Cadence Minerals Plc Annual Report 2022

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FY2022 Annual Report · Cadence Minerals Plc

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Company Registration No: 05234262

Cadence Minerals PLC

Annual Report and Accounts
For the year ended 31 December 2022

CADENCE MINERALS PLC
COMPANY INFORMATION
For the year ended 31 December 2022

Company registration number:

05234262

Registered office:

Directors:

c/o Hill Dickinson LLP
The Broadgate Tower
Primrose Street
London
EC2A 2EW

Andrew Suckling (Non-Executive Chairman)
Kiran Morzaria (Chief Executive Officer)
Donald Strang (Executive Finance Director)
Adrian Fairbourn (Non-executive Director)

Secretary:

Donald Strang

Nominated adviser and
Nominated broker:

Registrars:

Bankers:

Solicitors:

Auditors:

W. H. Ireland Limited
24 Martin Lane
London
EC4R 0DR

Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
West Midlands
B63 3DA

Barclays Bank Plc
1 Churchill Place
London
E14 5HP

Hill Dickinson LLP
The Broadgate Tower
20 Primrose Street
London
EC2A 2EW

PKF Littlejohn LLP, Statutory Auditor
15 Westferry Circus
London
E14 4HD

CADENCE MINERALS PLC
CONTENTS
For the year ended 31 December 2022

OUR BUSINESS AND INVESTMENT STRATEGY......................................................................................................... 1

CHAIRMAN’S STATEMENT ...................................................................................................................................... 2

CHIEF EXECUTIVE OFFICER’S COMMENTARY .......................................................................................................... 4

INVESTMENT REVIEW ............................................................................................................................................. 6

FINANCIAL REVIEW............................................................................................................................................... 15

PRINCIPAL RISKS AND UNCERTAINTIES................................................................................................................. 15

DIRECTORS’ SECTION 172 STATEMENT ................................................................................................................. 17

REPORT OF THE DIRECTORS.................................................................................................................................. 19

DIRECTORS’ RESPONSIBILITIES STATEMENT ......................................................................................................... 22

CORPORATE GOVERNANCE .................................................................................................................................. 23

BOARD MEMBERS ................................................................................................................................................ 28

REPORT ON REMUNERATION ............................................................................................................................... 31

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC ............................................ 34

STATEMENT OF COMPREHENSIVE INCOME .......................................................................................................... 39

STATEMENT OF FINANCIAL POSITITON ................................................................................................................ 40

STATEMENT OF CHANGES IN EQUITY ................................................................................................................... 41

STATEMENT OF CASH FLOWS ............................................................................................................................... 42

PRINCIPAL ACCOUNTING POLICIES ....................................................................................................................... 43

NOTES TO THE FINANCIAL STATEMENTS .............................................................................................................. 51

Forward-looking Statement

This annual report contains ‘forward-looking information’, which may include but is not limited to, statements concerning the future. This annual
report contains ‘forward-looking information’, which may include but is not limited to, statements concerning the future financial and operating
performance of Cadence Minerals, the estimation of mineral resources, the realisation of mineral resource estimates, costs of production, capital
and exploration expenditures, costs and timing of the development of new deposits, requirements for additional capital, governmental regulation
of mining operations and exploration operations, timing and receipt of approvals, licenses, environmental risks, title disputes or claims.

Often, but not always, forward-looking statements can be identified by the use of words such as ‘plans’, ‘expects’, ‘is expected’, ‘budget’,
‘scheduled’, ‘estimates’, ‘forecasts’, ‘intends’, ‘anticipates’ or ‘believes’, or variations (including negative variations) of such words and phrases, or
state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will’ be taken, occur or be achieved. Forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Cadence
and/or its subsidiaries, investment assets and/or its affiliated companies to be materially different from any future results, performance, or
achievements expressed or implied by the forward-looking statements.

Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current
exploration activities; conclusions of economic evaluations and studies; fluctuations in the value of UK Pounds Sterling relative to the United States
Dollar, and other foreign currencies; changes in project parameters as plans continue to be refined; future prices of products; possible variations
of ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the
mining industry; political instability, adverse weather conditions, insurrection or war; delays in obtaining governmental approvals or financing or
in the completion of development or construction activities.

Although Cadence has attempted to identify important factors that could cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may well be other factors that cause actions, events or results to differ from those currently
anticipated, estimated or intended.

Forward-looking statements contained herein are made as of the date of this annual report. Cadence disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-
looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking statements due to the inherent uncertainty therein. Nothing in this annual
report should be construed as a profit forecast.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

OUR BUSINESS AND INVESTMENT STRATEGY

Cadence Minerals is an early-stage investment and development company in the mineral resource sector. It is
quoted as an investment company on the London Stock Exchange AIM market and the Aquis Stock Exchange
in London.

Our strategy is to identify undervalued assets with strategic advantages that can deliver capital growth to our
portfolio and, therefore, our shareholders. We invest in these assets and, where applicable, assist
management in driving capital growth.

To meet the long-term demand, we recognize that the metals and mining sectors require focused investment
capital from knowledgeable investors who understand the significant risks involved in the mineral resource
sector and know how to mitigate these risks to maximize potential returns for our investors.

Our investment strategy encompasses investments in private assets, where we have adopted a private equity
approach to managing these investments, and public equity investments in companies listed on stock
exchanges. These investments can be actively or passively held.

Active investments typically involve more significant investments where Cadence aims to positively influence
the management of investee companies by providing oversight, guidance and management at the board or
senior executive level to enhance value and minimize downside risk.

Our private investments include mineral exploration and development projects through joint venture
companies or licenses. Joint venture companies operate these projects in partnership with in-country experts
with the necessary knowledge and expertise to advance the projects. In this segment of our investment
portfolio, we are actively involved in the management and decision-making of our investee companies. We
use legal agreements to implement negative control mechanisms to protect the company's investments.
Ideally, we seek to fund private investments through earn-ins and incentivize our joint venture partners with
equity in Cadence based on deliverables that add value.

The Equity Investment segment comprises active and passive investments within our trading portfolio. The
trading portfolio consists of investments in listed mining equities that the board considers undervalued by the
market, with significant upside potential through exploration success or the development of mining projects
towards commercial production. The primary objective is to achieve capital gains in the short to medium term.
Investments are evaluated individually based on various criteria, focusing on mining companies listed on the
TSX, ASX, AIM, or LSE.

Furthermore, we aim to mitigate our risk exposure by gaining a deep fundamental understanding of each
investment, including its potential economics, operating and legal environment, and management team. By
conducting thorough evaluations, we can eliminate many potential investments and focus on funding projects
that we believe will deliver value to our shareholders.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

CHAIRMAN’S STATEMENT

I am pleased to present the Company’s Annual Report and Audited Financial Statements for the year ended
31 December 2022.

The global macroeconomic outlook continues to be unpredictable and difficult to navigate. The expected
recovery and bounce back from pandemic-era conditions have largely been tempered by fast-rising interest
rate and inflation forecasts. Coupled with an increasing focus on China's status as an adversary rather than
just a competitor, the global outlook remains mixed and confusing. Over a year has passed, and the Ukraine
invasion has now become an entrenched war, with many of the initial supply disruptions looking set to become
semi-permanent dislocations. The Cadence Minerals portfolio is both balanced, diversified and constructed to
anticipate supply and demand shocks. As such it should be well placed to weather this ongoing uncertainty.

Although the above suggests caution and a degree of pessimism, there are actual positives emerging. Recent
economic forecasts suggest continued stimulus and support for infrastructure projects globally. Inflation, by
some metrics, may have peaked, and the transformation to an EV world is gaining even more momentum.
Recent merger and acquisition activity suggests an increasing awareness among multinational companies to
integrate critical and strategic materials into their respective portfolios.

Market observers will be aware of an increase in the number of potential nationalisations across specific
strategic industries and the resources sector. The net result is of course a greater focus on the resource sector,
particularly while major resource companies continue to ramp up capital allocation into the EV material space
to meet the sea change in demand for raw materials.

On behalf of the Board of Directors (Board) and management, I thank all our advisors, consultants, service
providers, and especially our shareholders for their support throughout the year. The Board and company have
continued site visits, viewed potential investment opportunities, and attended many industry conferences.

I am always reminded never to approach a marathon by counting every inch; it is a very hard way to keep and
maintain perspective. Investing in the resource space really is a marathon versus a sprint. In every area, it
continues to surprise how long permitting, licenses approvals, environmental studies, and raising capital can
take.

Many times, the Board has stated "we will look for opportunities to unlock and discover value across our
portfolio." I am particularly grateful that our patience has been rewarded with the continued success and
maturing of many of our portfolio companies. The successful listing on the ASX of Evergreen Lithium is a good
case in point and the Board sends its congratulations to all who made that listing possible.

The Board sees further potential within our private and public holdings for further listings and potential
transactional activity to bolster Company returns. In the wake of such a challenging year, we send our
congratulations and support to our portfolio companies for their continued success. As the Cadence
investment portfolio continues to mature, we will continue our search for new, accretive investments with the
same methodology and rigorous diligence as before in order to assure a continued supply of diversified growth
opportunities.

We have a clear path ahead for our flagship Iron Ore investment at Amapa, Brazil. The publication of initial
and preliminary studies, and the DEV team’s liaison with federal, state, and local authorities, continues to
unlock the potential of this project. The Board thanks our JV partner, lawyers, and consultants for their hard
work in negotiations, settlements, and the operational success emanating from this investment.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

CHAIRMAN’S STATEMENT (CONTINUED)

The challenge of a dislocated economic recovery and the prospect of a slowing Chinese economy, highlighted
by the likelihood of steel production at or below one billion tons, has proved to be a continual challenge to the
Cadence share price. However, due to the likelihood of support and stimulus coupled with acquisition and
investment in the resources sector, (particularly related to the EV transition), we expect the constitution of the
Cadence portfolio to remain robust and focused on the strategic and critical sectors of the economy.

I would like to personally thank my fellow Board members, staff, and partners, all of whom constitute the
Cadence Community and, of course, all of our shareholders for their encouragement and continued confidence
in the Company.

Andrew Suckling
Non-Executive Chairman, 22 June 2023

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

CHIEF EXECUTIVE OFFICER’S COMMENTARY

I am pleased to present the audited results for the year ended 31 December 2022, along with the Strategic
Report that provides a comprehensive review of our business activities during the year. It is important to
note that these results reflect the historical position of the Company's progress and financial standing, and
we have included additional information on key post-year-end events in the Strategic Report.

In reviewing the performance of Cadence during the year, it would be fair to say that our two portfolios
preformed quite differently despite the solid operational performance of the underlying assets and the long-
term outlook of the commodities these projects intend to extract. While we delivered excellent operational
results and strong investment returns within our private portfolio, our public traded portfolio decreased
substantially, despite the underlying assets delivering to their goals.

In our private portfolio, the Amapá iron ore project remained the primary focus for Cadence’s management. In
my capacity as a director of the joint venture, Cadence was heavily involved in the operational progress we have
seen to date, which cumulated in the delivery of a robust Pre-Feasibility Study (“PFS”), which confirmed the
project’s strong economics. To date, our investment has been circa US$9.3 million for 30% of the Amapá iron
ore project; the net present value of 100% was estimated in the PFS at US$949 million.

In addition to the progress made at Amapá, the Company increased the investment returns by converting some
of its passive private investments into public traded equity. These returns were achieved via two asset sales,
firstly our 31.5% interests in Lithium Technology Pty Ltd and Lithium Supplies Pty Ltd ("LT and LS") were sold to
Evergreen Lithium, and secondly, our 30% interest in licenses within the Yangibana Rare Earth Project
("Yangibana Project") were sold to owner/operator Hastings Technology Metals. These transactions were
completed after a year-end, so the financial returns are not reflected in these financial statements. Cadence
has invested approximately £1.7 million in these assets, and our sale price into the equity of the two public
companies was the equivalent of £7.4 million, representing a 335% cumulative return on our investments.

In contrast to these achievements, the performance of our publicly listed portfolio tracked our largest holding,
European Metals Holdings (“EMH”), which was down some 49% over the year despite the excellent progress
made in developing the asset. EMH’s price depreciation came off multi-year highs achieved during 2021 and
followed the general trend of the AIM basic resource index, which was also down year on year, reflecting the
risk-off approach we have seen with investors since mid-Aug 2021.

These negative year-over-year returns contradict the fundamental drivers in our portfolio, namely the
incredible growth of the lithium raw material market and the stabilisation of the iron ore market. Therefore,
the driver for the lacklustre performance appears to be a weakening in equity funds flow. Investment fund flows
were the weakest in eight years as investors turned their backs on UK equity funds in 2022, selling a record
£8.38 billion. In summary, Investors have sold UK equity and sought the safest havens, taking refuge in cash and
perceived lower-risk investments.

As previously stated, the lithium market has continued to expand rapidly. The global lithium-ion battery
manufacturing industry's expansion to feed the transportation sector's electrification fuelled this growth. This
expansion results from a concerted shift toward decarbonisation and net zero targets set by the private sector
and governments worldwide. The IEA predicts that demand for EV batteries will rise from around 340 Gigawatt
hours (GWh) today to over 3,500 GWh by 2030, with the industry requiring 50 additional lithium mines by then.
These macro drivers should continue to support the fundamentals behind our lithium and rare earth
investments.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

CHIEF EXECUTIVE OFFICER’S COMMENTARY (CONTINUED)

Within the iron ore market, although we saw a softening in the first of the year, it recovered by the end of 2022,
with the 62% Fe Platts closing at circa US$117 per dry metric tonne ("dmt”). Both short and longer-term
prospects for iron ore are driven by China, given that the nation is the world's biggest steel producer and
currently buys about 70% of global seaborne iron ore.

In the coming year, we look forward to further developing the Amapa Iron Ore project, progressing the
permitting pathway, and, if possible, securing a joint venture partner to co-develop the asset.

With our other investments, we look forward to developments at Evergreen Lithium, which given its proximity
to the Finnis project, represents the most prospective investment in our portfolio. Hastings and EMH are well
advanced in their development cycle, and we look forward to seeing the construction of the beneficiation plant
at Hastings in Q3 of this year and the publication of the EMH Definitive Feasibility Study in Q4 of this year.

As discussed in the Investment Review, Cadence’s ambition is to mitigate the need for external capital by
growing and reinvesting the profits from our assets under management. We believe we are on our way to
achieving this goal with our investments over the last three years of £8.64 million being funded by £7.77 million
of sales in our public portfolio and £0.87 million from equity capital. Excluding the equity funding for our
investments over the last three years Cadence has raised a total net funding from external sources of £3.72
million. At the time of writing, the realised profit since inception from the current public portfolio is £5.27
million and a total unrealised and realised gain is 338%.

I want to express my gratitude to the Cadence team and our investee companies, who have all worked tirelessly
to bring the Company and its investment to their current position. We believe concentrating risk across a few
crucial assets and commodities will pay off.

Kiran Morzaria
Chief Executive Officer, 22 June 2023

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW

As outlined in the section “Our Business and Investment Strategy” in the Annual Report, Cadence operates an
investment strategy in which we invest in private projects via a private equity model and public equity. In both
investment classes, we take either an active or passive role. We have reported in these segments below.

Overall, we achieved our goals within our private investment portfolio. Amapá delivered against its operational
targets, and the publication of the PFS outlined a potential asset value well above the valuation we have been
investing at. For Evergreen Lithium and our Investment in the Yangibana Rare Earth deposit, our goals were to
monetise these illiquid assets at a higher valuation for re-investment in our portfolio. We reached agreements
that would have achieved this during the year, delivering a 335% cumulative return on our investments. However,
due to regulatory delays outside our control, the crystallisation of this value was only after the year-end.

Our public portfolio followed the overall risk-off, the downward trend of the AIM basic resource index. In
particular, our holding in EMH reduced in price by 49% during the year, impacting our cumulative returns and was
reflected in our share price. Nonetheless, we were able to sell some of this stake to partly fund our continuing
investment in Amapá; the realised return on these sales was some 174% our overall return on EMH (realised and
unrealised) is some 264%.

The overall ambition of the portfolio is capital growth of the assets under management which should be reflected
in Cadence’s share price. We intend to fund this growth, where possible, by investing in undervalued assets, selling
these investments at higher valuations, and reinvesting the proceeds.

Once we reach critical mass in terms of assets under management, this investment cycle will mitigate the need
for outside capital, either in new equity or debt. Over the last three years, we have been slowly achieving this with
a total of £7.77 million in sales of our portfolio, which has partly funded a total of £8.64 million of new
investments. At the time of writing, the realised profit from the current public portfolio is £5.27 million since
inception.

PRIVATE INVESTMENTS, ACTIVE
The Amapá Iron Ore Project, Brazil
Interest – 30% at 31/12/2022 and 30% at 31/05/2023

The Amapá Project is a large-scale iron ore mine with associated rail, port and beneficiation facilities that
commenced operations in December 2007. The Project ceased operations in 2014 after the port facility suffered
a geotechnical failure, which limited iron ore export. Before the cessation of operations, the Project generated an
underlying profit of US$54 million in 2012 and US$120 million in 2011. Operations commenced in December 2007,
and 2008, the Project produced 712 thousand tonnes of iron ore concentrate. Production steadily increased,
producing 4.8 Mt and 6.1 Mt of iron ore concentrate products in 2011 and 2012, respectively.

Investment

In 2019 Cadence entered into a binding investment agreement to invest in and acquire up to 27% of the Amapá
iron ore mine, beneficiation plant, railway and private port owned by DEV. The agreement also gave Cadence a
first right of refusal to increase its stake to 49%. To acquire its 27% interest, Cadence invested US$6 million over
two stages in a joint venture company. The first stage is for 20% of the JV, the consideration for which was US$2.5
million. The second stage was for a further 7% of the JV for a consideration of US$3.5 million. Both of these
investments were completed in the first quarter of 2022. In October 2022, we increased this stake to 30% through
the conversion of loans, management capitalisation, consultancy charges, and cash investment.Cadence’s
investment in the Amapá Project at the end of the year was US$ 9.3 million for 30% of the asset.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

Operations Review
During the reporting period, the operational focus for the year at the Amapá Project was the completion of the
Pre-Feasibility Study (“PFS”) and the progress of the permitting pathway, including the regularisation of the mining
concessions, tailing storage facilities and the environmental permits.

Pre-Feasibility Study
As part of the PFS, the Amapá Project increased and upgraded its Mineral Resource Estimate. This resulted in a
substantial crease in total Measured, Indicated and Inferred Mineral Resources to 276.24 million tonnes grading
38.33% Fe and a maiden Measured Resource of 55.33 Mt grading 39.26% Fe.

The PFS was completed during the year, with the results announced in early January 2023. The PFS confirmed the
potential for the Amapá Iron Ore Project to produce a high-grade iron ore concentrate and generate strong returns
over its life of mine. It delivered a robust 5.28 Mtpa operation which can provide excellent cash flows and a post-
tax NPV of US$949 million.

The Key Highlights of the PFS are below:

•

Annual average production of 5.28 million dry metric tonnes per annum ("Mtpa") of Fe concentrate,
consisting of 4.36 Mtpa at 65.4% Fe and 0.92 Mtpa at 62% Fe concentrate.

Post-tax Net Present Value ("NPV") of US$949 million ("M") at a discount rate of 10%.

Post-tax Internal Rate of Return of 34%, with an average annual life of mine EBITDA of US$235 M annually

• Maiden Ore Reserve of 195.8 million tonnes ("Mt") at 39.34% Fe demonstrates an 85% Mineral Resource

conversion.

•

Free on Board ("FOB") C1 Cash Costs of US$35.53/dmt at the port of Santana. Cost and Freight ("CFR") C1
Cash Costs US$64.23/dmt in China.

Pre-production capital cost estimate of US$399 million, including the improvement and rehabilitation of the
processing facility and the restoration of the railway and the wholly owned port export facility

• Opportunities: exploration target at the Tucano Mine to further extend initial mine life and potential capital

savings at port loading facilities.

Based on the positive outcome of the PFS and subsequent consultations with the key contractors, three areas of
possible improvement to the Amapá Project were identified. The first was to review the historical drilling and
geological data north of the Amapá mining concessions. The data has been acquired and is currently being
processed to identify further iron ore resources, which, if present, would further increase the mine life.

The second area of potential improvement is a change in the layout of the port at Santana by moving the railway
loop further from the shore. After the year's end, a scoping study regarding this option was completed and
identified a potential net capital saving to the port refurbishment costs of US$28 million.

The last area of potential improvement is to investigate and review the flowsheet to improve the final product
quality over and above the current 65% iron ore concentrate. Once these studies are completed, work on a
Definitive Feasibility Study (“DFS”) can begin. The DFS is required to seek project debt and equity finance, which
will be sought once the DFS is complete.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

Permitting Pathway
Although DEV owns the Mining Concessions, it does need to obtain Mine Extraction and Processing Permit to
begin operations, and this is done by obtaining an Operational License ("LO") from the state environment
authority. Once this has been completed, DEV will apply for Mine Extraction Permit. Since the Project was acquired
by its current owners in 2022, DEV has made the required regulatory filings and embarked on studies and
maintenance works to comply with the National Mineral Agency requirements.

In 2022 DEV began the regularisation of the expired environmental permits. In consultation with the Amapá State
Environmental Agency and the relevant state authorities, DEV has requested that the requirement for an
environmental impact study be waived.

This request for a waiver was on the basis that the previous LOs were granted on an operation that is substantially
the same as is currently planned and remains applicable to future operations. DEV proposes that the company
submits an Environmental Control Plan - "PCA" (Plano de Controle Ambiental); and Environmental Control Report
- "RCA" (Relatório de Controle Ambiental). DEV has begun its proposed permit pathway for the Project based on
the above requirements of a PCA and RCA.

The proposed permit pathway for the Project has both legal and practical precedent and is a reasonable approach,
given the Project's status and level of development.

The state owns the railway line and associated land; therefore, for the Project to utilise this, it requires both the
LO and a concession agreement with the State of Amapá. The previous operators of the Project were granted this
concession in 2006 for 20 years under specific terms and conditions. The reinstatement of this concession to one
of DEV's 100% owned subsidiaries was in December 2019 and was extended to 2046. The concession allows DEV's
100% owned subsidiary to operate the railway to primarily transport iron ore from the mine to its port in Santana.
The State of Amapá owns the surface rights associated with the railway, and under the Railway Concession, DEV
has been granted use over these surface rights.

In addition to the LO detailed above, the company's port is regulated by the Agencia Nacional de Transportes
Aquaviários ("ANTAQ"). As a result of the change of ultimate beneficiary of DEV, a change of control request was
filed. This change of control was granted in November 2021. As part of the port change of control, ANTAQ agreed
to cease the recommended abrogation of the port concession. DEV owns the surface rights associated with the
port.

Secured Bank Settlement Iron Ore Shipments
As per the settlement agreement announced in December 2021 here, the net proceeds of the one shipment
carried out in 2022, along with approximately half of the net proceeds from the shipments in 2021, have been used
to pay the secured bank creditors.

The main driver for the lack of shipment during the year resulted from the impact of the Ukraine war and the
legacy of Covid on supply chains resulting in higher shipping costs and lower iron ore pricing. Other iron ore
producers in the region have been able to ship because their product is of a higher grade than our stockpiled
historical product (58% Iron), which typically will achieve a 10%-12% discount to 62% Fe Platts CFR. Given these
unprecedented macroeconomic conditions, DEV could not meet the 2022 payment schedule per the settlement
deed.

Although the bank creditors have reserved their rights, the settlement deed remains in full effect with all parties
in discussions to agree on a new timetable to rephase payments so these can be met in light of market conditions.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

With improving iron ore prices and stability returning to shipping costs, selling the 58% iron ore concentrate
stockpile is economically viable. Although DEV can recommend material shipment, the secured bank creditors
must approve such a shipment. Nonetheless, assuming that the secured bank creditors act under an economic
desire for their debt to be repaid, we expect shipping to recommence by the beginning of Q3 2023.

Development Plan for the Amapá Project
The goal is to bring this project back into production. With the PFS completed, a project would typically directly
proceed to DFS, funding, and construction. Cadence and Its joint venture partners have agreed that the lowest
risk and currently best commercial approach to developing this project is to bring on a highly experienced mining
operator or EPCM contractor as a joint venture partner, and we are working towards this goal. We currently have
three interested parties reviewing the data room in this regard. However, the above strategy does not preclude
the option for our joint venture company developing the project or embarking on trade sale of the project.

In our ongoing discussions with stakeholders of the Amapá Project, including shareholders of Cadence, there has
been concerns expressed in relation to the timing of the development of the project as we would have originally
expected to be in production at this point in time.

The extension of the development timeline is primary attributable to the almost two- and half-year delay in
reaching a settlement with the secured bank creditors, this was substantially more than we had all expected.
Given that a representative of the secured bank creditors indicated that they would be amenable to being paid
from the cashflow after operations had started. However, it transpired that the secured bank creditors were
seeking payment from the iron ore stockpiles and as such alongside our joint venture partners we negotiated a
substantial reduction if the amounts payable delivering substantial long term cash savings to the project.

In the absence of a settlement, as per the investment agreement with our joint venture partners, Cadence did not
want to risk capital in the project and therefore did not invest any substantial monies until this matter had been
resolved. It was only at this point in February 2022 that investment in the project and could start in earnest.

PRIVATE INVESTMENTS, PASSIVE
Evergreen Lithium Limited, Australia
Interest – 13.16% at 31/12/2022 and 8.74% on 31/05/2023

In July 2022, Cadence Minerals received approximately 15.8 million shares in Evergreen Lithium (“Evergreen”)
when Cadence sold its 31.5% stake in Lithium Technologies and Lithium Supplies ("LT and LS") to Evergreen as
announced on 27 June 2022. After the year-end, Evergreen was listed on the Australian Stock Exchange (”ASX”).
Before listing, Cadence's equity stake in Evergreen was 13.16%; due to the IPO and associated fundraising, this
was reduced to 8.74%. At the time of writing, the value of this stake was approximately £3.3 million; our initial
investment into this asset was £0.83 million.

A further AS$ 6.63 million (£3.80 million) shares in Evergreen are due to Cadence on achieving certain
performance milestones by Evergreen. Further details of these milestones can be found in the Evergreen
prospectus. Cadence's shares are subject to a 2-year escrow agreement as determined by the listing rules of the
ASX.

On acquiring LT and LS, Evergreen became the 100% owner of three exploration tenements. The Bynoe Lithium
Project and Fortune Lithium Project (awaiting grant of exploration permit) are located in the Northern Territory,
and the Kenny Lithium Project is in Western Australia.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

The Bynoe Lithium Project is Evergreen's flagship prospect. Evergreen's primary focus is to explore and discover
an economically viable lithium resource for development. The Bynoe Lithium Project is located south of Darwin in
the Northern Territory, Australia. It covers the north-eastern strike extent of the lithium- and tantalum-endowed
Bynoe Pegmatite Field.

The Bynoe Pegmatite Field is host to Core Lithium Ltd's (ASX: CXO) ("Core Lithium" or "Core") high-grade Finniss
lithium deposit, which is adjacent to Core Lithium's producing lithium mine. Core Lithium's deposit is just 1.2km
from the Bynoe Lithium Project. Soil sampling conducted on the Bynoe Lithium Project has returned geochemical
anomalies that indicate the lithium mineralisation continues along the trend into the Company's

Bynoe Lithium Project. Based on the initial stages of soil sampling alone (which only covers approximately 10- 20%
of the Bynoe Lithium Project area, an initial five target zones have been identified that contain lithium
mineralisation. The Bynoe Lithium Project covers an area of 231 km2, making Evergreen one of the largest
tenement holders within the central Bynoe Pegmatite Field after Core Lithium.

In recent years, exploration activities within the Bynoe Field have been focused on the discovery of economic
lithium mineralisation hosted in pegmatites, the most successful of which has been Evergreen's neighbour, Core
Lithium, which in a very short time frame, has delineated a JORC mineral resource of 18.9mt at 1.32% Li2O at its
Finniss Project. Core Lithium has achieved excellent drilling intercepts at their BP33 prospect of 107 metres at
1.70% Li2O, located within 1km of the Bynoe Lithium Project and Core Lithium's Finniss (BP33) mine. Evergreen
intends to expand the geochemical soil sampling significantly. In addition, Evergreen recently completed an
Ambient Noise Topography ("ANT") Survey and is currently awaiting its geophysical interpretation. Core Lithium
recently used ANT (refer to ASX announcement Core Lithium, 1 August 2022, "BP33 drilling delivers outstanding
results"). Core noted the results were an "outstanding success" and showed "excellent correlation" with known
pegmatite bodies already identified by drilling. Once the baseline geochemical and geophysical data is collected,
Evergreen plans to systematically drill the anomalies, starting with the highest priority along strike from Core
Lithium's mineralised pegmatites.

The Kenny Lithium Project is located within the Dundas Mineral Field of Western Australia and 50km East of
Norseman in the Eastern Goldfields. It is near the Mt Dean and Mt Belches-Bald Hill pegmatite fields, and multiple
significant lithium discoveries have been made near the Kenny Lithium Project.

The Kenny Lithium Project covers an area of 210 km2, providing Evergreen with a large and prospective land
holding within the Dundas mineral field.

The Kenny Lithium Project lies at the southern end of the Norseman-Wiluna Granite Greenstone Belt within the
Archaean Yilgarn Craton. This well-known lithium-producing region/mineral field is host to the significant Mount
Marion, Bald Hill and Baldania mines, respectively, close to the Company's Kenny Lithium Project.

Initial field mapping on the Kenny Lithium Project has confirmed the presence of substantial outcropping
pegmatites, whereby an approximate 10km zone of pegmatite outcropping has been confirmed in the North-
Eastern section of the Kenny Lithium Project, which significantly exceeds what has already been identified by the
Government Survey of Western Australia (GSWA).

Evergreen aims to explore and discover an economic lithium resource for subsequent development. As with the
Company's Bynoe Lithium Project, minimal geochemical work has been undertaken within the tenure; however,
historical results have proven encouraging. Evergreen has recently completed a comprehensive auger program,
drilling 1,731 holes.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)
Since the end of the year, Evergreen, listed on the ASX, has continued to progress the development of these assets
with some initial positive results from the geochemical results on both the Byone and Kenny lithium prospects.

PRIVATE INVESTMENTS, PASSIVE
Sonora Lithium Project, Mexico
Interest – 30% on 31/12/2022 and 31/05/2023

Cadence holds an interest in the Sonora Lithium Project via a 30% stake in the joint venture interests in each of
Mexalit S.A. de CV ("Mexalit") and Megalit S.A. de CV ("Megalit").

Mexalit forms part of the Sonora Lithium Project. The Sonora Lithium Project consists of ten contiguous
concessions covering 97,389 hectares. Two of the concessions (La Ventana, La Ventana 1) are owned as of the date
100% by subsidiaries of Gangfeng Lithium Co., Ltd (“Gangfeng”). El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1
concessions are owned by Mexalit S.A. de C.V. (“Mexalit”), which is owned 70% by Gangfeng and 30% by Cadence.

The Sonora Project holds one of the world’s largest lithium resources and benefits from being both high-grade and
scalable. The polylithionite mineralisation is hosted within shallow dipping sequences, outcropping on the surface.
A Mineral Resource estimate was prepared by SRK Consulting (UK) Limited (‘SRK’) following NI 43- 101.

The current lithium resources and reserves for the Sonora Lithium Project and the attributable amounts to
Cadence are available here: https://www.cadenceminerals.com/projects/sonora-lithium-project/.

A feasibility study report was published in January 2018, which confirmed the positive economics and favourable
operating costs of a 35,000 tonnes per annum battery-grade lithium carbonate operation.

The feasibility study report estimates a pre-tax project net present value of US$1.253 billion at an 8% discount rate,
an Internal Rate of Return of 26.1%, and Life of Mine operating costs of US$3,910/t of lithium carbonate. It should
be noted that under the published feasibility study, the concession owned by Mexalit will be mined starting in
year 9 of the mine plan and cease at the end of the mine life in year 19, and as such, assuming Cadence retains its
position, any net realisable economic benefit to Cadence would only accrue at this time.

The full report can be found here:
https://bacanoralithium.com/_userfiles/pages/files/documents/bacanorafstechnicalreport25012018_compress
ed.pdf

In 2021, Mexican politicians from the MORENA party tabled a draught bill to reform Mexico's energy sector,
including statements that lithium would be included among the minerals considered strategic for the energy
transition and that no new concessions for lithium exploitation by private companies could be granted. After the
year-end, the Mexican senate elevated lithium deposits to the "strategic minerals" category, declaring lithium's
exploration, exploitation, and use as the state's exclusive right. In February 2022, the Mexican government
established a decree that reserved some 234,855 hectares as a lithium mining reserve, which includes the areas
covered by the Sonora Lithium Project. However, the Decree also notes that the rights and obligations of the
holders of current mining concessions within the lithium mining reserve area are not affected.

We are constantly examining possible legislative changes. Our current view is that the Decree passed by the
senate only impacts licenses, concessions, or contracts to be granted, not already those given, as is the case for
the Sonora Lithium Project. Therefore, at this point, we do not believe there is a material impact on our joint
venture areas.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

PRIVATE INVESTMENTS, PASSIVE
Yangibana Project, Australia Interest - 30% at 31/12/2022

In June 2022, Cadence entered into a binding agreement to sell its working interest in the leases in the Yangibana
Project to Hastings Technology Metals (ASX: HAS) ("Hastings"), the current owner and operator of the Yangibana
Rare Project. Cadence sold its 30% working interest in the Yangibana Project tenements, to Hastings, for A$9
million (£5.1 million), which has been satisfied via the issue of 2,452,650 new ordinary shares in Hastings to
Cadence. These shares represent approximately 1.9% of the current issued share capital of Hastings Technology
and are subject to a 12-month voluntary escrow. At the time of writing, the value of this stake was approximately
£1.9 million; our initial investment into this asset was £0.91 million.

Hastings is a well-managed Perth-based rare earth company primed to become the world's next producer of
neodymium and praseodymium concentrate (“NdPr”). NdPr is vital in manufacturing permanent magnets used
daily in advanced technology products ranging from electric vehicles to wind turbines, robotics, medical
applications and digital devices.

Hastings flagship Yangibana project, in the Gascoyne region of Western Australia, contains a highly valued NdPr
deposit with an NdPr: TREO ratio of up to 52%. The site is permitted for long-life production and with offtake
contracts signed and debt finance in an advanced stage.

Hastings announced after the year's end that it had introduced a staged development programme to the
Yangibana asset. This strategy will reduce upfront capital requirements and project execution risks and provide a
faster pathway to cash flow by Q1 2025. Hastings will initially focus on constructing the Yangibana mine and
beneficiation plant to produce rare earths concentrate (Stage 1), followed by developing a hydrometallurgical
plant to produce mixed rare earth carbonate (Stage 2). This has resulted in the total project capital cost being
estimated at $948m, with the Stage 1 component being $470m. The beneficiation plant construction will
commence in Q3 2023, supporting the Stage 1 concentrate delivery target date of Q1 2025.

As a result of this staged development programme, Stage 1 will have a post-tax NPV11 of $538m, an IRR of 27.54%
and an average annual EBITDA of $174m, providing a funding source for Stage 2.

PRIVATE INVESTMENTS, PASSIVE
Ferro Verde Iron Ore, Brazil Interest - 1% at 31/12/2022

During the year, Cadence made a small (£0.21 million) in an advanced iron ore deposit in Brazil. The Ferro Verde
Deposit is located in the southern portion of the state of Bahia, in the northeastern region of Brazil, next to the town
of Urandi, some 700 km southwest of Salvador, the capital of the state of Bahia.

The project is currently progressing its definitive feasibility study. It has a historic inferred resource of 284 million
tonnes of iron ore at 31% Fe. The intent is to produce 4.5 Mtpa of 67% Fe. Our intended exit strategy is either
when the asset is listed, or the owners carry out a trade sale.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

PUBLIC EQUITY
The public equity investment segment includes active and passive investments in our trading portfolio.

The trading portfolio consists of investments in listed mining entities that the board believes possess attractive
underlying assets. The focus is to invest in mining companies that are significantly undervalued by the market and
where there is substantial upside potential through exploration success and/or the development of mining projects
for commercial production. Ultimately, the aim is to make capital gains in the short to medium term. Investments
are considered individually based on various criteria and are typically traded on the TSX, ASX, AIM or LSE.

During the period, our public equity investments generated an unrealised loss of £4.59 million (2021: profit of
£0.58 million). These unrealised losses tracked our largest holding, European Metals Holdings (“EMH”), down
some 49% over the year despite the excellent progress in developing the asset. We realised a profit from sales of
£0.55 million (2020: £0.59 million). Most of these profits were derived from selling European Metals Holdings
shares. If we look at the portfolio performance since inception the sales made during the year represented a 174%
profit above the original purchase price. Our investment in EMH is the only active investment in the public equity
portfolio.

The movement in public portfolio values during the year is summarised below.

Portfolio value at the beginning of period of 2022
New Investments public investments during the
year
Disposal of public Investments during the year

Realised and Unrealised loss on portfolio value for
the period
Portfolio value at the end of the period

Commentary

The majority of disposal was in EMH
with proceeds reinvested into Amapá
The majority of the loss driven by a
reduction in EMH share price

£,000
11,974
235

(1,927)

(5,038)

5,244

As of 31 December 2022, our public equity stakes consisted of the following:

Company

European Metals Holding Ltd
Charger Metals NL
Macarthur Minerals Ltd
Eagle Mountain Mining Ltd
Mont-Royal Resources Ltd
Celsius Resources Ltd
Miscellaneous
Total

31-Dec-22
£,000
4,882
301
-
37
19
-
5
5,244

30-Jun-22
£,000
5,357
196
103
47
39
-
5
5,747

31-Dec-21
£,000
11,287
342
181
122
35
-
7
11,974

30-Jun-21
£,000
14,180
109
327
153
-
103
6
14,878

31-Dec-20
£,000
13,426
-
329
-
-
-
6
13,761

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

INVESTMENT REVIEW (CONTINUED)

PUBLIC EQUITY, ACTIVE
European Metals Holdings Limited (“European Metals”)
Interest – 7.0% at 31/12/2022 and 6.5% 31/05/2022

Cadence has held an investment in European Metals since June 2015. As of year-end, Cadence held 7.0% in
European Metals.

European Metals owns 49% of Geomet s.r.o. with 51% owned by CEZ. CEZ is a significant energy group listed on
various European Exchanges. Geomet s.r.o. owns 100% of Cinovec which hosts a globally significant hard- rock
lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and 0.04% Sn and an Inferred
Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium
Carbonate Equivalent and 263kt of tin, as reported to ASX on 28 November 2017 (Further Increase in Indicated
Resource at Cinovec South).

An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and 0.09% Sn reported on 4 July 2017 (Cinovec Maiden Ore
Reserve –has been declared to cover the first 20 years’ mining at an output of 22,500tpa of battery-grade lithium
carbonate reported on 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium Carbonate).
This makes Cinovec the largest hard-rock lithium deposit in Europe, the fourth largest non-brine deposit in the
world and a globally significant tin resource.

For the reporting period EMH continued to manage the advancement of the Cinovec Lithium/Tin Project in Czech
Republic. The macro conditions relative to the Project have been very strong for the period. Despite some recent
falls, the lithium price remains at very high levels relative to historic prices, and at a level where the financial
parameters of the Project are exceptionally strong. In addition to pricing, the global focus on long term security of
strategic metals has increased dramatically and the Company expects this factor to play an increasingly important
role in moving the Project towards production.

The reporting period was highlighted by EMH’s announcement in January 2022, updating the 2019 PFS, which
indicated a post-tax NPV of US$1.938Bn and a post-tax IRR of 36.3%.

In addition, European Metals announced very significant developments in the optimisation of the flowsheet for
the processing plant. European Metals announced that it had finalised a considerably simplified Lithium Chemical
Plant (“LCP”) flowsheet with the initial six locked cycle test (“LCTs”) providing 99.99% pure Lithium Carbonate.

The simplification of the central section of the LCP flowsheet reduces the number of basic chemical engineering
unit processes (after the initial roast/water leach) from 15 to 7. The revised process also results in the elimination
of all energy-intensive cooling processes. The Company has been advised by its principal hydrometallurgical
adviser, Lithium Consultants Australasia (LCA), that the changes to the LCP noted above are expected to reduce
both Capex and Opex in the LCP by 10-20%.

European Metals continued progress towards finalisation of the DFS, which scheduled for completion in Q4 2023.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

FINANCIAL REVIEW

Total comprehensive income for the year attributable to equity holders was a loss of £5.50m (2021: £0.14m).
This decrease in profitability from the previous year of approximately £5.36m is mainly due to the reduced
amount of realised and unrealised profits and losses on for the year of approximately £4.04m (2021: £1.17m)
relating to our share investment portfolio (listed financial investments) held during the period. Administrative
expenses were down £0.34m from £1.80m to £1.46m, but foreign exchange gains were down £0.452m from
£0.455m to £0.003m.

Basic negative earnings per share was 3.355p (2021: 0.102p).

The net assets of the Group at the end of the period were £21.32 million (2021: £22.15 million). This decrease
of approximately £0.83m reflects the losses and shares issued in the year.

PRINCIPAL RISKS AND UNCERTAINTIES

Cadence continuously monitors its risk exposures and reports its review to the Board. The Board reviews these
risks and focuses on ensuring effective systems of internal financial and non-financial controls are in place and
maintained.

The main business risk is considered to be investment risk.

The Company faces external risks that can materially impact or influence the investment environment within
which the Company operates and can include changes in commodity prices, and the numerous factors which
can influence those changes, including economic recession and investor sentiment and including the current
and potential effects of the coronavirus pandemic.

Commodity prices have an impact on the investment performance and prospects of all our investments. The
extent of the impact varies depending on a wide variety of factors but depend largely by where the investment
sits on the mineral development curve. The majority of Cadence’s investments sit at the more advanced stage
of the development curve. Commodity price risk is pervasive at all stages of the development curve, but other
prominent risks such as exploration risk and technical and funding risks at the exploration/development stage,
may be considered to be weighted higher earlier in the curve than pure commodity risk which tends to have a
greater impact on producers.

The Company’s investments are located in jurisdictions other than the UK and therefore carries with it country
risk, regulatory/permitting risk, political risk, and environmental risk. Our investments can be at different
stages of development and each stage within the mining exploration and development cycle can carry its own
risks.

Where possible Cadence seeks to mitigate these risks by structuring its investments in a format which the
Board can influence, obtain high level oversight (often at board level) and use legal agreements to provide
control mechanisms (often negative control) to protect the Company’s investments. In addition, we seek to
further mitigate our risk exposure by obtaining a deep fundamental understanding of an asset, its potential
economics, operating and legal environment and its management team, prior to investment.

It should be noted that because the Company does not operate its project investments on a day-to-day basis,
there is a risk that the operator does not meet deadlines or budgets; fails to propose or pursue the appropriate
strategy; does not adhere to the legal agreements in place or does not provide accurate or sufficient
information to Cadence on a timely basis.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

PRINCIPAL RISKS AND UNCERTAINTIES (CONTINUED)

The equity investment segment of the Company’s investments is exposed to price risk within the market,
interest rate changes, liquidity risk and volatility. Although the investment risk within the portfolio is
dependent on many factors, the Group’s principal investments at the year-end are in companies with
significant iron ore and lithium assets and, to some extent, dependent on the market’s view of these
commodities or chemicals and/or the market’s view of the management of the companies in managing those
assets. As with our private investment, the Board seeks to mitigate this by obtaining a deep fundamental
understanding of an asset and its potential economics; its operating and legal environment and its
management team, prior to any investment by Cadence.

All countries carry political risk that can lead to interruption of activity. Politically stable countries can have
enhanced environmental and social risks; risks of strikes and changes to taxation; whereas less developed
countries can have, in addition, risks associated with changes to the legal framework; civil unrest and
government expropriation of assets. The Company has working knowledge of the countries in which the joint
venture holds exploration licences, and its local joint venture partner has experienced local operators to assist
the Company in its management of its investment in order to help reduce possible political risk.

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

DIRECTORS’ SECTION 172 STATEMENT

The following disclosure describes how the Directors have had regard to the matters set out in section
172(1)(a) to (f) and forms the Directors’ statement required under section 414CZA of The Companies Act 2006.
This new reporting requirement is made in accordance with the new corporate governance requirements
identified in The Companies (Miscellaneous Reporting) Regulations 2018, which apply to company reporting
on financial years starting on or after 1 January 2019.

The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider, in good
faith, would be most likely to promote the success of the Company for the benefit of its members as a whole,
and in doing so have regard (amongst other matters) to:

•
•
•
•
•
•

the likely consequences of any decisions in the long-term;
the interests of the Company’s employees;
the need to foster the Company’s business relationships with suppliers/customers and others;
the impact of the Company’s operations on the community and environment;
the Company’s reputation for high standards of business conduct; and
the need to act fairly between members of the Company.

As set out above in the Strategic Report the Board remains focused on providing for shareholders through the
long term success of the Company. The means by which this is achieved is set out further below.

Likely consequences of any decisions in the long-term;
The Chairman’s Statement, the Chief Executive Officer’s Commentary and the Strategic Review set out the
Company’s strategy. In applying this strategy, particularly in seeking new Project Investments and strategic
holdings in other public companies, the Board assesses the long term future of those companies with a view
to shareholder return. The approach to general strategy and risk management strategy of the group is set out
in the Statement of Compliance with the Quoted Companies Alliance (“QCA”) Corporate Governance Code
(the “QCA Code”) (Principles 1 and 4) on pages [23-24].

Interest of Employees;
The Group has a very limited number of employees, and all have direct access to the Executive Directors on a
daily basis and to the Chairman, if necessary. The Group has a formal Employees’ Policy manual which includes
process for confidential report and whistleblowing.

Need to foster the Company’s business relationships with suppliers/customers and others;
The nature of the Group’s business is such that the majority of its business relationships are with joint venture
partners, the boards of directors of the companies in which the Group has strategic stakes to the extent that
such relationships are permitted, and with suppliers for services. As the success of the business primarily
depends on its relationship with its partners and investees, the Executive Directors manage these
relationships on a day-to-day basis. Where possible, the Group will take a board, or similar appointment, in
strategic investees to ensure that there is a close and successful ongoing dialog between the parties. Service
providers are paid within their payment terms and the Group aims to keep payment periods under 30 days
wherever practical.

Impact of the Company’s operations on the community and environment;
The Group takes its responsibility within the community and wider environment seriously. Its approach to its
social responsibilities is set out in the Statement of Compliance with the QCA Code (Principle 3) on page [24].

CADENCE MINERALS PLC
STRATEGIC REPORT
For the year ended 31 December 2022

DIRECTORS’ SECTION 172 STATEMENT (CONTINED)

The desirability of the Company maintaining a reputation for high standards of business conduct;
The Directors are committed to high standards of business conduct and governance and have adopted the
QCA Code which is set out on pages [23 to 30]. Where there is a need to seek advice on particular issues, the
Board will consult with its lawyers and nominated advisors to ensure that its reputation for good business
conduct is maintained.

The need to act fairly between members of the Company;
The Board’s approach to shareholder communication is set out in the Statement of Compliance with the
(Principle 2) on page [23]. The Company aims to keep shareholders fully informed of significant developments
in the Group’s progress. Information is disseminated through Stock Exchange announcements, website
updates and, where appropriate video/web casts. During the year the Company issued various RNS and videos
to update shareholders. All information is made available to all shareholders at the same time and no
individual shareholder, or group of shareholders, is given preferential treatment.

CADENCE MINERALS PLC
REPORT OF THE DIRECTORS
For the year ended 31 December 2022

The Directors present their annual report together with the audited financial statements of the Company for
the Year Ended 31 December 2022.

Principal activity
The Company is an investment entity. The principal activity of the Company is that of holding assets involved
in the identification, investment and development of mineral resources.

Domicile and principal place of business
Cadence Minerals plc is domiciled in the United Kingdom, which is also its principal place of business.

Business review and Future Development
The results of the Company are shown on page [39].

Results and Dividends
The Directors do not recommend the payment of a dividend. A review of the performance of the Company
and its future prospects is included in the Strategic Report on pages [1 to 18].

Key Performance Indicators
Due to the current status of the Company, the Board has not identified any performance indicators as key
other than cash management and the carrying value and return of its investments. The carrying value and
returns on its investments are reviewed on pages [6 to 14]. Having sufficient cash for business operations is
vital and must be managed accordingly. The Directors review and manage the Group’s cash flow on a monthly
basis. The financial strategy is to ensure that, wherever possible, there are sufficient funds to cover corporate
overheads and exploration expenditure for as long a period as possible. Management has confidence that
financing of the Company can continue as and when required, albeit the board is keen to avoid excessive
dilution and will manage the financing process with that objective in mind. Investments are closely managed
and monitored; further details are included in the Chairman’s statement.

The monitoring and management of the carrying value of investments are specified on pages [1 to 14].

Furthermore, the Company has ensured that where possible it has built operational flexibility in its corporate
and exploration expenditure to be paused should the financing environment prove difficult and cash
preservation prove essential.

Principal risks and uncertainties
The principal risks and uncertainties facing the Company involve are specified on pages [15 to 16].

Financial risk management objectives and policies
The Company’s principal financial instruments are available for sale assets, trade receivables, trade payables,
loans and cash at bank. The main purpose of these financial instruments is to fund the Company's operations.
It is, and has been throughout the period under review, the Company’s policy that no trading in financial
instruments shall be undertaken. The main risks arising from the Company’s financial instruments are liquidity
risk and interest rate risk. The Board reviews and agrees policies for managing each of these risks and they are
summarised below. Further information is available in Note [12].

Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the
use of equity and its cash resources. Further details of this are provided in the principal accounting policies,
headed 'going concern' and Note [12] to the financial statements.

CADENCE MINERALS PLC
REPORT OF THE DIRECTORS
For the year ended 31 December 2022

Interest rate risk
The Company only has borrowings at fixed coupon rates and therefore minimal interest rate risk, as this is
deemed its only material exposure thereto. The Company seeks the highest rate of interest receivable on its
cash deposits whilst minimising risk.

Market risk
The Company is subject to market risk in relation to its investments in listed Companies held as available for
sale assets.

Foreign exchange risk
The Company operates foreign currency bank accounts to help mitigate the foreign currency risk, and currently
has little exposure except through its investments.

Political Donations and Expenditure
No charitable or political contributions were made during the current or previous year.

Directors
The membership of the Board is set out below. All directors served throughout the period unless otherwise
stated.

Andrew Suckling
Kiran Morzaria
Donald Strang
Adrian Fairbourn

Substantial shareholdings
Interests in excess of 3% of the issued share capital of the Company which had been notified as at 14 June
2023 were as follows:

Hargreaves Lansdown (Nominees) Limited (15942)
Interactive Investor Services Nominees Limited (SMKTISAS)
Barclays Direct Investing Nominees Limited
Hargreaves Lansdown (Nominees) Limited (VRA)
Interactive Investor Services Nominees Limited (SMKTNOMS)
JIM Nominees Limited
HSDL Nominees Limited
Hargreaves Lansdown (Nominees) Limited (HLNOM)
Vidacos Nominees Limited
Link Market Services Trustees (Nominees)Limited
HSBC Global Custody Nominee (UK) Limited

Ordinary shares
held Number
21,598,345
14,853,700
13,879,310
12,643,126
11,142,703
9,880,516
9,678,320
9,405,863
6,722,461
6,380,000
5,443,479

Percentage of
capital %
11.93%
8.21%
7.67%
6.99%
6.16%
5.46%
5.35%
5.20%
3.71%
3.53%
3.01%

Payment to suppliers
It is the Company's policy to agree appropriate terms and conditions for its transactions with suppliers by
means ranging from standard terms and conditions to individually negotiated contracts and to pay suppliers
according to agreed terms and conditions, provided that the supplier meets those terms and conditions. The
Company does not have a standard or code dealing specifically with the payment of suppliers.

Trade payables at the year end all relate to sundry administrative overheads and disclosure of the number of
days purchases represented by year end payables is therefore not meaningful.

CADENCE MINERALS PLC
REPORT OF THE DIRECTORS
For the year ended 31 December 2022

Events after the Reporting Period
Events after the Reporting Period are outlined in Note [15] to the Financial Statements.

Going concern
The Directors have prepared cash flow forecasts for the period ending 31 March 2025 which take account of
the current cost and operational structure of the Company, as described further on page [44].

The cost structure of the Company comprises a high proportion of discretionary spend and therefore in the
event that cash flows become constrained, costs can be quickly reduced to enable the Company to operate
within its available funding.

These forecasts demonstrate that the Company has sufficient cash funds available to allow it to continue in
business for a period of at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.

CADENCE MINERALS PLC
REPORT OF THE DIRECTORS
For the year ended 31 December 2022

DIRECTORS’ RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the Company financial statements in accordance with UK adopted
International Accounting Standards (IAS). Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss
of the Company for that period. In preparing these financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- state whether applicable IFRSs 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

Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.

In so far as each of the Directors are aware:
• there is no relevant audit information of which the Company's auditors are 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 auditors are aware of that information.

The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company's website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.

Auditors

PKF Littlejohn LLP offer themselves for re-appointment as auditor in accordance with Section 489 of the
Companies Act 2006.

ON BEHALF OF THE BOARD

Kiran Morzaria
Chief Executive Officer, 22 June 2023

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

Introduction to Governance

The Directors recognise that good corporate governance is a key foundation for the long-term success of the
Company. As the Company is listed on the AIM market of the London Stock Exchange and is subject to the
continuing requirements of the AIM Rules. The Board has therefore adopted the principles set out in the
Corporate Governance Code for small and midsized companies published by the Quoted Companies Alliance
(“QCA Code”). The principles are listed below.

While building a strong governance framework, we also try to ensure that we take a proportionate approach
and that our processes remain fit for purpose as well as embedded within the culture of our organisation. We
continue to evolve our approach and make ongoing improvements as part of building a successful and
sustainable company.

1. Establish a strategy and business model which promote long-term value for shareholders
Our strategy is to identify undervalued assets with irreplaceable strategic advantages that will deliver capital
growth to our shareholders. We invest in these assets and where required help deliver capital growth. To meet
long-term demand, we believe the metals and mining sectors require focused investment capital from
knowledgeable investors that understand the substantial risk of the mineral resource sector and how to
mitigate these risks to maximise potential returns for our investors.

A more detailed description of its Strategy and Business Model is available on page [1]. Details on the principal
risks and uncertainties which the Company faces are specified on pages [15 to 16]. The Company seeks to
share this vision and details of the implementation of its strategy through internal dialogue with employees as
well as external communications by way of public announcements and dissemination of information through
this website and the annual report and accounts.

2. Seek to understand and meet shareholder needs and expectations
The Board is committed to maintaining an open dialogue with shareholders. Communication with the Board
is committed to maintaining an open dialogue with shareholders. Communication with shareholders is
coordinated by the CEO. Cadence encourages two-way communication with institutional and private investors.
The Company’s major shareholders maintain an active dialogue and ensure that their views are communicated
fully to the Board. Where voting decisions are not in line with the Company’s expectations the Board will engage
with those shareholders to understand and address any issues. The Company Secretary is the main point of
contact for such matters.

The Company seeks out appropriate platforms to communicate to a broad audience its current activities,
strategic goals and broad view of the sector and other related issues. This includes but is not limited to media
interviews, website videos in -person investor presentations and written content. Communication to all
stakeholders is the direct responsibility of the Senior Management team. Managers work directly with
professionals to ensure all inquiries (through established channels for this specific purpose such as email or
phone) are addressed in a timely matter. Managers also ensure that the Company communicates with clarity
on its proprietary internet platforms. The Board routinely reviews the Company communication policy and
programmes to ensure the quality communication with all stakeholders.

The Board believes that the Annual Report and Accounts, and the Interim Report published at the half-year
which can be found on the Company’s website, play an important part in presenting all shareholders with an
assessment of the Company’s position and prospects. All reports and press releases are published under the
“Investors” tab of the Company’s website.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

3. Take into account wider stakeholder and social responsibilities and their implications for long-term

success

The Board recognises its prime responsibility under UK corporate law is to promote the success of the
Company for the benefit of its members as a whole. The Board also understands that it has a responsibility
towards employees, partners, customers, suppliers and to the community and environment it operates in as
a whole.

Communication with and feedback from these various groups is achieved in a variety of ways. The Executive
Directors hold investor roadshows and webcasts on a regular basis, at which feedback from shareholders is
sought. Regular dialogue is maintained with employees through regular discussion and updates given by the
Executive Directors.

The nature of the Cadence’s business as an investment company means that although it has no direct effect
on the working environments and communities of the companies it invests in, it nonetheless liaises with the
management of its investee companies to understand their approach to stakeholder engagement and their
policies, which will form part of its investment criteria.

4. Embed effective risk management, considering both opportunities and threats, throughout the

organisation

The Board has an established Audit Committee, a summary of its roles and responsibilities is available on the
corporate governance webpage. The Committee is specifically charged with ensuring that Cadence as a whole
has the appropriate policies and processes in place to identify the risks which the Company is exposed to and
to proactively mitigate those risks as appropriate.

The Company maintains a register of risks and publishes an overview of significant risks and uncertainties in
its Annual Report. Please refer to the Company’s Annual Report and Accounts for further details on the
principal risks and uncertainties which the Company faces.

The Company receives regular feedback from its external auditors on the state of its internal controls. The
Board maintains a register of risks and publishes an annual summary of the significant risks and uncertainties
in the Annual Report.

5. Maintain the board as a well-functioning, balanced team led by the chair
The Board is comprised of Andrew Suckling the Non-Executive Chairman, a Non-Executive Director and two
Executive Directors. The CEO, Kiran Morzaria, is engaged to work a minimum of a 27-hour week and is an
employee of the Company. The Finance Director, Donald Strang, is engaged to work a minimum of a 27-hour
week.

The Board deemed that given the stage and development of the Company, it would be more cost efficient to
employ a full-time accountant which along with the finance director ensure that Company’s financial systems
are robust, compliant, and support current activities and future growth.

The service agreements of the Non-Executive Directors anticipate that the Non-Executive Chairman should
spend 5 working days per month and the Non-Executive Director 3 working days per month. All Directors
dedicate such time as required to effectively perform their roles.

The roles of the Chairman and CEO are clearly separated. The Directors ensure the skills required to undertake
their roles are kept current through training and consultation with subject matter experts as required.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

Maintain the board as a well-functioning, balanced team led by the chair (continued)

5.
The CEO is responsible for the operational management of the business of Cadence and for the
implementation of strategy and policies as agreed by the Board. The non-executive Chairman is responsible
for the leadership and effective working of the Board, for setting the Board agenda, and ensuring that Directors
receive accurate, timely and clear information.

The CEO is responsible for the operational management of the business of Cadence and for the
implementation of strategy and policies as agreed by the Board. The Non-Executive Chairman is responsible
for the leadership and effective working of the Board, for setting the Board agenda, and ensuring that Directors
receive accurate, timely and clear information.

The Non-Executive Directors are not considered independent under the FRC Code as they hold options in the
Company. However, the Board considers that the Non-Executive Directors are independent of management
under all other measures and are able to exercise independence of judgement. Whilst conflicts of interest are
fully disclosed and understood, as appropriate Non-Executive Directors exercise independence of judgement.
No Director is involved in discussions or decisions where he has a conflict of interest. An Audit Committee and
a Remuneration Committee support the Board.

Cadence intends that the Board endeavours to hold full board meetings at least 3 times each year. The
attendance of Board members for meetings during the current financial year is as follows:

Andrew Suckling 10 of 11
Adrian Fairbourn 8 of 11
Kiran Morzaria
Donald Strang

11 of 11
9 of 11

6. Ensure that between them the directors have the necessary up-to-date experience, skills and

capabilities

Directors who have been appointed to the Company have been chosen because of the skills and experience
they offer. The Board continually strives to ensure that it has the right balance of knowledge, skills, experience
and contacts across the sectors in which it operates. This is evaluated in line with Cadence’s business model
as it changes.

It is of primary importance that the Board’s knowledge is kept up to date in a rapidly changing mining and
metals marketplace. This is achieved by maintaining a broad network of contacts across the industry and
ensuring regular dialogue is held and feedback obtained by both the executive and non-executive directors as
appropriate.

As necessary, Directors receive externally provided refresher and update training specific to their individual
roles.

The Company Secretary advises the Board members on their legal and corporate responsibilities and matters
of corporate governance.

Biographical details of each of the Directors are given on page [28] and the website.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
On 28 September 2018, the Company adopted the QCA Code. Prior to this point, given the nature and the
development of the Company, it did not set Key Performance Indicators.

The Company now measures its performance, and therefore inherently the performance of the Board as a
unit, against Key Performance Indicators. Due to the current status of the Company, the Board has not
identified any performance indicators as key other than cash management and the carrying value of
investments.

The performance of the Executive Directors is monitored and regularly reviewed by the Non-Executive
Directors. Such review considers both the KPIs outlined above, The Board intends to introduce qualitative
performance measurements for the Executive Directors to ensure that the right degree of focus is applied to
the strategic direction as well as the current financial performance of the business.

8. Promote a corporate culture that is based on ethical values and behaviours
The Company has a strong ethical culture, which is promoted by the actions of the Board and Executive team.
These include the following key policies which govern its ethical culture.

• Equal opportunities policy
• Code of conduct
• Whistleblowing policy
• Health and safety policy
• Email and internet policy
• Social media policy

The Company has an anti-bribery policy and has implemented adequate procedures described by the Bribery
Act 2010. The Company reports on its compliance to the Board on an annual basis. The Company has
undertaken a review of its requirements under the General Data Protection Regulation, implementing
appropriate policies, procedures and training to ensure it is compliant.

9. Communicate how the company is governed and is performing by maintaining a dialogue with

shareholders and other relevant stakeholders

The Company encourages two-way communication with both its institutional and private investors and
responds quickly to all significant queries received. The “Investors” tab of our website contains all required
regulatory information together with other information which shareholders may find useful.

The AGM is an important forum for shareholder engagement, and the directors are always available
immediately after the AGM to listen to the views of any shareholders in attendance and to provide them with
an update on the business.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

10. Maintain governance structures and processes that are fit for purpose and support good decision-

making by the board

Details of the Company’s corporate governance arrangements are provided within this Corporate Governance
section of the Annual Report and Accounts. The Board considers the appropriateness of these arrangements
against the size and complexity of the Company as it evolves over time.

The Chairman leads the Board and is responsible for ensuring its effectiveness in all aspects of its role. The
Chairman promotes a culture of openness and debate, in particular by ensuring the Non-Executive Directors
provide constructive challenge to the Executive Directors.

The matters reserved for the board are:
• Definition of the strategic goals for the Company, sets corporate objectives to enable the goals to be met,

and measures performance against those objectives;

• Ensuring that the necessary financial and human resources are in place to both meet its obligations to all

stakeholders and to provide a platform for profitable growth;

• Recommending any interim and final dividends;
• Approving all mergers and acquisitions and all capital expenditure greater than £200,000;
• Receiving recommendations from the Audit Committee in relation to the reporting requirements and the
appropriate accounting policies for the Company, the appointment of auditors and their remuneration,
and the identification and management of risk;

• Receives recommendations from the Appointments Committee concerning the appointment of executive
directors, and from the Remuneration Committee concerning the remuneration of the executive directors;

• Determination of the fees paid to the Non-Executive Directors.

The CEO has the overall responsibility for creating, planning, implementing, and integrating the strategic
direction of the Company. This includes responsibility for all components and departments of a business. The
CEO also ensures that the organisation’s leadership maintains constant awareness of both the external and
internal competitive landscape, opportunities for expansion, customer base, markets, new industry
developments and standards.

The Finance Director works alongside the CEO and has overall control and responsibility for all financial aspects
of company strategy. The Finance Director takes overall responsibility of the Company’s accounting function
and ensures that Company’s financial systems are robust, compliant and support current activities and future
growth. The Finance Director will co-ordinate corporate finance and manage company policies regarding
capital requirements, debt, taxation, equity and acquisitions as appropriate.

The Board is supported by two committees being the Audit Committee and Remuneration Committee. The
Audit Committee advises the Board on the reporting requirements and the appropriate accounting policies for
the Company, the appointment of auditors and their remuneration, and the identification and management
of risk. The Remuneration Committee advises the Board on all matters pertaining to the remuneration of the
Executive Directors.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

BOARD MEMBERS
The Board comprises of a Non-Executive Chairman, one Non-Executive Director and two Executive Directors.

Andrew Suckling, Non-Executive Chairman
Andrew has over 25 years’ experience in the commodity industry. He began in 1994 as a trader on the London
Metal Exchange and subsequently became a founding partner, research analyst and trader with the multi-
billion fund management group Ospraie. Andrew is a graduate of Brasenose College, Oxford University,
earning a BA (Hons) in Modern History in 1993 and an MA in Modern History in 2000. Andrew is the chair of
the Audit and Remuneration Committee.

Kiran Morzaria, Chief Executive Officer
Kiran holds a B.Eng. from the Camborne School of Mines and an MBA (Finance). He has over 25 years of
experience in the mineral resource industry, both in operational and management roles. The first four years
of his career were spent in exploration, mining, and civil engineering, after which he was involved in the
acquisition, recommissioning and eventual sale of the Vatukoula Gold Mine. Kiran was appointed as CEO of
Cadence in 2015, is a Non-Exec Director of European Metals Holdings and a Non-Executive Director of UK Oil
& Gas Plc.

Donald Strang, Finance Director
Donald is a member of the Australian Institute of Chartered Accountants and has over 20 years of experience
in both publicly listed and private enterprises in Australia, Europe and Africa. He has considerable corporate
and international expertise, and over the past decade, has focused on mining and exploration activities.

Adrian Fairbourn, Non-Executive Director
Adrian began his career as an investment analyst before moving to build and manage the highly successful
alternative fund-of-funds operation at the Bank of Bermuda. Adrian has co-managed a multi-family office in
London, responsible for hedge fund investments, direct investments and also asset-raising for co-investment
opportunities. He has successfully assisted in over $US1 billion of structuring, capital and fundraising projects
for private companies and alternative funds. Adrian is a member of the Audit and Remuneration Committee.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities
and operating performance. Day-to-day management is devolved to the Executive Directors, who are charged
with consulting the Board on all significant financial and operational matters. The Board retains ultimate
accountability for governance and is responsible for monitoring the activities of the executive team.

The roles of Chairman and Chief Executive Officer are split in accordance with best practice. The Chairman has
the responsibility of ensuring that the Board discharges its responsibilities. The Chairman is responsible for the
leadership and effective working of the Board, for setting the Board agenda, and ensuring that Directors
receive accurate, timely and clear information. No one individual has unfettered powers of decision.

The two Executive Directors are comprised of a Chief Executive Officer (“CEO”) and Finance Director. The CEO
has the overall responsibility for creating, planning, implementing, and integrating the strategic direction of
the Company. This includes responsibility for all components and departments of a business. The CEO also
ensures that the organisation’s leadership maintains constant awareness of both the external and internal
competitive landscape, opportunities for expansion, customer base, markets, new industry developments and
standards.

The non-executive directors are not considered independent under the Financial Reporting Council’s
Corporate Governance Code (April 2016) (“FRC Code”) as they both have options in the Company. However,
the Board considers that both non-executives are independent of management under all other measures and
able to exercise independence of judgement.

The Committees
Audit Committee
The Audit Committee consists of two non-executive members of the board and meet at least once a year.
The principal duties and responsibilities of the Audit Committee include:

• Overseeing the Company’s financial reporting disclosure process; this includes the choice of

appropriate accounting policies

• Monitor the Company’s internal financial controls and assess their adequacy
• Review key estimates, judgements and assumptions applied by management in preparing published

financial statements

• Assess annually the auditor’s independence and objectivity
• Make recommendations in relation to the appointment, re-appointment and removal of the

company’s external auditor

Remuneration Committee
The Remuneration Committee consists of two non-executive members of the board and meet at least once a
year.
The principal duties and responsibilities of the Remuneration Committee include:

Setting the remuneration policy for all Executive Directors

•
• Recommending and monitoring the level and structure of remuneration for senior management
• Approving the design of, and determining targets for, performance related pay schemes operated by

the company and approve the total annual payments made under such schemes

• Reviewing the design of all share incentive plans for approval by the Board and shareholders
• None of the Committee members have any personal financial interest (other than as shareholders and
option holders), conflicts of interest arising from cross-directorships or day-to-day involvement in the
running of the business. No director plays a part in any financial decision about his or her own
remuneration.

CADENCE MINERALS PLC
CORPORATE GOVERNANCE
For the year ended 31 December 2022

Principle And Approach Of The Board
Cadence is committed to achieve and maintain high standards of governance. As such, the Board has chosen
to adopt the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted
Companies 2018 (“the QCA Code”). Detailed below is how the Board applies the 10 principles of Corporate
Governance, which form part of the QCA code.

Internal Controls
The Directors acknowledge their responsibility for the Company’s systems of internal controls and for
reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Company
and to ensure the reliability of financial information for both internal use and external publication. While they
are aware that no system can provide absolute assurance against material misstatement or loss, in light of
increased activity and further development of the Company, continuing reviews of internal controls will be
undertaken to ensure that they are adequate and effective.

Risk Management
The Board considers risk assessment to be important in achieving its strategic objectives. There is a process of
evaluation of performance targets through regular reviews by Senior Management to forecasts. Project
milestones and timelines are reviewed regularly.

Business Risk
The Board regularly evaluates and reviews any business risks when reviewing project timelines. The types of
risks reviewed include:

regulatory and compliance obligations

•
• environmental requirements
•
• political and country risks where appropriate.

commodity price, interest rate, liquidity and volatility risks

Insurance
The Company maintains insurance in respect of its Directors and Officers against liabilities in relation to the
Company.

Treasury Policy
The Company finances its operations through equity and holds its cash as a liquid resource to fund the
obligations of the Company. Decisions regarding the management of these assets are approved by the Board.

Securities Trading
The Board has adopted a Share Dealing Code that applies to Directors, Senior Management and any employee
who is in possession of ‘inside information’. All such persons are prohibited from trading in the Company’s
securities if they are in possession of ‘inside information’. Subject to this condition and trading prohibitions
applying to certain periods, trading can occur provided the individual has received the appropriate prescribed
clearance.

CADENCE MINERALS PLC
REPORT ON REMUNERATION
For the year ended 31 December 2022

On behalf of the Board, I am pleased to present the Directors’ Remuneration Report summarising the
Company’s remuneration policy and providing information on the Company’s remuneration approach and
arrangements for Executive Directors, Non-Executive Directors and Senior Executive Management for the year
ended 31 December 2022.

This report is prepared in accordance with the QCA Remuneration Committee Guide for small and mid-sized
quoted companies, revised in 2020. A summary of the Remuneration Committee’s role, membership and
relevant qualifications can be found in the corporate governance section.

Remuneration Committee meetings are held at least once a year with the primary focus of setting goals for
the coming period and then assessing results at the end of that period. During the year, the Remuneration
Committee met 1 time and;

• Benchmarked the Boards Remuneration, both fixed and variable and as a whole, and compared it to

AIM-listed companies of a similar market capitalisation.

• Reviewed the above comparisons and established if applicable short, medium and long-term incentive
schemes. As a result of this review it did not recommend any additional incentive schemes over and
above the boards fixed renumeration.

• Reviewed the performance of the Board against targets and awarded incentives covering the reporting

period.

The Board recognises that Directors' remuneration is of legitimate concern to the shareholders. The Company
operates within a competitive environment; performance depends on the individual contributions of the
Directors and employees, and it believes in rewarding vision and innovation.

Policy on Executive Directors' Remuneration
The policy of the Board is to provide executive remuneration packages designed to attract, motivate and retain
Directors of the calibre necessary to maintain the Company's position and to reward them for enhancing
shareholder value and return. It aims to provide sufficient levels of remuneration to do this but to avoid paying
more than is necessary. The remuneration will also reflect the Directors' responsibilities and contain incentives
to deliver the Company's objectives.

Salary and Fees
Benchmarking data indicates that at the time of the review, for Salary and Fees, Cadence is slightly above the
median remuneration for an exploration and mining company between a £25 million and £50 million market
capitalisation on the AIM market. During this review, the Remuneration Committee recommended an increase
of seven percent in the salaries of the chief executive officer, finance director and non-executive chairman.

Bonuses
During the review by the Remuneration Committee and the benchmarking exercise. The Remuneration
Committee recommended that no short term incentives to be granted during the period. The bonuses
awarded in the previous year ending 31 December 2021 are shown on page [32].

Share Awards (Share Incentive Plan)
In 2020 to incentive the Board on a medium-term basis, the Remuneration Committee recommended under
the share incentive plan established in September 2014, to conditionally grant 240,000 Ordinary Shares to each
of the directors. These share awards were conditional on meeting performance conditions during the award
period ("2021 SIP Awards"). 2021 SIP Awards would be transferred from the Employee Benefit Trust ("EBT"),
with no New Ordinary Shares being issued to satisfy the 2021 SIP Awards.

CADENCE MINERALS PLC
REPORT ON REMUNERATION
For the year ended 31 December 2022

The 2021 SIP Awards were subject to the board achieving performance conditions which were in line with
market practice. One of the conditions was met in 2022 entitling each director to be awarded 80,000 shares
from EBT. With this award two of the three performance conditions were met during the period and no further
awards will be made in relation 2021 SIP Awards. The award of these shares has been expensed in 2022.

Pensions
The Company only operates a basic pension scheme for its directors and employees as required by UK
legislation. The Company made the following pension contributions in the year: K Morzaria £4,403 (2021:
£1,832) and D Strang £2,201 (2021: £1,832).

Benefits in kind
No benefits in kind were paid during the year to 31 December 2022 or the year ended 31 December 2021.

Notice periods
Andrew Suckling, Kiran Morzaria, Donald Strang and Adrian Fairbourn each have a 12 month rolling notice
period.

Share option incentives
At 31 December 2022 each Director held 1,800,000 options which are exercisable at any time before 30 April
2026. The exercise price is 29p (31 December 2021: 1,800,000). No options were exercised by Directors
during the period (2021: None).

The remuneration of the Directors was as follows:

A Fairbourn

A Suckling

K Morzaria

D Strang

Total

Year to 31 December 2022

Salary and fees (1)

Cost of shares awarded (2)

48,000
19,680

120,000
19,680

230,000
44,477

120,000
38,304

412,000

122,141

Total

67,680

139,680

274,477

158,304

640,141

Year to 31 December 2021

Salary and fees

Bonus

Share option charges (2)

Total

48,000
100,000
49,311

112,000
100,000
49,311

140,000
150,000
49,311

112,000
100,000
49,311

412,000

450,000

197,244

197,311

261,311

339,311

261,311

1,059,244

(1) The chief executive officer salary was increased by 7% during the period, the difference between this value (£150,000) and the salary this

year is a reflection of the chief executives role as a Director of the joint venture that manages the Amapa investment.

(2) The cost of shares awarded represents the value of the shares awarded to the Directors under the 2021 SIP Awards and were conditional
on meeting performance conditions during the award period. One of the conditions was met in 2022 entitling each director to be awarded
80,000 shares from the EBT. The award of these shares has been expensed in 2022.

(3) Share option charges represent a Black and Scholes valuation of the incentive options granted to the Directors during 2021. Options are

used to incentivise Directors and are a non-cash form of remuneration.

CADENCE MINERALS PLC
REPORT ON REMUNERATION
For the year ended 31 December 2022

At 31 December 2022 £Nil was outstanding in bonuses to directors (2021: £450,000).

The high and low share price for the year were 31.225p and 8.5p respectively (year ended 31 December 2021:
31.1p and 14.5p). The share price at 31 December 2022 was 11.35p (31 December 2021: 28.0p).

Andrew Suckling
Non-Executive Chairman, 22 June 2023

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC

Opinion
We have audited the financial statements of Cadence Minerals Plc (the ‘company’) for the year ended 31
December 2022 which comprises: the Statement of Comprehensive Income, the Statement of Financial
Position, the Statement of Changes in Equity, Statements 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 as applied in accordance
with the provisions of the Companies Act 2006.
In our opinion, the financial statements:

• give a true and fair view of the state of the company’s affairs as at 31 December 2022 and of its loss

for the year then ended;

• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.

Conclusions relating to going concern
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 Company’s ability to continue to adopt the going concern basis of accounting included a
review of budgets for 22 months from the sign off date including checking the mathematical accuracy of the
budgets and discussion of significant assumptions used by the management and comparing these with current
year and post year end performance. We have also reviewed the latest available post year general ledgers,
bank statements, regulatory announcements, board minutes and assessed any external industry wide factors
which might affect the company.

Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as
a going concern for a period of at least twelve months from when the financial statements are authorised for
issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.

Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative
thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit
procedures. The materiality applied to the financial statements was set at £319,000 (2021: £329,000), with
performance materiality set at £223,300 (2021: £230,270.
Materiality has been calculated as 1.5% of the benchmark of net assets, which we have determined, in our
professional judgement, to be one of the principal benchmarks within the financial statements relevant to
members of the Company in assessing financial performance.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit
above £15,950 (2021: £16,450).

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC

We applied the concept of materiality both in planning and performing the audit, and in evaluating the effect
of misstatement.

Our approach to the audit
In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement
in the financial statements. We addressed the risk of management override of internal controls, including
evaluating whether there was evidence of bias by the directors that represents a risk of material misstatement
due to fraud. 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 fair value of unquoted
investments and the value of the share options scheme.

In addition, we focused our audit on the significant risk areas including the Key Audit Matter as outlined below.

A full scope audit was performed on the complete financial information of the Company.

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.

Key Audit Matter
Carrying value of Financial Assets (Refer to note 6)
The Company held investments with a value of
£17.5m as at 31 December 2022. These are valued
in accordance with IFRS 13 and the fair value
hierarchy; and classified as per IFRS 9.

There is the risk that these investments have not
been valued in accordance with IFRS 13 and IFRS 9
and require impairment.

Investments which fall under Tier 3 of the fair value
hierarchy are subject to significant management
estimate and judgment, which increases the risk of
material misstatement.

The group has also invested in level 1 listed
investments, which are not subject to management
judgement or estimation, and are valued at their
year-end share price per the relevant exchange.

Given the value of the investments is material at
the year end and significant judgement needed
when valuing level 3 investment we have assessed
valuation of investments as a Key audit matter

How our scope addressed this matter

Our audit work will include:
 Reviewing and challenging the valuation

methodology for the investments held and
ensuring that the carrying values are supported
by sufficient and appropriate audit evidence.

 Ensuring that all asset types are categorised
according to IFRS, including the accounting
disclosures as required under IFRS 9;
 Reviewing the movement in investments to
ensure they are accounted for and disclosed
correctly in line with IFRS 9;

 Reviewing disclosures in relation to said assets;
 Ensuring that Cadence Minerals Plc has full title to

the investments held;

 Ensuring that appropriate disclosures surrounding
the estimates made in respect of any valuations
are included in the financial statements; and
 Considering whether the transactions have been
accounted for correctly within the financial
statements.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC

Carrying value and classification of loans
receivable (refer to note 7)
There is a risk that the loan amounts are not
recoverable given that no repayments were made
by the debtors for the loans outstanding and in
addition to the existing loans another loan was
extended.

There is also a risk that the loans have not been
accounted for in accordance with IFRS 9.

Risk has been assessed as a Key Audit Matter due
to the level of estimation and judgement
management have made in assessing the
recoverability of £3.9 million in loans from REM
Mexico.

Based on the work performed, we are satisfied that
the carrying value of the financial assets is materially
correct and adequately disclosed.

Our audit work will include:
 Obtaining and reviewing the loan agreements to
ascertain the key terms of the loan agreements.
 Ensuring that the loans have been classified and
disclosed correctly in accordance with IFRS 9;
 Discussing with Management to ascertain their
justification for no IFRS 9 ECL charge being
recognised in the year. Challenge management's
key assumptions and consider whether the loans
are fully recoverable or whether an IFRS 9 ECL
charge is required; and

 Ensuring that the loans are correctly classified as
current or non-current in accordance with the
payment terms per the loan agreements.
Based on the work performed, we are satisfied that
the carrying value and classification of the loan
receivable is materially correct.

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 financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and

the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC

Matters on which we are required to report by exception.
In the light of the knowledge and understanding of the Company and its environment obtained in the course
of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been

received from branches not visited by us; or

•

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the 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 company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the company or to cease operations,
or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:

• We obtained an understanding of the Company and the sector in which they operate to identify laws
and regulations that could reasonably be expected to have a direct effect on the financial statements.
We obtained our understanding in this regard through discussions with management and application
of cumulative audit knowledge and experience of the sector.

• We determined the principal laws and regulations relevant to the Company in this regard to be those
arising from Companies Act 2006, AIM listing rules, GDPR, QCA compliance, International Financial
Reporting Standards (in compliance with the Companies Act 2006) and tax legislation within the
United Kingdom.

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADENCE MINERALS PLC

• We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the Company with those laws and regulations. These procedures
included, but were not limited to:
o Review of board minutes
o Review of legal and professional expenditure
Independent confirmation from legal advisors
o

• We also identified the risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management
override of controls, that the potential for management bias was in the valuation of investments. We
addressed the risk by challenging the assumptions and judgements made by management when
auditing that significant accounting estimate.

• We addressed the risk of fraud arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the financial statements, as we will be less likely to become aware of instances
of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error,
as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.

Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the
company and the company's members as a body, for our audit work, for this report, or for the opinions we
have formed.

Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
22 June 2023

15 Westferry Circus
Canary Wharf
London E14 4HD

CADENCE MINERALS PLC
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022

Note

Year ended

31 December
2022
£’000

Year ended
31 December
2021
£’000

Income
Unrealised (loss)/profit on financial investments

Realised profit on financial investments

Share based payments

Other administrative expenses

Total administrative expenses

Operating loss

Finance income

Finance cost

Foreign exchange gain

Loss before taxation

Taxation

Loss attributable to the equity holders of the Company

Total comprehensive earnings for the year, attributable to
the equity holders of the company

Earnings per ordinary share

Basic earnings per share (pence)

Diluted earnings per share (pence)

(4,593)
552

(4,041)

(13)
(1,443)
(1,456)

(5,497)

-
(3)
3

(5,497)

577

593

1,170

(197)

(1,604)

(1,801)

(631)

(3)

455

(144)

(5,497)

(144)

(5,497)

(144)

(3.355)
n/a

(0.102)

n/a

The accompanying principal accounting policies and notes form an integral part of these financial statements.

CADENCE MINERALS PLC
COMPANY NUMBER 05234262
Statement of Financial Position
As at 31 December 2022

ASSETS

Non-current
Financial Assets

Current
Trade and other receivables

Financial Assets

Cash and cash equivalents

Total current assets

Total assets

LIABILITIES

Current
Trade and other payables

Total current liabilities

Total liabilities

EQUITY
Issued share capital

Share premium

Share based payment reserve

Investment in own shares

Retained earnings

Equity attributable

to equity holders of the Company

Total equity and liabilities

31 December
2022
£'000

31 December
2021
£'000

Note

11,365
11,365

3,957
6,206
110
10,273
21,638

317
317

317

2,144
37,612
252
(64)
(18,623)
21,321

5,660

5,048

11,974

324

17,346

23,006

853

1,903

33,207

249

(70)

(13,136)

22,153

21,638

23,006

The financial statements were approved by the Board on 22 June 2023, and signed on their behalf by;

Kiran Morzaria
Director

Company number 05234262

Donald Strang
Director

The accompanying principal accounting policies and notes form an integral part of these financial statements.

CADENCE MINERALS PLC
STATEMENT OF CHANGES IN EQUITY
As at 31 December 2022

Share
capital

Share
premium

Investment
in own
shares

Share based
payment
reserve

Retained
earnings

Total
equity

£'000

1,896

33,159

(2)

(70)

197

(9)

210

(13,001)

22,093

197

(70)

(2)

204

(144)

1,903

33,207

(70)

249

(13,136)

22,153

241

4,775

(376)

4,405

(10)

5,016

(376)

4,665

(5,497)

2,144

37,612

(64)

252

(18,623)

21,321

Balance at 31 December
2020

Share based payments
Payments made through
issue of warrants
Transfer on exercise of
options
Adjustment for shares held
in Trust

Share issue

Share issue costs

Transactions with owners

Loss for the period
Total comprehensive
earnings for the period
Balance at 31 December
2021

Share based payments
Transfer on exercise of
warrants
Issue of shares held in
Trust

Share issue

Share issue costs

Transactions with owners

Loss for the period
Total comprehensive
earnings for the period
Balance at 31 December
2022

The accompanying principal accounting policies and notes form an integral part of these financial statements.

CADENCE MINERALS PLC
STATEMENT OF CASH FLOWS
For the year ended 31 December 2022

Cash flow from operating activities
Continuing operations
Operating loss
Gain/(loss) on financial investments

Equity settled share based payments

Adjustment for issue of own shares

Payments made through issue of warrants

Decrease in trade and other receivables

(Decrease)/increase in trade and other payables

Net cash outflow from operating activities from continuing
operations

Cash flows from investing activities
Payments for non-current financial investments

Payments for investments in current financial investments

Receipts on sale of current investments

Net cash inflow from investing activities

Cash flows from financing activities
Proceeds from issue of share capital

Share issue costs

Net borrowings

Net finance cost

Net cash inflow from financing activities

Net change in cash and cash equivalents

Foreign exchange movements on cash and cash equivalents

Cash and cash equivalents at beginning of period

Year ended
31 December
2022
£'000

Year ended
31 December
2021
£'000

(5,497)
4,041
13
-
-
24
(536)

(1,955)

(4,600)
(235)
1,926
(2,909)

5,016
(376)
-
(3)
4,637

(227)
13
324

(631)
(1,170)

197

(70)

346

555

(751)

(2,275)

(830)

3,787

182

57
(2)

(220)

(3)

(168)

(737)

465

596

Cash and cash equivalents at end of period

110

324

Material non-cash transactions

During the year the Company disposed of its 31.5% stake in in Lithium Technologies and Lithium Supplies,
(non-current financial investments) for initial proceeds of £1,810,000 which were settled in shares of
Evergreen PTY Ltd (non-current investment). Additionally, at 31 December 2021 the Company had a loan
outstanding of £514,000 from Amapá and a balance of £554,000 held in a trust account (trade and other
receivables) which were converted into its investment in Amapá (non-current investment).

There were no material non-cash transactions in the year ended 31 December 2021.

The accompanying principal accounting policies and notes form an integral part of these financial statements.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

GENERAL INFORMATION

Cadence Minerals plc is a company incorporated and domiciled in the United Kingdom. The Company's shares
are listed on the AIM market of the London Stock Exchange, and on the AQUIS Growth Market as operated by
AQUIS Stock Exchange (“AQUIS”).

The Financial Statements are for the year ended 31 December 2022 and have been prepared under the
historical cost convention, except for the measurement to fair value of financial assets, and in accordance with
UK adopted International Accounting Standards (IAS) in conformity with the requirements of the Companies
Act 2006. These Financial Statements (the "Financial Statements") have been prepared and approved by the
Directors on 22 June 2023 and signed on their behalf by Donald Strang and Kiran Morzaria.

Employee Benefit Trusts (“EBTs”) are accounted for under IFRS 10 and are consolidated on the basis that the
parent has control, thus the assets and liabilities of the EBT are included on the Company balance sheet and
shares held by the EBT in the Company are presented as a deduction from equity.

The accounting policies have been applied consistently throughout the preparation of these Financial
Statements, and the financial report is presented in Pound Sterling (£) and all values are rounded to the nearest
thousand pounds (£‘000) unless otherwise stated.

INVESTING POLICY

The Company is an investment entity. The Company’s investing policy, which was approved at a General
Meeting on 29 November 2010, is to acquire a diverse portfolio of direct and indirect interests in exploration
and producing rare earth minerals and/or other metals projects and assets (‘Investing Policy’). In light of the
nature of the assets and projects that will be the focus of the Investing Policy, the Company will consider
investment opportunities anywhere in the world.

The Directors have considerable investment experience, both in structuring and executing deals and in raising
funds. Further details of the Directors’ expertise are set out on the Company website. The Directors will use
this experience to identify and investigate investment opportunities, and to negotiate acquisitions. Wherever
necessary, the Company will engage suitably qualified technical personnel to carry out specialist due diligence
prior to making an acquisition or an investment. For the acquisitions that they expect the Company to make,
the Directors may adopt earn-out structures with specific performance targets being set for the sellers of the
businesses acquired and with suitable metrics applied.

The Company may invest by way of outright acquisition or by the acquisition of assets – including the
intellectual property – of a relevant business, partnership or joint venture arrangement. Such investments may
result in the Company acquiring the whole or part of a company or project (which, in the case of an investment
in a company, may be private or listed on a stock exchange, and which may be pre-revenue), and such
investments may constitute a minority stake in the company or project in question. The Company’s
investments may take the form of equity, joint venture, debt, convertible documents, licence rights, or other
financial instruments such as the Directors deem appropriate.

The Company may be both an active and a passive investor depending on the nature of the individual
investments in its portfolio. Although the Company intends to be a long-term investor, the Directors will place
no minimum or maximum limit on the length of time that any investment may be held.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

There is no limit on the number of projects into which the Company may invest, or on the proportion of the
Company’s gross assets that any investment may represent at any time, and the Company will consider
possible opportunities anywhere in the world.

The Directors may offer new ordinary shares in the capital of the Company by way of consideration as well as
cash, thereby helping to preserve the Company’s cash for working capital and as a reserve against unforeseen
contingencies including, by way of example and without limit, delays in collecting accounts receivable,
unexpected changes in the economic environment and unforeseen operational problems. The Company may,
in appropriate circumstances, issue debt securities or otherwise borrow money to complete an investment.
There are no borrowing limits in the Articles of Association of the Company. The Directors do not intend to
acquire any cross holdings in other corporate entities that have an interest in the ordinary shares.

GOING CONCERN

The Directors have prepared cash flow forecasts for the period ending 31 March 2025 which take account of
the current cost and operational structure of the Company.

During 2022, the Company received net proceeds of £4,640,000 through share issues and £1,691,000 in net
receipts, from sales less purchases, of listed investments.

It is the prime responsibility of the Board to ensure the Company remains a going concern. At 31 December
2022 the Company had cash and cash equivalents of £110,000, current financial assets of £6,206,000 and no
borrowings. The Company has minimal contractual expenditure commitments, and the Board considers the
present funds sufficient to maintain the working capital of the Company for a period of at least 12 months
from the date of signing the Annual Report and Financial Statements. With overheads of £1,443,000 in 2022,
and creditors of £317,000 at 31 December 2022 the Company would still be able to meet its obligations,
without the requirement to cut costs, should the value of the current listed financial assets be reduced by 65%.
For these reasons the Directors adopt the going concern basis in the preparation of the Financial Statements.

STATEMENT OF COMPLIANCE WITH IAS

The Company’s financial statements have been prepared under the historical cost convention except for the
measurement to fair value of financial assets as described in the accounting policy below, and the financial
statements have been prepared in accordance with UK adopted International Accounting Standards (IAS) in
conformity with the provisions of the Companies Act 2006. The principal accounting policies adopted by the
Company are set out below.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

TAXATION

Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting period, which are unpaid at the balance sheet date. They are
calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based
on the taxable result for the period. All changes to current tax assets or liabilities are recognised as a
component of tax expense in the income statement.

Deferred income taxes are calculated using the liability method on temporary differences. This involves the
comparison of the carrying amounts of assets and liabilities in the financial statements with their respective
tax bases. In addition, tax losses available to be carried forward as well as other income tax credits to the
Company are assessed for recognition as deferred tax assets.

Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it
is probable that they will be able to be offset against future taxable income. Deferred tax assets and liabilities
are calculated, without discounting, at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance sheet date.

Most changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income
statement. Only changes in deferred tax assets or liabilities that relate to a change in value of assets or
liabilities that is charged directly to equity are charged or credited directly to equity.

FINANCIAL ASSETS

The Company's financial assets include cash, other receivables and financial assets. Except for those trade
receivables that do not contain a significant financing component and are measured at the transaction price
in accordance with IFRS 9, all financial assets are initially measured at fair value adjusted for transaction costs
(where applicable).

Financial assets, other than those designated and effective as hedging instruments, are classified into the
following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive income (FVOCI).

In the periods presented the corporation does not have any financial assets categorised as FVOCI.

The classification is determined by both:
• the entity’s business model for managing the financial asset
• the contractual cash flow characteristics of the financial asset.

All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

FINANCIAL ASSETS (CONTINUED)

Subsequent measurement of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVTPL):
• they are held within a business model whose objective is to hold the financial assets and collect its

contractual cash flows

• the contractual terms of the financial assets give rise to cash flows that are solely payments of principal

and interest on the principal amount outstanding

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Company’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.

Financial assets at fair value through profit or loss (FVTPL)

Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect
and sell’ are categorised at fair value through profit and loss. Further, irrespective of business model financial
assets whose contractual cash flows are not solely payments of principal and interest are accounted for at
FVTPL. All derivative financial instruments fall into this category, except for those designated and effective as
hedging instruments, for which the hedge accounting requirements would apply.

Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair
values of financial assets in this category are determined by reference to active market transactions or using
a valuation technique where no active market exists.

Impairment of financial assets

The Company considers trade and other receivables individually in accounting for trade and other receivables
as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the
expected shortfalls in contractual cash flows, considering the potential for default at any point during the life
of the financial instrument. In calculating, the Company uses its historical experience, external indicators and
forward-looking information to calculate the expected credit losses using a provision matrix.

FAIR VALUE MEASUREMENT

IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when
an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS
when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that
the Company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially
changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the Company. It
requires specific disclosures about fair value measurements and disclosures of fair values, some of which
replace existing disclosure requirements in other standards.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

FINANCIAL INVESTMENTS

Non-derivative financial assets comprising the Company’s strategic financial investments in entities not
qualifying as subsidiaries, associates or jointly controlled entities. These assets are classified as financial assets
at fair value through profit or loss. They are carried at fair value with changes in fair value recognised through
the income statement. Where there is a significant or prolonged decline in the fair value of a financial
investment (which constitutes objective evidence of impairment), the full amount of the impairment is
recognised in the income statement.

Due to the nature of these assets being unlisted investments or held for the longer term, the investment period
is likely to be greater than 12 months and therefore these financial assets are shown as non-current assets in
the Statement of financial position, unless their disposal is likely to occur within the forthcoming year. Listed
investments are valued at closing bid price on 31 December 2021. For measurement purposes, financial
investments are designated at fair value through income statement. Gains and losses on the realisation of
financial investments are recognised in the income statement for the period. The difference between the
market value of financial instruments and book value to the Company is shown as a gain or loss in the income
statement for the period.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand, bank deposits repayable on demand, and other
short term highly liquid investments that are readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value, less advances from banks repayable within three months
from the date of advance if the advance forms part of the Company's cash management.

EQUITY

Share capital is determined using the nominal value of shares that have been issued.

The share premium account represents premiums received on the initial issuing of the share capital. Any
transaction costs associated with the issuing of shares are deducted from share premium, net of any related
income tax benefits.

The share based payment reserve represents the cumulative amount which has been expensed in the income
statement in connection with share based payments, less any amounts transferred to retained earnings on
the exercise of share options.

Retained earnings include all current and prior period results as disclosed in the statement of comprehensive
income.

OPERATING LEASES

The Company does not have any leases within the scope of IFRS 16 in the current or prior year.

Payments, including prepayments, made under low value or short-term operating leases of less than 12
months (net of any incentives received from the lessor) are charged to the statement of comprehensive
income on a straight-line basis over the period of the lease.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

FOREIGN CURRENCIES

The financial statements are presented in Sterling, which is also the functional currency of the Company.

In the financial statements of the Company, foreign currency transactions are translated into the functional
currency of the Company entity using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at year-end exchange rates are recognised
in profit or loss.

SHARE BASED PAYMENTS

The Company issues equity-settled share-based payments to certain employees (including directors). Equity-
settled share-based payments are measured at fair value at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting
period, together with a corresponding increase in equity, based upon the Company's estimate of the shares
that will eventually vest.

Fair value is measured using the Black-Scholes model, as the options have no market related conditions. The
expected life used in the model has been adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural considerations.

The expense is allocated over the vesting period, based on the best available estimate of the number of share
options expected to vest. Non-market vesting conditions are included in assumptions about the number of
options that are expected to become exercisable. Estimates are subsequently revised, if there is any indication
that the number of share options expected to vest differs from previous estimates.

No adjustment is made to the expense or share issue cost recognised in prior periods if fewer share options
are, ultimately exercised than originally estimated. Upon exercise of share options, the proceeds received net
of any directly attributable transaction costs up to the nominal value of shares issued are allocated to share
capital with any excess being recorded as share premium.

Warrants
The Group has also issued equity settled share-based payments in respect of services provided by external
consultants in the form of warrants. The share-based payment is measured at fair value of the services
provided at the grant date, or if the fair value of the services cannot be reliably measured using the Black-
Scholes model. The expense is allocated over the vesting period.

FINANCIAL LIABILITIES

The Company’s financial liabilities include trade and other payables. Financial liabilities are obligations to pay
cash or other financial assets and are recognised when the Company becomes a party to the contractual
provisions of the instrument.

All financial liabilities are recognised initially at fair value, net of direct issue costs, and are subsequently
recorded at amortised cost using the effective interest method with interest related charges recognised as an
expense in the income statement.

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Sources of Estimation and Key Judgements

The preparation of the Financial Statements requires the Company to make estimates, judgements and
assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related
disclosure of contingent assets and liabilities. The Directors base their estimates on historic experience and
various other assumptions that they believe are reasonable under the circumstances, the results of which form
the basis of making judgements about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Significant judgments and estimates

The preparation of financial statements requires management to make estimates and judgments 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 amounts of income and expenditure during the reported period.
The estimates and associated judgments are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making judgments
about carrying values of assets and liabilities that are not readily apparent from other sources.

•

The estimates and underlying judgments are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.

In the preparation of these financial statements, estimates and judgments have been made by
management concerning calculating the fair values of the assets acquired on business combinations,
and the assumptions used in the calculation of the fair value of the share options. Actual amounts could
differ from those estimates.

Management has made the following estimates that have the most significant effect on the amounts
recognised in the financial statements.

Unlisted investments
The Company is required to make judgments over the carrying value of investments in unquoted companies
where fair values cannot be readily established and evaluate the size of any impairment required. It is
important to recognise that the carrying value of such investments cannot always be substantiated by
comparison with independent markets and, in many cases, may not be capable of being realised immediately.
Management’s significant judgement in this regard is that the value of their investment represents their cost
less previous impairment. Management reviews each unquoted investment at each reporting date for
indications of impairment. Management concluded that no impairment was necessary in the current or prior
year.

• Management has made the following judgement that has the most significant effect on the amounts

recognised in the financial statements.

Sonora Lithium Project License
As stated in the strategic report, Mexican politicians from the MORENA party tabled a draught bill to reform
Mexico's energy sector, including statements that lithium would be included among the minerals considered
strategic for the energy transition and that no new concessions for lithium exploitation by private companies

CADENCE MINERALS PLC
PRINCIPAL ACCOUNTING POLICIES
For the year ended 31 December 2022

Sonora Lithium Project License (continued)

could be granted. Subsequent to the year-end, the Mexican senate elevated lithium deposits to the category
of "strategic minerals", declaring lithium's exploration, exploitation, and use as the state's exclusive right.

Management’s current view is that the Decree passed by the senate only impacts licenses, concessions, or
contracts to be granted, NOT those already granted, as is the case for the Sonora Lithium Project. Therefore,
at this point, management have concluded that there is no material impact on Cadence’s joint venture areas.
Please see the strategic report for more details. Management will continue to review

Adoption of New or Amended IFRS

New standards, amendments and interpretations adopted by the Company

The company has applied the following standards and amendments for the first time for its annual reporting
period commencing 1 January 2022:

• Amendments to IFRS 3: References to the Conceptual Framework
• Amendments to IAS 16: Proceeds before intended use
• Amendments to IAS 37: Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)

IFRS 1, IFRS 9, IFRS 16 and IAS 41: Annual Improvements to IFRS Standards 2018-2020 Cycle - 1 January 2022
The adoption of the above has not had any material impact on the disclosures or amounts reported in the
financial statements.

New standards, amendments and interpretations not yet adopted

There are no IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material
impact on the Company.

Segment reporting

Segmental analysis is not applicable as there is only one operating segment of the continuing business –
investment activities.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

1. PROFIT BEFORE TAXATION AND SEGMENTAL INFORMATION

Profit before taxation - continuing operations

The loss before taxation is attributable to the principal activities of the Company.

The loss before taxation is stated after charging:

Year ended 31
December 2022

Year ended 31
December 2021

£'000

Share based payment charge

Directors’ fees and consulting (see Note [2])
Fees payable to the Company’s auditor for the audit of the financial
statements

518

197

412

Segment reporting

The Company operates a single primary activity to invest in businesses so as to generate a return for the
shareholders. The performance and position are therefore as stated in the primary statements.

Unrealised (loss)/profit on financial investments

Realised profit on financial investments

Year ended 31
December 2022

Year ended 31
December 2021

£'000

(4,593)

552

(4,041)

577

593

1,170

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

2. EMPLOYEE REMUNERATION

Employee benefits expense

The expense recognised for employee benefits, including Directors’ emoluments, is analysed below:

Short-term benefits
Wages, salaries and consulting fees

Bonus payments

Employers NI

Shares awarded

Other long-term benefits
Share based payments

Year ended
31 December
2022
£'000

Year ended
31 December
2021
£'000

623

122

811

512

450

197

1,237

The average number of employees (including directors) employed by the Company during the period was:

Directors

Other

2022
No.

4
2
6

2021
No.

Included within the above are amounts in respect of Directors, who are considered to be the key management
personnel, as follows:

Year ended
31 December
2022
£'000

Year ended
31 December
2021
£'000

Short-term benefits
Wages, salaries and consulting fees

Bonus payments

Shares awarded

Other long-term benefits

Share based payments charge on issue of options

518

-
122

-
640

Details of Directors' emoluments are included in the Report on Remuneration on pages [31 to 33].

412

450
-

197

1,059

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

3. FINANCE INCOME & COSTS

Loan interest received

Loan interest
Finance Fees

4. TAXATION

Year ended 31
December 2022
£'000

Year ended 31
December 2021
£'000

Year ended 31
December 2022
£'000

Year ended 31
December 2021
£'000

-
3
3

The tax assessed for the period differs from the standard rate of corporation tax in the UK as follows:

Year ended

31 December
2022

2022

31 December
2021

2021

£'000

(Loss)/profit before taxation

(5,497)

(144)

(Loss)/profit multiplied by standard rate
of corporation tax in the UK

Effect of:
Deferred tax asset not recognised
Remeasurement of deferred tax for changes in tax rates
Other permanent differences
Chargeable gains
Income not taxable
Expenses not deductible for tax purposes
Total tax charge for year

(1,044)

(27)

43
-
-
229
(105)
877
-

1,760
(1,573)
(1)
12
(222)

51
-

The Company has tax losses in the UK of £26.22m (2021: £25.97m), subject to His Majesty's Revenue and
Customs approval, available for offset against future operating profits. The Company has not recognised any
deferred tax asset in respect of these losses, due to there being insufficient certainty regarding its recovery.
The unrecognised deferred tax asset is £6.56m (2021: £6.50m). Changes in tax laws and rates may affect tax
assets and liabilities and our effective tax rate in the future. The main corporation tax rate in the UK is due to
increase to 25% from 19% on 1 April 2023.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

5. EARNINGS PER SHARE

The calculation of the basic earnings per share is calculated by dividing the consolidated profit attributable to
the equity holders of the Company by the weighted average number of ordinary shares in issue during the
period. The weighted average number of shares excludes shares held by an Employee Benefit Trust (see Note
[10]) and has been adjusted for the issue/purchase of shares during the period.

(Loss) attributable to owners of the Company

Weighted average number of shares in issue

Less: shares held by the Employee Benefit Trust (weighted
average)
Weighted average number of shares for calculating basic
earnings per share
Share options and warrants exercisable
Weighted average number of shares for calculating diluted
earnings per share

Basic earnings per share

Diluted earnings per share

Year ended
31 December 2022
£’000
(5,497)

Year ended
31 December 2021
£’000

(144)

2022
Number
170,208,788

2021
Number

148,535,664

(6,380,000)

(7,020,000)

163,828,788

141,515,644

n/a

2022
Pence
(3.355)
n/a

n/a

2021
Pence

(0.102)

n/a

The impact of the share options is considered anti-dilutive when the Company’s result for a period is a loss.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

6. FINANCIAL INVESTMENTS

Financial assets at fair value through profit or loss:

£'000
Level 1

£'000
Level 2

£'000
Level 3

£'000

Total

Fair value at 31 December 2020

Additions

Fair value changes

Gains on disposals

Disposal

Fair value at 31 December 2021

Additions

Fair value changes

(Loss)/Gains on disposals

Disposal

Fair value at 31 December 2022

Gains on investments held at fair value through profit or
loss
Fair value gain on investments

Realised gain/(loss) on disposal of investments
Net gain on investments held at fair value through profit
or loss

Financial assets

Non-current
Current

13,761

830
577
593
(3,787)
11,974
235
(4,593)
(446)
(1,926)
5,244

(4,593)
(446)

(5,039)

£'000
Level 1
-
5,244
5,244

-
-
-
-

-
-

-
-
-

-
-

2,885
2,775
-
-
-
5,660
7,479
-
998
(1,810)
12,327

16,646

3,605

577

593

(3,787)

17,634

7,714

(4,593)

552

(3,736)

17,571

-
998

(4,593)

552

998

(4,041)

£'000
Level 2
-

-
-

£'000
Level 3
11,365
962
12,327

£'000
Total
11,365

6,206
17,571

Level 1 represents those assets, which are measured using unadjusted quoted prices for identical assets.
Level 2 applies inputs other than quoted prices that are observable for the assets either directly (as prices) or
indirectly (derived from prices).
Level 3 applies inputs, which are not based on observable market data.

Level 1 assets comprise investments in listed securities which are traded on stock markets throughout the
world and are held by the Company as a mix of strategic and short term investments. These are classified as
current assets by virtue of their liquidity. The listed investments have been valued at bid price, as quoted on
their respective Stock Exchanges, at 31 December 2022. During the year ended 31 December 2022 the
company disposed of a variety of its shareholdings.

Level 3 assets comprise of investment in exploration costs where licences are not 100% owned by the
Company, and investments in other companies. The Directors carried out an impairment review as at 31
December 2022, and determined that no impairment was necessary. With the exception of the investment in
Mojito of £962,000 these are considered to be non-current assets due to their lack of liquidity. As the
Yangibana Project Tenements owned by Mojito were disposed of in 2023, this has been classified as a current
asset at 31 December 2022.

During 2022, £5,669,000 was invested in exploration costs by the Company (2021: £2,775,000).

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

7. TRADE AND OTHER RECEIVABLES

Current
Trade receivables

Other receivables

Amounts owed by subsidiaries

Prepayments and accrued income

31 December 2022
£'000

27
3,883
47
3,957

31 December 2021

£'000

1,094

3,883

5,048

There is no impairment of receivables, and no amounts are past due at 31 December 2022 or 31 December
2021.

The fair value of these financial assets is not individually determined as the carrying amount is a reasonable
approximation of fair value.

8. TRADE AND OTHER PAYABLES

Trade payables

Tax and social security

Other payables

Accruals and deferred income

31 December 2022

£'000

31 December 2021
£'000

246
-
1
70
317

254

591

853

The fair value of trade and other payables has not been disclosed as, due to their short duration, management
considers the carrying amounts recognised in the balance sheet to be a reasonable approximation of their fair
value.

9. BORROWINGS

The Company had no borrowings at 31 December 2022 or 31 December 2021

During the year ended 31 December 2021, £3,000 (USD$4,000) interest and finance charges were charged in
the period, £223,000 (USD$303,000) was repaid, and £1,000 of foreign exchange was recognised in respect of
borrowings.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

10. SHARE CAPITAL

Allotted, issued and fully paid
173,619,050 deferred shares of 0.24p

172,719,813 ordinary shares of 1p (31 December 2021:
148,649,098 ordinary shares of 1p)

31 December 2022

31 December 2021

£'000

417

1,727
2,144

417

1,486

1,903

Allotted and issued
At 1 January 2021
Issue of shares during the year

Share issue costs

At 31 December 2021
Issue of shares during the year

Reissue of shares held in trust

Share issue costs

At 31 December 2022

Ordinary shares

No.

Ordinary Share
Capital
£'000

147,949,098
700,000
-
148,649,098
24,070,715
-
-
172,719,813

1,479
7

1,486
241

1,727

Share Premium

£'000

33,159
50

(2)

33,207
4,775

(376)

37,612

During the year ended 31 December 2022 the following shares were issued: On 3 February 2022, 19,512,180
placing and 487,805 subscription shares were issued for proceeds of £4,100,000. On 21 February 2022,
3,634,825 shares were issued through an open offer for proceeds of £745,000. On 8 April 2022, 435,905 shares
were issued on exercise of warrants for proceeds of £65,000.

Investment in Own Shares
At 31 December 2022, the Company held in Trust 6,380,000 (2021: 7,020,000) of its own shares with a nominal
value of £63,800 (2021: £70,200). The Trust has waived any entitlement to the receipt of dividends in respect
of its holding of the Company’s ordinary shares. The market value of these shares at 31 December was £0.72m
(2021: £1.75m). In the current period nil were repurchased (2021: nil) and nil were transferred into the Trust
(2021: nil), with 640,000 reissued on award of shares to directors.

The deferred shares have no voting rights and are not eligible for dividends.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

11. SHARE BASED PAYMENTS

Share Options
The Company operates share option schemes for certain employees (including directors). Options are
exercisable at the option price agreed at the date of grant. The options are settled in equity once exercised.
The expected life of the options varies between 1 and 6 years. All options issued in the prior years vested
immediately, with no vesting requirements. During the year ended 31 December 2022 nil, (2021: 7,200,000)
options were issued to Directors.

Details of the number of share options and the weighted average exercise price (WAEP) outstanding during
the period are as follows:

31 December 2022

31 December 2021

Number

Outstanding at the beginning of the year

7,200,000

Issued

Exercised

Outstanding at the end of the year

Exercisable at year end

-
7,200,000

7,200,000

WAEP

£
0.290
-
-
0.290

Number

100,000
7,200,000
(100,000)
7,200,000
7,200,000

WAEP

£
0.060

0.290

(0.060)
0.290

The share options outstanding at the end of the period have a weighted average remaining contractual life
of 3.33 years (31 December 2021: 4.33 years) and have the following exercise prices and fair values at the
date of grant:

First exercise date
(when vesting
conditions are met)

Grant date

Exercise
price

Fair value

31 December
2022

31 December
2021

Number

30 April 2021

0.29

0.02742

7,200,000

At 31 December 2022 7,200,000 options were exercisable (31 December 2021: 7,200,000).

For those options and warrants granted where IFRS 2 “Share-Based Payment” is applicable, the fair values
were calculated using the Black-Scholes model. The inputs into the model for share based payments
recognised in the current and prior year were as follows:

30 April 2021

Risk free rate

0.19%

Share price
volatility
21.6%

Expected life

5 years

Share price at
date of grant
£0.2375

Expected volatility was determined by calculating the historical volatility of the Company’s share price for 12
months prior to the date of grant. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural
considerations.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

11. SHARE BASED PAYMENTS (CONTINUED)

Warrants

Details of the number of warrants and the weighted average exercise price (WAEP) outstanding during the
period are as follows:

Outstanding at the beginning of the year

Issued

Exercised

Outstanding at the end of the year

Exercisable at year end

31 December 2022

31 December 2021

Number

1,798,405
1,157,350
(435,905)
2,519,850
2,519,850

WAEP

0.16147
0.20500
(0.015)
0.18345

Number

1,598,405
800,000
(600,000)
1,798,405
1,798,405

WAEP

0.11348

0.20000

(0.085)
0.16147

The warrants outstanding at the end of the period have a weighted average remaining contractual life of 1.67
years (31 December 2021: 1.78 years) and have the following exercise prices and fair values at the date of
grant:

First exercise date
(when vesting
conditions are met)

Grant date

Exercise price

31 December
2022

31 December
2021

01 January 2020
06 May 2020

20 August 2020

01 January 2020
06 May 2020

20 August 2020

28 September 2021
25 February 2022

Number

0.15

0.06

0.12

0.20

0.205

41,667

520,833

800,000

1,157,350

2,519,850

435,905
41,667

520,833

800,000

1,798,405

For those warrants granted where IFRS 2 “Share-Based Payment” is applicable, the fair values were calculated
using the Black-Scholes model. The inputs into the model for share based payments recognised in the current
and prior year were as follows:

28 September 2021
25 February 2022

Risk free rate

0.19%
1.03%

Share price
volatility
28.4%
14.9%

Expected life

3 years
3 years

Share price at
date of grant
£0.1825
£0.1825

The Company recognised total expenses of £13,000 (year ended 31 December 2021: £197,000) relating to
equity-settled share-based payment transactions during the period.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

12. FINANCIAL INSTRUMENTS

The Company is exposed to a variety of financial risks which result from both its operating and investing
activities. The Board is responsible for co-ordinating the Company's risk management and focuses on actively
securing the Company's short to medium term cash flows. Long term financial investments are managed to
generate lasting returns.

The Company has purchased shares in Companies which are listed on public trading exchanges such as the LSE,
TSX and ASX, and these shares are held as an available-for-sale asset. The most significant risks to which the
Company is exposed are described below:

a Credit risk

The Company's credit risk will be primarily attributable to its trade receivables. At 31 December 2022 and 31
December 2021, the Company had no trade receivables and therefore minimal risk arises.

Generally, the Company’s maximum exposure to credit risk is limited to the carrying amount of the financial
assets recognised at the balance sheet date, as summarised below:

Investments
(carried at
fair value)

£’000

6,206

11,365

Loans and
receivables
(carried at
amortised

cost)
£’000

3,883

110

Investments
(carried at fair
value)
Other long
term financial
assets
Other
receivables
Receivables
from investee
companies
Prepayments
and accrued
income
Cash and cash
equivalents

Total

17,571

4,067

Derivative
financial
assets

31 December 2022
Statement
of
Financial
position
total
£’000

£’000

Investments
(carried at
fair value)

£’000

Loans and
receivables
(carried at
amortised
cost)
£’000

31 December 2021

Derivative
financial
assets

Statement
of financial
position
total

£’000

6,206

11,974

11,365

5,660

3,883

110

1,094

3,883

324

21,638

17,634

5,372

11,974

5,660

1,094

3,883

324

23,006

Financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1
to 3 based on the degree to which the fair value is observable:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for

identical assets or liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the

asset or liability that are not based on observable market data (unobservable inputs).

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

12. FINANCIAL INSTRUMENTS (CONTINUED)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.
In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is
significant to the fair value measurement. Management’s assessment of the significance of a particular input
to the fair value measurement in its entirety requires judgement and considers factors specific to the
investment.

Investments
The Company’s investment in shares in Listed Companies are included as a financial investment and has been
classified as Level 1, as market prices are available, and the market is considered an active, liquid market.

The Company’s investment in exploration costs where licences are not 100% owned by the Company, and
investments in other companies are classified as non-current Level 3.

The credit risk on liquid funds is limited because the Company only places deposits with leading financial
institutions in the United Kingdom.

a Liquidity risk

The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable
needs and to invest cash assets safely and profitably. The Directors prepare rolling cash flow forecasts and
seek to raise additional equity funding whenever a shortfall in funding is forecast. Details of the going concern
basis of preparing the financial statements are included in the principal accounting policies.

b Market risk

The amount and quality of minerals available and the related costs of extraction and production represent a
significant risk to the Company. The Company is exposed to fluctuating commodity prices in respect of the
underlying assets. The Company seeks to manage this risk by carrying out appropriate due diligence in respect
of the projects in which it invests.

The Company is exposed to the volatility of the stock markets around the world, on which it holds shares in
various listed entities, and the fluctuation of share prices of these underlying companies. The Company
manages this risk through constant monitoring of its investments share prices and news information but does
not hedge against these investments.

Interest rate risk

The Company only has borrowings at fixed coupon rates and therefore minimal interest rate risk, as this is
deemed its only material exposure thereto.

d Foreign exchange risk

The Company had no borrowings at 31 December 2022 or 31 December 2021. The Company operates foreign
currency bank accounts to help mitigate the foreign currency risk.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

12. FINANCIAL INSTRUMENTS (CONTINUED)

e Financial liabilities

The Company's financial liabilities are classified as follows:

31 December 2022

31 December 2021

Other
financial
liabilities
at
amortised
cost
£'000

Liabilities
not within
the scope
of IAS 39

Total

£'000

Other
financial
liabilities
at
amortised
cost
£'000

Liabilities
not within
the scope
of IAS 39

Total

£'000

Trade payables
Accruals and
deferred income
Other payables
Borrowings

Total

246

1
-
247

-
-

246

1
-
317

254

8
-
262

591

-
-

591

254

591

8
-

853

Maturity of financial liabilities

All financial liabilities at 31 December 2022 and 31 December 2021 mature in less than one year.

Borrowing facilities for the period ended 31 December 2022

The Company had no committed borrowing facilities at 31 December 2022 (31 December 2021: £Nil).

The Company had no committed undrawn facilities at 31 December 2022 or 31 December 2021.

f Capital risk management

The Company's objectives when managing capital are:

-
-

to safeguard the Company's ability to continue as a going concern, so that it continues to provide returns
and benefits for the shareholders;
to support the Company's stability and growth; and
to provide capital for the purpose of strengthening the Company's risk management capability.

The Company actively and regularly reviews and manages its capital structure, to ensure an optimal capital
structure, and equity holder returns, taking into consideration the future capital requirements of the Company
and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital
expenditures and projected strategic investment opportunities. Management regards total equity as capital
and reserves, for capital management purposes.

CADENCE MINERALS PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2022

13. RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

There was no financing activity in the year ended 31 December 2022.

1 January 2021

Cash-flows:

- Interest charged

- Realised foreign exchange
- Repayments

31 December 2021

14. RELATED PARTY TRANSACTIONS

Short-term
borrowings

219

1
(223)

Total

219

1
(223)

The Company was charged rent totalling £19,931 to Gunsynd Plc, a company of which Don Strang is a director
(2021: £19,200 accrued). Of this £9,500 was accrued and £131 was unpaid at 31 December 2022. Andrew
Suckling is a director of Macarthur Minerals Limited. During the year the Company purchased 600,000 shares
in Macarthur Minerals and sold 1,616,000 shares in Macarthur Minerals for net proceeds of £24,426 (2021:
286,000 shares disposed of for proceeds of £50,581). At the year end the company held nil shares in Macarthur
Minerals (2021: 1,016,000).

Key Management Personnel are considered to be the Company Directors only, and their fees and
remuneration are disclosed in the Directors Remuneration on pages [31 to 33], and within Note [2] to the
financial statements.

15. EVENTS AFTER THE END OF THE REPORTING PERIOD

On 25 January 2023, the Company announced that it had completed the sale of its working interests in the
Yangibana Rare Earths project ("Yangibana Project") tenements to Hastings Technology Metals (ASX: HAS)
("Hastings"). The Company received 2,452,650 shares of Hastings valued at AUD $9m.

On 26 January 2023, the Company announced that Evergreen Lithium Limited ("Evergreen") has filed its
admission Prospectus with Australian Securities & Investments Commission and the Australian Stock Exchange
("ASX"). Cadence owns approximately 15.8 million Evergreen shares which are anticipated to represent 8.7%
of the issued share capital of Evergreen on admission. At the offer price the Company’s interest is valued at
AUD $3.96m.

On 13 April 2023, the Company announced that Evergreen was listed on ASX on 11 April 2023, and that
Cadence is the largest shareholder, holding 8.74% of the issued share capital.

16. ULTIMATE CONTROLLING PARTY

In the opinion of the directors there is no controlling party.