Company No. 05285814
Alba Mineral Resources plc
REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2022
Alba Mineral Resources plc
CONTENTS
Officers and professional advisers
Chairman’s Statement
Strategic Report
Directors’ Report
Directors’ Responsibilities Statement
Corporate Governance Statement
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Cash Flow Statement
Company Cash Flow Statement
Notes to the Financial Statements
Page
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Alba Mineral Resources plc
OFFICERS AND PROFESSIONAL ADVISERS
DIRECTORS
George Frangeskides (Chairman)
Michael Nott
Elizabeth Henson
SECRETARY
Ben Harber
REGISTERED IN ENGLAND & WALES
Company Number 05285814
REGISTERED OFFICE
6th Floor, 60 Gracechurch St
London EC3V 0HR
NOMINATED ADVISERS
SPARK Advisory Partners Limited
5 St. John’s Lane
London EC1M 4BH
BROKERS
CMC Markets
133 Houndsditch
London EC3A 7BX
AUDITOR
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
SOLICITORS
Memery Crystal
165 Fleet Street
London EC4A 2DY
PRINCIPAL BANKERS
Metro Bank
One Southampton Row
London WC1B 5HA
REGISTRARS
Share Registrars Limited
3 Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
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Alba Mineral Resources plc
CHAIRMAN’S STATEMENT
The Board of Alba Mineral Resources plc is pleased to report the results for the financial year ended 30 November
2022.
References to the “Company” or “Alba” are to Alba Mineral Resources plc and references to the “Group” are to
Alba collectively with its Subsidiary Companies (as listed in Note 12).
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 £15,000. 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
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Alba Mineral Resources plc
CHAIRMAN’S STATEMENT
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
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Alba Mineral Resources plc
CHAIRMAN’S STATEMENT
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 km² 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 £5.1 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 £360 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
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Alba Mineral Resources plc
CHAIRMAN’S STATEMENT
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 £2.6 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 £500,000 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
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Alba Mineral Resources plc
CHAIRMAN’S STATEMENT
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
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Alba Mineral Resources plc
STRATEGIC REPORT
The Directors present the strategic report for Alba Mineral Resources plc for the year ended 30 November 2022.
References to the “Company” or “Alba” are to Alba Mineral Resources plc and references to the “Group” are to
Alba collectively with its Subsidiary Companies (as listed in Note 12).
PRINCIPAL ACTIVITIES
The Group’s principal activity is exploration for and development of natural resources.
BUSINESS REVIEW
The Company operates principally as a holding company and specifically provides support to the Subsidiary
Companies, which own and operate mining projects in Greenland (graphite, ilmenite, and iron ore), Wales (gold),
as well as having an investment in the onshore UK oil and gas sector.
The Group’s stated focus is unearthing hidden value from previously drilled or mined projects. The Directors
believe that the Group’s asset and investment portfolio provides access to a range of assets with potential to add
significant value for the Company’s shareholders in the long-term. Our strategy, where possible, is to target
assets that have a production history and are in stable jurisdictions, and which thereby offer real potential to be
brought into commercial production. A review of activities across the portfolio is given in the Chairman’s
Statement on pages 2-6.
The key challenge for the Company is identifying the most effective, including the most cost-effective, methods
for progressing mineral exploration activities at our projects, with the aim being to materially advance the level
of knowledge and confidence in the potential of our projects and thereby justify the committing of further
resources to progress those projects rapidly through exploration and into the development phase.
KEY PERFORMANCE INDICATORS (KPIs)
At this stage in the Company’s development, the Directors regularly monitor key performance indicators
associated with funding risk, being primarily projected cash flows associated with general administrative expenses
and projected cash flows on a project-by-project basis. This year the Company has been able to raise the funds
as needed to finance its activities.
Performance of projects is assessed using measures specific to that project. As an exploration group with no
production or proven reserves, evaluation is based on exploration results and technical reports and assessments.
In the review of activities, we have identified for each project the exploration results or assessments that
demonstrate the progress that is being made on that project. These assessments also inform our plans for future
work and assist in determining how much of our funding we allocate to each project.
In the prior year, the Board identified the following specific KPIs or milestones considered to be material indicators
of value having been added to the Company:
(i)
(ii)
(iii)
(iv)
Securing the necessary permissions and then undertaking development to access one or more key
underground mine targets within the Clogau-St David’s Gold Mine.
Submitting a planning application for the exploitation of the Waste Tip at the Clogau-St David’s Gold
Mine and/or for the reopening of the Clogau-St David’s Gold Mine for commercial production.
A maiden Mineral Resource estimate being announced in respect of at least one of Alba’s projects or
investments or that the declared level of Resources on any project or investment is increased.
The identification and securing of an interest in a mining project which is complementary to the
Company’s existing portfolio and where the Company has determined there is significant potential
for near-term production.
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Alba Mineral Resources plc
STRATEGIC REPORT
In respect of (i), at the date of this report the achievement of this milestone is subject to a number of factors and
outside the control of the Company. It remains a KPI for the Company.
In respect of (ii), in order to allow the competent regulator and other relevant stakeholders to focus on existing
permitting applications, the Company has deferred this objective until completion of (i) above. It remains a KPI of
the company in 2023.
In respect of (iii), GreenRoc Mining plc announced a maiden Mineral Resource estimate for the Amitsoq graphite
project on 8 March 2022 and an upgraded Mineral Resource estimate for the project on 23 January 2023.
In respect of (iv), the Company continues to actively seek and review projects that show significant potential for
near-term production and this remains a KPI for the current year.
PRINCIPAL RISKS AND UNCERTAINTIES
Principal risks and uncertainties facing the Group are:
(i)
Funding risk – the risk that the group will not be able to raise sufficient funds to continue as a going
concern or to progress exploration activities;
Exploration risk – the risk that exploration programmes are not successful; and
Global events – such as geopolitical uncertainty and public health incidents.
(ii)
(iii)
Funding risk
As reported in Note 1b) to these Accounts, there is a material uncertainty that the Group can obtain sufficient
funding to continue as a going concern as it does not have cash to cover 12 months of planned spend. Given its
strong track record in raising funds as needed, the Directors have prepared these accounts on the going concern
basis but must highlight this to users of the Report and Accounts. For further information see Note 1b) on page
35.
Exploration risk
Every project has exploration risk attached, being the risk that the project is not successful in finding, developing
and/or extracting sufficient quantities of minerals to be commercially viable.
Specific risks are identified, evaluated and addressed on a project-by-project basis and can include finding
insufficient reserves of minerals, difficulty in accessing minerals identified or complexity of extraction methods
required, obtaining environmental or regulatory consents required for exploration and development, meeting
commitments under a licence and licence expiry dates.
The Company considers all such matters when evaluating and planning its activities.
Global events
Both funding risk and exploration risk can be materially increased by the impact of international geopolitical,
financial and public health developments such as a pandemic, whether due to the resulting logistical challenges,
because of the unavailability of exploration personnel, equipment or materials or because of any negative effect
on capital markets and the availability of funding.
FINANCIAL REVIEW
Income Statement
Group operating losses of £1,623,000 (before impairments) compared to £1,067,000 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
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Alba Mineral Resources plc
STRATEGIC REPORT
companies, with their necessary costs - fees, professional advisers and Boards. Alba company’s operating loss
remained at a similar level of ~£800,000 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 (£199,000) plus the
write down of the Company’s investment in Horse Hill Developments Limited by £785,000.
Balance sheet
Group net assets have decreased from £12.9 million to £11.3 million. The drop reflects the impairment of
Inglefield Land by £0.2m, the investment in HHDL by £0.8m and the relative increase in costs in the income
statement of £0.6 million.
The increase in group intangible assets from £6.1 million to £8.5 million is direct cash spend on projects of £2.4
million.
Cash flow
Cash has decreased by £3.4 million from £3.9 million to £0.5 million, approximately split into spend on projects
of £2.4 million, cash spend on operating costs of £1.5 million, and a cash inflow from Alba’s placing in November
2022.
Section 172(1) Statement
The Directors believe they have acted in the way most likely to promote the success of the Company for the
benefit of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
- Consider the likely consequences of any decision in the long term,
Alba’s stated activities are exploration and development. The nature of such activities requires a long-term
perspective as it may take several years’ work on a project to bring it to the point of crystallising value. In the
evaluation of projects, both those in the portfolio and those identified as prospects for the Company, the
Company always considers the long-term potential of the project.
- Act fairly between the members of the Company,
The Company does not differentiate between members in terms of access to information – all information is
shared via the regulatory news service as required by AIM and any other communications are via public channels
such as Twitter.
In respect of acting fairly between members, the Directors note that equity financings are typically managed by
the Company’s appointed corporate brokers who are responsible for book-building on each private placement
undertaken for the Company. As a junior resource company, it is prohibitively expensive to undertake rights
issues whereby all existing shareholders are given the opportunity to participate in an equity financing, which is
why the Company expects to undertake future equity financings by way of private placements. However, the
Company will keep this under regular review.
- Maintain a reputation for high standards of business conduct,
The Directors are committed to high standards of business conduct and promotes these via policies and
procedures such as its anti-bribery and whistle-blowing policy, and a share dealing policy for dealings in shares
by Directors and senior employees and requiring adherence to the same by key suppliers.
- Consider the interests of the Company’s employees,
As a small Company, Alba does not have a large workforce other than the Board and management personnel and
a geological team under the leadership of its COO. All employees have direct access to senior management. The
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Alba Mineral Resources plc
STRATEGIC REPORT
Company demonstrates consideration of the interests of the team by enforcing safe working practices on sites,
giving employees a range of opportunities for career development, offering competitive remuneration and
flexibility in working arrangements.
-
Foster the Company’s relationships with suppliers, customers and others,
The Company endeavours to use suppliers and services local to the projects where possible. It maintains a
manned office in Wales near the licence areas and engages with the local community via open days, school visits,
dual language communications and visits to local landowners. The Company has also sponsored signage at a local
football club in North Wales and the local MP has visited the projects. The Company also works with other
stakeholders such as regulatory and environmental bodies (see below) and The Crown Estate.
- Consider the impact of the Company’s operations on the community and the environment.
Mining in England and Wales is highly regulated. The Company liaises closely with local and national regulatory
and environmental bodies and professional advisers to ensure that the Group’s activities are properly permitted
and approved. Our operations in Wales are undertaken in accordance with all applicable planning, environmental
and ecological regulations, and we work closely with the North Wales Minerals and Waste Planning Service
(“NWMWPS”), Snowdonia National Park Authority (“SNPA”) and Natural Resources Wales (“NRW”) on those
matters.
Approved by the Board of Directors and signed on behalf of the Board
George Frangeskides
Executive Chairman, 4 May 2023
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Alba Mineral Resources plc
DIRECTORS’ REPORT
The Directors present their report and the audited financial statements of Alba Mineral Resources plc for the year
ended 30 November 2022. 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 6th Floor 60 Gracechurch Street, London, United Kingdom, EC3V 0HR.
References to the “Company” or “Alba” are to Alba Mineral Resources plc and references to the “Group” are to
Alba collectively with its Subsidiary Companies (as listed in Note 12).
RESULTS AND DIVIDENDS
The loss of the Group for the year, after taxation, attributable to equity holders of the parent amounted to
£2,039,000 (2021: £1,699,000 loss). The Directors do not recommend the payment of a dividend (2021: £nil).
DIRECTORS
George Frangeskides, Michael Nott and Elizabeth Henson served as Directors throughout the year.
DIRECTORS’ INTERESTS
The beneficial interests of the Directors who held office at 30 November 2022 in the share capital of the Company,
and those of their connected parties, were as follows:
G Frangeskides
M Nott
No. of Ordinary shares 2022 No. of Ordinary shares 2021
37,893,290
52,387,230
48,115,199
52,387,230
SUBSTANTIAL SHAREHOLDERS
The Company has identified the following interests of 3% or more in its issued share capital at 1 May 2023:
Hargreaves Lansdown (Nominees) Limited
Barclays Direct Investing Nominees Limited
Interactive Investor Services Nominees Limited
Hargreaves Lansdown (Nominees) Limited
HSDL Nominees Limited
Interactive Investor Services Nominees Limited
Hargreaves Lansdown (Nominees) Limited
HSDL Nominees Limited
Pershing Nominees Limited
Vidacos Nominees Limited
No. of Ordinary shares
866,428,493
563,907,558
518,695,429
495,849,302
465,402,565
463,121,369
378,538,844
370,286,329
271,520,352
216,723,538
Percentage holding
12.17%
7.92%
7.28%
6.96%
6.54%
6.50%
5.32%
5.20%
3.81%
3.04%
DISCLOSURE OF INFORMATION TO THE AUDITOR
In the case of each person who was a Director at the time this report was approved:
•
so far as that Director was aware, there was no relevant audit information of which the Company’s auditor
was unaware; and
that Director had taken all steps that the Director ought to have taken as a director to make himself or
herself aware of any relevant audit information and to establish that the Company’s auditor was aware of
that information.
•
This information is given and should be interpreted in accordance with the provisions of section 418 of Companies
Act 2006.
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Alba Mineral Resources plc
DIRECTORS’ REPORT
AUDITORS
The auditors, PKF Littlejohn LLP, have indicted their willingness to continue in office, and a resolution that they
be re-appointed will be proposed at the annual general meeting.
FINANCIAL INSTRUMENTS AND RISKS
The disclosure relating to financial instruments and risks have been included in the Notes to the financial
statements (Note 22).
CORPORATE GOVERNANCE
The Board follows the Quoted Companies Alliance Corporate Governance Code. For further details see page 14.
EVENTS AFTER THE REPORTING PERIOD
See Note 25 and the Chairman’s Statement from page 2.
FUTURE DEVELOPMENTS
See Chairman’s Statement “Outlook” on page 5.
Approved by the Board of Directors and signed on behalf of the Board
George Frangeskides
Director, 4 May 2023
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Alba Mineral Resources plc
STATEMENT OF DIRECTORS’ RESPONSIBILTIES
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial period. Under that law the
Directors have elected to prepare the Group and parent company financial statements in accordance with UK-
adopted international accounting standards. Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period.
In preparing those financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
•
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable UK-adopted international accounting standards have been followed subject to
any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Company/Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group
and Company and enable them to ensure that the financial statements comply with the Companies Act 2006 and,
as regards to the Group Financial Statements, Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
13
Alba Mineral Resources plc
CHAIRMAN’S STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
The Board of Alba Mineral Resources plc (“Alba” or the “Company” and, together with its subsidiaries, the “Group”) is
responsible for the direction and oversight of all of the Company’s activities. The Board seeks, through effective and efficient
decision-making, to ensure that the Company is managed for the long-term benefit of all shareholders. Ensuring good
standards of corporate governance is an important part of the Board’s role, with the twin objectives being to reduce risk and
at the same time to add value to our business. The Chairman of the Board is responsible for ensuring the Board functions
effectively, particularly with regards to Corporate Governance matters.
The Board adopted the Quoted Companies Alliance Corporate Governance Code (the “Code”) in line with the changes to the
AIM Rules for Companies (“AIM Rules”) requiring all AIM-quoted companies to adopt and comply with a recognised
corporate governance code. The Code is available at www.theqca.com. The Code sets out 10 principles that should be
applied. How Alba complies with those principles currently is set out below. As required by the Code, we will provide annual
updates on our compliance with the Code.
At this stage in the Company’s development, the Board does not fully comply with the principle of the Code which concerns
the composition of the Board (see Principle 5). As projects and investments are advanced and as resources allow, the Board
will actively seek to move towards full compliance with the Code.
Principle 1: Establish a strategy and business model which promote long-term value for shareholders
Alba owns and operates mining projects in Wales (gold) as well as having investments in the onshore UK oil and gas sector
and in GreenRoc Mining plc, a Greenland-focused exploration company established and listed on AIM (LON: GROC).
The Board believes that the Group’s strong asset and investment portfolio provides access to a range of assets with potential
to add significant value for the Company’s shareholders in the long-term. Our strategy, where possible, is to target assets
that have a production history in stable jurisdictions, and which thereby offer real potential to be brought into commercial
production.
The key challenge for the Company is identifying the most effective, including the most cost-effective, methods for
progressing mineral exploration activities at our projects. Our aim is to materially advance the level of knowledge and
confidence in the potential of our projects in order to support committing further resources to progress those projects rapidly
through exploration and into the development phase. The expertise of the current Board and management team, and the
breadth of their contacts within the natural resources sector, will assist the Company in meeting this challenge.
Principle 2: Seek to understand and meet shareholders’ needs and expectations
The Board appreciates that it is accountable to shareholders for the performance and activities of the Company and, to this
end, is committed to providing effective communication with Alba shareholders. We publish all regulatory news promptly
through the London Stock Exchange’s Regulatory News Service (“RNS”) and on our website. Shareholders and other
interested parties can subscribe to automatic RNS updates via our website.
The Group is also active on social media via Twitter @AlbaMinerals, and the Executive Chairman regularly participates in
interviews on investment channels such as Vox Markets including Q&A sessions. The Group also hold occasional investor
webinars.
Shareholders can contact the Company via info@albamineralresources.com or ir@albamineralresources.com, or directly via
a contact form on our website . The Board welcomes feedback from shareholders as this helps Alba to better communicate
our activities and, where possible, to deal with any misconceptions in the investment market. We are constrained, however,
when responding to shareholder enquiries, by the requirements of the AIM Rules, and in particular the need to avoid making
selective disclosure of material information.
The Board maintains regular contact with the Company’s advisers, notably our Nominated Adviser (or “Nomad”), SPARK
Advisory Partners, and our retained broker, CMC Markets, which also assists the Company in understanding the views of
shareholders and the wider investment market.
14
Alba Mineral Resources plc
CHAIRMAN’S STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Board acknowledges that the long-term success of the Company is reliant on the efforts of employees and contractors,
suppliers and other stakeholders. As a natural resources company, we feel that we have a responsibility to engage openly,
transparently and effectively with community stakeholders and local and national government agencies in the countries in
which we conduct operations. The Board is keen to maintain an open dialogue and co-operation with key stakeholders as
the Company seeks to advance its projects and investments.
Our operations in Wales are undertaken in accordance with all applicable planning, environmental and ecological regulations,
and we work closely with the NWMWPS, SNPA and NRW on those matters. In Wales we engage with local residents via
regular meetings, open days, school visits, dual-language communications, sponsorship of a local football club and we
maintain a staffed local office. For more information relating to activities in Greenland, see the Report and Accounts of
GreenRoc Mining plc, published on their website and via RNS.
Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation
The Board identifies, assesses and manages various risks in its decision-making and constantly evaluates the Company’s risk
tolerance as part of its strategy as an exploration company. These range from financial and legal risks, to environmental,
exploration, regulatory and management risks. The Board will also seek consultation with experts in any area where a
particular risk is identified.
The financial risks to the Company are addressed in the 2022 Report and Accounts in Notes 1 and 22 to the accounts. This
covers funding risk, credit risk, liquidity risk and market risk, all areas which are monitored closely by the Board with a
particular focus on funding risk.
Environmental and exploration risks are considered at a project level and are constantly under review as project work is
planned and undertaken. Some elements of regulatory risk are also project-specific and would be included within that
review.
Regulatory risk at a corporate level is addressed annually during production of the Company’s Report and Accounts and also
at other times such as when notices are received from relevant regulatory bodies. This point is addressed further in Principle
10.
Management risks are mitigated by attracting talent and providing stability and continuity through appropriate remuneration
and the awarding of long-term share options, plus a culture of openness within the team, so that all members of the
management team feel comfortable in raising any issues with the Board and Chairman.
The Directors acknowledge their responsibility for the Group’s systems of internal controls and for reviewing their adequacy
and effectiveness. These internal controls are designed to safeguard the assets of the Group and ensure the reliability of
financial information for both internal and external use and publication.
Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair
The Board comprises the Executive Chairman and two Non-Executive Directors, Elizabeth Henson (independent) and Mike
Nott, who is not considered to be independent.
The Board is aware that it is not currently compliant with the Code in respect of not having two independent Non-Executive
Directors, and in having an Executive Chairman fulfilling the role of Chief Executive. The Directors believe that this is
appropriate at this stage of the Company’s development but both aspects are kept under regular review with a view to
moving to full compliance once the Company has achieved a significant, sustained increase in its market capitalisation.
The Board has a wide range of experience directly related to the Group and its activities and its structure ensures that no
one individual dominates the decision-making process. The Board also regularly seeks third-party expert advice to support
its decisions.
The Board meets on an ad-hoc basis as decisions are required, with update Board meetings also held periodically. During the
year, five scheduled Board meetings were held and all three Directors attended. Various additional ad-hoc meetings took
place to approve specific actions.
15
Alba Mineral Resources plc
CHAIRMAN’S STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
Each of the Directors has entered into a Service Contract or Letter of Appointment with the Company. Under the terms of
these agreements, each Director has agreed to devote such time and attention as is necessary to carry out his or her
responsibilities and duties as a director.
Principle 6: Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Board currently consists of three Directors and, in addition, the Company employs Ben Harber of Shakespeare Martineau
LLP to act as Company Secretary. The Directors have a range of technical, commercial and professional skills and the majority
have experience in the public markets. The Board also engages technical advisers whose specialism is in either mining or oil
and gas and who are thereby able to assist the Board in making effective decisions in relation to the Company’s projects and
investments. The Group employs a COO and CFO.
Further information about the Directors’ experience, skills, capabilities and personal qualities is published on our website
and on page 18 below. The Directors attend industry forums and conferences in addition to maintaining strong links within
the minerals and investment communities through regular networking. The Company subscribes to mineral and mining
publications for internal use and Directors are encouraged to maintain individual continuing professional education
programmes in their respective disciplines.
In addition to its COO, CFO and technical advisers (about whom further details can be found on the “Board and Management”
page of the Company’s website and in the latest corporate presentation, also found on the Company’s website), the Company
retains the services of auditors in the UK, a Nomad, broker and solicitors (for details see page 1). GreenRoc Mining plc also
retains auditors and solicitors in Greenland.
Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
Internal evaluation of the Board and individual Directors is undertaken on an ad-hoc basis in the form of peer appraisal and
discussions. A further evaluation, in the form of a questionnaire-type assessment tool is undertaken annually.
Given the current size of the Company, Board and senior management appointments are infrequent and subject to the
individual being the right “fit” for the Company. The Board seeks prospective candidates via its network of contacts in the
industry in the first instance and then via professional search agencies if required.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that it has a responsibility to set the corporate culture of the Company as a whole, and that sound and
ethical behaviour will contribute to the success of Alba’s projects and reputation. The Company operates internationally and
as such is mindful of local cultures and practices when planning and carrying out activities. The Board also has in place an
approved anti-bribery and whistle-blowing policy. Given the size of the Company, Alba’s management remains close to the
day-to-day operations and therefore better able to oversee the activities of the Company’s representatives. As the Company
grows, the Board will oversee the development of guidance on the Company’s policies to be issued to new employees and
contractors.
The Company has in place a share dealing policy for dealings in shares by Directors and senior employees in line with the
framework set by the AIM Rules and the UK Market Abuse regime (“MAR”) and also requires adherence to the same by key
suppliers. In addition to abiding by the AIM Rules, as Alba operates in the natural resources sector, the AIM Note for Mining
and Oil and Gas companies is applicable.
Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the
Board
Ultimate authority for all aspects of the Company’s activities rests with the Board. While the roles of Chairman and Chief
Executive are not separated, the Board receives regular updates on activities both formally and informally and has
unrestricted access to management and to the technical advisers of the Company. Each Board member also has access to
the Company’s solicitors and any independent professional advice they might need to discharge their duties effectively.
The Executive Chairman is the leading representative of the Company, presenting the Company’s strategy to external
interested parties. His responsibilities also include taking the Chair at Board Meetings and at General Meetings, where he is
responsible for ensuring the appropriate supply of information. The Executive Chairman is also responsible for the
development and execution of the Company’s long-term strategy, overseeing matters pertaining to the running of the
Company and ensuring that the Company meets all legal requirements and corporate responsibilities. The Non-Executive
Directors do not have specific individual responsibilities or remits.
16
Alba Mineral Resources plc
CHAIRMAN’S STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
All Directors sit on the Remuneration Committee, although a director whose performance, remuneration and employment
terms are due to be discussed at such a meeting shall absent himself or herself from the discussion and not vote on any
proposed terms which relate to him or her. The Remuneration Committee reviews the performance of the Executive
Director(s) and makes recommendations to the Board on matters relating to their remuneration and terms of employment.
The Remuneration Committee also considers and approves the granting of share options pursuant to the Company’s share
option plan and the award of shares in lieu of bonuses pursuant to the Company’s remuneration policy.
The Audit Committee comprises Mike Nott, Elizabeth Henson and the Group’s CFO Sarah Potter, a chartered accountant.
The Executive Chairman attends the Audit Committee by invitation. The Committee meets a minimum of twice per year and
has met twice in the reporting period in order to consider matters within its remit.
The principal duties and responsibilities of the Audit Committee include:
– Overseeing the Company’s financial reporting disclosure process; this includes the choice of appropriate accounting
policies.
– Monitoring the Company’s internal financial controls and assess their adequacy.
– Reviewing key estimates, judgements and assumptions applied by management in preparing published financial
statements.
– Annually assessing the auditor’s independence and objectivity.
– Making recommendations in relation to the appointment, re-appointment and removal of the company’s external
auditor.
Given the size of the Board, there is no separate Nominations Committee and therefore recommendations for appointments
to the Board are considered by the Board as a whole.
Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders
and other relevant stakeholders
For details of the various channels Alba uses for communicating with shareholders, see Principle 2 above.
The results of voting on resolutions proposed at the Company’s AGM are reported via RNS and recorded in the “News”
section on the Company’s website.
In the past five years, there has been no significant level of votes cast against any resolutions put to shareholders at the
Company’s AGM (where “significant” would mean at least 20 per cent of the votes cast being against a particular resolution).
Historical annual reports and half-yearly results can be accessed via the Company’s website under “Reports and Accounts”.
Final results and interim results are also released via RNS and therefore also reported in the “News” section of the website.
17
Alba Mineral Resources plc
CHAIRMAN’S STATEMENT OF COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE CODE
BOARD OF DIRECTORS
George Frangeskides, Executive Chairman
Mr Frangeskides has a broad range of experience gained from over 25 years in the legal and corporate advisory
sectors in Australia and the United Kingdom. Prior to working in the mining sector, Mr Frangeskides practised as
a lawyer in London and Sydney focusing on corporate finance, commercial and capital market transactions.
With his experience in mergers and acquisitions, Mr Frangeskides leads all corporate negotiations for the
Company. He has an extensive network of contacts across the mineral exploration and investment sectors in the
UK, Asia-Pacific, North America, Middle East and Far East regions, giving the Company wide exposure to both
investors and potential investments.
A confident communicator, Mr Frangeskides regularly makes presentations about the Company and projects to
the media and to shareholders.
Michael Nott, Non-Executive Director
Mr Nott is a geologist and mining engineer by profession and has over 40 years’ experience in the oil and gas,
mining, minerals and quarrying industries. His early career was based in Zambia, including eight years with Roan
Consolidated Mines Limited. He was a regional manager for Pioneer Aggregates (UK) Limited, then an Australian
company, and later a director of Jay Minerals Services Limited and Hills Aggregates Limited, becoming trading
director of ARC (Southern) Limited and production director of C. White Limited.
Mr Nott draws on his extensive experience of both the mining industry and the corporate world to offer pragmatic
advice to the Company.
Elizabeth Henson, Independent Non-Executive Director
Ms Henson was previously a senior international tax partner for PricewaterhouseCoopers LLP (PwC), based in
London. She was the Founder and Leader of PwC UK’s International Wealth business and is considered a leader
in her field and has an established and substantial contact base consisting of some of the wealthiest
entrepreneurs and high net worth individuals from the UK and across the globe.
Ms Henson was the 2018 Spears Private Client Accountant of the Year and won the Citywealth Powerwomen
Awards Silver award for Woman of the Year – Leadership (Large, Institutional) in 2016, 2018 and 2019, among
other awards. She has a huge amount of professional experience across a wide range of sectors and countries
and her advice and input will benefit the Group as it looks to grow. Her financial background adds to the strength
and depth of the Board.
18
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
Opinion
We have audited the financial statements of Alba Mineral Resources Plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 30 November 2022 which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial
Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent
Company Cash Flow Statements and notes to the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted
International Accounting Standards and as regards the parent company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 30 November 2022 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted International
Accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and parent company in accordance with
the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to note 1b in the financial statements, which indicates that the Group’s current cash resources
are insufficient to enable the Group to meet its recurring outgoings and projected exploration expenditure for the
twelve months from the date of approval of the financial statements. The Group incurred a net loss of £2,605,000
during the year ended 30 November 2022 and has cash of £456,000 as at 30 November 2022. As stated in note 1b,
these events or conditions, along with the other matters as set forth in note 1b, indicate that a material uncertainty
exists that may cast significant doubt on the Group’s ability to continue as a going concern. The Group is reliant on a
successful fundraise by the Parent Company to fund its recurring outgoings and projected exploration expenditure
for the twelve months from the date that the financial statements are approved.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s
ability to continue to adopt the going concern basis of accounting included:
•
reviewing the cashflow forecast and budgets for the period to 30 November 2024 and the corresponding
assumptions used. This includes future fundraising, exploration costs, salaries and ongoing regulatory costs;
• discussions with management regarding the future plans and availability of funding; and
•
challenging management’s assumption of raising funds to support the operations of the Group and Parent
Company.
19
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatement. At the planning stage, materiality is used to determine the financial statement areas that are included
within the scope of our audit. Materiality applied to the group financial statements was £365,000 (2021: £400,000)
with performance materiality set at £225,500 (2021: £280,000). The benchmark for determining materiality of the
group was 3% of net assets, given that the most significant balances for the Group relate to the exploration and
evaluation assets, investments, cash and cash equivalents.
A benchmark of 70% for performance materiality during our audit of the group and parent company was applied as we
believe that this would provide sufficient coverage of significant and residual risks.
We agreed with the audit committee that we would report to them all audit differences identified during the course
of our audit in excess of £18,250 (2021: £20,000) for the group. We also agreed to report any other audit misstatements
below that threshold that we believe warranted reporting on qualitative grounds.
Materiality applied to the parent company’s financial statements was £328,500 (2021: £320,000) with performance
materiality of £229,950 (2021: £224,000). The benchmark for determining materiality of the parent company was 3%
of net assets, given that the most significant balances relate to investment in subsidiaries, investment in Horse Hill
Developments Limited and cash and cash equivalents. The parent company is the funding vehicle for the exploration
work carried out by the subsidiaries.
For the parent company, we agreed with the audit committee that we would report all individual audit differences
identified during the course of our audit in excess of £16,425 (2021:£16,000) together with any other audit
misstatements below that threshold that we believe warranted reporting on qualitative grounds.
Component materiality ranged from £60,000 to £328,500 (2021: £84,000 to £350,000), based on their individual net
assets.
An overview of the scope of our audit
In designing our audit approach, we determined materiality and assessed the risk of material misstatement in the
financial statements. In particular, we assessed the areas requiring the directors to make subjective judgements, for
example in respect of significant accounting estimates and judgements including the carrying value of evaluation and
exploration assets, intra-group balances and investments in subsidiaries and the consideration of future events that
are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
An audit was performed on the financial information of the group’s material operating components which, for the year
ended 30 November 2022, were located in the United Kingdom, Wales and Greenland.
GreenRoc Mining Plc, Obsidian Mining Limited, White Eagle Resources Limited, GMOW (Operations) Limited and Alba
Mineral Resources plc have been assessed as significant components of the group and therefore we designed
procedures focused on exploration cost capitalisation and valuation of the exploration assets in accordance with IFRS
6. This work was significant in addressing our key audit matter in respect of capitalised exploration costs and valuation
of explorations assets in which the group’s exploration costs are recorded.
20
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section we have determined
the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
How the scope of our audit responded to the key audit
matter
Carrying value of capitalised exploration costs (group)
As at 30 November 2022, the group held £8,450k of
intangible assets, comprising capitalised exploration
costs. This is a material amount in its Consolidated
Statement of Financial Position.
There is a risk that these assets have been incorrectly
capitalised in accordance with IFRS 6 -Exploration for
and Evaluation of Mineral Resources (“IFRS 6”), and
that there are indications of impairment as at 30
November 2022 which have not been identified by
Management. Management's assessment of
impairment under IFRS 6 requires significant
estimation and judgement particularly in relation to
early-stage exploration projects.
There is a risk that the carrying value of these
intangible assets could be overstated (refer to notes 2
and 10).
We performed the following procedures:
• Confirmed that the subsidiaries hold good title to
the licence area;
This
subsidiaries.
• Performed tests of detail
in respect of the
capitalised costs relating to the licences of the
Greenland
included
considerations of the recognition criteria within
IFRS 6;
• Reviewed
challenged management’s
in respect of the
assessment of
subsidiaries. This included challenging the key
assumptions, data, and method to determine
whether any
in
accordance with IFRS 6;
indicators existed
impairment
impairment
and
• Discussed and challenged management as to the
status of the licence areas, results site work and
testing performed, and confirmed their future plans
for the licences;
• Reviewed management’s forecasts and budgets for
the licence areas and compared it to the required
minimum expenditure for the succeeding year; and
• Assessed progress of the individual projects during
the period and post year-end.
the
reasonable and
Based on the procedures performed, we consider
management’s judgements and estimates in respect of
the carrying value of their capitalised exploration costs
related disclosures
to be
appropriate. We do note that the Group is still awaiting
permission from Natural Resources Wales with regards
to its application for water transfer and discharge
permits and a European Protected Species licence, as
announced to the market by the Group via RNS on 27
March 2023. Management believes
the
applications will be successful and therefore no
impairment has been recognised with respect to the
that
21
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
Carrying value of investments in subsidiaries and intra-
group receivables (parent company)
The parent company holds material investments of
£6,955k in its Statement of Financial Position related
to its subsidiary undertakings. There are also material
intragroup balances of £1,550k as the parent company
funds operations in the subsidiaries.
Given the losses in the subsidiaries, there is a risk that
the investments in subsidiaries (where capitalised
exploration costs are the main asset) may not be fully
recoverable and therefore overstated (refer to notes 2
and 12). To a significant degree the carrying value of
the investments in subsidiaries is intrinsically linked to
the value of the capitalised exploration assets held
within them.
capitalised costs on the Clogau licence. Should the
applications be rejected, there is risk that the intangible
assets will be subsequently impaired.
We performed the following procedures:
• Confirmed ownership of the investments in
subsidiaries;
• Reviewed
and
challenged management’s
impairment assessments of the underlying assets of
the
IFRS 6
indicators on the licences held;
in accordance with
investments
• Assessed the intragroup balance receivables in
respect of the requirements set in IFRS 9 – Financial
Instruments (“IFRS 9”), through reviewing the
underlying terms and conditions;
• Obtained contracts and agreements, reviewing
terms and conditions to ensure the accounting
treatment
in accordance with UK-adopted
international accounting standards;
is
• Considered and assessed whether there were any
indicators of impairment;
• Reviewed management’s assessment of expected
in
receivables
intragroup
losses on
credit
accordance with IFRS 9 criteria; and
• Considered the appropriateness of the accounting
policies and disclosures included in the financial
statements.
Based on the procedures performed, we consider
management’s judgements on the recoverability of
investments and intragroup balances to be reasonable
and the related disclosures appropriate.
We performed the following procedures:
• Confirmed ownership of the investments;
• Reviewed the latest filed accounts of the parent
company of Horse Hill Developments Limited, being
UK Oil & Gas plc, and assessed whether there are
any indications of impairment;
22
in Horse Hill
Carrying value of
Developments Ltd and accounting treatment
in
accordance with IFRS 13 (group and parent company)
Investment
The group and parent company holds a material
investment of £2,600k in their Statements of Financial
Position relating to Horse Hill Developments Ltd. This
is classified as a level 3 hierarchy investment as the fair
value is not based on observable market data.
There is a risk that there are indications of
impairment as at 30 November 2022 which have not
been identified by Management. Management's
assessment of fair value under IFRS 13 - Fair Value
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
Measurement (“IFRS 13”), requires significant
estimation and judgement particularly as it is
classified as level 3.
There is a risk that the carrying value of the investment
in Horse Hill Developments Ltd is overstated (refer to
note 11).
• Reviewed the accounting treatment to ensure
classification and valuation is in accordance with
IFRS 9 and IFRS 13;
• Reviewed and challenged management’s basis of
fair value and accordingly obtained relevant
supporting documentation; and
• Considered the appropriateness of the accounting
policies and disclosures included in the financial
statements.
During our audit work the directors recorded an
impairment on the carrying value to reflect the value of
Horse Hill Developments recognised by its majority
owner, UK Oil and Gas plc. Details of this are disclosed
within note 11. We consider management’s judgements
in Horse Hill
on
Developments Ltd to be reasonable and the related
disclosures appropriate.
the valuation of
investment
Other information
The other information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the group
and parent company financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our
audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or
a material misstatement of the other information. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
to report to you if, in our opinion:
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
23
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation
of the group and parent company financial statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group’s
and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or
the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the group and parent company and the sector in which they operate to
identify laws and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through discussions with management, industry
research, application of our cumulative audit knowledge and experience of the sector.
• We determined the principal laws and regulations relevant to the group and parent company in this regard to
be those arising from Companies Act 2006, AIM rules, mining regulation in the relevant jurisdictions,
Employment Law, Anti-Bribery and Money Laundering Regulations and QCA Corporate Governance Code.
• We designed our audit procedures to ensure the audit team considered whether there were any indications
of non-compliance by the group and parent company with those laws and regulations. These procedures
included, but were not limited to:
o Enquiries of management regarding potential non-compliance;
o Review of legal and professional fees to understand the nature of the costs and the existence of any
non-compliance with laws and regulations;
o Review of minutes of meetings of those charged with governance and RNS announcements; and
o Review of accounting ledgers for any unusual journal entries which may indicate non-compliance
• We also identified the risks of material misstatement of the financial statements due to fraud. We considered,
in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls,
that the potential for management bias was identified in relation to the carrying value of the capitalised
exploration costs and investments as described in the Key Audit Matters section above.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business and review of bank statements during the period to
identify any large and unusual transactions where the business rationale is not clear.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases
the more that compliance with a law or regulation is removed from the events and transactions reflected in the
24
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALBA MINERAL RESOURCES PLC
financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater
regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery,
collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's
members as a body, for our audit work, for this report, or for the opinions we have formed.
Alistair Roberts (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
4 May 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
25
Alba Mineral Resources plc
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
Other income
Administrative expenses
Impairment expense
Operating loss
Revaluation of financial liability
Revaluation of investment
Finance costs
Loss for the year before tax
Taxation
Loss for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per ordinary share
Basic and diluted (pence)
Note
4
16
11
7
2022
£’000
-
(1,623)
(984)
(2,607)
2
-
-
(2,605)
-
(2,605)
2021
£’000
23
(1,067)
-
(1,044)
(180)
(615)
(1)
(1,840)
-
(1,840)
(2,039)
(566)
(2,605)
(1,699)
(141)
(1,840)
8
(0.031)
(0.027)
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
26
Alba Mineral Resources plc
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2022
Loss after tax
Items that may subsequently be reclassified to profit or
loss:
-
Foreign exchange movements
Total comprehensive income
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interests
2022
£’000
(2,605)
2021
£’000
(1,840)
-
(2,605)
(1)
(1,841)
(2,039)
(566)
(2,605)
(1,700)
(141)
(1,841)
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
27
Alba Mineral Resources plc
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 NOVEMBER 2022
Note
Non-current assets
Property, plant and equipment
Intangible fixed assets
Investments – Horse Hill Developments Limited
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Financial liabilities
Total current liabilities
Net current assets
Net assets
Capital and reserves
Share capital
Share premium
Warrant reserve
Dilution of ownership reserve
Other reserves
Retained losses
Foreign currency reserve
Equity attributable to equity holders of the parent
Non-controlling interests
9
10
11
13
14
15
16
17
5
18
2022
£’000
150
8,450
2,600
11,200
129
456
585
(464)
-
(464)
2021
£’000
137
6,110
3,385
9,632
178
3,948
4,126
(671)
(221)
(892)
121
3,234
11,321
12,866
5,076
10,461
1,187
991
136
(8,929)
168
9,090
2,231
5,005
9,877
1,425
991
89
(7,421)
168
10,134
2,732
Total equity
11,321
12,866
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
These financial statements were approved and authorised for issue by the Board of Directors on 4 May 2023.
Signed on behalf of the Board of Directors
George Frangeskides, Director, Company No. 05285814
28
Alba Mineral Resources plc
COMPANY STATEMENT OF FINANCIAL POSITION
30 NOVEMBER 2022
Note
2022
£’000
2021
£’000
Non-current assets
Investments – Horse Hill Developments Limited
Investments in subsidiaries
Loans to subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade and other payables
Total current liabilities
Net current assets
Net assets
Capital and reserves
Share capital
Share premium
Warrant reserve
Retained losses
Equity shareholders’ funds
11
12
12
13
14
15
17
2,600
6,955
1,550
11,105
3,385
6,616
1,195
11,196
111
322
433
104
663
767
(165)
(165)
(167)
(167)
268
600
11,373
11,796
5,076
10,461
1,187
(5,351)
11,373
5,005
9,877
1,425
(4,511)
11,796
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
The Company has taken advantage of the exemption allowed under Section 408 of the Companies Act 2006 and
has not included its own income statement and statement of comprehensive income in these Financial
Statements. The Company’s loss for the year was £1,341,000 (2021: a profit of £1,948,000).
These financial statements were approved and authorised for issue by the Board of Directors on 4 May 2023.
Signed on behalf of the Board of Directors
George Frangeskides, Director
Company No. 05285814
29
Alba Mineral Resources plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2022
Warrant Warrants to be
reserve
£’000
Dilution of
issued reserve ownership reserve
£’000
-
£’000
416
Other
reserves
£’000
-
Retained Foreign currency
reserve
£’000
169
losses
£’000
(6,153)
Attributable to Non-controlling
interests
equity holders
£’000
£’000
(16)
10,063
At 30 November 2020
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Shares and warrants issued
Shares issued in exchange for ownership
interests (not resulting in change in control)
Equity settled share-based payments
Transfer on exercise or expiry of warrants
Dilution of ownership (not resulting in
change in control)
Subsidiary equity settled share-based
payments
Total transactions with owners
Share
capital
£’000
4,984
Share
premium
£’000
9,360
-
-
-
7
14
-
-
-
-
-
-
-
162
355
-
-
-
-
1,287
-
-
-
416
-
153
(431)
-
-
-
-
-
(416)
-
-
-
-
-
21
517
138
(416)
At 30 November 2021
5,005
9,877
1,425
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Shares and warrants issued
Equity settled share-based payments
Transfer on exercise or expiry of warrants
Subsidiary equity settled share-based
payments
Total transactions with owners
-
-
-
71
-
-
-
71
-
-
-
584
-
-
-
584
-
-
-
176
87
(501)
-
(238)
At 30 November 2022
5,076
10,461
1,187
-
-
-
-
-
-
-
-
-
-
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
30
-
-
-
-
-
-
-
991
-
991
991
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
89
89
89
-
-
-
-
-
-
47
47
(1,699)
-
(1,699)
-
-
-
431
-
-
431
(7,421)
(2,039)
-
(2,039)
-
-
501
30
531
-
(1)
(1)
-
-
-
-
-
-
-
168
-
-
-
-
-
-
-
-
(1,699)
(1)
(1,700)
169
369
153
-
991
89
1,771
10,134
(2,039)
-
(2,039)
831
87
-
77
995
Total
£’000
10,047
(1,840)
(1)
(1,841)
169
376
153
-
(141)
-
(141)
-
7
-
-
2,806
3,797
76
2,889
165
4,660
2,732
12,866
(566)
-
(566)
-
-
-
65
65
(2,605)
-
(2,605)
831
87
-
142
1,060
991
136
(8,929)
168
9,090
2,231
11,321
Alba Mineral Resources plc
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2022
Notes
Share
capital
£’000
Share
premium
£’000
Warrant
reserve
£’000
Warrants to be
issued reserve
£’000
Retained
losses
£’000
Attributable to equity
holders of parent
£’000
At 30 November 2020
4,984
9,360
1,287
416
(6,890)
Profit for the year
Total comprehensive income for the year
Shares and warrants issued
Equity settled share-based payments
Transfer on exercise or expiry of warrants
Total transactions with owners
-
-
21
-
-
21
-
-
517
-
-
517
At 30 November 2021
5,005
9,877
Loss for the year
Total comprehensive income for the year
Shares and warrants issued
Equity settled share-based payments
Transfer on exercise or expiry of warrants
Total transactions with owners
-
-
71
-
-
71
-
-
584
-
-
584
At 30 November 2022
5,076
10,461
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
-
-
416
153
(431)
138
1,425
-
-
176
87
(501)
(238)
1,187
-
-
(416)
-
-
(416)
-
-
-
-
-
-
-
-
31
1,948
1,948
-
-
431
431
(4,511)
(1,341)
(1,341)
-
-
501
501
9,157
1,948
1,948
538
153
-
691
11,796
(1,341)
(1,341)
831
87
-
918
(5,351)
11,373
Alba Mineral Resources plc
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
Note
2022
£’000
2021
£’000
(2,607)
(1,044)
Cash flows from operating activities
Operating loss
Depreciation
Fees settled in shares
Impairment
Loss on disposal of oil & gas asset
Share based payment charges
Foreign exchange revaluation adjustment
(Decrease)/increase in creditors
Decrease/(increase) in debtors
Net cash used in operating activities
Cash flows from investing activities
Payments for exploration expenditure
Payments for tangible fixed assets
Net cash used in investing activities
9
13
Cash flows from financing activities
Proceeds from the issue of shares and exercise of warrants
Costs of issue
Proceeds from the issue of shares and warrants - GreenRoc
IPO transaction costs
Finance expense
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of year
14
7
-
984
-
228
-
(208)
49
(1,547)
(2,417)
(20)
(2,437)
522
(30)
-
-
-
492
(3,492)
3,948
456
5
32
-
9
237
(1)
386
(110)
(486)
(2,544)
(31)
(2,575)
1,295
(72)
5,075
(800)
(1)
5,497
2,436
1,512
3,948
Significant non-cash transactions in the period not reflected above are:
Consideration of £339,000 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 £214,000) plus the purchase of part of a royalty attached
to the project and settlement of some historic debts. See Note 5 for details.
The Accounting Policies and Notes on pages 34 to 58 form part of these financial statements.
32
Alba Mineral Resources plc
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 NOVEMBER 2022
Note
Cash flows from operating activities
Operating loss
Fees settled in shares
Impairment expense
Loss on disposal of oil & gas asset
5
Share based payment charge
Movement in the expected credit loss provision for loans to
subsidiaries
Foreign exchange revaluation adjustment
(Decrease)/increase in creditors
Decrease/(increase) in debtors
Net cash used in operating activities
Cash flows from investing activities
Loans granted to subsidiaries
Loan repayments received from subsidiaries
Net cash used in investing activities
12
Cash flows from financing activities
Proceeds from the issue of shares and exercise of warrants
Costs of issue
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of year
14
2022
£’000
(1,341)
-
785
-
87
15
-
(2)
(7)
(463)
(370)
-
(370)
522
(30)
492
(341)
663
322
2021
£’000
(265)
32
9
153
(454)
62
(98)
(72)
(633)
(1,925)
500
(1,425)
1,295
(72)
1,223
(835)
1,498
663
Significant non-cash transactions in the period not reflected above are:
Consideration of £339,000 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.
33
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
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 6th 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 £’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
•
• Amendments to IAS 37 Onerous Contracts (effective 1 Jan 2022) – Cost of Fulfilling a Contract
IFRS 17 and Amendments Insurance contracts (effective 1 Jan 2023)
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.
34
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (continued)
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.
35
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (continued)
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
o excluding the impact of any service and non-market performance vesting conditions (eg profitability, sales growth
including any market performance conditions (eg the entity’s share price)
o
targets and remaining an employee of the entity over a specified time period), and
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.
36
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (continued)
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
Loans to subsidiaries (Company only)
Investments
Financial liabilities
Trade and other payables
Borrowings
Other borrowings
Derivative financial instrument
Amortised cost
Amortised cost
At fair value through profit or loss (FVPL)
Amortised cost
Amortised cost
Amortised cost
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.
37
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (continued)
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: Initially 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.
38
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION (continued)
Taxation
i.
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.
Segmental information
j.
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 - £2,417,000
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.
39
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
Impairment assessment of exploration and evaluation costs – £8,450,000
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 £3,084,000 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 – £2,600,000
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 – £8,505,000
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 – £2,600,000
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.
40
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
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:
Total assets
Exploration and development
Oil and gas
Current assets
Capital expenditure
Exploration and plant
2022
£’000
8,600
2,600
585
11,785
2021
£’000
6,247
3,385
4,126
13,758
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:
Total assets
Republic of Ireland (fully impaired)
Greenland
England & Wales
Capital expenditure
Greenland
England & Wales
2022
£’000
-
5,343
6,442
11,785
2022
£’000
2,091
345
2,436
2021
£’000
-
3,451
10,307
13,758
2021
£’000
1,763
852
2,615
The administrative expenditure in the income statement primarily relates to central costs or exploration costs that cannot
be capitalised.
41
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
4. EXPENSES BY NATURE AND AUDITOR REMUNERATION
Auditor’s remuneration:
Current auditor (PKF Littlejohn LLP)
- Group audit services
- Subsidiary audit services
- Taxation advice
- Corporate finance services relating to
IPO (costs in equity)
- Taxation advise relating to IPO (costs in
equity)
Alba and
subsidiaries
£’000
GreenRoc
£’000
2022
£’000
39
-
3
-
-
42
35
-
9
-
-
44
74
-
12
-
-
86
2021
£’000
35
32
6
60
12
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:
Staff costs (note 6)
Professional fees and insurances
Consultancy not capitalised
Office, travel, PR, other
Forex
Depreciation
Settlement of historic claims
Administrative expenses
Other income
Government grants
Services provided
Alba and
subsidiaries
£’000
427
174
45
120
(17)
7
-
756
GreenRoc
£’000
534
217
9
107
-
-
-
2022
£’000
961
391
54
227
(17)
7
-
867
1,623
2022
£’000
-
-
-
2021
£’000
628
260
108
90
7
5
(31)
1,067
2021
£’000
7
16
23
42
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
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 ~£72,000 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 £39,000 via a Black Scholes formula. On the date of issue, the share price was
0.15 pence and therefore the effective consideration was £300,000.
The carrying value of the 10% put-and-call option was £214,000. 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
Resources plc
GreenRoc
Mining plc
Total Group
Alba Mineral
Resources plc
GreenRoc
Mining plc
Total Group
£’000
£’000
£’000
£’000
£’000
£’000
Directors’ fees, salaries and
pension (see table below)
Directors’ share based payments
Directors’ social security costs
Staff costs
Salaries and wages
Share based payment charges
Social security costs
Defined contribution pension
scheme
Fees classified as consultancy
Costs recharged to projects
Staff costs reported in
administrative expenses (Note 4)
185
56
16
221
31
25
5
(33)
(79)
427
54
69
7
295
72
27
10
-
-
534
239
125
23
516
103
52
15
(33)
(79)
961
220
114
19
247
31
26
5
(39)
(161)
462
54
16
4
71
23
7
1
-
-
166
274
130
23
318
54
33
6
(39)
(161)
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.
43
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
6. DIRECTORS’ EMOLUMENTS AND STAFF COSTS (continued)
Directors’ remuneration:
2022
2021
Fees Salaries Pension
FV of options
vesting
Total
Fees
Salaries
Pension
Bonus
FV of options
vesting
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
G.F.
36
115
Fees capitalised
(15)
M.C.N
E.H.
M.L.
L.B.
G.F. GreenRoc
6
6
-
-
-
L.B. GreenRoc*
n/a
Total
33
-
18
18
-
-
54
n/a
205
1
-
-
-
-
-
-
n/a
1
56
-
-
-
-
-
69
n/a
125
208
(15)
24
24
-
-
241
123
n/a
364
43
(15)
6
-
5
-
-
-
115
-
18
23
2
19
9
5
39
191
1
-
-
1
-
-
-
2
-
2
20
10
32
56
-
8
25
-
25
16
-
130
215
(15)
32
49
7
46
334
45
15
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 £50,000. 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.
44
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
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
United Kingdom corporation tax at 19% (2021: 19%)
Deferred taxation
b) Factors affecting tax charge for the period
2022
£’000
-
-
2021
£’000
-
-
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:
Loss before tax
2022
£’000
2021
£’000
(2,605)
(1,840)
Loss multiplied by standard rate of tax
(495)
(350)
Effects of:
Expenses not deductible
Deferred tax assets not recognised/capital allowances not claimed
235
260
-
201
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 £8,501,000 before
adjustments required by local tax rules and excluding losses on intra-group transactions (2021: £6,436,000).
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.
Loss attributable to group shareholders
2022
2021
£’000
(2,039)
£’000
(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)
45
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
9.
PROPERTY, PLANT AND EQUIPMENT
Group
Cost
At 1 December 2020
Additions
At 30 November 2021
Additions
At 30 November 2022
Accumulated Depreciation
At 30 November 2020 and at 1 December 2021
Charge for the year
At 30 November 2021
Charge for the year
At 30 November 2022
Net Book Value at 30 November 2022
Net Book Value at 30 November 2021
Land Plant, equipment
and vehicles
£’000
£’000
Total
£’000
85
-
85
-
85
-
-
-
-
-
85
85
26
31
57
20
77
-
(5)
(5)
(7)
111
31
142
20
162
-
(5)
(5)
(7)
(12)
(12)
65
52
150
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.
46
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
10.
INTANGIBLE FIXED ASSETS
Group
Cost
As 30 November 2020
Additions
Disposals
As 30 November 2021
Additions
At 30 November 2022
Amortisation and impairment
At 30 November 2020
Disposals
At 30 November 2021
Impairment charge 2022
At 30 November 2022
Net book value
At 30 November 2022
At 30 November 2021
Exploration and
evaluation
£’000
Development and
production
£’000
4,261
2,584
-
6,845
2,539
9,384
(735)
-
(735)
(199)
(934)
8,450
6,110
374
-
(374)
-
-
-
(374)
374
-
-
-
-
-
Total
£’000
4,635
2,584
(374)
6,845
2,539
9,384
(1,109)
374
(735)
(199)
(934)
8,450
6,110
The Group’s intangible fixed assets relate to the Welsh gold projects (Clogau, Dolgellau Gold and Gwynfynydd) (£3,107,000),
and the Greenland projects held by GreenRoc Mining plc (£5,343,000).
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 £199,000.
At the year end the amount of liabilities (being creditors and accruals) relating to the exploration and evaluation assets was
£265,000.
47
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
11.
INVESTMENTS
Group and Company
At 30 November 2020
Revaluation of investment
At 30 November 2021
Revaluation of investment
£’000
4,000
(615)
3,385
(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.
48
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
12.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Investments
Notes
Company
At 30 November 2020
Additions – purchase of minorities
5
Additions – expenditure
Repayments
Disposals to another group company
Additional holding in subsidiary as
consideration, net of costs
Foreign exchange movements
Adjustment to Expected Credit Loss
provision
Impairment of intercompany loan
At 30 November 2021
Additions – purchase of minority and
royalty
Additions – expenditure
Impairment of intercompany loan
£’000
298
370
-
-
(668)
5,500
-
-
-
5,500
-
-
-
Capital
Contributions
£’000
Loans
Total
£’000
£’000
1,116
1,341
-
1,965
(500)
2,755
370
1,965
(500)
(2,003)
(2,671)
-
(49)
417
24
5,500
(49)
417
24
-
-
-
-
-
-
-
-
1,116
339
-
-
1,195
7,811
-
370
(15)
339
370
(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.
49
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
12.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS (continued)
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
incorporation
Holding at 30
November 2022
Nature of
holding
Holding at 30
November 2021
Business
Aurum Mineral Resources Ltd
Ireland
Mauritania Ventures Limited
England & Wales
Dragonfire Mining Limited
England & Wales
Gold Mines of Wales Limited
Jersey
GMOW (Holdings) Limited
England & Wales
GMOW (Operations) Limited
England & Wales
GMOW Gwynfynydd Limited
England & Wales
GreenRoc Mining plc
Obsidian Mining Limited
White Eagle Resources
Limited
England & Wales
England & Wales
England & Wales
White Fox Resources Limited
England & Wales
100%
50%
100%
100%
100%
100%
100%
54%
54%
54%
54%
Direct
Direct
Direct
Indirect
Indirect
Indirect
Direct
Direct
Indirect
Indirect
Indirect
100%
Exploration
50% Non-trading
100%
Exploration
90%
90%
90%
Holding Co.
Holding Co.
Exploration
100%
Exploration
54%
Parent
54% (indirect)
54% (indirect)
54% (indirect)
Exploration
Exploration
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 3rd 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.
50
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
13.
TRADE AND OTHER RECEIVABLES
Current
Other debtors
Prepayments and accrued income
Group
2022
£’000
109
20
Group
2021
£’000
159
19
Company
2022
£’000
92
19
Company
2021
£’000
88
16
129
178
111
104
The fair value of trade and other receivables approximates to their book value.
14.
CASH AND CASH EQUIVALENTS
Cash at bank and in hand
The fair value of cash at bank is the same as its carrying value.
15.
TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors
Accruals and deferred income
Group
2022
£’000
456
Group
2021
£’000
3,948
Company
2022
Company
2021
£’000
£’000
322
663
Group
2022
£’000
222
15
227
464
Group
2021
£’000
481
13
177
671
Company
2022
£’000
81
15
69
165
Company
2021
£’000
80
13
74
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
Financial Liabilities
At 30 November 2019 and 2020
Revaluation recognised in the profit and loss
At 30 November 2021
Released as part of 10% minority purchase
At 30 November 2022
£’000
7
-
7
(7)
-
Derivative financial
instrument
£’000
34
180
214
(214)
-
Total
£’000
41
180
221
(221)
-
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.
51
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
17.
CALLED UP SHARE CAPITAL
Issued, allotted and fully paid
Ordinary shares of 0.1 pence
Ordinary shares of 0.01 pence
Deferred shares of 0.9 pence
2022
Number
of shares
2022
£’000
2021
Number
of shares
-
7,121,568,996
93,070,100
712 6,404,645,919
838
93,070,100
B deferred shares of 0.09 pence
3,918,351,946
3,526 3,918,351,946
Total
11,132,991,042
5,076 10,416,067,965
2021
£’000
-
641
838
3,526
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 £1,000,000 on each such share.
During the year the Company issued ordinary shares as follows:
Ordinary shares Deferred shares Share premium
Total
Ordinary shares
of 0.01 pence
6,404,645,919
£’000
641
£’000
4,364
At 1 December 2021
September issue of shares as
consideration for 10% minority
acquisition
September exercise of warrants
November placing net of fees
November placing warrants
valuation
At 30 November 2022
200,000,000
16,923,077
500,000,000
20
1
50
-
-
-
£’000
9,877
280
20
420
(136)
£’000
14,882
300
21
470
(136)
712
4,364
10,461
15,537
Warrants
809,286,713
250,000,000
81,930,830
-
(16,923,077)
(244,363,636)
879,930,830
Warrants
reserve
£’000
1,425
136
39
87
(13)
(487)
1,187
At 1 December 2021
Warrants granted with placings
Warrants issued as consideration
Warrants vesting (counted in brought forward balance)
Warrants exercised
Warrants expired/waived
At 30 November 2022
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.
52
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
17.
CALLED UP SHARE CAPITAL (continued)
As at 30 November 2022 Alba had 879,930,830 warrants and options outstanding:
No. of warrants
60,000,0001
60,000,0002
50,000,0003
200,000,0003
Exercise price (pence)
0.4 pence
0.42 pence
0.16 pence
0.16 pence
160,000,000
10,000,000
8,000,0004
91,930,830
250,000,000
879,930,830
0.75 pence
0.375 pence
0.5 pence
0.4 pence
0.2 pence
At 30 November 2022
Final exercise date
13 January 2027
2 May 2028
31 December 2023
28 August 2030
23 November 2022
1 December 2022
7 December 2023
31 August 2024
16 November 2024
Vested
Awarded under the EMI scheme. Vested.
Awarded under the EMI scheme. Vested.
Partially vested.
Awarded under the EMI scheme.
Partially vested.
Vested.
Vested.
Vested.
Vested.
Vested.
As at 30 November 2021 Alba had 809,286,713 warrants and options outstanding:
No. of warrants
60,000,0001
60,000,0002
16,923,077
236,363,636
50,000,0003
200,000,0003
Exercise price (pence)
0.4 pence
0.42 pence
0.13 pence
0.55 pence
0.16 pence
0.16 pence
160,000,000
10,000,000
16,000,0004
809,286,713
0.75 pence
0.375 pence
0.5 pence
At 30 November 2021
Final exercise date
13 January 2027
2 May 2028
4 September 2022
20 September 2022
31 December 2023
28 August 2030
23 November 2022
1 December 2022
7 December 2023
Vested
Awarded under the EMI scheme. Vested.
Awarded under the EMI scheme. Vested
Vested
Vested
Partially vested.
Awarded under the EMI scheme.
Partially vested.
Vested.
Vested.
Partially vested.
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 £175,000. 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.
53
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
18.
NON-CONTROLING INTERESTS
Mauritania
Ventures Ltd
White Fox
Resources Ltd
GreenRoc
Mining plc
Total NCIs
£’000
At 30 November 2020
Acquisition of NCI
NCI arising from IPO
Share of loss for the year
Share of other reserves
At 30 November 2021
Share of loss for the year
Share of movement on other
reserves
At 30 November 2022
(9)
-
-
-
-
(9)
-
-
(9)
(7)
7
-
-
-
-
-
-
-
-
-
2,806
(141)
76
2,741
(566)
65
2,240
(16)
7
2,806
(141)
76
2,732
(566)
65
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 £19,000.
20.
CAPITAL COMMITMENTS
As at 30 November 2022, the Group / Company had commitments to spend at least £470,000 in the calendar year 2023 on
its Greenland licences (2021: £105,000), After taking into account credit from historic expenditure, the real commitments
for 2023 reduce to approximately £130,000 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.
54
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
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 £25,000 that was past due but not impaired (2021: £8,100). 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.
55
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
22.
FINANCIAL INSTRUMENTS (continued)
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
Financial assets
Investments at fair value through profit or loss:
Investment in HHDL (Note 11)
Held at amortised cost:
Trade and other receivables
Cash and cash equivalents
Intercompany receivables net of expected credit losses
Financial liabilities
Liabilities held at fair value through profit or loss:
Derivative financial instrument (Note 16)
Held at amortised cost:
Trade and other payables
Other financial liabilities
Group
Group
Company
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
2,600
3,385
2,600
3,385
109
456
-
159
3,948
-
3,165
7,492
92
322
1,550
4,564
88
663
1,195
5,331
-
214
237
-
237
494
7
715
-
96
-
96
-
93
-
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.
56
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
22.
FINANCIAL INSTRUMENTS (continued)
The Group’s financial instruments by valuation method:
Financial assets held at FVTPL
Investment - FV at 30 November 2021
Impairment expense in 2022
Investment - FV at 30 November 2022
Financial liabilities held at FVTPL
Derivative financial instrument (Note 16) – FV at 30 November 2021
Exercise of instrument in 2022
Derivative financial instrument (Note 16) – FV at 30 November 2022
Level 3
£’000
3,385
(785)
2,600
214
(214)
-
Total
£’000
3,385
(785)
2,600
214
(214)
-
For more information on the valuation bases see the relevant Notes referred to above.
Included in the value for HHDL are loans of £2,126,000 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 £2,000 (2021: £nil) 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 £36,000 (2021: £43,000). Of these fees, £15,000 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 £7,000 for historic expenses incurred on behalf of the Group. These
costs were accrued in prior periods.
57
Alba Mineral Resources plc
Notes to the Financial Statements for the year ended 30 November 2022
24.
RELATED PARTY TRANSACTIONS (continued)
As at the year-end £53,000 (2021: £44,000) was owed to Aetos Consulting Limited and £36,000 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 £6,000 for
consultancy services during the year including £1,500 accrued at 30 November 2022.
Ixia Advisers, a company controlled by Elizabeth Henson, a director of the Company, charged the Group fees of £6,000 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.
.
58