditure - - 370 370
Impairment of intercompany
loan - - (15) (15)
At 30 November 2022 5,500 1,455 1,550 8,505
=========== ===================== ======= =======
Upon adoption of IFRS 9 the Company recognised a provision for
expected credit loss against the loans due from subsidiaries. These
loans are interest-free and have no agreed terms. For the purposes
of IFRS 9 the loans were assumed to be repayable on demand.
However, management has agreed that these loans will not be
recalled within 12 months from the balance sheet date, so they are
classified as long term.
The loans are assessed as being credit impaired on inception as
the subsidiaries have no income other than the receipt of
inter-company funding and as the loans are primarily used to fund
the subsidiaries deferred exploration expenditure. The subsidiaries
would only be able to repay the loans if they can either sell their
exploration assets or develop them to the point at which the assets
generate cash flows, both of which would take time to achieve.
Therefore, at inception, it is known that the loans will not be
able to be repaid in accordance with the loan terms (that is, on
demand) and therefore they are assessed as being credit
impaired.
Historic and current data has been used to derive a probability
of default and this has been applied across the portfolio of
loans.
At 30 November 2022 the Company held the following interests in
subsidiary undertakings, which are included in the consolidated
financial statements:
Name of company Country of Holding Nature of Holding at Business
incorporation at 30 November holding 30 November
2022 2021
------------------------- ---------------- ---------------- ---------- --------------- ------------
Aurum Mineral Resources
Ltd Ireland 100% Direct 100% Exploration
Mauritania Ventures England &
Limited Wales 50% Direct 50% Non-trading
Dragonfire Mining England &
Limited Wales 100% Direct 100% Exploration
Gold Mines of Wales Holding
Limited Jersey 100% Indirect 90% Co.
GMOW (Holdings) England & Holding
Limited Wales 100% Indirect 90% Co.
GMOW (Operations) England &
Limited Wales 100% Indirect 90% Exploration
GMOW Gwynfynydd England &
Limited Wales 100% Direct 100% Exploration
GreenRoc Mining England &
plc Wales 54% Direct 54% Parent
Obsidian Mining England &
Limited Wales 54% Indirect 54% (indirect) Exploration
White Eagle Resources England & 54% (indirect)
Limited Wales 54% Indirect Exploration
White Fox Resources England & 54% (indirect)
Limited Wales 54% Indirect Exploration
The address of the registered office of Aurum Mineral Resources
Ltd is c/o Hugh Lennon Associates, Unit 8&10 Church View,
Cavan, Ireland.
The address of the registered office of Gold Mines of Wales
Limited is 3(rd) Floor, IFC5, Castle Street, St Helier, Jersey JE2
3BY.
All the other companies have their registered office at 6th
Floor, 60 Gracechurch Street, London EC3V 0HR.
Mauritania Ventures Limited has been treated as a subsidiary
undertaking because the Company exercises dominant influence over
the investment by virtue of having the casting vote at Board
meetings. The Company was dissolved on 14 February 2023.
During the period Dragonfire Mining Limited acquired 10% of Gold
Mines of Wales Limited, taking its holding to 100%. See Note 5 to
the Accounts for further details on this transaction.
After the reporting date, GreenRoc Mining plc issued further
share capital. Alba's interest in GreenRoc was diluted to 44.67% at
9 March 2023. See Note 25 "Events after the Reporting Date" for
more information.
13. TRADE AND OTHER RECEIVABLES
Group Group Company Company
2022 2021 2022 2021
------- ------- ------- -------
Current GBP'000 GBP'000 GBP'000 GBP'000
Other debtors 109 159 92 88
Prepayments and accrued income 20 19 19 16
129 178 111 104
======= ======= ======= =======
The fair value of trade and other receivables approximates to
their book value.
14. CASH AND CASH EQUIVALENTS
Group Group Company Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Cash at bank and in hand 456 3,948 322 663
======= ======= ======= =======
The fair value of cash at bank is the same as its carrying
value.
15. TRADE AND OTHER PAYABLES
Group Group Company Company
2022 2021 2022 2021
Current GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Trade creditors 222 481 81 80
Other creditors 15 13 15 13
Accruals and deferred income 227 177 69 74
------- ------- ------- -------
464 671 165 167
======= ======= ======= =======
The fair value of trade and other payables approximates to their
book value.
16. FINANCIAL LIABILITIES
The Company has no financial liabilities.
Group Other borrowings Derivative financial Total
instrument
Financial Liabilities GBP'000 GBP'000 GBP'000
---------------- -------------------- -------
At 30 November 2019 and 2020 7 34 41
Revaluation recognised in the
profit and loss - 180 180
At 30 November 2021 7 214 221
Released as part of 10% minority
purchase (7) (214) (221)
---------------- -------------------- -------
At 30 November 2022 - - -
================ ==================== =======
The derivative financial instrument related to the recognition
of a liability in respect of the put and call option over the
remaining 10% shareholding in the Clogau gold project at last year
end, which the Company acquired during the period. See Note 5 for
further information.
17. CALLED UP SHARE CAPITAL
2022 2022 2021 2021
Number Number
of shares GBP'000 of shares GBP'000
----------------------------- -------------- ------- -------------- -------
Issued, allotted and fully
paid
Ordinary shares of 0.1 pence - -
Ordinary shares of 0.01
pence 7,121,568,996 712 6,404,645,919 641
Deferred shares of 0.9 pence 93,070,100 838 93,070,100 838
B deferred shares of 0.09
pence 3,918,351,946 3,526 3,918,351,946 3,526
----------------------------- -------------- ------- -------------- -------
Total 11,132,991,042 5,076 10,416,067,965 5,005
============================= ============== ======= ============== =======
The Company's Articles do not specify authorised share capital.
All issued ordinary shares carry equal rights. The deferred shares
do not carry any rights to vote or dividend rights. In addition,
holders of deferred shares will only be entitled to a payment on a
return of capital or on a winding up of the Company after each of
the holders of the ordinary shares have received a payment of
GBP1,000,000 on each such share.
During the year the Company issued ordinary shares as
follows:
Ordinary Ordinary Deferred Share premium Total
shares shares shares
of 0.01 pence
GBP'000 GBP'000 GBP'000 GBP'000
At 1 December 2021 6,404,645,919 641 4,364 9,877 14,882
September issue of
shares as consideration
for 10% minority acquisition 200,000,000 20 - 280 300
September exercise
of warrants 16,923,077 1 - 20 21
November placing net
of fees 500,000,000 50 - 420 470
November placing warrants
valuation (136) (136)
At 30 November 2022 712 4,364 10,461 15,537
============== ======== ======== ============= =======
Warrants Warrants
reserve
GBP'000
At 1 December 2021 809,286,713 1,425
Warrants granted with placings 250,000,000 136
Warrants issued as consideration 81,930,830 39
Warrants vesting (counted in brought forward balance) - 87
Warrants exercised (16,923,077) (13)
Warrants expired/waived (244,363,636) (487)
------------- --------
At 30 November 2022 879,930,830 1,187
------------- --------
Of the warrants outstanding at 30 November 2022, 857,930,830 are
vested and able to be exercised. The weighted average exercise
price of these vested warrants is 0.35 pence. Where warrants were
exercised in the year, the weighted average share price at the date
of exercise was 0.14 pence.
As at 30 November 2022 Alba had 879,930,830 warrants and options
outstanding:
No. of warrants Exercise price (pence) Final exercise date Vested
---------------- ----------------------- -------------------- --------------------------------------
60,000,000(1) 0.4 pence 13 January 2027 Awarded under the EMI scheme. Vested.
60,000,000(2) 0.42 pence 2 May 2028 Awarded under the EMI scheme. Vested.
50,000,000(3) 0.16 pence 31 December 2023 Partially vested.
200,000,000(3) 0.16 pence 28 August 2030 Awarded under the EMI scheme.
Partially vested.
160,000,000 0.75 pence 23 November 2022 Vested.
10,000,000 0.375 pence 1 December 2022 Vested.
8,000,000(4) 0.5 pence 7 December 2023 Vested.
91,930,830 0.4 pence 31 August 2024 Vested.
250,000,000 0.2 pence 16 November 2024 Vested.
---------------- ----------------------- -------------------- --------------------------------------
879,930,830 At 30 November 2022
================
As at 30 November 2021 Alba had 809,286,713 warrants and options
outstanding:
No. of warrants Exercise price (pence) Final exercise date Vested
---------------- ----------------------- -------------------- --------------------------------------
60,000,000(1) 0.4 pence 13 January 2027 Awarded under the EMI scheme. Vested.
60,000,000(2) 0.42 pence 2 May 2028 Awarded under the EMI scheme. Vested
16,923,077 0.13 pence 4 September 2022 Vested
236,363,636 0.55 pence 20 September 2022 Vested
50,000,000(3) 0.16 pence 31 December 2023 Partially vested.
200,000,000(3) 0.16 pence 28 August 2030 Awarded under the EMI scheme.
Partially vested.
160,000,000 0.75 pence 23 November 2022 Vested.
10,000,000 0.375 pence 1 December 2022 Vested.
16,000,000(4) 0.5 pence 7 December 2023 Partially vested.
---------------- ----------------------- -------------------- --------------------------------------
809,286,713 At 30 November 2021
================
(1,2,3,4) These warrants fall within the scope of IFRS 2
"Share-based Payments" and were issued in 2017, 2018, 2020
respectively.
The fair value of the warrants issued in 2022 calculated using a
Black Scholes model was GBP175,000. Within the meaning of the IFRS
13 fair value hierarchies, this is a Level 2 valuation. It is based
on a risk-free rate of 10 year gilts on the date of grant, a
dividend yield of nil, the life of the options, the share price at
the date of issue of the warrants and the strike prices of the
warrants. The volatility was derived from the quoted prices for the
Company's shares in the 12-month period prior to the issue of the
respective warrants.
18. NON-CONTROLING INTERESTS
Mauritania White Fox Resources GreenRoc Total NCIs
Ventures Ltd Ltd Mining plc GBP'000
------------- ------------------- -----------
At 30 November 2020 (9) (7) - (16)
Acquisition of NCI - 7 - 7
NCI arising from IPO - - 2,806 2,806
Share of loss for
the year - - (141) (141)
Share of other reserves - - 76 76
------------- ------------------- ----------- ----------
At 30 November 2021 (9) - 2,741 2,732
Share of loss for
the year - - (566) (566)
Share of movement
on other reserves - - 65 65
------------- ------------------- ----------- ----------
At 30 November 2022 (9) - 2,240 2,231
------------- ------------------- ----------- ----------
The Group recognises the non-controlling interest in GreenRoc
Mining plc at the non-controlling interest's proportionate share of
the entity's net identifiable assets as included in the Group
balance sheet. These differ from the assets presented in the
standalone GreenRoc Mining plc Report and Accounts due to
consolidation entries, including elimination of fair valuation
uplift generated in the IPO in 2021. This fair value uplift was
judged by management to be intragroup profit.
At the balance sheet date Alba holds 53.96% of the share capital
of GreenRoc Mining plc (see Note 12). Voting rights do not differ
from ownership interests.
After the year end Alba's ownership was diluted to 44.67%. For
more information see Note 25.
The Report and Accounts of GreenRoc Mining plc for the period
ended 30 November 2022 can be found on its website
www.greenrocmining.com.
19. LEASES
The Company has no lease or rental commitments within scope of
IFRS 16. Expenditure short-term leases during the year was
GBP19,000.
20. CAPITAL COMMITMENTS
As at 30 November 2022, the Group / Company had commitments to
spend at least GBP470,000 in the calendar year 2023 on its
Greenland licences (2021: GBP105,000), After taking into account
credit from historic expenditure, the real commitments for 2023
reduce to approximately GBP130,000 due to be spent on the Melville
Bay project.
21. CONTINGENT LIABILITIES
A 4% net smelter royalty agreement was agreed as part of the
acquisition of the Clogau gold project in 2018. During the year the
Group acquired 3% of that. A 1% net smelter royalty agreement
remains in place. The Group has no obligations under this agreement
until such time as gold is produced and sold.
22. FINANCIAL INSTRUMENTS
The Group's financial instruments comprise investments, cash at
bank and various items such as debtors, loans and creditors. The
Group has not entered into derivative transactions nor does it
trade financial instruments as a matter of policy.
Credit risk
The Group's credit risk arises primarily from cash at bank,
debtors and the risk the counterparty fails to discharge its
obligations. As at 30 November 2022, debtors included GBP25,000
that was past due but not impaired (2021: GBP8,100). Given the low
number and value of debtors management considers recoverability of
any overdue amount individually on an annual basis.
The Company's credit risk primarily arises from intercompany
debtors and this is reviewed annually in the course of reviewing
the Expected Credit Loss provision required under IFRS 9. See Note
12 for more details.
Funding risk
Funding risk is the possibility that the Group might not have
access to the financing it needs. The Group's continued future
operations depend on the ability to raise sufficient working
capital through the issue of equity share capital. The Directors
are confident that adequate funding will be forthcoming with which
to finance operations. The Board has a strong track record of
raising funds as required. Controls over expenditure are carefully
managed and activities planned to ensure that the Group has
sufficient funding.
Liquidity risk
Liquidity risk arises from the management of cash funds and
working capital. The risk is that the Group will fail to meet its
financial obligations as they fall due. The Group operates within
the constraints of available funds and cash flow projections are
produced and regularly reviewed by management.
At 30 November 2022 the management considers that the liquidity
risk is not material as sufficient cash is held to meet financial
liabilities to be settled in cash.
Future liquidity risk is addressed in Note 1 under the heading
"Going Concern".
Interest rate risk profile of financial assets
Excluding the investment in HHDL, the only financial assets
(other than short term debtors) are cash at bank and in hand, which
comprises money at call. The interest earned in the year was nil.
The Directors believe the fair value of the financial instruments
is not materially different to the book value.
The investment in HHDL includes a loan element. Under an
investment agreement those loans attract interest. Loans plus
interest become payable once HHDL has surplus cash. As the Group /
Company treats the loan as held at fair value through profit and
loss, any interest credit is subsumed within the fair value
movement.
Foreign currency risk
The Group has an Irish subsidiary, which can affect the Group's
sterling denominated reported results as a consequence of movements
in the sterling/euro exchange rates. The Group also incurs costs
denominated in foreign currencies (primarily
Danish Krone) which gives rise to short term exchange risk. The
Group does not currently hedge against these exposures as they are
deemed immaterial and there is no material exposure as at the
year-end. No sensitivity analysis has been performed.
Market risk
Following the acquisition of the investment in Horse Hill
Developments Limited ("HHDL"), the Group is exposed to market risk
in that the value of the investment would be expected to vary
depending on the price of oil and the future cash calls will, to an
extent, depend on the revenue generated from oil produced from well
testing activities. For a review of the progress of the Horse Hill
project, please see the Chairman's Statement.
During the year under review the price of Brent crude oil
trended upwards from $70 at the start of the year to over $100 then
to $86 at the 30 November 2022, stabilising at around $85 for the
last 6 month. However, a sustained downturn in the price of oil
would have a materially adverse effect on the revenues generated
from the Horse Hill Oil Field. A material reduction in the market
value of HHDL shares can be expected to result in a proportionate
reduction in the carrying value of the Group's investment in HHDL
.
Categories of financial instrument
Group Group Company Company
2022 2021 2022 2021
GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------- -------
Financial assets
Investments at fair value through profit or loss:
Investment in HHDL (Note 11) 2,600 3,385 2,600 3,385
Held at amortised cost:
Trade and other receivables 109 159 92 88
Cash and cash equivalents 456 3,948 322 663
Intercompany receivables net of expected credit losses - - 1,550 1,195
------- ------- ------- -------
3,165 7,492 4,564 5,331
======= ======= ======= =======
Financial liabilities
Liabilities held at fair value through profit or loss:
Derivative financial instrument (Note 16) - 214 - -
Held at amortised cost:
Trade and other payables 237 494 96 93
Other financial liabilities - 7 - -
======= ======= ======= =======
237 715 96 93
======= ======= ======= =======
Valuation of financial instruments
Under IFRS 9 the valuation of financial instruments is
categorised based on the inputs used to generate the valuation as
follows:
Level 1: The fair value of financial instruments traded in
active markets (such as publicly traded derivatives, and equity
securities) is based on quoted market prices at the end of the
reporting period. The quoted market price used for financial assets
held by the group is the current bid price. These instruments are
included in level 1.
Level 2: The fair value of financial instruments that are not
traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which
maximise the use of observable market data and rely as little
as
possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included in level 3.
This is the case for unlisted equity securities.
The Group's financial instruments by valuation method:
Level 3 Total
GBP'000 GBP'000
------- -------
Financial assets held at FVTPL
Investment - FV at 30 November 2021 3,385 3,385
Impairment expense in 2022 (785) (785)
------- -------
Investment - FV at 30 November 2022 2,600 2,600
------- -------
Financial liabilities held at FVTPL
Derivative financial instrument (Note 16) - FV at 30 November 2021 214 214
Exercise of instrument in 2022 (214) (214)
------- -------
Derivative financial instrument (Note 16) - FV at 30 November 2022 - -
======= =======
For more information on the valuation bases see the relevant
Notes referred to above.
Included in the value for HHDL are loans of GBP2,126,000 plus
accrued interest. These were designated as fair value through the
profit and loss on recognition as they form part of the Company's
investment in Horse Hill Developments Limited. The maximum exposure
to credit risk of this financial asset at the end of the reporting
period is the carrying amounts of the loans. The loans are not
valued separately from the investment. No change in fair value to
date has been attributable to a change in credit risk.
23. CAPITAL MANAGEMENT
The Group's objective when managing capital is to safeguard the
entity's ability to continue as a going concern and develop its
mining and exploration activities to provide returns for
shareholders. The Group's funding comprises equity and debt. The
Directors consider the Company's capital and reserves to be
capital. When considering the future capital requirements of the
Group and the potential to fund specific project development via
debt, the Directors consider the risk characteristics of all the
underlying assets in assessing the optimal capital structure.
24. RELATED PARTY TRANSACTIONS
All related party transactions have been conducted at arm's
length.
Fees charged by Directors are detailed below and also shown in
Note 6. "Directors' emoluments and staff costs".
Company
Transactions between the Company and its subsidiaries, which are
related parties of the Company, have been eliminated on
consolidation. The loan balances and transactions in the year with
the subsidiaries are disclosed in Note 12. Details of transactions
between the Company and other related parties are disclosed
below.
Group
Stirling Corporate Limited and Berwick Capital Limited,
companies which George Frangeskides, a director of the Company,
controls, billed the Group combined GBP2,000 (2021: GBPnil) for
recharges of historic costs incurred in the course of work
performed on behalf of the Group. These amounts were accrued in
prior periods and were outstanding at year end. There are no terms
and conditions associated with the outstanding balances.
Aetos Consulting Limited, a company which George Frangeskides, a
director of the Company, jointly controls, charged the Group fees
for consultancy services of GBP36,000 (2021: GBP43,000). Of these
fees, GBP15,000 represents work carried out specifically on the
advancement of the Group's project portfolio and has therefore been
capitalised. During the period this company also recharged the
Group amounts totalling GBP7,000 for historic expenses incurred on
behalf of the Group. These costs were accrued in prior periods.
As at the year-end GBP53,000 (2021: GBP44,000) was owed to Aetos
Consulting Limited and GBP36,000 was accrued for invoices expected.
There are no terms and conditions associated with the outstanding
balance.
Woodridge Associates, a trading name of Michael Nott, a director
of the Company, charged the Group fees of GBP6,000 for consultancy
services during the year including GBP1,500 accrued at 30 November
2022.
Ixia Advisers, a company controlled by Elizabeth Henson, a
director of the Company, charged the Group fees of GBP6,000 for
consultancy services during the year.
25. EVENTS AFTER THE REPORTING PERIOD
Corporate
In December 2022 GreenRoc Mining plc announced a placing and a
broker option. On 6 March 2023 GreenRoc Mining plc announced a
further placing. The combined effect of these rounds of fundraising
is to dilute Alba's holding in GreenRoc Mining plc to 44.67% after
the reporting date.
On 2 May 2023 the Company announced a change in broker.
Clogau Gold Project
On 27 March 2023 the Company updated the market on the progress
of the permit applications for activities at the Clogau Gold
Project.
GreenRoc Mining plc - Amitsoq Graphite Project
Since the balance sheet date GreenRoc Mining plc has made a
number of RNS announcements on the progress of the Amitsoq graphite
project. Also announced was a share placing (see "Corporate"
above).
For further information see GreenRoc Mining plc full year
results announced on 24 March 2023.
Horse Hill Oil Project
On 28 March 2023 terms of a proposed farm-in arrangement for a
seismic survey and future drilling at the Horse Hill oil field were
announced by UKOG. These are subject to shareholder consent.
Limerick Base Metals
The Group announced that it had surrendered its exploration
licence in Limerick on 20 January 2023. Due to lack of permissions,
viable exploration targets could not be progressed and under the
terms of the licence from relevant authorities in Ireland, the
licence must be surrendered where no further expenditure was
planned.
26. ULTIMATE CONTROLLING PARTY
The Directors consider there is no ultimate controlling
party.
27. PUBLICATION OF THE ANNUAL REPORT
The annual report will be available on the Company's website (
www.albamineralresources.com shortly.
**ENDS**
For further information, please visit www.albamineralresources.com or contact:
Alba Mineral Resources plc
George Frangeskides, Executive Chairman +44 20 3950 0725
SPARK Advisory Partners Limited
(Nomad)
Andrew Emmott +44 20 3368 3555
----------------------------
CMC Markets plc (Broker)
Thomas Smith / Douglas Crippen +44 (0) 20 3003 8632
----------------------------
St Brides Partners (Financial PR) alba@stbridespartners.co.uk
Isabel de Salis / Catherine Leftley
----------------------------
Alba's Projects & Investments
Mining Projects Operated Location Ownership
by Alba
Clogau (gold) Wales 100%
----------- ----------
Dolgellau Gold Exploration
(gold) Wales 100%
----------- ----------
Gwynfynydd (gold) Wales 100%
----------- ----------
Investments Held by Alba Location Ownership
----------- ----------
GreenRoc Mining Plc (mining) Greenland 44.7%
----------- ----------
Horse Hill (oil) England 11.765%
----------- ----------
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END
FR SSDFWLEDSEII
(END) Dow Jones Newswires
May 05, 2023 02:00 ET (06:00 GMT)
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