ALIEN METALS LIMITED
CONTENTS
Registered number: FC027089
ALIEN METALS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
ALIEN METALS LIMITED
CONTENTS
Company Information
Chairman’s Report
Directors’ Report
Statement of Directors’ Responsibilities
Corporate Governance Report
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Statement of Cash flows
Notes to the Financial Statements
Page
2
3
6
13
14
21
26
27
28
29
30
ALIEN METALS LIMITED
COMPANY INFORMATION
Directors
Registered Office
Company Number
Bankers
Nominated and Financial Adviser
Broker
Company Secretary
Independent Auditor
Registrars
Lawyers
Financial PR
Guy Robertson (Interim Executive Chairman)
Elizabeth Henson (Senior Independent Non-Executive Director)
Robert Mosig (Independent Non-Executive Director)
Craigmuir Chambers
PO Box 71
Road Town
Tortola
British Virgin Islands
VG1110
UK FC027089
BVI 1029783
HSBC Bank plc
70 Pall Mall
London
SW1Y 5EZ
Strand Hanson Limited
26 Mount Row
London
W1K 3SQ
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
SGH Company Secretaries Limited
6th Floor
60 Gracechurch Street
London
EC3V 0HR
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London
E14 4HD
Computershare Investor Services PLC
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Hill Dickinson LLP
No.1 St. Paul’s Square
Liverpool
L3 9SJ
Yellow Jersey PR Limited
85 Great Portland Street
First Floor
London
W1W 7LT
2
ALIEN METALS LIMITED
CHAIRMAN’S REPORT
Dear Shareholders,
I am pleased to present the Chairman's statement for Alien Metals Limited (the “Company”, “Alien Metals”, or “Alien”) for the
year ended 31 December 2023. The Company made significant progress during the year, particularly on the Hancock Iron
Ore Project, culminating in the publishing of the Development study in February 2024.
Project updates
Hancock Iron Ore Project:
The 90% owned Hancock Iron Ore Project (“Hancock” or the “Project”) is located 17 kilometres (“km”) north of the regional
iron ore mining hub of Newman, Western Australia. The geology of the area supports nearby world class iron ore mines and
the Company has an opportunity to build on the current high confidence JORC compliant mineral resources and ore reserves
to develop a long life, direct ship, high grade iron ore mine.
The Project has progressed significantly during 2023 culminating in the publishing of a development study (the “Development
Study”) in early 2024. Highlights from the Development Study include:
• MRE of 8.4Mt @ 60% Fe JORC Mineral Resource, including an upgraded Indicated Resource of 4.5Mt@ 60.2% Fe.
• Based on 8Mt of the Mineral Resource being converted to mining inventory, robust project financials of the base
case produced the following:
Initial development Capital Cost of A$28m
an average annualised EBITDA of A$39m
a pre-tax NPV10 of A$146m and a pre-tax IRR of 133%
o
o
o All in sustaining cost of US$85/t
o Production rate of 1.25mtpa
o
o Other key highlights from the Development Study include the following:
o High confidence in the Capital and Operational Costs with pricing received through the Early Contractor
involvement and Preferred Tenderer process resulting in up-to-date tendered pricing for more than 90% of
the Capital Costs and Operational Costs.
Initial production plan focussed on current 3.9Mt mining inventory with further upside to mine the entire
Mineral Resource of 8.4Mt and beyond to be realised through ongoing exploration upside. Further work
confirmed a 165% increase in Indicated Resources from 2.8mt to 4.5mt as part of an updated Mineral
Resource Statement.
o
Ore processing will utilise a mobile dry crushing and screening plant capable of producing 1.25Mt to 1.5Mt of 100%
fines product per annum on a single shift basis. Sprint capacity of the plant working on a double shift basis is up to
3.0Mt per annum.
•
Low start-up cost of A$28m capital including:
o A$18.0m for main roads intersection and access to Site,
o A$2.5m for site establishment and pre-production capital,
o A$6.5m of owners costs, working capital and contingency allowances.
• Reduction in costs achieved through the close proximity to the Mining Hub of Newman. The proximity allows the
Company to avoid extensive construction capital costs associated with airstrip, mining camp and associated
services.
• Provisional export capacity through the Port of Port Hedland has been secured and remains on track for final
approvals during the first half of 2024.
CSA Global conducted an independent review based on existing geological information and a site visit to express an opinion
about the Exploration Potential of the Hancock Project. Their findings included:
•
Tenement E47/3954: Significant exploration potential has been identified, in addition to the 8.4Mt Mineral Resource
outside of the known Mineral Resource area.
Tenement E47/3954: Walk up drill targets, with a potential to increase the existing Mineral Resource
•
• Hancock Project Tenements E47/3954 and E47/5001: Significant strike lengths of Weeli Wolli Formation BIF and
Boolgeeda Iron Formations identified and yet to be adequately explored.
• Alien has also separately completed an additional internal review of Project Tenement E47/5001, identifying
(interpreted from GSWA 250k mapping) significant underlying geological lithologies that are suitable hosts for iron
ore mineralisation and exploration potential.
• Success through accelerating exploration activities could therefore significantly increase the existing 8.4Mt JORC
Mineral Resources, resulting in potential for increases to planned production and mine life.
3
ALIEN METALS LIMITED
CHAIRMAN’S REPORT
Alien plans to conduct additional exploration during 2024 to target an increase in its Mineral Resource while preparing for the
mining development. During April 2024, the Western Australian Department of Mines granted the mining lease (M47/1633)
for the project, giving security of tenure for a 21 year term through to 17 April 2045, and allowing for site development to
commence in 2024, assuming the requisite funding has been secured.
The Company continued work on multiple fronts towards putting the Project into production.
In November, the Company signed a conditional, non-binding, Memorandum of Understanding with the Pilbara Ports Authority
for Iron Ore exports. This would provide access to the Utah Bulk Handling Facility, with multi-user berth in Port Hedland. The
Company has also substantially agreed the terms for a binding agreement, which would be subject to typical regulatory
approvals.
The Company executed a Native Title Project Mining Agreement with the Karlka Nyiyaparli Aboriginal Corporation RNTBC
(“KNAC”). This covers the Project and associated tenements. In addition, the signing of Heritage Agreements with (KNAC)
enabled the Western Australian Department of Mines, Industry Regulation and Safety to grant the Miscellaneous Licence
from the Great Northern Highway to the project.
During the year, the Company completed infill diamond core drilling (13 holes for 1,048.9 metres) at the high grade Sirius
Deposit in May 2023 with results released in July 2023 showing consistent grades of over 60% Fe with low levels of deleterious
elements. These results were included in the Mineral Resource Estimates included in the Development Study.
A Heritage Agreement with the PKKP Aboriginal Corporation RNTBC was also executed during the year for the Vivash Gorge
Project. This was done to facilitate the exploration of licence E47/3071 cooperatively with the Puutu Kunti Kurrama and
Pinikura people, whilst ensuring best practice protection of their cultural heritage.
Pinderi Hills Project:
Alien undertook a detailed review of historical data on the Elizabeth Hill mining lease during the year including site visits. The
review supports a significant opportunity for high-grade polymetallic mineralisation. The key base metals results of this review,
include:
-
-
-
-
1 metre (“m”) @ 3.98% Cu, 12 troy ounces (“ozt”) Ag, 0.95% Ni from 35m in EC002
1m @ 3.5% Cu, 125ozt Ag, 0.58% Ni from 2m in UGD063
5.2m @ 2.18% Ni, 166ozt Ag, 0.76% Cu from 3m in UGD069
1.05m @ 1.90% Ni, 114ozt Ag, 1.25% Cu, from 5.05m in UGD072
Some of these results extend outside of the known mineralisation zones and support potential extensions to the silver resource
envelope. In addition, following significant corporate activity targeting the region during the year, including the announced
SQM and Hancock Prospecting joint $1.7 billion bid for Azure Minerals and SQM’s announced strategic joint venture with
Novo Resources (ASX:NVO) for lithium, the Company undertook a preliminary review for lithium prospectivity within the
Pinderi Hills project which is in progress as at the date of this report.
Alien Metals engaged consultants to review the Munni Munni PGM project during the period with a view to potential joint
venture funding to enable the project to progress. The project area contains a historic JORC 2004 compliant resource of 24
million tonnes @ 2.9 grams per tonne (“g/t”) PGM and gold for 1.14 million ounces (‘moz’) palladium (‘Pd’), 0.83 moz Pt
(‘platinum’), 152 thousand ounces (“koz”) Au (“gold”) and 76 koz Rh (“rhodium”). Potential exists for a much larger, high value,
multi-commodity resource, many of which appear on critical mineral lists. Munni Munni represents one of the largest
undeveloped primary PGM Resources in Australia. Alien Metals newly appointed Board member, Robert Mosig, has intimate
knowledge of this project and will assist in development of plans to extract value.
Subsequent to year end, the Company through its wholly owned subsidiary Alien Metals Australia Pty Ltd, entered into a joint
venture with Errawarra Resources Ltd (ASX: ERW) in respect of the lithium rights on the Pinderi Hills Project.
Errawarra has the potential to earn up to a 50% interest in the lithium rights in the Project by spending up to A$4 million
with the first A$500,000 being by the way of a subscription for common shares in the capital of the Company. The
proceeds of the subscription will be applied to general working capital purposes:
• Stage 1: Errawarra will earn-in for a 25% participating interest in the joint venture by spending A$1m on the Project,
within 24 months of the date of entering into the Agreement; and
• Stage 2: Errawarra will earn-in for a further 25% participating interest in the joint venture by spending a further
A$2.5m on the Project , within 60 months of the date of entering into the Agreement.
At the conclusion of Stage 2, Errawarra’s interest in the Project will be 50% and from that point, the Parties will contribute
towards any Project related expenditure on a pro-rata basis. If Errawarra does not meet the required spend (as noted above)
in either Stage 1 or Stage 2, its interest in the joint venture will reduce proportionally. If AMA chooses not to contribute on a
pro-rata basis following the completion of Errawarra’s Stage 2 earn in, AMA’s 50% interest will dilute on a pro rata basis, and
in the event that AMA’s interest in the joint venture falls below 10%, its remaining holding will convert to a 2% gross revenue
royalty.
4
ALIEN METALS LIMITED
CHAIRMAN’S REPORT
Donovan 2 Copper-Gold Project:
Alien Metals is taking steps to divest its projects in Mexico given the strength of its Australian based portfolio.
Funding
The Company raised £2 million in August 2023, issuing 1,000,000,000 shares at 0.2 pence a share. In July 2023 the Company
executed a short-term funding facility for $1 million. $0.5 million of this facility was subsequently cancelled following the capital
raise in August 2023.
Subsequent to year end the Company entered into a further short term funding facility of A$2 million. This facility will meet
short-term capital requirements and contribute towards exploration and the ongoing review of strategic funding options to
maximise value for the Company's shareholders and stakeholders, including: Considering various longer -term financing
options, including continued discussions with strategic partners regarding offtake funding, debt, equity project funding in
connection with the Hancock Project and the Pinderi Hills PGM, silver and base metals project; and actively exploring the
potential for the sale or joint venture of non-core assets providing further funding for the Company.
Financial Results
Alien Metals Limited reported a loss for the twelve months ended 31 December 2023 of $3,721,000 (31 December 2022: loss
of $2,375,000).
Included in the 2023 financial results is non-cash share based payment expense of $216,000, a write down of the carrying
value of the Mexico exploration assets in the amount of $794,000, and the write down of other assets in the amount of
$140,000.
Board Changes
During the year Mr Guy Robertson (26 April 2023), Ms Elizabeth Henson (4 August 2023) and Mr Alwyn Vorster (4 August
2023) were appointed to the Board. Mr Vorster resigned subsequent to year end (15 March 2024) given other commitments,
however remains as an advisor on the Hancock project.
Mr Robert Mosig was appointed as a director on 15 March 2024.
Mr Daniel Smith (6 September 2023), Mr Mark Culbert (4 August 2023), Mr Jo Battershill (26 April 2023) and Mr Roderick
McIllree (30 June 2023) resigned as directors during the year.
Outlook
Looking ahead, we remain focused on delivering long-term value for our shareholders by continuing to advance our
exploration and development projects.
We will continue to prioritise safety, sustainability, and good governance in all our operations, as we work to create value for
all our stakeholders.
Conclusion
In conclusion, I would like to thank our employees, contractors, and shareholders for their continued support during the year.
We are pleased with the progress we have made, and we look forward to updating you on our achievements in the coming
year.
Yours sincerely,
Guy Robertson
Interim Executive Chairman
22 May 2024
5
ALIEN METALS LIMITED
DIRECTORS’ REPORT
The Directors present their Report, together with the Consolidated Financial Statements and Independent Auditor’s Report,
for the year ended 31 December 2023.
Principal Activities
The principal activity of the Group is to create and develop a multi-commodity portfolio of exploration and mining projects in
jurisdictions with established mining communities, stable political backgrounds, and where strong operational controls can be
assured.
The Group’s principal activities are in the premier Pilbara mining region of Western Australia.
Business Review
Alien Metals’ geological team continue to assess and identify projects that fit with the Group’s strategic objectives. Wherever
possible, the projects are acquired on a low-cost option basis whilst preliminary exploration is undertaken to assess the merits
of further work and with clear value drivers for shareholders and stakeholders alike.
Where preliminary studies show evidence of sufficient mineralisation, increasingly comprehensive studies and development
will be undertaken with a view to delineating a compliant mineral resource estimate in readiness for mine development or of
the potential sale of the asset to a producing mining company, at which time a significant premium over its acquisition and
development cost may be justified.
A detailed review of the business of the Group during the year and an indication of likely future developments may be found
in the Chairman’s Report on pages 3, 4 and 5.
Principal risks and uncertainties are discussed on pages 7 to 12.
Results and Dividends
The loss of the Group for the year ended 31 December 2023 amounts to $3,721,000 (31 December 2022: loss of $2,375,000).
The Directors do not recommend the payment of a dividend for the year (31 December 2022: Nil).
Directors and Directors’ Interests
The Directors who served during the year ended 31 December 2023 had the following beneficial interests in the shares of the
Company at year end.
31 December 2023
31 December 2022
Ordinary
Shares
Options
Performance
Rights
Ordinary
Shares
Options
Performance
Rights
Director
A Vorster*
12,500,000
65,000,000
G Robertson***
-
-
E Henson**
8,455,722
65,000,000
D J Smith*******
4,517,715
45,000,000
M C Culbert******
6,666,666
-
J L Battershill*****
-
50,000,000
R McIllree****
137,404,762 230,000,000
* Appointed 4 August 2023, resigned 15 March 2024
** Appointed 4 August 2023
*** Appointed 26 April 2023
**** Appointed 7 September 2022, resigned 30 June 2023
***** Resigned 26 April 2023
****** Resigned 4 August 2023
******* Resigned 6 September 2023
-
-
-
-
-
-
-
-
-
-
-
-
-
4,517,715
57,342,509
6,666,666
7,500,000
-
50,000,000
137,404,762
230,000,000
-
-
-
-
-
-
-
Further details on options can be found in Note 17 to the Financial Statements. Directors’ remuneration is disclosed in Note
20.
6
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Substantial shareholders
The substantial shareholders with more than a 3% shareholding at 29 February 2024 are shown below
Bennelong Limited
Windfield Metals Limited
Gilmore Capital Limited
Key Performance Indicators (“KPIs”)
Percentage
7.21%
5.92%
4.06%
The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based
on budget versus actual to assess the performance of the Group. The indicators set out below will be used by the Board to
assess performance over the period.
The three main KPIs for the Group are as follows. These allow the Board to monitor costs and plan future exploration and
development activities:
Cash and cash equivalents ($)
Administrative expenses as a percentage of total assets (%)
Exploration costs capitalised during the year ($)
2023
676,000
16%
1,708,000
2022
2,177,000
13%
3,029,000
Principal Risks and Uncertainties
Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more
than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on
the Group.
The financing, exploration, development and mining of any of the Company’s properties is subject to a number of factors
including the price of copper, silver, gold, lead, iron ore and zinc, laws and regulations, political conditions, currency
fluctuations, environmental regulations, hiring and retaining qualified people and obtaining necessary services in jurisdictions
where the Company operates.
The Board periodically carries out robust assessments of the emerging and principal risks facing the Company including those
that would threaten its business model, future performance, solvency or liquidity. The assessment includes a review of all
material controls including those which are related to finance, operations and compliance.
The Audit Committee is responsible for monitoring the effectiveness of the Company’s risk management and internal control
systems, and reports to the Board as required.
Alien Metals operates with a small team of key personnel and with open lines of internal communication. Where new risks
are identified, they are reported to the Company Secretary or the Board. Where practicable, a method of mitigation is
determined, and the risk together with any form of mitigation is presented to the Board for discussion.
The following is a brief discussion of those distinctive or special characteristics of the Company’s operations and industry
which may have a material impact or constitute risk factors in respect of the Company’s future financial performance.
Principal risks and uncertainties
Key risks
Strategic risks
Exploration
and
development
and
acquisitions
future
Description of risk
Mitigating factors
The Group's operations are subject to all of the hazards
and risks incidental to exploration, development and the
production of minerals, including damage to life or
property, environmental damage and legal liability for
damage, which could have a material adverse impact on
the business and its financial performance.
The Group may acquire additional mining concessions in
Australia or elsewhere in the world.
Our mineral
concessions are
evaluated carefully by qualified
geologists
independent
and
advisors are engaged as and when
appropriate.
The management
has
significant experience operating in
Australia.
team
7
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Key risks
Strategic risks
Description of risk
Mitigating factors
The Group may be unable to obtain suitable mining
concessions at competitive prices.
Any exploration programme entails risks relating to the
location of economic ore bodies, the development of
appropriate metallurgical processes,
the receipt of
necessary governmental permits and the construction of
mining and processing facilities.
that
the event
In
the Group’s portfolio of mining
concessions is deemed by management not to warrant
further exploration and the Group is unsuccessful in
acquiring suitable new projects, the Group will have no
exploration or development projects to pursue.
No reserves or
resources
The Group has announced its maiden mining reserve and
associated mining inventory.
No assurance can be given that any future exploration
programme will result in any new resources and or
discoveries.
The Group received an independent
assessment of the reserve resource
potential of the Hancock project and
believes that there is good potential
to delineate additional mineral
resources
in accordance with
JORC.
Key risks
Strategic risks
Mineral
concessions
and titles risks
Description of risk
Mitigating factors
In relation to exploration and mining concessions over
which the Group holds legal rights, if the Group fails to fulfil
the specific terms of any of its concessions or operates in
the concession areas in a manner that violates Mexican
or Australian mining law, regulators may impose fines,
suspend or revoke the concessions, any of which could
have a material adverse effect on the Group's operations
and proposed operations.
Ownership of the mineral concessions in Mexico has been
transferred from the Group’s former operating subsidiary
Alien Metals de Mexico SA de CV (“ASM”) to its new
operating subsidiary, Compañía Minera Estrella de Plata
SA de CV (“CMEP”). Whilst the Group has previously
received legal opinions in respect of title of ASM to its
properties. There is no guarantee that the title to such
properties will not be challenged or impugned by third
parties. The Group’s concessions could be subject to prior
unregistered agreements, transfers or other claims and
title could be affected by unidentified or unknown defects
or government actions. A formal legal opinion has not
been obtained as to the legal title of CMEP to the mineral
concessions.
The Group’s mineral concessions
have been registered in the name of
CMEP and no contest or objection
was received.
The Group is aware of necessary
minimum expenditure and annual
rental obligations
its
exploration and mining permits and
maintains the necessary payments
to
and expenditure obligations
negate any risk from this aspect.
for all
Prior to entering into agreements
relating
to mineral concessions,
formal searches and reviews of legal
documentation are conducted to
provide evidence of the legal owner,
including outsourcing of legal and/or
tenement due diligence to legal
practitioners.
31 December
At
the
exploration and evaluation assets in
Mexico had been written down to nil.
2023
Key risks
Financial risks
Requirement of
additional
financing
Liquidity risk
Description of risk
Mitigating factors
Failure to obtain sufficient financing for any projects would
result in a delay or indefinite postponement of exploration,
development or production on properties covered by the
Group's concessions or even the loss of a concession.
The Group has an experienced
Board and management team with
significant experience in financing
mining activities.
Additional financing might not be available when needed,
or if available, the terms of such financing might not be
favourable to the Group and could involve substantial
dilution to shareholders. In the absence of adequate
funding or cost reductions, the Group may not be able to
continue as a going concern.
The Group’s approach to managing liquidity risk is to
ensure that it will have sufficient liquidity to meet liabilities
The Group has been successful in
raising funds in the past and it is our
intention to raise additional funds in
future
the ongoing
to support
development of the business.
The Group ensures sufficient funds
will be available to allow it to meet its
8
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Key risks
Financial risks
Description of risk
Mitigating factors
Capital
management
risk
Price risk
Foreign
currency risk
Credit risk
when due. The Group’s accounts payable have
contractual maturities of less than 30 days and are subject
to normal trade terms. In the short-term, liabilities will be
funded by cash.
The Group’s objective when managing capital is to
safeguard the Group’s ability to continue as a going
concern and have access to adequate funding for its
exploration and development projects so that it can
provide returns for shareholders and benefits for other
stakeholders. The Group manages the capital structure
and makes adjustments in light of changes in economic
conditions and risk characteristics of the underlying
assets.
The price risk is the risk that the fair value or future cash
flows of a financial instrument will fluctuate because of
changes in market prices, whether those changes are
caused by factors specific to the individual financial
instrument or its issuer, or factors affecting all similar
financial instruments in the market.
The Group’s exploration expenditure is made in Mexican
pesos, Australian dollars or US dollars and head office
expenses are predominantly made in the UK in pounds
sterling. The Group is therefore exposed to the movement
in exchange rates for these currencies.
At the year end, the majority of the Group’s cash
resources were held in GBP and AUD. The Group
therefore also has downside exposure to any weakening
of GBP and AUD against the US dollar as this would
increase expenses in US dollar terms and accelerate the
resources. Any
depletion of
strengthening of GBP or AUD against the US dollar would,
however, result in a reduction in expenses in US dollar
terms and preserve the Group’s cash resources.
the Group’s cash
In addition, any movements in pounds sterling, Australian
dollars or Mexican peso would affect the presentation of
the consolidated statement of financial position when the
net assets of the Mexican and Australian subsidiaries and
the parent company in the UK are translated from their
functional currencies into US dollars.
The Group’s credit risk is primarily attributable to cash and
the financial stability of the institutions holding it.
The Group’s maximum exposure
is
attributable to cash. The credit risk on cash is limited
because the Group invests its cash in deposits with well
capitalised financial institutions with strong credit ratings.
to credit risk
commit
liabilities as they fall due. To achieve
this, cash balances and cash flow
projections are reviewed by the
Board on a regular basis. The Board
will not
to material
expenditures prior to being satisfied
that sufficient funding is available.
In order to maintain or adjust the
capital structure, the Group may
issue new shares, acquire debt, or
sell assets. Management regularly
to
flow
reviews cash
determine whether the Group has
sufficient cash reserves to meet
future working capital requirements
and to take advantage of business
opportunities.
The Group does not currently have
any financial instruments in issue
other
than share options and
warrants.
forecasts
The Group does not hedge its
exposure to price risk.
The Group does not currently hedge
foreign exchange risk.
There is not considered to be any
material exposure in respect of other
monetary assets and liabilities of the
Group.
The Group
deposits
financial
credit ratings.
invests
its cash
in
well-capitalised
institutions with strong
with
Investment risk The Group may from time to time hold shares in other
mining companies. There is not always a liquid market for
the shares in companies and it may not always be
possible to sell such shares at the optimum time or price.
The Group has previously been
successful in realising value from
investments.
Key risks
External risks
Metals prices
Description of risk
Mitigating factors
The Group’s ability to obtain further financing will depend
in part on the price of commodity prices, including copper,
silver, lead, iron ore and zinc, and the industry’s
perception of its future price. The Group's resources and
financial results of operations will also be affected by
It is an accepted risk that the
Group’s
be
impacted by the price of metals.
performance will
9
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Key risks
External risks
Description of risk
fluctuations in metal prices over which the Group has no
control.
A reduction in the metal prices could prevent the Group’s
properties from being economically mined or result in
curtailment of existing production activities or result in the
impairment and write-off of assets. The price of
commodities, which is affected by numerous factors
including inflation levels, fluctuations in the US dollar and
other currencies, supply and demand and political and
economic conditions, could have a significant influence on
the market price of the Company’s common shares.
Mitigating factors
The Board and management believe
the price of precious metals in
particular will increase in the long
term.
The Group does not hedge its
exposure to metals prices.
Key risks
Operational risks
Reliance
contractors
on
Key personnel
Environmental
factors
Description of risk
Mitigating factors
The Group relies on contractors to implement exploration
and development programmes. The failure of a contractor
or key service provider to properly perform its services to
the Group could delay or inconvenience the Group’s
operations and have a materially adverse effect on the
Group.
The Group has operated in Australia
and in Zacatecas in Mexico, for
several years and has well-
trusted
established
relationships
various
contractors.
and
with
The Group’s business is dependent on retaining the
services of a small number of key personnel of the
appropriate calibre as the business develops. The Group
has entered into employment agreements with certain key
managers. The success of the Group is and will continue
to be to a significant extent, dependent on the expertise
and experience of the directors and senior management.
The loss of one or more of these individuals could have a
materially adverse effect on the Group. The Group does
not currently have any insurance in place with respect to
key personnel.
The Group’s operations are subject to environmental
regulation in the jurisdictions in which it operates. Such
regulation covers a wide variety of matters including,
without limitation, prevention of waste, pollution and
protection of the environment, labour regulations and
health and safety. The Group might also be subject under
such regulations to clean-up costs and liability for toxic or
hazardous substances, which might exist on or under any
of the properties covered by its concessions, or which
might be produced as a result of its operations.
the Group does not comply with environmental
If
regulations or does not
impact
statements in relation to each of its concessions, it might
be subject
its operations might be
suspended, closed and/or its concessions may be
revoked.
file environmental
to penalties,
&
The Board has established a
Nomination
Remuneration
Committee which is responsible for
considering succession planning
is
and ensuring
sufficient to attract and retain staff of
the
The
Company also has the ability, and
track record, to attract new Directors
and personnel if and when required.
remuneration
necessary
calibre.
The Group has an experienced
Board and management team with
an awareness and knowledge of
these types of risk.
to
their acquisition
Concessions are evaluated carefully
prior
for
environmental risks and consultants
are engaged to advise on specific
risks when appropriate.
The Group has an excellent track
record on environmental matters.
Environmental legislation and permit requirements are
likely to evolve in a manner which will require stricter
standards and enforcement, increased fines and penalties
for non-compliance, more stringent environmental
assessments of proposed projects and a heightened
degree of responsibility for companies and their directors
and employees.
The Group’s activities could be subject to prolonged
disruptions due to weather conditions depending on the
location of operations in which the Group has interests.
The Group is conducting its exploration activities in the
Zacatecas region of Mexico, and in Western Australia.
The Group may be adversely affected by changes in
judicial, administrative or other
economic, political,
10
Political risk
believe
Directors
The
the
governments of Australia and
Mexico support the development of
foreign
natural
operators.
resources
by
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Key risks
Operational risks
Description of risk
Mitigating factors
from various
regulatory factors such as taxation in these jurisdictions,
where the Group operates and holds its major assets.
Mexico may have a more volatile political environment
and/or more challenging trading conditions than in some
other parts of the world. There is no assurance that future
political and economic conditions in Mexico will not result
in the government of Mexico adopting different policies in
respect of foreign development and ownership of mineral
resources. Any such changes in policy may result in
changes in laws affecting ownership of assets, taxation,
rates of exchange, environmental protection, labour
relations, and repatriation of income and return of capital.
These changes may affect both the Group's ability to
undertake exploration and development activities in
respect of future properties in the manner currently
contemplated, as well as its ability to continue to explore
and develop those properties, in respect of which it has
obtained exploration and development rights to date.
Under the mineral property concessions and certain other
contractual agreements to which a member of the Group
is, or may in the future become, a party, any such
company is, or may become, subject to payment and other
obligations. If such obligations are not complied with when
due, in addition to any other remedies which may be
available to other parties, this could result in dilution or
forfeiture of interests held by such companies.
The operations of the Group require approvals, licenses
and permits
regulatory authorities,
governmental and otherwise. There can be no guarantee
that the Group will be able to obtain or maintain all
necessary approvals, licenses and permits that may be
required to explore and develop its various projects and/or
commence construction or operation of mining facilities
that economically justify the cost.
The Group competes with numerous other companies and
individuals in the search for and acquisition of mineral
claims, leases and other mineral interests, as well as for
the recruitment and retention of qualified employees.
There is significant competition for the silver and other
precious metals opportunities available and, as a result,
the Group may be unable to acquire further mineral
concessions on terms it considers acceptable.
Certain directors and officers of the Group also serve as
directors and/or officers of other companies involved in
mineral exploration and development and consequently
there is the potential for conflicts of interest. The Group
expects that any such director or officer shall disclose
such interest in accordance with its articles of association
or his contractual obligations to the Group and any
decision made by any of such directors and officers
involving the Group will be made in accordance with their
duties and obligations to deal fairly and in good faith with
a view to the best interests of the Group and its
shareholders.
Alien Metals operates in an environment with work related
hazards and
injuries and accidents. A
comprehensive health and safety programme is the
primary means for delivering best practices in health and
safety management. This programme is regularly required
to be updated to incorporate employee suggestions,
lessons learned from past incidents and new guidelines
related to new projects with the aim of identifying areas for
further improvement of health and safety management.
This requires continuous improvement of the health and
safety programme. Employee involvement is recognised
as fundamental in recognising and reporting unsafe
risk of
11
Payment
obligations
Regulatory
approvals
Competition
Conflicts
interest
of
Health
Safety
and
The Directors have
in place a
system of internal controls to ensure
any
are
complied with.
obligations
payment
has
significant
The Group
experience in operating in Mexico
and Australia and believes that the
Group holds or will obtain all
necessary approvals, licenses and
permits under applicable laws and
regulations in respect of its current
projects.
The Group and its management
team have significant experience in
mining operations in Australia and
Mexico. Through its experience and
relationships, counterparties may
consider the Group to have lower
transaction risk than its competitors.
The Group’s Articles of Association
have been adopted by shareholders
and any conflicts of interest are dealt
with in accordance with the rules set
out therein.
In the event of a conflict of interests,
the conflicted director shall not vote
on the relevant matter.
environmental
The Group has established and
published robust corporate health,
safety,
and
community relations policies, and at
the operations level have put into
operating
place
procedures covering a variety of the
Group’s activities. The active
participation of all staff
the
development, implementation and
these
further development of
procedures is actively encouraged.
clear
safe
in
ALIEN METALS LIMITED
DIRECTORS’ REPORT
Key risks
Operational risks
Description of risk
Mitigating factors
conditions and avoiding events that may result in injuries
and accidents.
Internal Controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control
environment and any related shortfalls during the year. Since the Group was established, the Directors are satisfied that,
given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware
that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and
proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are
adequate and effective.
Going Concern
These financial statements have been prepared on a going concern basis, as set out in Note 2.4.
The Directors have prepared cash flow forecasts for the period ending 31 May 2025, which take into account the cost and
operational structure of the Group and Parent Company, planned exploration and evaluation expenditure, licence
commitments and working capital requirements. These forecasts indicate that the Group and parent Company’s cash
resources are not sufficient to cover the projected expenditure for the period of 12 months from the date of approval of these
financial statements. These forecasts indicate that the Group and Parent Company, in order to meet their operational
objectives, and expected liabilities as they fall due, will be required to raise additional funds within the next 12 months.
Whilst the Directors are confident that they will be able to secure the necessary funding, the current conditions do indicate
the existence of a material uncertainty that may cast doubt regarding the applicability of the going concern assumption and
the auditors have made reference to this in their audit report. The Directors are confident in the Company’s ability to raise
additional funds as required, from existing and/or new investors, within the next 12 months. Thus, they continue to adopt the
going concern basis of accounting in preparing these financial statements. The auditors make reference to going concern by
way of a material uncertainty over the ability of the Company and the Group to fund the forecasted expenditure.
Directors’ and Officers’ Indemnity Insurance
During the financial year, the Company maintained insurance cover for its Directors and Officers under a Directors’ and
Officers’ liability insurance policy. The Company has not provided any qualifying indemnity cover for the Directors.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
•
•
there is no relevant audit information of which the Company's auditor is unaware; and
the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.
Auditor
PKF Littlejohn LLP was appointed in the current year and signified its willingness to be reappointed in office as auditor.
This report was approved by the Board on 21 May 2024 and signed on its behalf.
Guy Robertson
Interim Executive Chairman
12
ALIEN METALS LIMITED
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with the applicable
law and regulations including the AIM Rules for Companies.
The Directors are required to prepare Financial Statements for each financial year. The Directors have elected to prepare the
Group’s Financial Statements in accordance with UK-adopted International Accounting Standards. 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 of the profit or loss of the Group for that period. In preparing these Financial Statements, the Directors are required
to:
• select suitable accounting policies and then apply them consistently;
• make judgments 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;
• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s
transactions and disclose with reasonable accuracy at any time the financial position of the Group. They are also responsible
for safeguarding the assets 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
Group’s website, https://www.alienmetals.uk. The Group is compliant with AIM Rule 26 regarding the Group’s website.
The Directors confirm that they have complied with the above requirements in preparing these Financial Statements.
13
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
The Board recognises the value and importance of maintaining the highest standards of corporate governance and is
committed to the principles and best practice of good corporate governance. In this regard the Directors have elected to
comply with the 2018 UK Corporate Governance Code (“the Code”) though there are a number of provisions which the Group
have not complied with due to it not being practical to do so, having regard to the size and stage of development of the Group.
The Directors remuneration is disclosed in Note 19.
Although the Code contains a set of five Principles that emphasise the value of good corporate governance to long term
sustainable success and focuses on the application of such Principles, it does not set out a rigid set of rules but instead offers
flexibility through the application of Principles and through “comply or explain” Provisions and supporting guidance.
The Company is small with a modest resource base. The Company has a clear mandate to optimise the allocation of limited
resources to support its development plans. As such, the Company strives to maintain a balance between conservation of
limited resources and maintaining robust corporate governance practices. As the Company evolves, the Board is committed
to enhancing the Company’s corporate governance policies and practices deemed appropriate for the size and maturity of
the organisation.
During the year the Board underwent a number of changes. The Board currently consists of three Directors: an Executive
Chairman, and two Non-Executive Directors (“NED”). The Board considers that appropriate oversight of the Group’s
provided by the currently constituted Board. The sections below set out the way in which the Group applies the Principles.
Principle 1: Board Leadership and Company Purpose
Alien Metals’ objective is to create a multi-commodity portfolio of exploration and mining projects in established mining
jurisdictions, stable political backgrounds and where strong operational controls can be assured.
The Company routinely evaluates mining projects in a wide array of world-class mining jurisdictions including Mexico
and Australia.
Where preliminary studies evidence sufficient mineralisation, increasingly comprehensive studies will be undertaken with
a view to delineating a compliant mineral resource estimate in readiness for the potential sale of the asset to a producing
mining company, at which time a significant premium over its acquisition and development cost may be justified.
The Executive Director is responsible for overseeing the long-term success and strategic direction of the Company
in accordance with the schedule of matters reserved for Board decision and is responsible for monitoring the activities
of the executive management.
The Board usually meets a minimum of four times a year but may meet more frequently on ad-hoc basis as and when
required. The Chairman is ultimately responsible for ensuring that each Board decision is taken having sufficient
information on and with all due discussion as is relevant to such decision. All Directors attended each meeting held during
the year.
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the
other commitments and interests of its Directors and changes to these commitments and interests are reported to, and,
where appropriate, agreed with the rest of the Board.
The Company has also adopted an Anti-Corruption and Bribery Policy to ensure compliance with the relevant laws
governing anti-corruption and anti-bribery as well as a Share Dealing Code for Directors and applicable employees to ensure
compliance with AIM Rule 21 and the provisions of the Market Abuse Regulations relating to dealings in the Group’s
securities.
Provision 5 of the Code recommends that the Board appoints a Director from the workforce, creates a formal
workforce advisory panel or appoints a designated Non-Executive Director to engage with the workforce. However, due
to the Group currently having a small number of employees, the Board does not consider this to be appropriate but at
such time as the size of the workforce increases, it will review the position and make any such appointments or take other
actions it considers appropriate.
Principle 2: Division of Responsibilities
The Group has a schedule of matters reserved for its own decision and two committees comprised entirely of Non-
Executive Directors: the Audit and Risk Committee (the “ARC”) and the Nomination and Remuneration Committee
(the “N&R Committee”, each with formally delegated duties and responsibilities set out in respective Terms of Reference.
The division of responsibilities between the Chairman and senior management is clearly defined in writing. However,
they work closely together to ensure effective decision making and the successful delivery of the Group’s strategy.
Each Director has a Letter of Appointment or a Services Agreement in place to ensure that they clearly understand
the requirements of the role. All Directors are required to allocate sufficient time to the Company to discharge their
responsibilities effectively.
14
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
Due to the size of the Board, the nomination of any one particular director to act as a Senior Independent Director, as
recommended by Code Provision 12, is not currently considered to be appropriate or improve the effective operation of the
Board. However, the matter is kept under review.
Provision 11 of the Code requires at least half the Board, excluding the Chairman, to be Non-Executive Directors whom the
Board considers to be independent. During the year the Alien Metals Board consisted of three Non-Executive Directors –
Daniel Smith, Mark Culbert and Jonathan Battershill – of which Mark Culbert was deemed to be independent by virtue of not
having been granted Options in the prior year. Daniel Smith and Jonathan Battershill were not considered to be independent
by virtue of each having been granted Options in the most recent award and as each were recompensed for the provision of
material consultancy services to the Company outside of their respective standard remuneration as Directors.
The change in Board during the year saw the appointment of an Executive Director, Guy Robertson, and two Non-Executive
Directors, Alwyn Vorster and Elizabeth Henson. Subsequent to the period end, on 15 March 2024, Rob Mosig was appointed
as a Non-Executive Director, replacing Alwyn Vorster, and Guy Robertson resumed his position as Executive Chairman on
an interim basis. On the same date, Elizabeth Henson assumed the role of Senior Independent Non-Executive Director.
Principle 3: Composition, Succession and Evaluation
During the year ended 31 December 2023, the Board comprised of one Executive Director and three Non-Executive Directors.
The Board established a N&R Committee and an ARC, each with formally delegated duties and responsibilities set out in
respective Terms of Reference, to assist with oversight and governance.
The Board and its advisers have significant experience in the mining sector and from that, a strong network of individuals
working in the sector. The N&R Committee leads the process for Board appointments and is responsible for review of the
Board size, structure and composition (both Executive and Non-Executive) including any potential new applicants to ensure
the Board contains the right balance of skills, knowledge and experience to manage and grow the business. The N&R
Committee will make recommendations to the Board on any proposed or suggested changes to the Board with a view on the
leadership needs of the business including succession planning.
The Board does not carry out a formal annual evaluation of its performance, its committees, the Chairman and individual
Directors, which is contrary to the recommendation of Code Provision 21.
However, the Chairman continuously considers the performance of the Board, its committees and of individual directors and
provides feedback when appropriate. Similarly, the Chairman invites feedback in the same manner from the Non-Executive
Directors and the Company Secretary.
The Board considers the time and cost involved in carrying out a formal process, especially one that is externally facilitated,
cannot be justified for the Company at this stage in its development. Nonetheless, the Board acknowledges the merits in
carrying out formal Board evaluations and will monitor the continuing suitability of this stance as the Company grows in size.
Principle 4: Audit, Risk and Internal Control
The ARC is currently comprised of the full Board, given the Company had only 3 Directors at year end. However, other
individuals such as executive management may be invited to attend all or any part of any meeting when deemed appropriate.
The Company’s external auditors are invited to attend meetings of the Committee on a regular basis
The ARC has responsibility for, among other things, the monitoring of the integrity of the financial statements of the Company
and its Group and the involvement of the Group's auditors in that process. It focuses in particular on compliance with
accounting policies and ensuring that an effective system of external audit and financial control is maintained, including
considering the scope of the annual audit and the extent of the non-audit work undertaken by external auditors and advising
on the appointment of external auditors. The ultimate responsibility for reviewing and approving the annual report and
accounts and the half-yearly reports remains with the Board. The Audit Committee will meet at least three times a year at the
appropriate times in the financial reporting and audit cycle. The committee also review the emerging and principal risks of the
business, refer to Principal Risks and Uncertainties on page 7.
Independence of the External Auditor
The independence of the auditor is considered by the Audit Committee each year. In assessing the auditor’s independence,
the Audit Committee considers:
• Ratio of audit fees to non-audit fees
•
• Whether there are any known material relationships between the Company, its directors and senior executives, and
Length of tenure
the audit firm, its partners, and the audit team
• Application of constructive challenge and professional scepticism
Audit and non-audit fees are disclosed in the financial statements.
15
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
The Audit Committee considers the nature and value (in the context of the audit fee) of any non-audit services on the auditor’s
independence and is required to give its prior approval of any such non-audit services.
Effectiveness of the external audit process
In considering the effectiveness of the external audit process, the Audit Committee consider:
• Effectiveness of the audit plan, its delivery and execution
• Knowledge and experience of the audit team
• Robustness of the audit
The Group’s external auditor is PKF Littlejohn LLP for the audit of the 31 December 2023 accounts.
Having assessed the performance, objectivity and independence of the auditor, the Committee will be recommending the
reappointment of PKF Littlejohn LLP as auditor to the Company at the 2024 Annual General Meeting.
During the year to 31 December 2023, the Audit Committee considered the following key issues in relation to the Financial
Statements:
Issue
• Accounting policies
• Carrying value of intangibles
• Going concern review
• Review of audit and non-audit
services and fees
Action
The Committee reviewed and discussed the significant accounting
policies with management and the external auditor and reached the
conclusion that each policy was appropriate to the Group.
The Committee reviewed the impairment assessment report prepared by
management and agreed that given the reasonable expectation that the
Group will achieve its milestone targets in the near future that no
impairment to the value of the intangibles was required as at 31
December 2023, other than the impairment recorded in relation to assets
in Mexico.
The Committee considered the ability of the Group to operate as a Going
Concern considering cash-flow forecasts for the next 12 months. It was
determined by the Committee that the forecasts indicate that the Group
and parent Company’s cash resources are not sufficient to cover the
projected expenditure for the period of 12 months. Notwithstanding, the
Directors are confident in the Company’s ability to raise additional funds
as required, from existing and/or new investors, within the next 12
months. Thus, they continue to adopt the going concern basis of
accounting preparing these financial statements. Refer to page 12 and
note 2.4 for further information on going concern.
The external auditor is not engaged by the Group to carry out any non-
audit work in respect of which it might, in the future, be required to
express an audit opinion.
The Committee reviewed the fees charged for the provision of audit and
non-audit services and determined that they were in line with fees
charged to companies of similar size and stage of development.
The Committee considered and was satisfied the external auditor’s
assessment of its own independence.
Internal audit function
The Audit Committee considers annually whether there is a need for an internal audit function and makes a recommendation
to the Board if a change is considered to be appropriate. The Company’s operations are small in scale, the organisational
structure is flat, and the cost of an internal audit function is not considered to be justified at present.
Principle 5: Remuneration
The N&R Committee is currently comprised of the full Board, given the Company had only three Directors at year end.
The N&R Committee recognises that an effective Board comprises a range and balance of skills, experience, knowledge,
genders and independence, with individuals that are prepared to challenge each other whilst working as a team, which
requires a range of personal attributes, including character, intellect, sound judgement, honesty and courage.
In addition, the N&R Committee is responsible for establishing a formal and transparent procedure for developing policy on
executive remuneration and to set the remuneration packages of individual Directors. This includes agreeing with the Board
the framework for remuneration of executive management of the Company as it is designated to consider. It is furthermore
16
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
responsible for determining the total individual remuneration packages of each Director including, where appropriate,
bonuses, incentive payments and share options.
Provision 34 of the Code specifies that the remuneration of Non-Executive Directors should not include share options or other
performance-related elements. However, although all Non-Executive Directors have been granted Options, the Board
considers the quantum of Options granted to each Non-Executive Director is such that it does not impair or compromise their
impartiality or objectivity in decision making. The independence of Non-Executive Directors is reviewed and will continue to
be reviewed by the Board on a regular basis.
The scale and structure of the remuneration and compensation packages for the Directors is set taking into account time
commitment, comparatives, and risks and responsibilities, to ensure that the amount of compensation adequately reflects the
individual’s previous performance, achievements, experience, responsibilities and the risks of the office or position held, and
in the context of the Company’s risk profile, to ensure they do not encourage excessive risk taking.
Remuneration Policy
The Company’s remuneration policy is intended to support the Company’s long-term strategy and sustainable success in a
manner consistent with the Company’s purpose and values, attracting and retaining the highest quality of directors and senior
executives. The pay policy aligns with Provision 40 of the code and is as follows:
•
•
•
•
•
•
•
remuneration of Directors is disclosed in annual accounts for clarity and to ensure transparency.
remuneration structures are limited to salaries and options to avoid complexity and are clearly communicated by the
Board to ensure predictability.
align the interests of the Board and senior executives with shareholders’.
align the interests of the workforce (including the Board and senior executives) with the Company’s purpose and
values.
avoid incentivising excessive risk taking by the Board and senior executives.
be proportionate to the contribution of the individuals concerned, and;
be sensitive to pay and employment conditions elsewhere in the group.
The remuneration policy does not require post-employment shareholding requirements. Share options ordinarily lapse upon
the resignation of the option holder, unless the Board determines otherwise.
The scale and structure of the remuneration and compensation packages of Directors is set taking into account time
commitment, comparatives, risks and responsibilities, to ensure that the amount of compensation adequately reflects the
individual’s previous performance, achievements, experience, responsibilities and risks of the office or position held, and in
the context of the Company’s risk profile, to ensure they do not encourage excessive risk taking on the part of the recipient of
such compensation.
As the Company is at an early stage of development, the use of traditional performance standards, such as corporate
profitability, is not considered by the N&R Committee to be appropriate in the evaluation of corporate or directors’
performance. Discretionary bonuses may be paid to aid staff retention and reward performance.
The Board considers that the remuneration policy has operated as intended in terms of company performance and quantum.
The Company provides executive directors with base salaries which represent their minimum compensation for services
rendered during the financial year. The base salaries of Directors and senior executives depend on the scope of their
experience, responsibilities, and performance. A description of the material terms of each director’s contract is provided under
“Terms of Directors’ Employment, Termination and Change of Control Benefits” below.
The N&R Committee has considered the risk implications of the Company’s compensation policies and practices and has
concluded that there is no appreciable risk associated with such policies and practices since such policies and practices do
not have the potential of encouraging an executive officer or other applicable individual to take on any undue risk or to
otherwise expose the Company to inappropriate or excessive risks. Furthermore, although the Company does not have in
place any specific prohibitions preventing executives from purchasing financial instruments, including prepaid variable forward
contracts, equity swaps, collars, or units of exchange funds that are designed to hedge or offset a decrease in market value
of options or other equity securities of the Company granted in compensation or held directly or indirectly, by the director, the
Company is unaware of the purchase of any such financial instruments by any director.
The Chair welcomes major shareholders to discuss the Company’s strategy and governance, including, on the appointment
of key Board appointments. The Chair reports to the Board as a whole, on the views of major shareholders.
The Company does not anticipate making any significant changes to its compensation policies and practices during 2024.
17
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
Culture and employees
At the Company’s present stage of development, it has fewer than 10 employees and its culture therefore exists principally in
the Boardroom and amongst any contractors. It is considered that the Board is well positioned to ensure that policy, practices
and behaviour throughout the business is aligned with the Company’s purpose, values and strategy. In the event that the
Board had any concerns, it would require management to take remedial action.
The Board recognises the importance of the remuneration structure supporting its strategy and reinforcing the culture of the
organisation.
Board assessments
The Chair continuously considers the performance of the Board, its committees and of individual directors, and provides
feedback when appropriate. Similarly, the Chair invites feedback in the same manner from the Non-Executive Directors and
the Company Secretary. The N&R Committee considers the time and cost involved in carrying out a formal process, especially
one that is externally facilitated, cannot be justified for the Company at this stage in its development.
The N&R Committee acknowledges the merits in carrying out formal Board evaluations and will monitor the continuing
suitability of this stance as the Company grows in size.
Relations with stakeholders
The Company is committed to a continuous dialogue with shareholders as it believes that this is essential to ensure a greater
understanding of and confidence amongst its shareholders in the medium and longer term strategy of the Group and in the
Board’s ability to oversee its implementation. It is the responsibility of the Board as a whole to ensure that a satisfactory
dialogue takes place.
Whilst the Company is a BVI registered company, the UK Corporate Governance code references Section 172 of the
Companies Act 2006 which requires Directors to take into consideration the interests of stakeholders in their decision making.
The Board is committed to understanding and engaging with all key stakeholder groups of the Company in order to maximise
value and promote long-term Company success in line with our strategic objectives. The Board recognises how the
Company’s activities and decisions will impact employees, those with which it has a business relationship, the community
and environment and its reputation for high standards of business conduct. In weighing all of the relevant factors, the Board,
acting in good faith and fairly between members, makes decisions and takes actions that it considers will best lead to the
long-term success of the Company.
During the year, the Board assessed its current activities between the Board and its stakeholders, which demonstrated that
the Board actively engages with its stakeholders and takes their various objectives into consideration when making decisions.
Specifically, actions the Board has taken to engage with its stakeholders in 2023 include:
•
•
•
•
Attended the 2023 AGM and prepared to answer any questions raised by shareholders;
Made presentations at conferences and published recordings and slide decks on the Company’s exploration activities;
Evaluated the relationships with the Company’s various collaborators through management and identified ways to
strengthen relationships and arrangements with key collaborations; and
Monitored company culture and engaged with employees on efforts to continuously improve company culture and
morale.
The Board believes that appropriate steps and considerations have been taken during the year so that each Director has an
understanding of the various key stakeholders of the Company. The Board recognises its responsibility to consider all such
stakeholder needs and concerns as part of its discussions, decision-making, and in the course of taking actions, and will
continue to make stakeholder engagement a top priority in the coming years.
The Chairman and other Directors, as appropriate, make themselves available for contact with major shareholders and other
stakeholders in order to understand their issues and concerns.
The Company plans to use the AGM as an opportunity to communicate with its shareholders. To ensure compliance with the
Governance Code, the Board proposes separate resolutions for each issue, and proxy forms allow shareholders who are
unable to attend the AGM to vote for or against or to withhold their vote on each resolution. The results of all proxy voting will
be published on the Group’s website after the AGM. Shareholders who attend the AGM will have the opportunity to ask
questions.
The Group’s website is the primary source of information on the Group. The website includes an overview of the activities of
the Group and all recent Group announcements.
18
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
Going Concern
The Directors have reviewed cash flow forecasts for the period ending 31 May 2025, which indicate that the Group and parent
Company’s cash resources are not sufficient to cover the projected expenditure for the period of 12 months from the date of
approval of these financial statements. The Directors are confident in the Company’s ability to raise additional funds as
required, from existing and/or new investors, within the next 12 months. Thus, they continue to adopt the going concern basis
of accounting preparing these financial statements
Provisions not applied
The Company is small with a modest resource base. The Company has a clear mandate to optimise the allocation of limited
resources to support its development plans. To ensure the appropriate corporate governance is applied to the size and
maturity of the Company, there are certain provisions the group specifically does not comply with, given the size of the Group,
as noted below:
Employee Engagement
Due to the Company only having a small number of employees, the Board has not appointed a director from the workforce,
created a formal workforce advisory panel or designated a Non-Executive D irector to engage with the workforce. This is
contrary to Code Provision 5 and is explained in the section headed “Culture and employees”. At such time as the size of the
workforce increases, the Board will review the position and make any such appointments or take other actions it considers
appropriate.
Senior Independent Director
The Board had not appointed a Senior Independent Director for the full year. This is contrary to Code provision 12. The role
of a Senior Independent Director is to provide a sounding board for the Chair and serve as an intermediary for the other
directors and shareholders. In addition, a senior independent director would be expected to meet the other Non-Executive
directors without the Chair present, to appraise his performance. Elizabeth Henson was appointed as Senior
Independent Non-Executive Director from 4 August 2023.
The Company Secretary, as well as each of the Non-Executive Directors, is available as a sounding Board to the Chair and
to serve as an intermediary for shareholders. The Company Secretary is also available to serve as an intermediary for any of
the directors when required. Due to the size of the Board, the nomination of any one particular director to act as a Senior
Independent Director is not currently considered to be appropriate and would not improve its effective operation. However,
the matter is kept under review.
Open advertising
The Board does not always use open advertising and/or an external search consultancy for the appointment of the Chair and
Non-Executive Directors. This is Contrary to Code Provision 20. Given the size of the Company and skills required by the
Board it is not always possible to run an open advertising process.
Annual evaluation of the performance of the Board
The Board does not carry out a formal annual evaluation of its performance, its committees, the Chair and individual directors.
This is contrary to Code Provision 21 and is explained in the section headed “Board assessments”.
Board Committees
The Nomination and Remuneration Committee and the Audit and Risk Committee are comprised of two independent
directors, Ms Elizabeth Henson and Mr Robert Mosig.
Performance related pay
Non-Executive Directors participate in the Company’s share option plan. This is contrary to Code Provision 34.
The Company’s Non-Executive Directors participate in the Company’s discretionary share option plan (the “Unapproved
Plan”) because the Board considers that the holding of options helps align the interests of the Non-Executive
Directors with shareholders by incentivising their decision making with a view to providing growth in the Company’s
share price. The Company’s long-term success will be dependent upon raising additional finance in future; aligning the
interests of all directors and senior executives with shareholders incentivises all concerned to achieve the best possible
price for such placings and to minimise undue dilution of interests.
19
ALIEN METALS LIMITED
CORPORATE GOVERNANCE REPORT
Viability statement
In accordance with the UK Corporate Governance Code published in July 2018, the Directors have assessed the prospects
of the Group and concluded that it is appropriate to adopt the going concern basis of accounting based on the amount of cash
on hand at the end of the year and alternative funding options available at the time of publication of this report. The assessment
of going concern is disclosed in Note 2.
The Board’s assessment of the Group’s current position and principal risks are disclosed in the Directors’ Report on page 6.
The Directors consider that the Annual Report and the Financial Statements, taken as a whole, are fair, balanced, and
understandable and provide the information necessary for the shareholders to assess the Company’s position and
performance, business model and strategy. Refer to the Statement of Directors Responsibilities on page 13.
Elizabeth Henson
Senior Independent Non-Executive Director
22 May 2024
20
ALIEN METALS LIMITED
INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report to the Members of Alien Metals Limited
Opinion
We have audited the financial statements of Alien Metals Limited (the ‘Group’) for the year ended 31 December 2023 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted International Accounting Standards.
In our opinion, the financial statements:
•
•
give a true and fair view of the state of the Group’s affairs as at 31 December 2023 and of its loss for the year then
ended; and
have been properly prepared in accordance with UK-adopted International Accounting Standards.
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 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 2.4 in the financial statements, which indicates that the Group holds a cash and cash equivalents
balance of $676,000 as at 31 December 2023 and that the Group will be required to raise further finance, equity and/or debt,
in order to fund its forecasted expenditure over the next twelve months. As stated in note 2.4, these events or conditions,
along with the other matters as set forth in note 2.4, indicate that a material uncertainty exists that may cast significant doubt
on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s ability to
continue to adopt the going concern basis of accounting included reviewing and challenging cashflow forecasts prepared by
management covering the 12 months from the approval of these financial statements and the related key assumptions,
confirming their mathematical accuracy, ascertaining the Group’s current financial position and cash reserves, discussing
their strategies regarding future fund raises, and reviewing post year end arrangements entered into by the Group.
In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to:
•
•
the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt
the going concern basis of accounting; and
the directors' identification in the financial statements of the material uncertainty related to the entity’s ability to
continue as a going concern over a period of at least twelve months from the date of approval of the financial
statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
21
ALIEN METALS LIMITED
INDEPENDENT AUDITOR’S REPORT
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing and extent of our audit procedures.
Materiality for the consolidated financial statements was set at $360,000 and was based upon 2% (2022: 1.5%) of gross
assets (2022: $274,000). Performance materiality and the triviality threshold for the financial statements were set at $252,000
and $18,000 respectively (2022: $137,000 and $13,700). We also agreed to report to the Board of Directors any other
differences below the threshold for triviality that we believed warranted reporting on qualitative grounds. The amount was
determined based upon where the areas of significant risk arose. Gross assets include exploration and evaluation assets
which make up the majority of the financial statement balances and the going concern of the group is dependent on its ability
to fund operations going forward including the valuation of its assets which represent the underlying value of the Group.
For each component in the scope of our Group audit, we allocated a materiality that was less than our overall Group
materiality. The range of materiality applied across group components was between $228,000 and $117,000 (2022: $185,000
and $130,000).
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
In particular we looked at areas involving significant accounting estimates and judgements by the directors and considered
future events that are inherently uncertain, such as the carrying value of exploration and evaluation assets and the fair value
assigned to share warrants and share options issued in the year. We also addressed the risk of management override of
internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk
of material misstatement due to fraud.
A full scope audit was performed on the complete financial information of four of the components of the Group and a limited
scope review was performed on the remaining three as they were assessed as insignificant.
Of the seven reporting components of the Group, one is located in the British Virgin Islands, one is located in Mexico, two are
located in the United Kingdom and three are located in Australia. PKF Littlejohn LLP audited the ultimate parent company,
situated in the British Virgin Islands, and all other reporting components. The Engagement Partner conducted audit work in
the United Kingdom but interacted regularly with the management team in the Australia during all stages of the audit and was
responsible for the scope and direction of the audit process. This, in conjunction with additional procedures performed, gave
us appropriate evidence for our opinion on the Group financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined
the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter
How our scope addressed this matter
Carrying value of intangible assets (Note 8)
The carrying value of
intangible assets related to
exploration and evaluation assets amounted to $16,593k
as at 31 December 2023 and as such, is material. The
carrying value of these assets is dependent on the
successful development on its iron ore resources in
Western Australia.
Our work in this area included but was not limited to:
• Substantive testing on additions capitalised to
exploration and evaluation assets during the year to
especially assess whether they are:
Management are required to assess by reference to IFRS
6 Exploration and Evaluation Assets, whether there are
potential
impairment of the Group’s
exploration and evaluation assets at each reporting date.
indicators of
o
o
appropriate to capitalise; and
are allocated to a valid legal right to
explore which is owned by the Group.
22
ALIEN METALS LIMITED
INDEPENDENT AUDITOR’S REPORT
If potential indicators of
identified,
management are required to perform a full assessment of
the recoverable value of the exploration and evaluation
assets in accordance with IAS 36 Impairment of Assets.
impairment are
• Obtaining, reviewing and critically assessing
management’s impairment assessment and obtaining
supporting evidence for management’s key inputs and
judgements therein;
Given the inherent judgement involved in the assessment
of whether there are
in
exploration and evaluation assets, as required by IFRS 6,
there is a risk the carrying amount of exploration and
evaluation assets are overstated and should be impaired.
indications of
impairment
• Assessing whether impairment indicators exist in line
with IFRS 6, including considering factors such as the
licence status and its expiry date.
• Reviewing the licences terms to ensure that any
minimum expenditure terms enclosed have been
adequately met or are expected to be met over the
licence period;
• Discussing with management their plans regarding
future exploration on the licence areas; and
• Assessing the appropriateness of the accounting
policies and disclosures included in the financial
statements in accordance with IFRS 6.
Our work found the judgements applied to assess the
carrying value of exploration and evaluation assets to be
reasonable. We note that the recoverability of the
carrying value of exploration and evaluation assets is
dependent upon the Group successfully securing
additional funding or obtaining the financial support of a
joint venture partner or similar.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion
on the Group financial statements does not cover the other information and, except to the extent otherwise explicitly stated in
our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate Governance Statement
We have reviewed the directors' statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the company's compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
• Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 18 and 19;
• Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why
the period is appropriate set out on page 18 and 19;
• Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in
operation and meets its liabilities set out on page 18 and 19;
• Directors' statement that they consider the annual report and the financial statements, taken as a whole, to be fair,
balanced and understandable set out on page 19;
23
ALIEN METALS LIMITED
INDEPENDENT AUDITOR’S REPORT
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page
15;
The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 15; and
The section describing the work of the audit committee set out on page 15 and 16.
•
•
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the
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 financial statements, the directors are responsible for assessing the Group’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 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 the sector in which it operates to identify laws and regulations that
could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in
this regard through discussions with management and independent research.
• We determined the principal laws and regulations relevant to the Group in this regard to be those arising from the
British Virgin Islands (“BVI”) Business Companies Act, AIM Rules, local tax legislation and local environmental,
employment and health and safety laws.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-
compliance by the Group with those laws and regulations. These procedures included, but were not limited to:
o Discussions with management regarding compliance with laws and regulations by the Group;
o Reviewing of Board meeting minutes; and
o Reviewing of regulatory news announcements.
• 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 there
was potential for management bias in relation to the carrying value of intangible assets and the accounting for asset
acquisitions. We addressed these risks by challenging the assumptions and judgements made by management
when auditing these significant accounting estimates (see the Key Audit Matters section of our report).
• 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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading
to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
24
ALIEN METALS LIMITED
INDEPENDENT AUDITOR’S REPORT
Use of our report
This report is made solely to the company’s members, as a body, in accordance with our engagement letter dated 28 March
2023. 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 (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
22 May 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
25
ALIEN METALS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 December 2023
Continuing Operations
Administration expenses
Other losses
Other gains
Operating loss
Finance costs
Finance income
Loss for the year before taxation
Income tax
Loss for the year
Loss attributable to:
-
owners of the Parent
Other Comprehensive Income:
Items that may be subsequently reclassified to profit or loss
Exchange differences recognised directly in equity
Total Comprehensive Income
Attributable to:
- owners of the Parent
Total Comprehensive Income
-
Total comprehensive income attributable to continuing
operations
Note
6
6
6
18
18
7
Group
Year ended 31
December 2023
$
(2,712,000)
(1,153,000)
178,000
Year ended 31
December 2022
$
(2,352,000)
(30,000)
-
(3,687,000)
(2,382,000)
(42,000)
8,000
-
7,000
(3,721,000)
(2,375,000)
-
-
(3,721,000)
(2,375,000)
(3,721,000)
(2,375,000)
(3,721,000)
(2,375,000)
(415,000)
(1,531,000)
(415,000)
(1,531,000)
(415,000)
(1,531,000)
(415,000)
(1,531,000)
Total comprehensive loss for the year attributable to equity
shareholders of the parent
(4,136,000)
(3,906,000)
Earnings/(loss) per share (cents) from continuing operations
attributable to owners of the Parent – Basic & Diluted
21
(0.065)
(0.050)
The Notes on pages 30 to 49 form part of these Financial Statements.
26
ALIEN METALS LIMITED
REGISTERED NUMBER: FC027089
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
Non-Current Assets
Intangible assets
Assets under construction
Plant and equipment
Right of use asset
Total Non-current assets
Current Assets
Trade and other receivables
Cash and cash equivalents
Total Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liability
Convertible note
Total Current Liabilities
Total Liabilities
Net Assets
Equity attributable to owners of the Parent
Share capital
Warrant reserve
Share-based payment reserve
Foreign exchange translation reserve
Accumulated losses
Total Equity
Note
Group
2023
$
2022
$
8
9
10
11
12
13
10
14
15
16
16
16
16,593,000
15,639,000
455,000
10,000
24,000
455,000
-
17,000
17,082,000
16,111,000
261,000
676,000
937,000
318,000
2,177,000
2,495,000
18,019,000
18,606,000
726,000
26,000
571,000
1,323,000
1,323,000
446,000
17,000
-
463,000
463,000
16,696,000
18,143,000
82,097,000
79,586,000
834,000
854,000
279,000
739,000
771,000
694,000
(67,368,000)
(63,647,000)
16,696,000
18,143,000
The Financial Statements were approved and authorised for issue by the Board of Directors on 20 May 2024 and were signed
on its behalf by:
Guy Robertson
Executive Chairman
The Notes on pages 30 to 49 form part of these Financial Statements.
27
ALIEN METALS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share
capital
$
Warrant
reserve
$
Share
based
payment
reserve
$
Foreign
exchange
translation
reserve
$
Retained
losses
$
Total equity
$
As at 1 January 2022
70,422,000
865,000
1,179,000
2,225,000
(62,420,000)
12,271,000
Loss for the year
Other comprehensive income
Exchange differences recognised
directly in equity
Total comprehensive income for
the year
Transactions with owners
Issue of ordinary shares
Cost of capital
-
-
-
9,365,000
(141,000)
-
-
-
-
-
Share based payment charge
(60,000)
422,000
Exercise of options & warrants
Expiry of warrants & options
Expiry of options in prior year
-
-
-
(437,000)
(111,000)
Total transactions with owners
9,164,000
(126,000)
(408,000)
-
(575,000)
-
-
-
-
-
192,000
(17,000)
(8,000)
-
(2,375,000)
(2,375,000)
(1,531,000)
-
(1,531,000)
(1,531,000)
(2,375,000)
(3,906,000)
-
-
-
-
-
-
-
-
-
-
9,365,000
(141,000)
554,000
454,000
119,000
575,000
-
-
-
1,148,000
9,778,000
As at 31 December 2022
79,586,000
739,000
771,000
694,000
(63,647,000)
18,143,000
Loss for the year
Other comprehensive income
Exchange differences recognised
directly in equity
Total comprehensive income for
the year
Transactions with owners
Issue of ordinary shares
Cost of capital
-
-
-
2,606,000
(128,000)
-
-
-
-
-
-
-
-
-
-
Share based payment charge
-
95,000
Exercise of options & warrants
33,000
-
121,000
(38,000)
Total transactions with owners
2,511,000
95,000
83,000
-
(3,721,000)
(3,721,000)
(415,000)
-
(415,000)
(415,000)
(3,721,000)
(4,136,000)
-
-
-
-
-
-
-
-
-
-
2,606,000
(128,000)
216,000
(5,000)
2,689,000
As at 31 December 2023
82,097,000
834,000
854,000
279,000
(67,368,000)
16,696,000
The Notes on pages 30 to 51 form part of these Financial Statements
28
ALIEN METALS LIMITED
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2023
Cash flows from operating activities
Loss before taxation from continuing operations
Adjustments for:
Share based payments
Impairment – Exploration and evaluation
Impairment – Other
Loss on initial recognition of convertible note
Other gains
Exchange difference
Finance charges
Depreciation and amortisation
Increase in trade and other receivables
Decrease in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Acquisition of intangibles
Additions of intangibles
Expenditure on plant and equipment
Expenditure on assets under construction
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Cost of share issue
Proceeds from convertible note
Lease payments
Net cash generated from financing activities
Note
Group
2023
$
2022
$
(3,721,000)
(2,375,000)
17
6,8
6
6
6
6
8
8
9
15
15
14
10
216,000
794,000
140,000
198,000
(169,000)
(379,000)
-
52,000
(94,000)
(242,000)
192,000
-
-
-
-
(42,000)
(7,000)
102,000
(53,000)
(209,000)
(3,205,000)
(2,392,000)
(21,000)
(1,708,000)
(10,000)
(432,000)
(3,029,000)
-
-
(164,000)
(1,739,000)
(3,625,000)
2,639,000
(128,000)
500,000
(46,000)
2,965,000
2,452,000
(141,000)
-
(102,000)
2,209,000
Net decrease in cash and cash equivalents
(1,979,000)
(3,808,000)
Cash and cash equivalents at beginning of year
Effect of exchange rate fluctuations on translation
Cash and cash equivalents at end of year
12
2,177,000
478,000
676,000
6,431,000
(446,000)
2,177,000
Major non-cash transactions
During the year, shares based payment expenses of $216,000 relating to the issue of options and warrants were recorded.
During the year, an impairment of $794,000 related to exploration and evaluation assets in Mexico was recorded. During the
year, an impairment of $140,000 related to other net assets recorded in Mexico was recorded.
During the year, a gain on derivative liability of $131,000 was recorded in other gains which represented the change in value
of the option for the convertible note to be settled in shares of the Company. A further $38,000 was recorded as a write-back
of a deferred tax liability.
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
ACCOUNTING POLICIES
1. General Information
The principal activity of Alien Metals Limited (“the Company”) and its subsidiaries (together “the Group”) is the acquisition and
development of mineral resource assets.
The Company’s shares are traded on AIM, a market operated by the London Stock Exchange. The Company is incorporated
in the British Virgin Islands and domiciled in the United Kingdom.
The address of its registered office is Craigmuir Chambers, PO Box 71, Road Town, Tortola, BVI.
2. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of these Financial Statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
The Group Financial Statements have been prepared in accordance with UK-adopted international accounting standards.
The Group Financial Statements have also been prepared under the historical cost convention, except as modified for assets
and liabilities recognised at fair value on an asset acquisition.
The Financial Statements are presented in US dollars rounded to the nearest thousand.
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Group and
Company Financial Statements are disclosed in Note 4.
2.2 Changes in Accounting Policy and Disclosures
(a) New and amended standards adopted by the Group
The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial
Reporting Standards and IFRIC interpretations. The amendments and revisions applicable for the period ended 31 December
2023 did not result in any material changes to the financial statements of the Group.
b) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:
Standard
IAS 1 (Amendments)
IAS 1 (Amendments)
IFRS 16 (Amendments)
Impact on initial application
Classification of liabilities as current or non-current
Presentation of Financial Statements: Non-current
liabilities with covenants
Lease Liability in a Sale and Leaseback
Effective date
1 January 2024
1 January 2024
1 January 2024
None are expected to have a material effect on the Group Financial Statements.
2.3 Basis of Consolidation
The Group Financial Statements consolidate the Financial Statements of Alien Metals Limited and the Financial Statements
of all of its subsidiary undertakings made up to 31 December 2023.
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. Where an entity does not have returns, the Group’s power over the investee is assessed as to whether control
is held. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated
from the date that control ceases.
30
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Below is a summary of subsidiaries of the Group:
Name of subsidiary
Place of
business
Parent company
Share capital
held
Principal activities
Arian Silver Corporation (UK) Ltd
Arian Silver (Holdings) Limited
England and
Wales
England and
Wales
A.C.N. 643 478 371 Pty Ltd
Australia
Iron Ore Company of Australia Pty
Ltd
Australia
Alien Metals Australia Pty Ltd
Australia
Mallina Exploration Pty Ltd
Australia
Compañía Minera Estrella de Plata
S.A. de C.V.
Mexico
Alien Metals
Limited
Alien Metals
Limited
Alien Metals
Limited
Alien Metals
Limited
Alien Metals
Limited
Alien Metals
Limited
Alien Metals
Limited
100%
Holding
100%
Holding
100%
Exploration
100%
Exploration
100%
Exploration
100%
Exploration
100%
Exploration
Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated on
consolidation. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
2.4 Going Concern
These financial statements have been prepared on the going concern basis. The Group’s business activities, together with
the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement and the
Strategic Report.
As at 31 December 2023, the Group had cash and cash equivalents of $676,000. The Directors have prepared cash flow
forecasts to 31 May 2025 which take account of the cost and operational structure of the Group, planned exploration and
evaluation expenditure, licence commitments and working capital requirements. These forecasts indicate that the Group’s
cash resources are not sufficient to cover the projected expenditure for the period for a period of 12 months from the date of
approval of these financial statements.
In common with many exploration and evaluation entities, the Company will need to raise further funds within the next 12
months in order to meet its expected liabilities as they fall due and progress the Group into construction and eventual
production of revenues. The Directors are confident in the Company’s ability to raise additional funds as required, from existing
and/or new investors, within the next 12 months.
Given the Group’s current cash position and its demonstrated ability to raise capital, the Directors have a reasonable
expectation that the Group and Parent Company has adequate resources to continue in operational existence for the
foreseeable future.
Notwithstanding the above, these circumstances indicate that a material uncertainty exists that may cast significant doubt on
the Group’s ability to continue as a going concern and, therefore, that the Group and Parent Company may be unable to
realise their assets or settle their liabilities in the ordinary course of business. As a result of their review, and despite the
aforementioned material uncertainty, the Directors have confidence in the Group and Parent Company’s forecasts and have
a reasonable expectation that the Group will continue in operational existence for the going concern assessment period and
have therefore used the going concern basis in preparing these consolidated financial statements. The auditors make
reference to going concern by way of a material uncertainty in their report.
2.5 Segment Reporting
Operating segments are reported in a manner consistent with the 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 that makes strategic decisions.
31
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Segment results, include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
The Board of Directors considers there to be only one operating segment during the year, the exploration, development and
exploitation of mineral resources, and three geographical segments, being Mexico, Australia and United Kingdom.
2.6 Foreign Currencies
(a) Functional and presentation currency
Items included in the Financial Statements of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the ‘functional currency’). The functional currency of the Company is Pounds
Sterling, the functional currency of the Australian subsidiaries is Australian Dollars and Mexican subsidiary Mexican pesos.
The Financial Statements are presented in US dollars, rounded to the nearest thousand.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income.
(c) Group companies
The results and financial position of all the Group’s entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date
of that statement of financial position;
•
•
income and expenses for each statement of comprehensive income presented are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income where material.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary
items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future,
are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the
income statement as part of the gain or loss on sale.
2.7 Intangible Assets
Exploration and evaluation assets
The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be
successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation
assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological,
geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical
feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when
the mining property is capable of commercial production.
Exploration and evaluation assets are recorded and held at cost
Exploration and evaluation assets are not subject to amortisation but are assessed annually for impairment. The assessment
is carried out by allocating exploration and evaluation assets to cash generating units (“CGU’s”), which are based on specific
projects or geographical areas. The CGU’s are then assessed for impairment using a variety of methods including those
specified in IFRS 6.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of
commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the
associated expenditures are written off to the Consolidated Statement of Comprehensive Income.
Exploration and evaluation assets recorded at fair-value on acquisition
Exploration assets which are acquired are recognised at fair value. When an acquisition of an entity whose only significant
assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is
equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value
of the exploration asset.
32
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
During the year, the Company completed one acquisition which has been treated as an asset acquisition. Per IFRS 3, an
entity shall determine whether a transaction or other event is a business combination by applying the definition in this IFRS,
which requires that the assets acquired and liabilities assumed constitute a business. If the assets acquired are not a
business, the reporting entity shall account for the transaction or other event as an asset acquisition. As the acquisitions were
not considered to meet the definition of a business combination under IFRS 3, the Group Financial Statements are prepared
as though the group has acquired an asset. The fair value of the assets were determined by management and the assets
were classified as intangible assets given that they represent exploration and evaluation assets.
2.8 Investment in Subsidiaries
Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment
provision.
2.9 Assets Under Construction
Assets under construction are stated at historical cost less accumulated depreciation and any accumulated impairment losses.
Assets under construction are not depreciated until they are completed and brought into use.
All assets are subject to annual impairment reviews. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the replacement part is derecognised. All other repairs and maintenance are
charged to the Consolidated Statement of Comprehensive Income during the financial period in which they are incurred.
The asset’s residual value and useful economic lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within
‘Other net gains / (losses)’ in the Consolidated Statement of Comprehensive Income.
2.10 Right of Use Assets and Leases
The Group leases certain property, plant and equipment.
The lease liability is initially measured at the present value of the lease payments that are not paid. Lease payments generally
include fixed payments less any lease incentives receivable. The lease liability is discounted using the interest rate implicit in
the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The Group estimates the
incremental borrowing rate based on the lease term, collateral assumptions, and the economic environment in which the
lease is denominated. The lease liability is subsequently measured at amortized cost using the effective interest method. The
lease liability is remeasured when the expected lease payments change as a result of new assessments of contractual options
and residual value guarantees.
The right-of-use asset is recognised at the present value of the liability at the commencement date of the lease less any
incentives received from the lessor. Added to the right-of-use asset are initial direct costs, payments made before the
commencement date, and estimated restoration costs. The right-of-use asset is subsequently depreciated on a straight-line
basis from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease
term. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.
Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance
charges, are included in lease liabilities, split between current and non-current depending on when the liabilities are due. The
interest element of the finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period. Assets obtained under finance
leases are depreciated over their useful lives. The lease liabilities are shown in Note 10.
Exemptions are applied for short life leases and low value assets, with payment made under operating leases charged to the
Consolidated Statement of Comprehensive Income on a straight-line basis of the period of the lease.
33
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
2.11 Impairment of Non-Financial Assets
Assets that have an indefinite useful life, for example, intangible assets not ready to use, are not subject to amortisation and
are tested annually for impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in
use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash generating units).
Non-financial assets that suffered impairment (except goodwill) are reviewed for possible reversal of the impairment at each
reporting date.
2.12 Financial Assets
(a) Classification
The Group classifies its financial assets in the following categories: at amortised cost including trade receivables and other
financial assets at amortised cost, at fair value through other comprehensive income and at fair value through profit or loss,
loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were
acquired. Management determines the classification of its financial assets at initial recognition.
(b) Recognition and measurement
Amortised cost
Trade and other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain
significant financing components, in which case they are recognised at fair value. The group holds the trade and other
receivables with the objective of collecting the contractual cash flows, and so it measures them subsequently at amortised
cost using the effective interest method.
The group classifies its financial assets as at amortised cost only if both of the following criteria are met:
•
•
the asset is held within a business model whose objective is to collect the contractual cash flows; and
the contractual terms give rise to cash flows that are solely payments of principle and interest.
(c) Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and
all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies
the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit
risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases,
the Group may also consider a financial asset to be in default when internal or external information indicates that the Group
is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by
the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows
and usually occurs when past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial
asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the
financial asset have occurred.
(d) Derecognition
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
34
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and
the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial
asset measured at fair value through profit and loss.
2.13 Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable
transaction costs.
The Group’s financial liabilities include trade and other payables. Financial liabilities measured at amortised cost include
current borrowings and trade and other payables that are short term in nature. Financial liabilities are derecognised if the
Group’s obligations specified in the contract expire or are discharged or cancelled. Convertible loan notes are classified
entirely as liabilities and contain an embedded derivative which has been designated as at fair value through profit or loss on
initial recognition and, as such, the embedded conversion feature is not separated.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Trade and other payables
After initial recognition, trade and other payables are subsequently measured at amortised cost using the effective interest
rate (‘EIR method’). Gains and losses are recognised in the statement of profit or loss and other comprehensive income when
the liabilities are derecognised, as well as through the EIR amortisation process.
Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The EIR amortisation is included as finance costs in the Consolidated Statement of Comprehensive Income.
Derecognition
A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit
or loss and other comprehensive income.
Fair value
All assets and liabilities for which fair value is measured or disclosed in the consolidated Financial Statements are categorised
within the fair value hierarchy. The fair value hierarchy prioritises the inputs to valuation techniques used to measure fair
value. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments and other
assets and liabilities for which the fair value was used:
-
-
-
level 1: quoted prices in active markets for identical assets or liabilities;
level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and
level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
2.14 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand.
2.15 Taxation
Tax 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’s subsidiaries and associates
operate and generate 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.
35
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
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 consolidated 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 are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries,
associates and joint arrangements, except for deferred income tax liability where the timing of the reversal of the temporary
difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.
Generally, the group is unable to control the reversal of the temporary difference for associates. Only where there is an
agreement in place that gives the group the ability to control the reversal of the temporary difference not recognised.
Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries,
associates and joint arrangements only to the extent that it is probable the temporary difference will reverse in the future and
there is sufficient taxable profit available against which the temporary difference can be utilised.
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.
There has been no tax credit or expense for the period relating to current or deferred tax.
2.16 Share Capital, and Other Reserves
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity, as a deduction, net of tax, from the proceeds provided
Other reserves consist of the share option reserve and the foreign exchange translation reserve. See Note 16 for further
detail.
2.17 Share Based Payments
The Group operates a number of equity-settled share-based schemes, under which the entity receives services from
employees or third-party suppliers as consideration for equity instruments (shares, options and warrants) of the Group. The
Group may also issue warrants to share subscribers as part of a share placing. The fair value of the equity-settled share
based payments is recognised as an expense in the Consolidated Statement of Comprehensive Income or charged to equity
depending on the nature of the service provided or instrument issued. The total amount to be expensed or charged in the
case of options is determined by reference to the fair value of the options or warrants granted:
•
•
•
including any market performance conditions;
excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales
growth targets, or remaining an employee of the entity over a specified time period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to save).
In the case of shares and warrants the amount charged is determined by reference to the fair value of the services received
if available. If the fair value of the services received is not determinable the shares are valued by reference to the market price
and the warrants are valued by reference to the fair value of the warrants granted as described previously.
Non-market vesting conditions are included in assumptions about the number of options or warrants that are expected to vest.
The total expense or charge 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 reporting period, the directors revise their estimates of the number of options
that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original
estimates, if any, in the Consolidated Statement of Comprehensive Income or equity as appropriate, with a corresponding
adjustment to the share based payment reserve or warrant reserve in equity.
When the warrants or options are exercised, the Company issues new shares. The proceeds received, net of any directly
attributable transaction costs, are credited to share capital (nominal value) when the warrants or options are exercised.
36
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
2.18 Finance Income and Cost
Finance income and finance costs are recognised using the effective interest rate method.
3. Financial Risk Management
3.1 Financial Risk Factors
The Group’s activities expose it to a variety of financial risks being market risk (including, interest rate risk, currency risk and
price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of
financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
Market Risk
Market risk is the risk that the Group’s future earnings will be adversely impacted by changes in market prices. Market risk for
Alien Metals comprises two types of risk: foreign currency risk and price risk.
(b) Foreign currency risks
The Group’s operational expenditure is made in Mexico in Mexican pesos, in Australia in Australian dollars, and head office
expenses are predominantly made in the UK in pounds sterling, and United States dollars. The Group is therefore exposed
to the movement in exchange rates for these currencies. The Group does not currently hedge foreign exchange risk.
At the year end the majority of the Group’s cash resources were held in Australian dollars. The Group therefore also has
downside exposure to any strengthening of United States dollar and pounds sterling against the Australia dollar as this would
increase expenses in Australian dollar terms and accelerate the depletion of the Group’s cash resources. Any weakening of
United States dollar, or pounds sterling against the Australian dollar would, however, result in a reduction in expenses in
Australian dollar terms and preserve the Group’s cash resources.
The carrying amounts of the Group’s foreign currency denominated financial assets and monetary liabilities at the reporting
date are as follows:
Pounds sterling
Australian dollars
Mexican pesos
Sensitivity Analysis
Liabilities
2023
123,893
500,848
-
2022
51,000
196,000
41,000
Assets
2023
2022
2,646,758
4,605,000
15,363,381
13,495,000
-
142,000
The Group holds cash in pounds sterling and Australian dollars to settle accounts payable balances derived in those
currencies. The main risk is through foreign exchange fluctuations in companies where the cash balances are held in a
currency that is different to the functional currency.
Exposure to foreign currency risk sensitivity analysis:
15% strengthening in the United States dollar
15% weakening in the United States dollar
Against A$
US$
(77,000)
77,000
A 15% variation is considered an appropriate level of sensitivity given recent levels of foreign exchange volatility.
(c) Price risk
The price risk is the risk that the Group’s future earnings will be adversely impacted by changes in the market prices of
commodities. Given the Group has yet to enter production it is not possible to quantify this impact at this stage.
(d) © Interest rate risk
37
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate
due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the
Group uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimise
the financial risk faced by the Group. Interest bearing assets comprise cash and cash equivalents which are considered to be
short-term liquid assets. No sensitivity analysis has been disclosed as management does not consider any reasonable
fluctuation in interest rates to be sufficiently material to disclose as there are no variable interest bearing loans and interest
income is only from cash held with banks.
Credit Risk
Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any
losses from non-performance of these receivables.
The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board. No credit limits
were exceeded during the reporting period, and management does not expect any losses from non-performance by these
counterparties.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.
Liquidity Risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due.
The directors regularly review cash flow forecasts to determine whether the Group has sufficient cash reserves to meet future
working capital requirements and discretionary business development opportunities including exploration activities.
As at 31 December 2023, the Company had cash and other receivables of $937,000 to settle accounts payable and lease
liabilities of $752,000. The Company’s accounts payable have contractual maturities of less than 30 days and are subject to
normal trade terms. In the short-term, liabilities will be funded by cash.
The Group’s assets are at an early stage and in order to meet financing requirements for their development the Company
has raised funds by way of several share placements, which is a common practice for junior mineral exploration companies.
Although the Company has been successful in the past in raising equity finance, there can be no assurance that the funding
required by the Group will be made available to it when needed or, if such funding were to be available, that it would be offered
on reasonable terms. The terms of such financing might not be favourable to the Group and might involve substantial dilution
to existing shareholders.
3.2 Capital Risk Management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern and have
access to adequate funding for its exploration and development projects, so that it can provide returns for shareholders and
benefits for other stakeholders. The Group manages the capital structure and makes adjustments in the light of changes in
economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure the
Group may issue new shares, acquire debt, or sell assets. Management regularly reviews cash flow forecasts to determine
whether the Group has sufficient cash reserves to meet future working capital requirements and to take advantage of business
opportunities.
4. Critical Accounting Estimates and Judgements
The preparation of the Group Financial Statements in conformity with IFRSs requires Management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the Financial Statements and the reported amount of expenses during the year. Actual results may vary from the
estimates used to produce these Financial Statements.
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.
Significant items subject to such estimates and assumptions include, but are not limited to:
Recognition and Impairment of exploration and evaluation costs
Exploration and evaluation costs had a carrying value at 31 December 2023 of $16,593,000 (2022: $15,639,000): refer to
Note 8 for more information. During the year asset acquisitions with a carrying value of $21,000 were recognised (2022:
$7,707,000), refer to Note 8 for more information. The Group has a right to renew exploration permits and the asset is only
depreciated once extraction of the resource commences. Management tests annually whether exploration projects have future
economic value in accordance with the accounting policy stated in Note 2.7.
38
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the
exploration results returned during the year warrant further exploration expenditure and have the potential to result in an
economic discovery. This review takes into consideration the expected costs of extraction, long term metal prices, anticipated
resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration
target and results indicate there is no additional upside, a decision will be made to discontinue exploration.
Fair value of assets acquired
During the prior year the group acquired a number of interests in different projects and these acquisitions did not fall within
the scope of IFRS 3 but rather IFRS 6. As a result, these assets acquired were required to initially be recognised as fair value.
The Directors assessed the fair value of all project interests acquired as being equal to the fair value of the consideration to
acquire said interests in projects. See note 9 for further details
Fair value of financial liabilities
During the year the group entered into a convertible loan note with an embedded derivative and warrants which were
measured at fair value. See note 14 for further details.
Share based payment transactions
The Group has made awards of options and warrants over its unissued share capital to certain Directors and employees as
part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for
shares and to suppliers for various services received.
The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future
dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in
Note 17.
5. Segmental Information
As at 31 December 2023, the Group operates in three geographical areas, the UK, Mexico and Australia. The Company
operates in one geographical area, the UK. Activities in the UK are mainly administrative in nature whilst activities in Australia
and Mexico relate to exploration and evaluation work. The reports used by the chief operating decision maker are based on
these geographical segments.
The Group generated $9,000 in other income during the year ended 31 December 2023 (2022: Nil).
2023
Administrative expenses
Other losses
Other gains
Australia
(870,000)
(557,000)
-
Mexico
$
(1,000)
(140,000)
-
UK
$
Total
$
(1,841,000)
(2,712,000)
(456,000)
178,000
(1,153,000)
178,000
Operating loss from continued operations per
reportable segment
Reportable segment assets
Reportable segment liabilities
Reportable segment net assets
(1,427,000)
(141,000)
(2,119,000)
(3,687,000)
15,290,000
(544,000)
- 2,729,000
- (779,000)
18,019,000
(1,323,000)
14,746,000
- 1,950,000
16,696,000
Segment assets and liabilities are allocated based on geographical location.
2022
Australia
Mexico
$
UK
$
Total
$
Administrative expenses
Other gains/(losses)
(171,000)
(98,000)
(2,083,000)
(2,352,000)
-
-
(30,000)
(30,000)
Operating loss from continued operations per
reportable segment
(171,000)
(98,000)
(2,113,000)
(2,382,000)
39
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Reportable segment assets
Reportable segment liabilities
Reportable segment net assets
15,660,000
(291,000)
15,369,000
783,000
(15,000)
768,000
2,163,000
18,606,000
(157,000)
(463,000)
2,006,000
18,143,000
6. Expenses/Income by Nature
Directors’ fees (Note 20)
Employee wages and salaries
Fees payable to the Company’s auditors for the audit of the consolidated
financial statements
Professional, legal and consulting fees
Insurance
Office and administrative expenses
Depreciation
Travel and subsistence
Share option expense
Other expenses
Foreign exchange movement
Total administrative expenses
Impairment – Exploration and evaluation assets
Impairment – Other net assets
Loss on initial recognition of convertible note
Other
Other losses
Gain on revaluation of convertible note derivative
Other
Other gains
7. Taxation
2023
$
273,000
864,000
62,000
1,013,000
71,000
185,000
52,000
194,000
216,000
190,000
(408,000)
2,712,000
794,000
140,000
198,000
21,000
1,153,000
131,000
47,000
178,000
2022
$
438,000
307,000
59,000
962,000
82,000
90,000
102,000
133,000
192,000
42,000
(55,000)
2,352,000
-
-
-
-
-
-
-
-
Group
2023
$
2022
$
Loss before tax from continued operations
(3,721,000)
(2,375,000)
Income tax using the weighted corporation tax rate 19.2% (2022: 18.6%)
(713,000)
(442,000)
Expenditure not deductible for tax purposes
248,000
(57,000)
Net tax effect of losses carried forward on which no deferred tax asset
is recognised
Income tax for the year
465,000
385,000
-
-
No charge to taxation arises due to the losses incurred.
40
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
The weighted average applicable tax rate of 19.2% (2022: 18.6%) used is a combination of the 19% standard rate of
corporation tax in the UK, 25% Australian corporation tax and 30% Mexican tax rate. The Group has accumulated tax losses
of approximately $32,887,000 (2022: $30,459,000) available to carry forward against future taxable profits.
Under IFRS, a net deferred tax asset has not been recognised due to the uncertainty as to the amount that can be utilised.
No adjustments are required in respect of the subsidiaries.
8.
Intangible Assets
Exploration & Evaluation Assets at Cost and Net Book Value
Balance as at 1 January
Additions
Asset acquisitions
Impairment
Foreign exchange differences
As at 31 December
2023
$
15,639,000
1,708,000
21,000
(794,000)
19,000
16,593,000
2022
$
5,939,000
3,029,000
7,707,000
-
(1,036,000)
15,639,000
Deferred exploration costs relate to the initial acquisition of the licences and subsequent exploration expenditure incurred in
evaluating the projects. Asset acquisitions related to the assets of Mallina Exploration Pty Ltd. A subsidiary of the Group
also granted a 2% gross revenue royalty to the seller of any iron ore produced from the tenement.
In accordance with IFRS 6, the Directors undertook an assessment of the following areas and circumstances which could
indicate the existence of impairment:
• The Group’s right to explore in an area has expired or will expire in the near future without renewal.
• No further exploration or evaluation is planned or budgeted for.
• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a
commercial level of reserves.
• Sufficient data exists to indicate that the book value may not be fully recovered from future development and production.
As a result of the review, the Directors concluded that the Mexico assets were fully impaired, as no further exploration or
evaluation is planned for Mexico. An impairment of $794,000 was recorded in other losses for the year. The Directors do not
consider any other assets to be impaired.
9. Assets Under Construction
Balance as at 1 January
Additions
As at 31 December
2023
$
455,000
-
455,000
2022
$
291,000
164,000
455,000
Mining plant equipment, recertification costs and the related transport costs capitalised as a Mining asset in A.C.N 643 478
371 Pty Ltd in relation to the headframe and associated equipment for the Elizabeth Hill Silver mine.
10. Right of Use Assets and Lease Liability
At the reporting date, the Group had one property, in Australia, under lease agreement. The Group recognised the following
right of use asset and related lease liability in respect of this lease agreement. A lease previously recognised for office space
in London, United Kingdom, was fully amortised during the year.
41
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Right of use asset
Balance as at 1 January
Additions
Amortisation
Foreign exchange differences
As at 31 December
Lease liability
Balance as at 1 January
Additions
Rental payments
Foreign exchange differences
As at 31 December
A maturity analysis of the undiscounted minimum lease payments due are as follows:
No later than one year
As at 31 December
11. Trade and Other Receivables
VAT receivable
Prepayments
Other receivables
As at 31 December
2023
$
17,000
55,000
(48,000)
-
24,000
2023
$
17,000
55,000
(46,000)
-
26,000
2022
$
131,000
-
(102,000)
(12,000)
17,000
2022
$
131,000
-
(102,000)
(12,000)
17,000
2023
$
41,000
41,000
2023
$
125,000
7,000
129,000
261,000
2022
$
133,000
95,000
90,000
318,000
Trade and other receivables are all due within one year. The fair value of all receivables is the same as their carrying values
stated above. These assets, excluding prepayments, are the only form of financial asset within the Group, together with cash
and cash equivalents.
The carrying amounts of the Group‘s trade and other receivables are denominated in the following currencies:
42
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
UK Pounds
Australian Dollars
Mexican Peso
As at 31 December
2023
$
171,000
90,000
-
261,000
2022
$
173,000
75,000
70,000
318,000
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.
The Group does not hold any collateral as security. All trade and other receivables are considered fully recoverable and
performing.
12. Cash and Cash Equivalents
Cash at bank and in hand
13. Trade and Other Payables
Trade payables
Other payables
Accrued expenses
As at 31 December
The carrying amounts of the Group‘s trade and other payables are denominated in the following currencies:
UK Pounds
US Dollars
Mexican Peso
Australian Dollars
As at 31 December
2023
$
207,000
-
-
519,000
726,000
43
2023
$
2022
$
676,000
2,177,000
2023
$
591,000
36,000
99,000
726,000
2022
$
272,000
69,000
105,000
446,000
2022
$
148,000
37,000
15,000
246,000
446,000
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
14. Convertible Note
Liability - Host
Liability - Derivative
Total
2023
$
500,000
71,000
571,000
2022
$
-
-
-
During the year, the Company issued 500,000 convertible notes with a face value of US$500,000 which was received in cash.
The initial fair value of the liability portion of the convertible notes was determined using a market interest rate for an equivalent
non-convertible notes at the issue date. The liability is subsequently measured on an amortised cost basis until extinguished
on conversion or maturity. The convertible notes include a derivative liability, which represents the value of the option to
convert the notes to ordinary shares of the Company. The fair value of the derivative liability was determined using a Monte
Carlo Simulation model. A loss of $198,000 was recognised on the initial recognition of the derivative liability, which was
recorded in other losses. Thereafter a revaluation gain of $131,000, which represents the change in value of the derivative
liability during the year, was recorded in other gains. Refer to note 17 for further details.
15. Share Capital and Share Premium
The Company is authorised to issue an unlimited number of common shares of no par value.
Issued share capital
Group
At 1 January 2022
Share issue costs – 1 January 2022
Issue of Ordinary Shares on exercise of warrants – 21 January 2022
Issue of Ordinary Shares on exercise of options – 21 January 2022
Issue of Ordinary Shares on exercise of warrants – 10 February 2022
Issue of Ordinary Shares on exercise of warrants – 10 February 2022
Issue of Ordinary Shares as consideration for asset acquisition – 23 February 2022 (Note 8)
Issue of Ordinary Shares on exercise of warrants – 14 March 2022
Number of shares
Total
$
3,902,181,625
70,422,000
-
202,247,000
1,100,000
1,111,111
816,666
50,000,000
3,333,333
(60,000)
367,000
4,000
5,000
3,000
467,000
12,000
Issue of Ordinary Shares as consideration for asset acquisition – 22 March 2022 (Note 8)
138,703,396
1,384,000
Issue of Ordinary Shares as consideration for asset acquisition – 22 March 2022 (Note 8)
358,617,818
3,577,000
Issue of Ordinary Shares on exercise of warrants – 22 March 2022
Issue of Ordinary Shares on exercise of warrants – 22 March 2022
Issue of Ordinary Shares on exercise of warrants – 13 April 2022
Issue of Ordinary Shares on exercise of warrants – 13 April 2022
Issue of Ordinary Shares on exercise of warrants – 13 April 2022
Issue of Ordinary Shares on exercise of options – 26 April 2022
Issue of Ordinary Shares as consideration for asset acquisition – 20 June 2022 (Note 8)
Share issue costs – 7 September 2022
Issue of Ordinary Shares for cash – 8 September 2022
Share issue costs – 28 September 2022
Issue of Ordinary Shares on exercise of options – 1 December 2022
66,666,666
26,610,661
14,000
122,267
984,375
2,000,000
7,827,883
-
153,000
73,000
1,000
1,000
3,000
7,000
69,000
(12,000)
300,000,000
1,814,000
-
(128,000)
2,500,000
8,000
44
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Issue of Ordinary Shares as consideration for asset acquisition – 20 December 2022 (Note 8)
260,000,000
1,416,000
At 31 December 2022
Issue of Ordinary Shares for cash – 12 January 2023
Issue of Ordinary Shares for cash – 16 May 2023
Issue of Ordinary Shares for cash – 10 August 2023
Issue of Ordinary Shares in lieu of fees – 3 November 2023
Share issue costs – 10 August 2023
At 31 December 2023
5,324,836,801
79,586,000
2,500,000
8,142,373
8,000
25,000
1,000,000,000
2,545,000
26,315,000
-
61,000
(128,000)
6,361,794,174
82,097,000
On 12 January 2023 2,500,000 options, with no par value, were exercised at an issue price of 0.25 pence per share.
On 16 May 2023 8,142,373 options, with no par value, were exercised at an issue price of 0.25 pence per share.
On 10 August 2023, the Company completed a placement of 1,000,000,000 shares, at 0.20 pence per share, in order to raise
gross proceeds of GBP 2,000,000.
On 3 November 2023, the Company issued 26,315,000 shares in lieu of fees.
16. Other Reserves
Foreign currency translation reserve
Share based payment reserve
Warrant reserve
2023
$
279,000
854,000
834,000
2022
$
694,000
771,000
377,000
The foreign currency translation reserve represents the effect of changes in exchange rates arising from translating the
Financial Statements of subsidiary undertakings into the Company’s presentational currency. The share-based payment
reserve arises on the grant of share options to directors, employees and other eligible persons under the share option plan.
Refer to Note 17 for more information. The warrants reserve arises on the issue of warrants. Refer to Note 17 for further
information.
17. Share Based Payments
Share options outstanding at 31 December 2023 have the following expiry dates and exercise prices:
Grant date
2018
2019
2019
2019
2019
2020
2020
2020
2021
2021
2021
2022
2023
2023
2023
2023
Total
Expiry date
14-May-23
28-Mar-24
28-Mar-24
28-Mar-24
28-Mar-24
30-Aug-23
30-Aug-23
30-Aug-23
21-Oct-24
21-Oct-24
21-Oct-24
26-Sep-26
31-Jul-27
31-Jul-27
31-Jul-27
31-Jul-27
Number
Exercise price in
£ per share
2023
2022
0.0025
0.0025
0.0022
0.0030
0.0045
0.0045
0.0050
0.0055
0.0100
0.0115
0.0145
0.008 – 0.014
0.0072
0.0090
0.0108
0.0126
-
12,342,509
3,000,000
3,000,000
4,000,000
-
-
-
10,000,000
10,000,000
15,000,000
345,000,000
22,500,000
30,000,000
37,500,000
40,000,000
532,342,509
10,642,373
12,342,509
3,000,000
3,000,000
4,000,000
18,750,000
18,750,000
22,500,000
10,000,000
10,000,000
15,000,000
345,000,000
-
-
-
-
472,984,882
Options with an expiry date of 28-Mar-24 expired subsequent to year end.
45
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Warrants outstanding at 31 December 2023 have the following expiry dates and exercise prices:
Grant date
2020
2020
2020
2020
2021
2022
2022
2023
2023
2023
Total
Expiry date
18-May-23
10-Sep-23
18-May-23
30-Nov-23
17-Nov-24
14-Sept-25
31-Dec-25
1-Jul-26
1-Jul-24
1-Jul-26
Exercise
price in £
per share
0.0012
0.006
0.015
0.013
0.085
0.0025
0.0025
0.005198
Note 1
Note 1
Number
2023
-
-
-
-
23,529,401
7,200,000
100,000,000
10,000,000
250,000
250,000
141,229,401
Number
2022
2,625,000
12,000,000
11,208,125
13,600,000
23,529,401
7,200,000
100,000,000
-
-
-
170,162,516
Note 1: During the year, commitment and conversion warrants were issued in relation to the convertible note. The number of
warrants to be issued depends on the number of notes converted to shares at a future date. Each tranche of the Conversion
Warrants will have an exercise price to the lower of a 25% premium to the 10-day VWAP on Alien’s shares prior to the date
of the Deed (1 July 2023) and the Assumed Conversion Date (1 July 2024). Where the noteholder elects to convert the notes
in to shares, the noteholder will receive 0.5 12 month warrants, and 0.5 36 month warrants for every note converted. The
maximum number of warrants to be issued is therefore 250,000 12 month warrants and 250,000 36 month warrants.
The estimate of the fair value of the share options and warrants is measured based on the Black-Scholes model. The
parameters used for options and warrants granted in the year ended 31 December 2023 are detailed below:
Granted on:
Life (years)
Exercise price (pence per share)
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value (£)
Granted on:
Life (years)
Exercise price (pence per share)
Risk free rate
Expected volatility
Expected dividend yield
Marketability discount
Total fair value (£)
2023 Options
07/07/2023
3 years
0.72
4.1%
102%
-
-
50,000
2023 Options
07/07/2023
3 years
0.90
4.1%
102%
-
-
62,000
2023 Conversion
Warrants
01/07/2023
1 year
Variable
4.7%
75%
-
-
29,000
2023 Conversion
Warrants
01/07/2023
3 years
Variable
3.6%
75%
-
-
42,000
2023 Options
07/07/2023
3 years
1.08
4.1%
102%
-
-
74,000
2023
Commitment
Warrants
01/07/2023
3 years
0.5198
3.6%
75%
-
-
5,000
2023 Options
07/07/2023
3 years
1.26
4.1%
102%
-
-
75,000
The expected volatility is based on the historical share prices over the prior comparable period of the Company share price.
46
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
The movement of share options for the year to 31 December 2023 is shown below:
As at 1 January
Granted (not yet vested)
Exercised
Expired
2023
2022
Weighted
average
exercise
price (£)
Number
Number
472,984,882
0.0100
134,834,882
130,000,000
(10,642,373)
(60,000,000)
0.0106
0.0100
0.0050
345,000,000
(5,600,000)
(1,250,000)
Outstanding as at 31 December
532,342,509
0.0100
472,984,882
Weighted
average
exercise
price (£)
0.0100
0.0100
0.0100
0.0100
0.0100
Exercisable at 31 December
57,342,509
0.0100
127,984,882
0.0100
The movement of warrants for the year to 31 December 2023 is shown below:
As at 1 January
Granted
Granted
Exercised
Expired
Outstanding as at 31 December
Exercisable at 31 December
2023
2022
Weighted
average
exercise
price (£)
0.004
0.0052
Number
170,162,516
10,000,000
Number
389,620,248
130,729,411
500,000
Variable
-
NA
(301,906,079)
(39,433,115)
0.0068
(48,281,064)
141,229,401
140,729,401
0.004
0.004
170,162,516
170,162,516
Weighted
average
exercise
price (£)
0.0024
0.0025
0.0024
0.0024
0.004
0.004
The weighted price and life for warrants and options for the year end 31 December 2023 is as follows:
2023
Range of
exercise
prices ($)
Weighted
average
exercise
price ($)
Weighted
average
remaining life
expected
(years)
Weighted
average
remaining life
contracted
(years)
Number of
shares
0.004-0.6
0.00874
674,071,899
1.85
1.85
The total fair value charged to the statement of comprehensive income for the year ended 31 December 2023 and included
in administrative expenses was $216,000 (2022: $192,000).
Options and warrants exercised in 2023 resulted in 10,642,374 shares being issued (2022: 130,729,411) at a weighted
average price of £0.0025 each (2022: £0.0025 each) and as a result $38,377 was recorded as share capital.
During the year 130,000,000 incentive options (2022: 178,000,000) were conditionally granted to certain directors and are to
be awarded on the basis of length of service. The options were granted with various exercise prices at premiums to the share
price on the date they were awarded.
47
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
A Vorster
A Vorster
A Vorster
A Vorster
E Henson
E Henson
E Henson
E Henson
Number
Exercisable by
12,500,000
15,000,000
17,500,000
20,000,000
10,000,000
15,000,000
20,000,000
20,000,000
31/07/2027
31/07/2027
31/07/2027
31/07/2027
31/07/2027
31/07/2027
31/07/2027
31/07/2027
Premium to price on
date of issue
100%
150%
200%
250%
100%
150%
200%
250%
Exercise price in £ per
share
0.0072
0.0090
0.0108
0.0126
0.0072
0.0090
0.0108
0.0126
18. Net Finance Charges
Finance charges
Interest income
19. Employees
Staff costs (excluding Directors)
Salaries and wages
Social security costs
Pensions
Group
2023
$
(42,000)
8,000
34,000
2022
$
-
7,000
7,000
Group
2023
$
2022
$
760,000
256,000
34,000
70,000
13,000
38,000
864,000
307,000
The average monthly number of employees during the year was 4 (2022: 6).
20. Directors' Remuneration
2023
Executive Directors
G Robertson
R McIllree
Non-Executive Directors
A Vorster
E Henson
D Smith
J Battershill
M C Culbert
Short term employment
benefits
$
Share based
payment
$
Total
$
44,000
37,000
61,000
26,000
37,000
5,000
10,000
-
-
44,000
37,000
61,000
61,000
-
-
-
122,000
87,000
37,000
5,000
10,000
220,000
122,000
342,000
48
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
Employers tax contributions of $10,000 have not been included in the above. During the year, A Vorster was issued
65,000,000 options and E Henson was issued 65,000,000 options, with fair value charged to the statement of comprehensive
income for $61,000 and $61,000, respectively.
2022
Executive Directors
B Brodie Good
R McIllree
Non-Executive Directors
D J Smith
J L Battershill
M C Culbert
Short term employment
benefits
$
Share based
payment
$
Total
$
210,000
27,000
74,000
63,000
32,000
406,000
-
-
-
192,000
-
192,000
210,000
27,000
74,000
255,000
32,000
598,000
Employers tax contributions of $31,000 have not been included in the above. During 2022, Jonathan Battershill was issued
35,000,000 options with fair value charged to the statement of comprehensive income for $192,000.
21. Loss per Share
The calculation of the total basic losses per share of 0.065 pence (2022: loss 0.050 pence) is based on the losses attributable
to equity owners of the group of $3,721,000 (2022: $2,375,000) and on the weighted average number of ordinary shares of
5,728,076,556 (2022: 4,712,310,829) in issue during the year.
In accordance with IAS 33, basic and diluted earnings per share are identical as the effect of the exercise of share options or
warrants would be to decrease the loss per share.
22. Commitments
(a) Work programme commitment
As at 31 December 2023, Alien Metals owned 16 mineral exploration licenses in Australia and 9 mineral exploration licenses
in Mexico. These licences include commitments to pay annual licence fees and minimum spend requirements as follows:
Less than 1 year
1 to 5 years
Total
(b) Lease agreements
License
fees
$
Minimum
spend
requirements
$
Total
$
91,000
455,000
546,000
291,000
1,964,000
2,255,000
382,000
2,419,000
2,801,000
The Group had London offices under lease agreement. The agreement was signed on 21 April 2021 and covered office rent
for the period from 1 May 2021 until 28 Feb 2023, with monthly payments of £6,916 (US$9,514) and a deposit of £20,748
(US$28,542). This lease was not renewed. At 31 December 2023, nil remained payable in respect of this lease.
The Group leased a property in West Australia for on-site staff accommodation until 30 November 2024 with current monthly
payments of A$3,545. At 31 December 2023, $40,737 remained payable in respect of this lease.
49
ALIEN METALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2023
23. Related Party Transactions
Transactions with key management personnel
During the year ended 31 December 2023, the Company did not enter into transactions involving Directors other than
Directors remuneration outlined in note 20.
24. Ultimate Controlling Party
The Directors believe there to be no ultimate controlling party.
25. Events after the Reporting Date
On 15 March 2024, the Company executed a funding package of up to A$2m that has been made available through a
convertible loan note from Bennelong Resource Capital Pty Limited, a shareholder in the Company, with a current holding of
7.2%. The facility is to be drawn in three tranches of A$1m, $0.5m, and $0.5m, respectively. The facility is available for a
period of 12 months, incurs interest at the Secured Overnight Financing Rate plus 10%, has a face value of A$1 per
convertible security, a commitment fee of 3% of funds drawn, and the lender is to receive 25,000,000 warrants. The balance
due under the facility (including accrued interest at the end of each fiscal quarter) can be converted into Ordinary Shares at
the option of the lender.
On 15 March 2024, Mr Alwyn Vorster resigned as a director of the Company and was replaced by Mr Robert Mosig.
During April 2024 the Company, through its wholly owned subsidiary Alien Metals Australia Pty Ltd, entered into a joint
venture with Errawarra Resources Ltd (ASX: ERW) in respect of the lithium rights on the Pinderi Hills Project. Errawarra has
the potential to earn up to a 50% interest in the lithium rights in the Project by spending up to A$4 million with the first
A$500,000 being by the way of a subscription for common shares in the capital of the Company.
There were no matters or circumstances that have arisen since the end of the financial year, other than those outlined above,
that have significantly affected or may significantly affect the operations of the Company, the results of those operations, or
state of affairs in future financial years.
50