Annual Report and
Consolidated Financial
Statements 2020
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
1
Contents
Chairman’s Statement
Company Information
Board of Directors
Directors’ Report
2
5
6
8
Independent Auditors’ Report
16
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Company Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement
of Cash Flows
Company Statement
of Cash Flows
Notes to and forming part of
the consolidated and company
financial statements
22
23
24
25
26
27
28
29
30
2
Chairman’s Statement
Professor Richard Conroy
Chairman
Dear Shareholder,
I have great pleasure in
presenting the Company’s
Annual Report and Consolidated
Financial Statements for the
year ended 31 May 2020.
praised the Irish mineral sector and the
contribution it makes to the economy,
pointing out that “Relying on distant
resources (for minerals) is becoming
untenable”.
This attitude is echoed in Finland where
the Company has promising exploration
acreage for both gold and copper.
Heads of Terms with Anglo
Asian Mining plc
Post year end the Company entered
into a non-binding Heads of Terms for
an agreement regarding a proposed joint
venture between the Company and AAZ.
The joint venture’s proposed goal is the
development of a gold mine and further
exploration of the series of gold targets
along the trend that the Company has
discovered in the Longford-Down Massif.
Under the HoT, it is proposed that AAZ
will acquire an initial 17.5% working
interest in a joint venture for committing
to spend a minimum of €2 million on a
Primary Expenditure Programme.
AAZ will have an option to increase
its working interest to 25% by spending
an additional €2 million to complete the
Primary Expenditure Programme, with
a combined minimum of €4 million.
Under the HoT, AAZ has the option to
acquire a total 55% working interest in
exchange for committing to meet the
necessary expenditures of the Secondary
Expenditure Programme including
drilling and other technical requirements,
environmental studies, final feasibility
studies, planning application and
permission and mining permitting,
land acquisition in order to advance
the Clontibret Gold Deposit to mine
construction ready status, and a further
€3 million on exploration across the
Company’s other licences.
Excellent progress continued
on the 65 km (40 mile) new district
scale gold trend which the Company
has discovered along the Orlock Bridge
Fault Zone in north eastern Ireland.
These excellent technical results were
mirrored by the industry interest in
the project shown at the Prospector’s
and Developers Association Conference
(“PDAC”) in Toronto, in March and,
post year end, by the signing of Heads
of Terms (“HoT”) for a proposed Joint
Venture with Anglo Asian Mining plc
(“AAZ”).
Business Development
The Company’s objective of making
a major economic mineral discovery
is, with the discovery of a new district
scale mineral resource, its recognition
in the industry and the signing of HoT
for the development of the first gold
mine, well on its way to achievement.
The first gold mine planned, at
Clontibret in Co Monaghan, is likely
to be followed by a series of other gold
mines along the trend as a number
of other gold targets, some of them
with a gold-in-soil footprint greater
than Clontibret’s, have already been
discovered along the trend.
The Company’s licences cover
an area of over 800km2 and give
exclusive rights to Conroy to apply
for a mining lease or licence. Ireland
is a mining friendly country with an
established mining tradition and a
favourable business climate. There
is security of tenure combined with
a fiscal framework and excellent
infrastructure and technical services.
The then Irish Minister for Mines,
Mr Seán Canney T.D., attended
both the 2019 and the 2020 PDAC
Conference and visited the Company’s
booth accompanied by members of his
Department. Minister Canney confirmed
the positive attitude of successive Irish
Governments towards mining and
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 3
Field Team in Longford-Down Massif.
Clontibret Mineralised Core 7.0m @ 9.3 g/t Au incl. 2.5m @ 25 g/t Au.
325,000 warrants to acquire ordinary
shares in Conroy Gold at 16p were
issued to AAZ with additional warrants
proposed to be issued upon completion
of the final Joint Venture Agreement.
The initial 325,000 warrants were
exercised by AAZ, as announced by
the Company in November 2020.
The proposed joint venture remains
subject to, inter alia, the completion
of due diligence and the entering
into of definitive documentation
including the final joint venture
agreement. In addition, the proposed
joint venture, should it proceed on the
basis anticipated under the HoT, will
be subject to the Company seeking
shareholder approval.
Conroy and AAZ continue to work
towards the goal of entering into
a definitive, final joint venture
agreement however the COVID-19
pandemic and related restrictions has
resulted in progress being slower than
expected. The Company will provide
further update announcements at the
appropriate time.
Exploration Results
Exploration on the Company’s licences
in the Longford-Down Massif continued
to yield excellent results during the year.
The results included gold antimony
results from Clontibret, new gold
mineralisation at Glenish and gold-in-
bedrock at Slieve Glah. Results from a
new geophysical survey are likely to be
of particular value in relation to controls
on high grade gold grades at Clontibret.
COVID-19
The onset of the COVID-19 pandemic
impacted the Company’s activities
in the last quarter of the financial
year. In accordance with the Irish
Governments COVID-19 related
public health measures and public
health advice staff worked remotely.
Since the outbreak of the COVID-19
pandemic, the Company has taken
necessary measures in accordance
with Government guidelines to protect
the health, safety and wellbeing of its
employees, contractors and partners in
Ireland and Finland. COVID-19 continues
to limit field and laboratory work given
the restrictions on operations and
movement and other work also continues
in relation to the Company’s exploration
and development programme.
Directors and executives took a
50% reduction in fees and salaries
while technical and field staff took
a 25% reduction in salaries.
Financials
The loss after taxation for the financial
year ended 31 May 2020 was €677,380
(2019: €557,569) and the net assets
as at 31 May 2020 were €17,645,315
(2019: €17,873,326). During the
year the Company raised €350,000
through the issue of Convertible Loan
Notes and a further £302,500 through
a placing and subscription of new
ordinary shares in the Company. Full
details are set out at Notes 13 and 14 in
the Consolidated Financial Statements.
Post year end the Company’s cash
resources have been supplemented
by a placing and subscription of new
ordinary shares to raise £800,000 at
25 pence per share, as announced
by the Company in August 2020,
and warrant exercises which have
resulted in further funds of £455,333
being received between July 2020
and November 2020. The funds are
being used to support activities in
relation to the AAZ joint venture,
to advance the Company’s gold
exploration activities in Finland and
for general working capital purposes.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 4
PDAC Booth. Minister for Mines, Mr Seán Canney T.D. visits booth.
Drilling at Slieve Glah.
Directors and Staff
I would like to express my deep
appreciation of the support and
dedication of all the directors,
consultants and staff which has
made possible the continued progress
and success which the Company has
achieved. I am particularly pleased
to welcome Howard M. Bird, a very
distinguished geoscientist who,
post year end, joined the Board
as a Non-Executive Director.
Future Outlook
We are approaching a new era
and I look forward to the Company
continuing with its record of success
in exploration and to the successful
development of its first gold mine
on the new district-scale gold trend
which it has discovered in Ireland.
Professor Richard Conroy
Chairman
30 November 2020
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc Company Information
5
Directors
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Howard M. Bird§
Non-Executive Director
(Appointed 28 July 2020)
Professor Garth Earls§
Non-Executive Director
Brendan McMorrow§
Non-Executive Director
§ Member of the Audit Committee
Company Registration
Number
232059
Nominated Adviser (Nomad)
Allenby Capital Limited
5 St. Helen’s Place
5th Floor
London, EC3A 6AB, UK
www.allenbycapital.com
Company Secretary and
Registered Office
Maureen T.A. Jones
3300 Lake Drive
Citywest Business Campus
Dublin 24, D24 TD21, Ireland
Brokers
Brandon Hill Capital Ltd
1 Tudor Street
London, EC4Y 0AH, UK
First Equity Ltd
Salisbury House
London Wall
London, EC2M 5QQ, UK
Statutory Audit Firm
Deloitte Ireland LLP
Chartered Accountants
and Statutory Audit Firm
6 Lapp’s Quay
Cork, T12 VY7W, Ireland
Banker
AIB
1-4 Lower Baggot Street
Dublin 2, D02 X342, Ireland
Registrars
Link Registrars Limited
2 Grand Canal Square
Grand Canal Harbour
Dublin 2, D02 A342, Ireland
www.linkassetservices.com
enquiries@linkgroup.ie
Legal Advisers
William Fry Solicitors
2 Grand Canal Square
Dublin 2, D02 A342, Ireland
Roschier, Attorneys Ltd.
Kasarmikatu 21A
FL-00130, Helsinki
Finland
Head Office
Conroy Gold and
Natural Resources plc
3300 Lake Drive
Citywest Business Campus
Dublin 24, D24 TD21, Ireland
For further information visit
the Company’s website at:
www.conroygold.com
or contact:
Lothbury Financial Services
Floor 6, 131 Cannon Street
London, EC4N 5AX, UK
Tel: +44 20 3290 0707
or
Hall Communications
1 Northumberland Road
Dublin 4, D04 F578
Ireland
Tel: + 353 1 6609377
London Stock Exchange
AIM Symbol: CGNR
SEDOL: BZ4W18
ISIN number: IE00BZ4BTZ13
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
Professor Garth Earls
Non-Executive Director
Brendan McMorrow
Non-Executive Director
Howard M. Bird
Non-Executive Director
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 6
Board of Directors
Maureen T.A. Jones joined Conroy
Petroleum and Natural Resources P.L.C.
on its foundation in 1980 and was a
Director and member of the Board of
Directors of Conroy Petroleum/ARCON
from 1986 to 1994. Maureen T.A. Jones
has a medical background and specialised
in the radiographic aspects of nuclear
medicine before becoming a manager
of International Medical Corporation
in 1977.
Professor Garth Earls
Non-executive Director
Professor Garth Earls provides technical
advice and guidance to the Company in
relation to the exploration and resource
development matters.
Experience
Professor Garth Earls is Consulting
Economic Geologist and Professor in
the Department of Geology, University
College Cork. He has been a Member of
the Board of Directors and Managing
Director of both AIM and TSX listed
companies and has worked globally on
a wide range of gold and base metal
projects. In the 1980s he was part of the
team that discovered the Curraghinalt
gold deposit in Co. Tyrone. Professor
Garth Earls is a former Director of the
Geological Survey of Northern Ireland
and former Chairman of the Geosciences
Committee of the Royal Irish Academy.
Professor Richard Conroy
Chairman of the Board of Directors
Professor Richard Conroy is responsible
for leading the Board and ensuring
it operates in an effective manner
whilst promoting communication with
shareholders. He has over 40 years’
experience of founding and growing
companies in the natural resources
industry with a track record in making
discoveries of global significance.
Experience
Professor Richard Conroy has been
involved in natural resources for
many years. He established Trans-
International Oil, which was primarily
involved in Irish offshore oil exploration.
Trans-International Oil initiated the
Deminex Consortium which included
Deminex, Mobil, Amoco and DSM.
Trans-International Oil was merged
with Aran Energy P.L.C. in 1979,
which was later acquired by Statoil.
Professor Richard Conroy founded
Conroy Petroleum and Natural
Resources P.L.C. (“Conroy Petroleum”).
Conroy Petroleum was involved in both
onshore and offshore oil production
and exploration and also in mineral
exploration. Conroy Petroleum, in 1986,
made the significant discovery of the
Galmoy zinc deposits in County Kilkenny
later developed as a major zinc mine.
The discovery at Galmoy led to the
revival of the Irish base metal industry
and to Ireland becoming an international
zinc province.
Conroy Petroleum was also a founding
member of the Stoneboy consortium,
which included Sumitomo Metal Mining
Co. Ltd., an exploration Group which
discovered the world class Pogo gold
deposit in Alaska, now in production
as a major gold mine.
Conroy Petroleum acquired
Atlantic Resources P.L.C. in 1992
and subsequently changed its name
to ARCON International Resources
P.L.C. (“ARCON”). The oil and gas
interests in ARCON were transferred
to form Providence Resources P.L.C.
ARCON was later acquired by Lundin
Mining Corporation.
Professor Richard Conroy was Chairman
and Chief Executive of Conroy Petroleum/
ARCON from 1980 to 1994. He founded
Conroy Gold and Natural Resources P.L.C.
in 1995.
Professor Richard Conroy served in the
Irish Parliament as a Member of the
Senate. He was at various times front
bench spokesman for the Government
party in the Upper House on Energy,
Industry and Commerce, Foreign Affairs
and Northern Ireland.
Professor Richard Conroy is Emeritus
Professor of Physiology in the Royal
College of Surgeons in Ireland.
Professor Richard Conroy’s research
included pioneering work on jet lag,
shift working and decision making in
business after intercontinental flights.
He co-authored the first textbook on
human circadian rhythms.
Maureen T.A. Jones
Managing Director
Maureen T.A. Jones oversees all of the
Company’s business and is responsible
for formulating the Company’s objectives
and strategy. She is also the Company
Secretary for the Company.
Experience
Maureen T.A. Jones has over twenty
years’ experience at senior level in the
natural resource sector. She has been
Managing Director of Conroy Gold and
Natural Resources P.L.C. since 1998.
Maureen T.A. Jones is also a Director
of Karelian Diamond Resources P.L.C.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 7
Howard M. Bird
Non-executive Director
Howard M. Bird brings a broad range
of knowledge gained through holding
senior positions in a variety of different
roles in the natural resources sector.
He was appointed to the Board on
28 July 2020.
Experience
Howard M. Bird is an internationally
experienced Professional Geoscientist
(diamonds, gold, platinum and base
metals) and has over 30 years’ diverse
junior and senior mining company
exploration, development and mining
experience, including over 15 years at
senior executive management level.
He also has a strong background in
both European and North American
marketing, capital financings, mergers
and acquisitions, and joint ventures.
Brendan McMorrow
Non-executive Director
Brendan McMorrow was appointed
to the Board on 28 August 2017.
He brings a broad range of knowledge
gained through holding senior financial
roles in a variety of listed public
companies in the natural resources
sector.
Experience
Brendan McMorrow has over 25 years’
experience in a number of public
companies in the oil and gas and base
metals mining sectors listed in London,
Toronto and Dublin where he held senior
executive finance roles. He is currently
Finance Director of Dunraven Resources
P.L.C., an oil and gas exploration and
development company. Prior to that
he was Chief Financial Officer of
Circle Oil P.L.C. from 2005 to 2015,
an AIM listed oil and gas exploration,
development and production company,
with operations in North Africa and
the Middle East. Brendan is a Fellow
of the Chartered Association of
Certified Accountants.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 8
Directors’ Report
On 28 July 2020, the Company appointed
Howard M. Bird as a non-executive
Director. Please refer to previous page
for further details. On 31 July 2020, the
Company received a notice to exercise
warrants to subscribe for 1,358,333
ordinary shares of €0.001 each at a price
of 16 pence per ordinary share for which
funds of €241,013 (£217,333) have
been received. On 11 August 2020, the
Company raised €887,164 (£800,000)
through a placing of 3,200,000 ordinary
shares of €0.001 in the capital of the
Company at a price of £0.25 sterling per
placing share. On 17 August 2020, the
Company received a notice to exercise
warrants to subscribe for 100,000
ordinary shares of €0.001 each at a
price of 16 pence per ordinary share
for which funds of €17,743 (£16,000)
have been received. In November 2020,
before the signing date, the Company
announced that it has received a notice
to exercise warrants over a total of
1,387,500 ordinary shares of €0.001
each at an exercise price of 16 pence
per ordinary share, for which funds of
€247,800 (£222,000) have been received
by the Company.
COVID-19 continues to limit field and
laboratory work given the restrictions
on operations and movement and
other work also continues in relation
to the Company’s exploration and
development programme. There were
no other events after the reporting year
requiring adjustment to or disclosure
in, these audited consolidated financial
statements.
The Board of Directors submit their
annual report together with the audited
consolidated financial statements of
Conroy Gold and Natural Resources P.L.C.
(the “Company”) and its subsidiaries
(“Conroy Gold”, or the “Group”) and the
separate financial statements of the
Company for the financial year ended
31 May 2020.
Principal activities,
business review and future
developments
Information with respect to the Group’s
principal activities and the review of
the business and future developments
as required by Section 327 of the
Companies Act 2014 is contained in the
Chairman’s statement on pages 2 to 4.
The Company is a mineral exploration
and development company whose
objective is to discover and develop
world class ore bodies in order to create
value for its shareholders. The Company’s
strategy is to explore in politically stable
and geographically attractive countries
such as Ireland and Finland.
The challenges facing the Company
in achieving this strategy are world
commodity prices and general economic
activity, ensuring compliance with
governmental and environmental
legislation and meeting work
commitments under exploration permits
and licences sufficient to maintain
the Company’s interest therein. To
accomplish its strategy and manage
the challenges involved, the Company
employs experienced individuals with a
track record of success of discovering
world class ore bodies together with
suitably qualified technical personnel
and consultants, experienced drilling
and geophysical and other contractors
and uses accredited international
laboratories and technology to interpret
and assay technical results. Additionally,
the Company ensures as far as possible
to obtain adequate working capital
to carry out its work obligations and
commitments.
By co-ordinating all of the above, this
should result in a satisfactory return
and value for shareholders.
Results for the year and state
of affairs at 31 May 2020
The consolidated income statement
for the financial year ended 31 May
2020 and the consolidated statement
of financial position at that date are
set out on pages 22 and 24. The loss
for the financial year amounted to
€677,380 (2019: a loss of €557,569)
and net assets at 31 May 2020 were
€17,645,315 (2019: €17,873,326). No
interim or final dividends have been
or are recommended by the Board of
Directors.
The Group is not yet in a production
stage and so has no income.
Consequently, the Group is not expected
to report profits until it disposes of or is
able to profitably develop or otherwise
turn to account its exploration projects.
The Directors monitor the activities and
performance of the Group on a regular
basis and use both financial and non-
financial indicators to assess the Group’s
performance.
Important events since
the year-end
On 20 July 2020, the Company entered
into a non-binding Heads of Terms
regarding a proposed joint venture
between the Company and Anglo Asian
Mining plc. The joint venture’s goal is
the development of a gold mine and
further exploration and development of
a series of gold targets along the 65km
(40 mile) district scale gold trend that the
Company has discovered in the Longford-
Down Massif in Ireland. Concurrent with
the signing, the Company issued to Anglo
Asian warrants to subscribe for 325,000
ordinary shares of €0.001 each in the
capital of the Company at an exercise
price of 16 pence per ordinary share with
an initial exercise period of 6 months
from the date of the signing.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 9
Directors
Please refer to pages 5, 6 and 7 for a listing of Directors and further details.
Except as disclosed in the tables below, neither the Directors nor their families had any beneficial interest in the share capital of the
Company. Apart from Directors remuneration (detailed in Note 4), loans from Directors (detailed in Note 12) and professional services
provided by Professor Garth Earls and Brendan McMorrow (detailed in Note 16 (g)), there have been no contracts or arrangements
entered into during the financial year ended 31 May 2020 in which a Director of the Company had a material interest. Refer to
Note 16 for further details.
Company Secretary
Maureen T.A. Jones served as Company Secretary throughout the year.
Directors’ shareholdings and other interests
The interests of the Directors and their spouses and children in the share capital of the Company were as follows:
Director
Date of
signing
financial
statements
Ordinary
Shares of
€0.001 each
Date of
signing
financial
statements
Warrants
31 May
2020
31 May
2020
1 June
2019
1 June
2019
Ordinary
Shares of
€0.001 each
Warrants
Ordinary
Shares of
€0.001 each
Professor Richard Conroy
2,795,521*
121,198
2,795,521*
349,347
2,795,521*
Maureen T.A. Jones
329,239
86,671
329,239
225,069
329,239
Professor Garth Earls
Brendan McMorrow
Howard M. Bird**
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
* Of the 2,795,521 (2018: 2,795,521) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2018: 192,942) are held by Conroy P.L.C.,
a company in which Professor Richard Conroy has a controlling interest.
** Appointed on 28 July 2020 as an non-executive Director.
Details of warrants are as follows:
Director
Date of
signing
financial
statements
Date of
signing
financial
statements
31 May
2020
31 May
2020
1 June
2019
1 June
2019
Expiry Date
Warrants
Price €
Warrants
Price €
Warrants
Price €
Professor Richard Conroy
–
–
228,149
Professor Richard Conroy
121,198
4.33
121,198
Maureen T.A. Jones
Maureen T.A. Jones
–
–
138,398
86,671
4.33
86,671
3.70
4.33
3.70
4.33
28,149
3.70 15 November 2020
121,198
4.33 16 November 2022
138,398
3.70 15 November 2020
86,671
4.33 16 November 2022
Warrants
349,347
225,069
–
–
–
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 10
Directors’ Report continued
Substantial shareholdings
So far as the Board of Directors are aware, no person or company, other than the shareholders listed below, held 3% or more
of the issued ordinary share capital of the Company.
Shareholder
Mr. Patrick O’Sullivan
Professor Richard Conroy
Mr. Philip Hannigan
Paul and Marial Johnson
Date of
signing
financial
statements
Ordinary
Shares of
€0.001 each
3,000,000
2,795,521*
2,011,577
1,686,255
Sanderson Capital Partners
–
Date of
signing
financial
statements
31 May
2020
31 May
2020
31 May
2019
31 May
2019
%
9.30
8.67
6.24
5.23
–
Ordinary
Shares of
€0.001 each
3,000,000
2,795,521*
2,011,577
1,686,255
833,333
%
Ordinary
Shares of
€0.001 each
11.44
10.66
7.67
6.43
3.18
3,000,000
2,795,521*
801,962
1,210,973
–
%
12.66
11.80
3.38
5.11
–
* Of the 2,795,521 (2019: 2,795,521) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (2019: 192,942) are held by Conroy P.L.C.,
a company in which Professor Richard Conroy has a controlling interest.
Compliance policy statement
of Conroy Gold and Natural
Resources P.L.C.
The Directors, in accordance with
Section 225(2) of the Companies
Act 2014, acknowledge that they are
responsible for securing the Company’s
compliance with certain obligations
specified in that section (‘relevant
obligations’). The Directors confirm that:
n a compliance policy statement
has been drawn up setting out the
Company’s policies that in their
opinion are appropriate with regard to
compliance with relevant obligations;
n appropriate arrangements and
structures have been put in place
that, in their opinion, are designed
to provide reasonable assurance of
compliance in all material respects
with those relevant obligations; and
n a review has been conducted,
during the financial year, of those
arrangements and structures.
It is the policy of the Group to review
during the course of each financial
year the arrangements and structures
referred to above which have been
implemented with a view to determining
if they provide a reasonable assurance of
compliance in all material respects with
relevant obligations.
Statement of Directors’
responsibilities in respect
of the annual report and
the consolidated financial
statements
The Directors are responsible for
preparing the annual report, including
the Directors’ Report and the financial
statements in accordance with
the Companies Act 2014 and the
applicable regulations. Irish Company
law requires the Directors to prepare
financial statements for each financial
year. Under that law, they have
elected to prepare the consolidated
financial statements in accordance
with International Financial Reporting
Standards (“IFRS”) as adopted by the EU
and applicable law and the Company
financial statements in accordance
with Financial Reporting Standard
101: Reduced Disclosure Framework
(“FRS101”), issued by the Financial
Reporting Council.
Under company law, the Directors
must not approve the Consolidated and
Company financial statements unless
they are satisfied that they give a true
and fair view of the assets, liabilities
and financial position of the Group and
Company and of the Group’s profit or
loss for that financial year and otherwise
comply with the Companies Act 2014. In
preparing these financial statements, the
Directors are required to:
n select suitable accounting policies
for the Group and Company financial
statements and then apply them
consistently;
n make judgements and estimates
that are reasonable and prudent;
n state whether the financial statements
have been prepared in accordance
with the applicable accounting
standards, identify those standards,
and note the effect and the reason
for any material departure from
these standards; and
n prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and the Company will continue
in business.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 11
The Directors are responsible for
keeping adequate accounting records
which disclose with reasonable accuracy
at any time the assets, liabilities,
financial position and profit or loss of
the Company and which enable them
to ensure that the financial statements
of the Company and the Group are
prepared in accordance with the relevant
accounting framework and comply with
the provisions of the Companies Act
2014. They have general responsibility
for taking such steps as are reasonably
open to them to safeguard the assets
of the Group and the Company and
to prevent and detect fraud and
other irregularities. The Directors
are also responsible for preparing a
Directors’ report that complies with the
requirements of the Companies Act 2014.
The Directors are responsible for
the maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the Republic of Ireland
governing the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.
Going concern
The Group and the Company incurred
a loss of €677,380 (2019: a loss of
€557,569) for the financial year ended
31 May 2020. The Group and the
Company had net assets of €17,645,315
(2019: €17,873,326) at that date. The
Group had net current liabilities of
€4,338,318 (2019: €3,910,066) and
the Company had net current liabilities
of €3,981,670 (2019: €3,560,948) at
that date. The Group and the Company
had cash and cash equivalents of
€117,270 for both at 31 May 2020
(2019: €77,299).
The Directors, namely Professor Richard
Conroy, Maureen T.A. Jones, Professor
Garth Earls and Brendan McMorrow, and
former Directors, namely James P. Jones,
Séamus P. Fitzpatrick, C. David Wathen,
Louis J. Maguire, Dr. Sorċa C. Conroy
and Michael E. Power, have confirmed
that they will not seek repayment of
amounts owed to them by the Group
and the Company of €3,197,755 (2019:
€2,917,454) for a minimum period of
12 months from the date of approval
of the financial statements, unless the
Group has sufficient funds to repay.
Subsequent to the year-end, the
Company raised a total of €887,164
(£800,000) through a placing of ordinary
shares in the Company. Full details were
announced on 11 August 2020 and are
set out in Note 19 in the consolidated
financial statements. The Company
also received €241,013 (£217,333) and
€17,743 (£16,000) by the Company’s
warrants exercise (see Note 19 for further
details). In November 2020, before the
signing date, the Company announced
that it has received a notice to exercise
warrants over a total of 1,387,500
ordinary shares of €0.001 each at an
exercise price of 16 pence per ordinary
share, for which funds of €247,800
(£222,000) have been received by the
Company.
In addition, Karelian Diamond Resources
P.L.C. has confirmed that it does not
intend to seek repayment of amounts
owed to it at 31 May 2020 by the Group
and the Company of €58,469 (2019:
€54,241) for a minimum period of
12 months from the date of approval
of the financial statements, unless the
Group has sufficient funds to repay.
The Board of Directors have considered
carefully the financial position of the
Group and the Company and in that
context, have prepared and reviewed
cash flow forecasts for the period
to 30 November 2021. As set out in
the Chairman’s statement, the Group
and the Company expects to incur
capital expenditure in 2021, consistent
with its strategy as an exploration
company. In reviewing the proposed
work programme for exploration and
evaluation assets and on the basis of
the funds received after the financial
year end, the results obtained from
the exploration programme and the
prospects for raising additional funds
as required, the Board of Directors are
satisfied that it is appropriate to prepare
the Group and the Company financial
statements on a going concern basis.
Corporate governance
The Board has adopted the QCA
Corporate Governance Code (“QCA
Code”), which is derived from the 2018
UK Corporate Governance Code and
the Guidance on Board Effectiveness
(the “Code”) but adapted to the needs
of smaller quoted companies. The
Company agrees that good governance
contributes to sustainable success and
recognises the renewed emphasis on
business building trust by forging strong
relationships with key stakeholders. The
Company understands the importance
of a corporate culture that is aligned
with the Company’s purpose and
business strategy, and which promotes
integrity and includes diversity. The
Company conducts its business with
integrity, honesty and fairness and
requires its partners, contractors
and suppliers to meet similar ethical
standards. It is an objective of the
Company that all individuals are aware
of their responsibilities in applying and
maintaining these standards in all their
actions. The Board ensures that support
is available in the form of staff training
and updating its employee handbook
such that staff members understand
what is expected of them. The Company’s
Statement of Compliance with the QCA
code is available on the Company’s
website: www.conroygold.com.
Board of Directors
The Board of Directors is made up of
two executive and three non-executive
Directors. One of non-executive directors
was appointed on 28 July 2020.
Biographies of each of the Directors
are set out on pages 6 and 7.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 12
Directors’ Report continued
The Board of Directors agrees a schedule
of regular meetings to be held in each
calendar year and also meets on other
occasions as necessary. Meetings are
usually held at the head office in 3300
Lake Drive, Citywest Business Campus,
Dublin 24, D24 TD21, Ireland. Board
of Directors’ meetings were held on 8
occasions from 1 June 2019 to 31 May
2020 and attendance is set out in the
table below. An agenda and supporting
documentation were circulated in
advance of each meeting.
Meetings held during the year
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Board
8
8
8
8
8
There is an agreed list of matters which
the Board of Directors has formally
reserved to itself for decision, such as
approval of the Group’s commercial
strategy, trading and capital budgets,
financial statements, Board of Directors’
membership, major capital expenditure
and risk management policies.
Responsibility for certain matters
is delegated to Board of Directors’
committees. Executive Directors spend
as much time on Group matters as is
necessary for the proper performance of
their duties. Non-executive Directors are
expected to spend a minimum of one day
a month on Group activities in addition
to preparation for and attendance at
Board and sub-committee meetings.
There is an agreed procedure for
Directors to take independent legal
advice. The Company Secretary is
responsible for ensuring that Board of
Directors procedures are followed, and
all Directors have direct access to the
Company Secretary.
All Directors receive regular reports
and full Board of Directors’ papers are
sent to each Director in sufficient time
before Board of Directors’ meetings,
and any further supporting papers
and information are readily available
to all Directors on request. The Board
of Directors’ papers include the minutes
of the Audit committee of the Board
of Directors which have been held
since the previous Board of Directors’
meeting, and, the Chairman of each
committee is available to give a report
on the committee’s proceedings at Board
of Directors’ meetings if appropriate.
The Board of Directors has a process
whereby each year every Director
may meet the Chairman to review the
conduct of Board of Directors’ meetings
and the general corporate governance of
the Group. The non-executive Directors
(other than Professor Garth Earls) are
regarded as independent and have no
material interest or other relationships
with the Group.
The Board, having fully considered the
corporate needs of the Group, is satisfied
that it has an appropriate balance of
experience and skills to carry out its
duties. The Chairman of the Company
oversees this process and reviews the
Board composition to ensure it has
the necessary experience, skills and
capabilities.
The current non-executive Directors
have a wide range of financial
and technical skills based on both
qualifications and experience including
significant fundraisings, financial
management, technical expertise and the
discovery and bringing into production
of operating mines. Each board member
keeps their skills up to date through
a combination of courses, continuing
professional development through
professional bodies and reading.
The Company Secretary provides
Directors with updates on key
developments relating to the Company,
the sector in which the Company
operates, legal and governance matters
including advice from the Company’s
brokers, lawyers and advisors.
Board performance
The Board, through its Chairman, will
in the coming year evaluate its ongoing
performance, based on the requirements
of the business and corporate
governance standards.
It is envisaged that the review process
will include the use of internal reviews
and periodic external facilitation. The
results of such reviews will be used
to determine whether any alterations
are needed at either a board or senior
management level or whether any
additional training would be beneficial.
It is intended that with effect from the
end of the next financial year, these
evaluations will be undertaken annually,
after the end of each financial year but
prior to the publication of the respective
annual report and accounts.
Director’s performance will be measured
by way of such matters as:
n Commitment;
n Independence;
n Relevant experience;
n Impartiality;
n Specialist knowledge; and
n Effectiveness on the Board.
As set out in the Constitution of
the Company, each year, one third
(or the number nearest to one third)
of the Directors with the exception of
the Chairman and the Managing Director,
retire from the Board of Directors by
rotation. Effectively, therefore, each
such Director will retire by rotation
within a two-year period.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 13
Ethical values and behaviours
The Board of Directors is committed to
high standards of corporate governance
and integrity in all its activities and
operations and promotes a culture of
good ethical values and behaviour.
The Group conducts its business
with integrity, honesty and fairness
and requires its partners, contractors
and suppliers to meet similar ethical
standards. Individual staff members must
ensure that they apply and maintain
these standards in all their actions.
The Chairman of the Board of Directors
regularly monitors and reviews the
Group’s ethical standards and cultural
environment and where necessary takes
appropriate action to ensure proper
standards are maintained. Due to the size
and available resources of the Company,
the Chairman of the Board of Directors
carries out executive functions. The
Group is fully committed to complying
with all relevant health, safety and
environment rules and regulations as
these apply to its operations. It is an
objective of the Group that all individuals
are aware of their responsibilities in
providing a safe and secure working
environment.
Board Committees
The Board of Directors has implemented
an effective committee structure to assist
in the discharge of its responsibilities.
Membership of the Audit Committee,
constituted in accordance with Section
1097 of the Companies Act 2014, is
comprised exclusively of independent
non-executive Directors. The Company
is currently reconstituting the Executive
Committee and the Remuneration
Committee. It is intended that the
Remuneration Committee will be
established in accordance with the
QCA Remuneration Committee Guide
for Small and Mid-Size Quoted
Companies before the publication of
next year’s annual report and accounts
and following the completion of the
Board evaluation process outlined earlier.
Remuneration Committee
In the absence of a Remuneration
Committee during the year, the Board
as a whole took on the functions of the
Remuneration Committee. As such, the
Board monitors the performance of each
of the Company’s executive Directors
and senior executives to ensure they are
rewarded fairly for their contribution to
the Group. The executive Directors are
excused from the meetings to determine
their remuneration. It also sets the
remuneration and terms and conditions
of appointment for the non-executive
Directors. In determining remuneration
levels, the Board takes into consideration
the practices of other companies of
similar scope and size to ensure that
senior executives and Board members
are properly rewarded and motivated
to perform in the best interests of the
shareholders.
Audit Committee
The Audit Committee’s terms of
reference have been approved by the
Board of Directors. The Audit Committee,
constituted in accordance with Section
1097 of the Companies Act 2014,
comprises of the three non-executive
Directors and is chaired by Brendan
McMorrow. Attendance at the Audit
Committee meetings is set out below:
Meetings held during
the year
Brendan McMorrow
Professor Garth Earls
Audit
Committee
3
3
3
The Audit Committee reviews the
accounting principles, policies and
practices adopted, and areas of
management judgement and estimation
during the preparation of the interim
and annual financial statements and
discusses with the Group’s Auditors
the results and scope of the audit. The
external auditors have the opportunity
to meet with the members of the Audit
Committee alone at least once a year.
The Audit Committee advises the
Board of Directors on the appointment
of external auditors and on their
remuneration and discusses the nature
and scope of the audit with the external
auditors. An analysis of the fees payable
to the external audit firm in respect of
audit services during the financial year
is set out in Note 3 to the consolidated
financial statements.
The Audit Committee also undertakes
a review of any non-audit services
provided to the Group; and a discussion
with the auditors of all relationships
with the Group and any other parties
that could affect independence or the
perception of independence.
The Audit Committee is responsible
for monitoring the controls which
are in force to ensure the information
reported to the shareholders is accurate
and complete. The Audit Committee also
reviews internal controls and contributes
to the review of the effectiveness of
the Group’s internal controls and risk
management systems. It also considers
the need for an internal audit function,
which it believes is not primarily required
at present because of the size of the
Group’s operations. The members of the
Audit Committee have agreed to make
themselves available should any member
of staff wish to make representations to
them about the conduct of the affairs
of the Group.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 14
Directors’ Report continued
Internal control
The Directors have overall responsibility
for the Group’s system of internal control
to safeguard shareholders’ investments
and the Group assets. They operate
a system of financial controls which
enable the Board of Directors to meet
its responsibilities for the integrity and
accuracy of the Group’s accounting
records. Among the processes applied in
reviewing the effectiveness of the system
of internal controls are the following:
n The Board of Directors establishes
risk policies as appropriate, for
implementation by executive
management;
n All commitments for expenditure
and payments are subject to approval
by personnel designated by the Board
of Directors; and
n Regular management meetings
take place to review financial and
operational activities.
The Board of Directors has considered
the requirement for an internal audit
function. Based on the scale of the
Group’s operations and close involvement
of the Board of Directors, the Directors
have concluded that an internal audit
function is not currently required.
Risks and uncertainties
The Group is subject to a number
of potential risks and uncertainties,
which could have a material impact
on the long-term performance of the
Group and could cause actual results
to differ materially from expectation.
The management of risk is the collective
responsibility of the Board of Directors.
An ongoing process for identifying,
evaluating and managing or mitigating
the principal risks faced by the Group has
been in place throughout the financial
year and has remained in place up to
the approval date of the report and
accounts. The Board intends to keep its
risk control procedures under constant
review, particularly with regard to the
need to embed internal control and risk
management procedures further into
the operations of the business and to
deal with areas of improvement which
come to management’s and the Board’s
attention.
As might be expected in a group of this
size, a key control procedure is the day-
to-day supervision of the business by
the Executive Directors, supported by the
senior managers with responsibility for
key operations. The Board has considered
the impact of the values and culture of
the Group and ensures that, through
staff communication and training, the
Board’s expectations and attitude to risk
and internal control are embedded in the
business. The Board of Directors consider
the following risks to be the principal
risks affecting the business.
General Industry Risk
The Group’s business may be affected
by the general risks associated with
all companies in the gold exploration
industry. These risks (the list of which
is not exhaustive) include: general
economic activity, the world gold
prices, government and environmental
regulations, permits and licenses,
fluctuating metal prices, the requirement
and ability to raise additional capital
through future financings and price
volatility of publicly traded securities.
As such there is no guarantee that future
market conditions will permit the raising
of the necessary funds by way of issue
of new equity, debt financing or farming
out of interests. To mitigate this risk,
the Board regularly reviews Group cash
flow projections and considers different
sources of funds.
Environmental Risk
Environmental and safety legislation
may change in a manner that may
require stricter or additional standards
than those now in effect. These could
result in heightened responsibilities for
the Group and could cause additional
expense, capital expenditures, restrictions
and delays in the activities of the Group,
the extent of which cannot be predicted.
The Group employs staff experienced
in the requirements of the relevant
environmental authorities and seeks,
through their experience, to mitigate
the risk of non-compliance with
accepted best practice.
Exploration Risk
All drilling to establish productive
gold resources is inherently speculative
and, therefore, a considerable amount
of professional judgement is involved
in the selection of any prospect for
drilling. In addition, in the event
drilling successfully encounters gold,
unforeseeable operating problems may
arise which render it uneconomic to
exploit such finds. Estimates of potential
resources include substantial proportions
which are undeveloped. These resources
require further capital expenditure in
order to bring them into production.
No guarantee can be given as to the
success of drilling programmes in which
the Group has an interest. The Group
employs highly competent experienced
staff and uses a range of techniques to
minimise risk prior to drilling and utilises
independent experts to assess the results
of exploration activity.
Financial Risk
Refer to Note 18 in relation to the use
of financial instruments by the Group,
the financial risk management objectives
of the Group and the Group’s exposure
to interest rate risk, foreign currency risk,
liquidity risk and credit risk. Management
is authorised to achieve best available
rates in respect of each forecast currency
requirement.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 15
Auditors
Deloitte Ireland LLP will continue in
office in accordance with Section 383 (2)
of the Companies Act 2014. Shareholders
will be asked to authorise the Directors
to fix their remuneration.
On behalf of the Directors:
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
30 November 2020
Accounting records
The Board of Directors are responsible
for ensuring adequate accounting
records, as outlined in Section 281
to 285 of the Companies Act 2014,
are kept by the Company. The Board
of Directors, through the use of
appropriate procedures and systems
and the employment of competent
persons have ensured that measures
are in place to secure compliance with
these requirements.
The accounting records are maintained
at the Company’s business address, 3300
Lake Drive, Citywest Business Campus,
Dublin 24, D24 TD21, Ireland.
Disclosure of information
to auditors
So far as each of the Directors in office
at the date of approval of the financial
statements is aware:
n There is no relevant audit information
of which the Company’s auditors are
unaware; and
n The Directors have taken all steps that
they ought to have taken as Directors
in order to make themselves aware of
any relevant audit information and to
establish that the Company’s auditors
are aware of that information.
This information is given and should
be interpreted in accordance with
the provisions of Section 330 of the
Companies Act 2014.
Pandemic Risk
The onset of the COVID-19 pandemic
impacted on Company activities in the
last quarter of the financial year. In
accordance with the Irish Governments
COVID-19 related public health measures
and public health advice staff worked
remotely.
Since the outbreak of the COVID-19
pandemic, the Company has taken
necessary measures in accordance
with Government guidelines to protect
the health, safety and wellbeing of its
employees, contractors and partners in
Ireland and Finland. COVID-19 continues
to limit field and laboratory work given
the restrictions on operations and
movement and other work also continues
in relation to the Company’s exploration
and development programme.
Communication
with shareholders
The Group gives high priority to
communication with both shareholders
and all other stakeholder groups.
This is achieved through publications
such as the annual and interim report,
and news releases on the Company’s
website www.conroygold.com, which
is regularly updated.
The Company encourages shareholders
to attend the Annual General Meeting
(AGM) to meet, exchange views and
discuss the progress of the Group.
The Directors are available after the
conclusion of the formal business of
the AGM to meet, listen to shareholders
and discuss any relevant matters arising.
Political donations
There were no political donations during
the financial year (2019: €Nil).
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 16
Independent Auditors’ Report
to the Members of Conroy Gold and Natural Resources Plc
Independent auditor’s report to the members of Conroy Gold and Natural Resources Plc
Report on the audit of the financial statements
Opinion on the financial statements of Conroy Gold and Natural Resources Plc (the ‘Company’)
In our opinion the Group and Parent Company financial statements:
•
•
give a true and fair view of the assets, liabilities and financial position of the Group and Parent
Company as at 31 May 2020 and of the loss of the Group for the financial year then ended; and
have been properly prepared in accordance with the relevant financial reporting framework and, in
particular, with the requirements of the Companies Act 2014.
The financial statements we have audited comprise:
•
•
•
•
•
•
•
•
•
•
•
The Group financial statements:
the Consolidated income statement;
the Consolidated statement of comprehensive income;
the Consolidated statement of financial position;
the Consolidated statement of changes in equity;
the Consolidated statement of cash flows; and
the related notes 1 to 21, including a summary of significant accounting policies as set out in note 1.
The Parent Company financial statements:
the Company statement of financial position;
the Company statement of changes in equity;
the Company statement of cash flows; and
the related notes 1 to 21, including a summary of significant accounting policies as set out in note 1.
The relevant financial reporting framework that has been applied in their preparation is the
Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the
European Union (“the relevant financial reporting framework”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and
applicable law. Our responsibilities under those standards are described below in the “Auditor's responsibilities
for the audit of the financial statements” section of our report.
We are independent of the Group and Parent Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Ireland, including the Ethical Standard issued by the Irish
Auditing and Accounting Supervisory Authority, 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.
Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Going concern (see material uncertainty related to going concern section)
• Valuation of intangible assets and recoverability of amounts owed by Group
companies.
Within this report, any new key audit matters are identified with
and any key
audit matters which are the same as the prior year identified with
.
Materiality
Scoping
The materiality that we used in the current year was €529,000 which was
determined on the basis of approximately 3% of Shareholders Equity.
We identified one significant component, which was the Parent Company, Conroy
Gold and Natural Resources Plc.
Significant changes
in our approach
There were no significant changes in our approach.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
17
Material uncertainty related to going concern
We draw your attention to Note 1 in the financial statements, which indicates that the Group incurred a loss in
the financial year ended 31 May 2020 of €677,380 and, as of that date, the Group and Parent Company had
net current liabilities of €4,338,318 and €3,981,670 respectively.
In response to this, we:
• Obtained an understanding of the Group’s and Company’s controls over the preparation of cash flow
forecasts and approval of the projections and assumptions used in cash flow forecasts to support the
going concern assumption, and assessed the design and determined the implementation of these
controls;
Evaluated the Directors’ plans and their feasibility by challenging the key assumptions used in the
cash flow forecast provided by agreeing the inputs to expenditure commitments and other supporting
documentation;
•
• Obtained an understanding of Directors’ plans to enable the Group and Parent Company to raise the
•
•
funds required to meet the expenditure commitments of the Group and Parent Company;
Inspected confirmations received by the Group and Parent Company from the Directors and former
Directors that they will not seek repayment of amounts owed to them by the Group and Parent
Company within 12 months of the date of approval of the financial statements, unless the Group has
sufficient funds to repay;
Inspected the confirmation received from Karelian Diamond Resources Plc that it does not intend to
seek repayment of amounts owed by the Group and Parent Company within 12 months of the date of
approval of the financial statements, unless the Group has sufficient funds to repay;
Assessed the mechanical accuracy of the cash flow forecast model;
Assessed the adequacy of the disclosures made in the financial statements.
•
•
• We obtained evidence of the post year end share issues supporting the cash flow projections for the
Group and Parent Company.
As stated in Note 1, these events or conditions along with other matters as set forth in Note 1 indicate that a
material uncertainty exists that may cast significant doubt on Group’s and Parent Company’s ability to continue
as a going concern. Our opinion is not modified in respect of this matter.
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 financial year and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In
addition to the matter described in the material uncertainty relating to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
Valuation of Intangible Assets and Recoverability of Amounts Owed by Group Companies
Key audit matter
description
At 31 May 2020, the carrying value of Exploration and Evaluation Assets included in
Intangible assets in the Consolidated Statement of Financial Position and Company
Statement of Financial Position amounted to €22,330,743 and €21,974,093
respectively. At 31 May 2020, the carrying value of amounts owed by Group
companies in the Company Statement of Financial Position amounted to €356,648.
We draw your attention to the disclosures made in Note 1, 8 and 10 to the financial
statements concerning the realisation of intangible assets held and recoverability of
amounts owed by Group companies. The realisation of intangible assets by the
Group and Company and the amounts owed by Group companies to the Company,
is dependent on the further successful development and ultimate production of the
mineral resources and the availability of sufficient finance to bring the resources to
economic maturity and profitability.
The realisation of intangible assets in the Consolidated Statement of Financial
Position and Company Statement of Financial Position was assessed as a significant
risk. The recoverability of amounts owed by Group Companies in the Consolidated
Statement of Financial Position and Company Statement of Financial Position was
assessed as a higher risk. These areas were therefore considered to be key
audit matters.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
18
Independent Auditors’ Report continued
How the scope of
our audit
responded to the
key audit matter
We performed the following procedures:
• We evaluated the Directors’ procedures for assessing indicators of
impairment of intangible assets in line with the accounting policies;
• We evaluated the design and determined the implementation of controls in
place over capitalisation and subsequent valuation of Intangible assets.
• We inspected documentation in respect of licences held and considered
and challenged the Directors’ assessment of indicators of impairment in
relation to exploration and evaluation assets in both Ireland and Finland;
• We performed a review of proposed exploration programme in respect of
the Group and the Company’s assets in Ireland and Finland; including:
-
discussing and challenging the allocation of capitalised costs used for
their reasonableness,
assessing the reasonableness of the assets capitalised in the current
year, and
reviewing and considering indicators of impairment.
-
-
• We obtained a listing of Intangible asset additions in the financial year and
selected a sample of additions to ensure the capitalisation was in line with
accounting policies.
• We performed a review of Board of Directors Meeting Minutes and press
releases issued by the Group in relation to the status of exploration and
evaluation assets;
• We performed a review of budgeted expenditure for the next 12 months;
• We assessed the financial position of related parties from which balances
are due to Conroy Gold & Natural Resources to ensure there are no
indicators of impairment; and
• We also considered the adequacy of the disclosure in the financial
statements.
Key observations
A significant uncertainty exists in relation to the ability of the Group and Company
to realise the exploration and evaluation assets capitalised to intangible assets and
in relation to the ability of the Company to realise amounts owed by Group
companies.
As noted above, we draw your attention to the disclosures made in Note 1, 8 and
10 to the financial statements concerning the realisation of intangible assets and
recoverability of amounts owed by Group companies. The realisation of intangible
assets by the Group and Company and the amounts owed by Group companies to
the Company, is dependent on the further successful development and ultimate
production of the mineral resources and the availability of sufficient finance to bring
the resources to economic maturity and profitability. The financial statements do
not include any adjustments in relation to these uncertainties and the ultimate
outcome cannot, at present, be determined. Our opinion is not modified in respect
of this matter.
Our audit procedures relating to these matters were designed in the context of our audit of the financial
statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the
financial statements is not modified with respect to any of the risks described above, and we do not express an
opinion on these individual matters.
Our application of materiality
We define materiality as the magnitude of misstatement that makes it probable that the economic decisions of
a reasonably knowledgeable person, relying on the financial statements, would be changed or influenced. We
use materiality both in planning the scope of our audit work and in evaluating the results of our work.
We determined materiality for the Group and Parent Company to be €529,000 which is approximately 3% of
Shareholders Equity. We have considered Shareholders Equity to be the critical component for determining
materiality as we determined the Shareholders Equity to be of most importance to the principal external users
of the financial statements. Raising equity funding is of key importance to the Group and Parent Company in
continuing it current operations and is reflective of the current business life cycle of the Group and Parent
Company. We have considered quantitative and qualitative factors such as understanding the entity and its
environment, history of misstatements, complexity of the Group and Parent Company and reliabity of control
environment .
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
19
Shareholders
Equity €17.6M
Shareholders
Equity
Materiality
Materialty
€529,000
Audit Committe
Reporting
Threshold
€26,450
We agreed with the Audit Committee that we would report to them any audit differences in excess of €26,450,
as well as differences below that threshold which, in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that we identified when assessing the overall
presentation of the financial statements.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment and assessing
the risks of material misstatement at the Group level. Based on that assessment, we focused our Group audit
scope primarily on the audit work in one significant component, which was the Parent Company. This
component was subject to a full scope audit and accounts for approximately 98% of the Group’s intangible
assets and 100% of the Group’s net assets. The remaining non-significant components were subject to
specified audit procedures where the extent of our testing was based on our asssessment of the risks of
material misstatement to the Group Financial Statements.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material misstatement of the other information. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Directors’ Report, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view and otherwise comply with the
Companies Act 2014, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the Group and
Parent Company or to cease operations, or have no realistic alternative but to do so.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
20
Independent Auditors’ Report continued
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 (Ireland) 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.
As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Group and Parent Company’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor’s report.
However, future events or conditions may cause the entity (or where relevant, the Group) to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the business activities
within the Group to express an opinion on the (consolidated) financial statements. The Group auditor is
responsible for the direction, supervision and performance of the Group audit. The Group auditor remains
solely responsible for the audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
the auditor identifies during the audit.
For listed entities and public interest entities, the auditor also provides those charged with governance with a
statement that the auditor has complied with relevant ethical requirements regarding independence, including
the Ethical Standard for Auditors (Ireland), and communicates with them all relationships and other matters
that may reasonably be thought to bear on the auditor’s independence, and where applicable, related
safeguards.
Where the auditor is required to report on key audit matters, from the matters communicated with those
charged with governance, the auditor determines those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key audit matters. The auditor describes
these matters in the auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, the auditor determines that a matter should not be communicated in
the auditor’s report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the
Companies Act 2014. 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.
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
21
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
• We have obtained all the information and explanations which we consider necessary for the purposes of
•
•
•
our audit.
In our opinion the accounting records of the parent Company were sufficient to permit the financial
statements to be readily and properly audited.
The parent Company balance sheet is in agreement with the accounting records.
In our opinion the information given in the directors’ report is consistent with the financial statements and
the directors’ report has been prepared in accordance with the Companies Act 2014.
Matters on which we are required to report by exception
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and the Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the directors'
Based on the knowledge and understanding of the Group and the Parent Company and its environment
report.
obtained in the course of the audit, we have not identified material misstatements in the directors' report.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to
report to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by
you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not
law are not made.
made.
Kevin Butler
Kevin Butler
For and on behalf of Deloitte Ireland LLP
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Chartered Accountants and Statutory Audit Firm
6 Lapp’s Quay
6 Lapp’s Quay
Cork
Cork
Date: 30 November 2020
30 November 2020
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
22
Conroy Gold and Natural Resources P.L.C.
Consolidated income statement
for the financial year ended 31 May 2020
Continuing operations
Operating expenses
Finance income – interest
Loss before taxation
Income tax expense
Loss for the financial year
Loss per share
Basic loss per share
Diluted loss per share
Note
2
3
5
6
6
2020
€
(677,380)
-
(677,380)
-
2019
€
(557,573)
4
(557,569)
-
(677,380)
(557,569)
(0.0278)
(0.0278)
(0.0244)
(0.0244)
The total loss for the financial year is entirely attributable to equity holders of the Company.
_____________________ ___________________
Professor Richard Conroy
Chairman
Maureen T.A. Jones
Managing Director
22
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of comprehensive income
for the financial year ended 31 May 2020
23
2020
€
2019
€
Loss for the financial year
(677,380)
(557,569)
Income recognised in other comprehensive income
-
-
Total comprehensive loss for the financial year
(677,380)
(557,569)
The total comprehensive loss for the financial year is entirely attributable to equity holders of the Company.
23
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
24
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of financial position
as at 31 May 2020
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
Total assets
Equity
Capital and reserves
Share capital presented as equity
Share premium
Capital conversion reserve fund
Share-based payments reserve
Other reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Convertible loans
Total non-current liabilities
Current liabilities
Trade and other payables
Related party loans
Total current liabilities
Note
31 May
2020
€
31 May
2019
As restated
€
31 May
2018
As restated
€
8
9
11
10
14
14
14
17
13
12
12
22,330,743
10,692
22,341,435
21,772,045
11,347
21,783,392
21,000,286
13,232
21,013,518
117,270
89,948
207,218
77,299
106,181
183,480
233,161
72,298
305,459
22,548,653
21,966,872
21,318,977
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
10,528,124
12,727,194
30,617
751,293
-
(6,163,902)
17,873,326
10,524,488
12,174,285
30,617
995,489
-
(5,850,529)
17,874,350
357,802
357,802
-
-
-
-
3,885,704
659,832
4,545,536
3,541,714
551,832
4,093,546
3,259,284
185,343
3,444,627
Total liabilities
4,903,338
4,093,546
3,444,627
Total equity and liabilities
22,548,653
21,966,872
21,318,977
The financial statements were approved by the Board of Directors on 30 November 2020 and authorised for issue on 30
November 2020. They are signed on its behalf by:
_____________________
Professor Richard Conroy
Chairman
_________________
Maureen T.A. Jones
Managing Director
24
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 25
Conroy Gold and Natural Resources P.L.C.
Company statement of financial position
as at 31 May 2020
Assets
Non-current assets
Intangible assets
Investment in subsidiary
Property, plant and equipment
Total non-current assets
Current assets
Cash and cash equivalents
Other receivables
Total current assets
Total assets
Equity
Capital and reserves
Called up share capital presented as equity
Share premium
Capital conversion reserve fund
Share-based payments reserve
Other reserve
Retained deficit
Total equity
Liabilities
Non-current liabilities
Convertible loans
Total non-current liabilities
Current liabilities
Trade and other payables
Related party loans
Total current liabilities
Note
8
7
9
11
10
14
14
14
17
13
12
12
31 May
2020
€
21,974,093
2
10,692
21,984,787
31 May
2019
As restated
€
21,422,925
2
11,347
21,434,274
31 May
2018
As restated
€
20,654,326
2
13,232
20,667,560
117,270
446,596
563,866
77,299
455,299
532,598
233,161
418,256
651,417
22,548,653
21,966,872
21,318,977
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
10,528,124
12,727,194
30,617
751,293
-
(6,163,902)
17,873,326
10,524,488
12,174,285
30,617
995,489
-
(5,850,529)
17,874,350
357,802
357,802
-
-
-
-
3,885,704
659,832
4,545,536
3,541,714
551,832
4,093,546
3,259,284
185,343
3,444,627
Total liabilities
4,903,338
4,093,546
3,444,627
Total equity and liabilities
22,548,653
21,966,872
21,318,977
The loss for the financial year was €677,380 (2019: a loss of €557,569).
The financial statements were approved by the Board of Directors on 30 November 2020 and authorised for issue on 30
November 2020. They are signed on its behalf by:
_____________________ _________________
Maureen T.A. Jones
Professor Richard Conroy
Managing Director
Chairman
25
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
26
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of changes in equity
for the financial year ended 31 May 2020
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
10,528,124
12,727,194
30,617
751,293
Balance at 1 June 2019
Share issue (see Note
14)
Share issue costs
Share based payments
Conversion feature
(convertible loans)
Transfer from share-
based payment reserve
to retained deficit
Loss for the financial
year
Balance at 31 May
2020
2,521
-
-
357,453
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
reserve
Retained
deficit
Total
equity
€
-
-
-
-
€
€
(6,163,902)
17,873,326
-
(16,420)
-
359,974
(16,420)
97,482
-
-
97,482
-
8,333
-
8,333
(273,900)
-
-
-
273,900
-
(677,380)
(677,380)
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Balance at 1 June 2018
Share issue (see Note
14)
Transfer from share-
based payment reserve
to retained deficit
Loss for the financial
year
10,524,488
12,174,285
30,617
995,489
3,636
552,909
-
-
-
-
-
-
-
-
(244,196)
-
Balance at 31 May 2019
10,528,124
12,727,194
30,617
751,293
Other
reserve
Retained
deficit
Total
equity
€
-
-
-
-
-
€
€
(5,850,529)
17,874,350
-
556,545
244,196
-
(557,569)
(557,569)
(6,163,902)
17,873,326
Share capital
The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises
deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at Extraordinary General
Meetings held on 26 February 2015 and 14 December 2015. A detailed breakdown of the share capital figure is included in Note 14.
Share premium
The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of share issued.
Capital conversion reserve fund
The ordinary shares of the Company were re-nominalised from €0.03174435 each to €0.03 each in 2001 and the amount by which the issued share
capital of the Company was reduced, was transferred to the capital conversion reserve fund.
Share-based payment reserve
The share-based payment reserve comprises of the fair value of all share options and warrants which have been charged over the vesting period,
net of amounts relating to share options and warrants forfeited, exercised or lapsed during the year, which are reclassified to retained deficit.
Other reserve
The other reserve comprises of the equity portion of convertible loans.
Retained deficit
This reserve represents the accumulated losses absorbed by the Group to the consolidated statement of financial position date.
26
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Company statement of changes in equity
for the financial year ended 31 May 2020
27
Other
reserve
Retained
deficit
Total
equity
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
10,528,124
12,727,194
30,617
751,293
€
-
-
-
-
€
€
(6,163,902)
17,873,326
-
(16,420)
359,974
(16,420)
-
-
97,482
8,333
-
-
97,482
-
8,333
(273,900)
-
-
-
273,900
-
(677,380)
(677,380)
2,521
-
357,453
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 1 June
2019
Share issue (see
Note 14)
Share issue costs
Share based
payment
Conversion feature
(convertible loans)
Transfer from
share-based
payment reserve to
retained deficit
Loss for the
financial year
Balance at 31 May
2020
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share- based
payment
reserve
€
Balance at 1 June
2018
Share issue (see
Note 14)
Transfer from
share-based
payment reserve to
retained deficit
Loss for the
financial year
Balance at 31 May
2019
10,524,488
12,174,285
30,617
995,489
3,636
552,909
-
-
-
-
-
-
-
-
(244,196)
-
10,528,124
12,727,194
30,617
751,293
Other
reserve
Retained
deficit
Total
equity
€
-
-
-
-
-
€
€
(5,850,529)
17,874,350
-
556,545
244,196
-
(557,569)
(557,569)
(6,163,902)
17,873,326
27
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
28
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of cash flows
for the financial year ended 31 May 2020
Cash flows from operating activities
Loss for the financial year
Adjustments for:
Depreciation
Share based payment
Interest expense
Increase in payables
Decrease/(increase) in receivables
Net cash used in operating activities
Cash flows from investing activities
Expenditure on intangible assets
Purchase of property, plant and equipment
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Proceeds from convertible loans issue
Advances from Karelian Diamond Resources P.L.C.
Payments to Karelian Diamond Resources P.L.C.
Advances from related parties
Net cash provided by financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2020
€
(677,380)
1,884
97,482
16,135
(561,879)
339,762
16,233
(205,884)
(558,698)
(1,229)
(559,927)
359,974
(16,420)
350,000
45,046
(40,818)
108,000
805,782
39,971
77,299
117,270
2019
€
(557,569)
1,885
-
-
(555,684)
341,326
(33,883)
(248,241)
(771,759)
-
(771,759)
556,545
-
-
89,397
(148,293)
366,489
864,138
(155,862)
233,161
77,299
28
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Company statement of cash flows
for the financial year ended 31 May 2020
29
Cash flows from operating activities
Loss for the financial year
Adjustments for:
Depreciation
Share based payment
Interest expense
Increase in payables
Decrease/(increase) in receivables
Net cash used in operating activities
Cash flows from investing activities
Expenditure on intangible assets
Payments to acquire property, plant and equipment
Cash used in investing activities
Cash flows from financing activities
Issue of share capital
Share issue costs
Proceeds from convertible loans issue
Advances from Karelian Diamond Resources P.L.C.
Payments to Karelian Diamond Resources P.L.C.
Advances from related parties
Net cash provided by financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2020
€
(677,380)
1,884
97,482
16,135
(561,879)
339,762
8,703
(213,414)
(551,168)
(1,229)
(552,397)
359,974
(16,420)
350,000
45,046
(40,818)
108,000
805,782
39,971
77,299
117,270
2019
€
(557,569)
1,885
-
-
(555,684)
341,326
(37,043)
(251,401)
(768,599)
-
(768,599)
556,545
-
-
89,397
(148,293)
366,489
864,138
(155,862)
233,161
77,299
29
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
30
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020
1
Accounting policies
Reporting entity
Conroy Gold and Natural Resources P.L.C. (the “Company”) is a company domiciled in Ireland. The consolidated
financial statements of the Company for the financial year ended 31 May 2020 comprise the financial statements
of the Company and its subsidiaries (together referred to as the “Group”). The Company is a public limited company
incorporated in Ireland under registration number 232059. The registered office is located at 3300 Lake Drive,
Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
Basis of preparation
The consolidated financial statements are presented in Euro (“€”). The € is the functional currency of the Company.
The consolidated financial statements are prepared under the historical cost basis except for derivative financial
instruments, where applicable, which are measured at fair value at each reporting date.
The preparation of consolidated financial statements requires the Board of Directors and management to use
judgements, estimates and assumptions that affect the application of policies and reported amounts of assets,
liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised and in any future periods affected. Details of critical judgements are disclosed in the
accounting policies. The consolidated financial statements were authorised for issue by the Board of Directors on
30 November 2020.
Going Concern
The Group and the Company incurred a loss of €677,380 (2019: a loss of €557,569) for the financial year ended 31
May 2020. The Group and the Company had net assets of €17,645,315 (2019: €17,873,326) at that date. The Group
had net current liabilities of €4,338,318 (2019: €3,910,066) and the Company had net current liabilities of
€3,981,670 (2019: €3,560,948) at that date. The Group and the Company had cash and cash equivalents of €117,270
at 31 May 2020 (2019: €77,299). The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor
Garth Earls and Brendan McMorrow and former Directors, namely, James P. Jones, Séamus P. Fitzpatrick, C. David
Wathen, Louis J. Maguire, Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek repayment
of amounts owed to them by the Group and the Company of €3,197,755 (2019: €2,917,454) within 12 months of
the date of approval of the financial statements, unless the Group has sufficient funds to repay. In addition, Karelian
Diamond Resources P.L.C. has confirmed that it does not intend to seek repayment of amounts owed to it at 31 May
2020 by the Group and the Company of €58,469 (2019: €54,241) within 12 months of the date of approval of the
consolidated financial statements, unless the Group has sufficient funds to repay.
Subsequent to the year-end, on 31 July 2020, the Company received a notice to exercise warrants to subscribe for
1,358,333 ordinary shares of €0.001 each at a price of 16 pence per Ordinary Share for which funds of €241,013
(£217,333) have been received. On 11 August 2020, the Company raised €887,164 (£800,000) through a placing of
3,200,000 ordinary shares of €0.001 in the capital of the Company at a price of £0.25 sterling per placing share. On
17 August 2020, the Company received a notice to exercise warrants to subscribe for 100,000 ordinary shares of
€0.001 each at a price of 16 pence per Ordinary Share for which funds of €17,743 (£16,000) have been received. In
November 2020, before the signing date, the Company announced that it has received a notice to exercise warrants
over a total of 1,387,500 ordinary shares of €0.001 each at an exercise price of 16 pence per Ordinary Share, for
which funds of €247,800 (£222,000) have been received by the Company.
The Board of Directors have considered carefully the financial position of the Group and the Company and in that
context, have prepared and reviewed cash flow forecasts for the period until November 2021. As set out in the
Chairman’s statement, the Group and the Company expects to incur capital expenditure in 2021, consistent with its
strategy.
30
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
31
1 Accounting policies (continued)
Going Concern (continued)
The Directors recognise that net current liabilities of €4,338,318 is a material uncertainty that may cast significant
doubt on the Company’s ability to continue as a going concern and, therefore, that it may be unable to realise its
assets and discharge its liabilities in the normal course of business. In reviewing the proposed work programme for
exploration and evaluation of assets and on the basis of the funds raised since the year-end date, the results obtained
from the exploration programme and the prospects for raising additional funds as required, the Board of Directors
are satisfied that it is appropriate to prepare the financial statements on a going concern basis. The consolidated
and the Company’s financial statements do not include any adjustments to the carrying value and classification of
assets and liabilities that would arise if the Group and the Company were unable to continue as going concern.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union (“EU”). The Company’s financial statements have been
prepared in accordance with Financial Reporting Standard 101: Reduced Disclosure Framework (“FRS101”).
Recent accounting pronouncements
The following new standards, amendments to standards and interpretations adopted and endorsed by the EU have
been issued to date and are not yet effective for the financial year from 1 June 2019:
• Amendments to references to the Conceptual Framework in IFRS Standards – Effective date 1 January 2020
• Amendments to IFRS 3 Business Combinations – Definition of a Business – Effective date 1 January 2020
• Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform – Effective date 1 January 2020
• Amendment to IFRS 16 about providing lessees with an exemption from assessing whether a COVID-19-related
rent concession is a lease modification – Effective date 1 June 2020
The adoption of the above amendments to standards and interpretations is not expected to have a significant
impact on the consolidated financial statements either due to being not applicable or immaterial.
The following new standards and amendments to standards have been issued by the International Accounting
Standards Board but have not yet been endorsed by the EU, accordingly none of these standards have been applied
in the current year. The Board of Directors are currently assessing whether these standards once endorsed by the
EU will have any impact or a material impact on the consolidated financial statements.
• Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint
•
venture – postponed indefinitely
IFRS 1 amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (subsidiary as a first-
time adopter) – Effective date 1 January 2022
IFRS 3 amendments updating a reference to the Conceptual Framework – Effective date 1 January 2022
IFRS 4 amendments regarding the expiry date of the deferral approach – Effective date 1 January 2023
•
•
• Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16, and IAS 39 regarding replacement issues in the context of the
•
•
•
•
IBOR reform – Effective date 1 January 2021
IFRS 17: Insurance contracts – Effective date deferred to 1 January 2023
IAS 1 amendments regarding the classification of liabilities - Effective date 1 January 2023
IAS 16 amendments prohibiting a company from deducting from the cost of property, plant and equipment
amounts received from selling items produced while the company is preparing the asset for its intended use –
Effective date 1 January 2022
IAS 37 amendments regarding the costs to include when assessing whether a contract is onerous – Effective
date 1 January 2022
31
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
32
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
1 Accounting policies (continued)
Basis of consolidation
The consolidated financial statements include the financial statements of Conroy Gold and Natural Resources P.L.C.
and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Group is exposed
to or has the right to variable returns from its involvement with the entity and has the ability to affect those returns
through its control over the entity. In assessing control, potential voting rights that presently are exercisable are
taken into account. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases. Intra-Group balances, and any unrealised
income and expenses arising from intra-Group transactions are eliminated in preparing the consolidated financial
statements. The Company recognises investment in subsidiaries at cost less impairment.
(a) Intangible assets
The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral
Resources.
(i) Capitalisation
Certain costs (other than payments to acquire the legal rights to explore) incurred prior to acquiring the rights to
explore are charged directly to the consolidated income statement. Exploration, appraisal and development
expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible
exploration and evaluation (“E&E”) assets. E&E capitalised costs include geological and geophysical costs, and other
direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities).
In addition, E&E capitalised costs include an allocation from operating expenses, including share-based payments.
All such costs are necessary for exploration and evaluation activities. E&E capitalised costs are not amortised prior
to the conclusion of appraisal activities.
At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered,
then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once
the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an
area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires,
then the costs of such unsuccessful exploration and evaluation is written off to the consolidated income statement
in the period in which the event occurred.
Impairment
(ii)
If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an
impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E
assets:
• The period for which the entity has the right to explore in the specific area has expired or will expire in the near
future and is not expected to be renewed.
• Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is
neither budgeted nor planned.
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in
the specific area.
• Sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development
or by sale.
For E&E assets, where the above indicators exist or on an annual basis, an impairment test is carried out. The E&E
assets are categorised into Cash Generating Units (“CGU”) on a country-by-country basis (31 May 2020: Finland and
Ireland). The carrying value of the CGU is compared to its recoverable amount and any resulting impairment loss is
written off to the consolidated income statement. The recoverable amount of the CGU is assessed as the higher of
its fair value, less costs to sell, and its value in use.
32
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
33
1 Accounting policies (continued)
(b) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided on a straight-line basis to write off the cost less estimated residual value of the assets over
their estimated useful lives as follows:
Motor vehicles
Plant and office equipment
5 years
10 years
(c) Income taxation expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the consolidated
income statement except to the extent that it relates to items recognised directly in other comprehensive income,
in which case it is recognised in the consolidated statement of comprehensive income.
Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax
assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and
they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities on a net basis or their tax assets and liabilities will be settled
simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
(d) Share-based payments
For equity-settled share-based payment transactions (i.e. the granting of share options and share warrants), the
Group measures the services and the corresponding increase in equity at fair value at the measurement date (which
is the grant date) using a recognised valuation methodology for the pricing of financial instruments (Binomial Lattice
Model). As the exercise prices for warrants are denominated in sterling, the risk-free rate assumption is based on a
sterling gilts zero-coupon yield curve at the date of issue. Given that the share options and warrants granted do not
vest until the completion of a specified period of service, the fair value is determined on the basis that the services
to be rendered by employees as consideration for the granting of share options and warrants will be received over
the vesting period, which is assessed at the grant date. 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, based on the Company’s
estimate of equity instruments that will eventually vest.
(e) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated
by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
potentially dilutive ordinary shares.
(f) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank held by the Group and short-term bank deposits with a maturity
of three months or less. Cash and cash equivalents are held for the purpose of meeting short-term cash
commitments.
33
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
34
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
1 Accounting policies (continued)
(g) Trade and other receivables and payables
Trade and other receivables are measured at transaction price. Trade payables are measured at initial recognition
at fair value, and subsequently measured at amortised cost.
(h) Pension costs
The Group provides for pensions for certain employees through a defined contribution pension scheme. The
amounts are charged to the consolidated income statement. Any difference between amounts charged and
contributions paid to the pension scheme is included in receivables or payables in the consolidated statement of
financial position.
(i) Foreign currencies
Transactions denominated in foreign currencies relating to costs and non-monetary assets are translated into € at
the rates of exchange ruling on the dates on which the transactions occurred. Monetary assets and liabilities
denominated in foreign currencies are translated into € at the rate of exchange ruling at the consolidated statement
of financial position date. The resulting profits or losses are dealt with in the consolidated income statement.
(j) Loans
The Directors’ loans are initially measured at fair value, net of transaction costs and subsequently measured at
amortised cost using the effective interest method, with interest expense recognised on the effective interest rate
method. The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial liability.
As the convertible loans are made up of both equity and liability components, they are considered to be compound
financial instruments. At initial recognition, the carrying amount of a compound financial instrument is allocated to
its equity and liability components. The fair value of the conversion feature is taken directly to equity. The fair value
of the liability, which is the difference between the transaction price and the fair value of the conversion feature, is
recognised as a liability in the consolidated statement of financial position. The liability is subsequently measured at
amortised cost. The Company accounts for the interest expense of the convertible loan notes at the effective interest
rate. The difference between the effective interest rate and interest rate attached to the convertible loan increases
the carrying amount of the liability so that, on maturity, the carrying amount is equal to the capital cash repayment
that the Company may be required to pay.
(k) Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares and share options
are recognised as a deduction from retained earnings, net of any tax effects.
Impairment – financial assets measured at amortised cost
(l)
Financial assets measured at amortised cost are reviewed for impairment loss at each reporting date. The Company
applies the simplified approach in accordance with IFRS 9.
The Company measures the loss allowance at an amount equal to the lifetime expected credit losses as required
under a simplified approach for trade receivables that do not contain a financing component. The Company’s
approach to expected credit losses (“ECL”) reflects a probability-weighted outcome, the time value of money and
reasonable and supportable information that is available without undue cost or effort at the reporting date about
past events, current conditions and forecasts of future economic conditions. Significant financial difficulties of the
counterparty, probability that the counterparty will enter bankruptcy or financial re-organisation and default in
payments are all considered indicators for increases in credit risks. If the credit risk increases to the point that it is
considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted
for the loss allowance. Any contractual payment which is more than 90 days past due is considered credit impaired.
34
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
35
1 Accounting policies (continued)
(m) Significant accounting judgements and key sources of estimation uncertainty
Significant judgements in applying the Group’s accounting policies
The preparation of the consolidated financial statements requires the Board of Directors to make judgements and
estimates and form assumptions that affect the amounts of assets, liabilities, contingent liabilities, revenues and
expenses reported in the consolidated financial statements. On an ongoing basis, the Board of Directors evaluates
its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Board
of Directors bases its judgements and estimates on historical experience and on other factors it believes to be
reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions and
conditions. In the process of applying the Group’s accounting policies above, the Board of Directors have identified
the judgemental areas that have the most significant impact on the amounts recognised in the consolidated financial
statements (apart from those involving estimations), which are dealt with as follows:
Exploration and evaluation assets
The assessment of whether general administration costs and salary costs are capitalised exploration and evaluation
costs or expensed involves judgement. The Board of Directors consider the nature of each cost incurred and whether
it is deemed appropriate to capitalise it within exploration and evaluation assets. Given that the activity of
management and the resultant administration and salary costs are primarily focused on the Group’s gold prospects,
the Board of Directors consider it appropriate to capitalise a portion of such costs. These costs are reviewed on a
line by line basis with the resultant calculation of the amount to be capitalised being specific to the activities of the
Company in any given year.
The carrying value of exploration and evaluation assets in the consolidated statement of financial positions was
€22,330,743 (2019: €21,772,045) at 31 May 2020 (Note 8). The Board of Directors carried out an assessment, in
accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources relating to the remaining licence or
claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities over
specific claims and available data which may suggest that the recoverable value of an exploration and evaluation
asset is less than its carrying amount. Based on this assessment the Board of Directors is satisfied as to the carrying
value of these assets and is satisfied that these are recoverable, acknowledging however that their recoverability is
dependent on future successful exploration efforts.
Going concern
The preparation of consolidated financial statements requires an assessment on the validity of the going concern
assumption. The validity of the going concern assumption is dependent on the successful further development and
ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to
economic maturity and profitability. The Directors recognise that described above are material uncertainties that
may cast significant doubt on the Company’s ability to continue as a going concern and, therefore, that it may be
unable to realise its assets and discharge its liabilities in the normal course of business. However, the Board of
Directors, having reviewed the proposed programme for exploration and evaluation assets, the funds received post
year end, the results from the exploration programme and the prospects for raising additional funds as required, are
satisfied that it is appropriate to prepare the financial statements on the going concern basis.
Refer to page 30 for further details.
Deferred tax
No deferred tax asset has been recognised in respect of tax losses as it is not considered probable that future taxable
profit will be available against which the related temporary differences can be utilised.
35
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
36
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
1 Accounting policies (continued)
(m) Significant accounting judgements and key sources of estimation uncertainty (continued)
Key sources of estimation uncertainty
The preparation of the consolidated financial statements requires the Board of Directors to make estimates and
assumptions that affect the amounts reported for assets and liabilities as at the consolidated statement of financial
position date and the amounts reported for revenues and expenses during the financial year. The key sources of
estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
Cash Generating Units (“CGUs”)
As outlined in the Intangible assets accounting policy, the exploration and evaluation assets should be allocated to
CGU. The determination of what constitutes a CGU requires judgement.
The carrying value of each CGU is compared to its recoverable amount. The recoverable amount of the CGU is
assessed as the higher of its fair value less costs to sell and its value in use. The determination of value in use requires
the following judgements:
•
•
•
Estimation of future cash flows expected to be derived from the asset;
Expectation about possible variations in the amount or timing of the future cash flows; and
The determination of an appropriate discount rate.
Employee benefits - Share-based payment transactions
The Company had equity-settled share-based payment arrangements with non-market performance conditions
which fall within the scope of and are accounted for under the provisions of IFRS 2: Share-based Payment.
Accordingly, the grant date fair value of the options under these schemes is recognised as a personnel expense with
a corresponding increase in the “Share-based payment reserve”, within equity, over the vesting period. The
estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration
as to the inputs necessary for the valuation model chosen.
The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the
time of exercise of those options. The model used by the Company is the Binomial Lattice Model. The fair value of
these options is measured using an appropriate option pricing model, taking into account the terms and conditions
upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number
of share options that vest, except where forfeiture is only due to share prices not achieving the threshold for vesting.
(n) Segmental reporting
Operating segment information is presented in the consolidated financial statements in respect of the Group’s
geographical segments which represent the financial basis by which the Group manages its business. The Group has
one class of business, Gold Exploration. The Group has two principal reportable segments as follows:
•
•
Irish exploration assets: gold exploration assets in Ireland; and
Finnish exploration assets: gold exploration assets in Finland.
Group assets and liabilities include cash resources held by the Group. Corporate expenses include other operational
expenditure incurred by the Group. These are not within the definition of an operating segment. Performance is
measured based on segment result and total asset value as included in the internal management reports that are
reviewed by the Group’s Board of Directors. There are no significant inter segment transactions. Costs that are
directly attributable to Ireland and Finland have been capitalised to exploration and evaluation assets as
appropriate (Note 8). The Group did not earn any revenue in the current or comparative financial year.
36
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
37
2 Operating expenses
(a) Analysis of operating expenses
Operating expenses
Transfer to intangible assets
2020
€
1,046,487
(369,107)
677,380
2019
€
948,938
(391,365)
557,573
Operating expenses are analysed as follows:
Wages, salaries and related costs
Other operating expenses
Auditor’s remuneration
Depreciation
565,744
357,809
23,500
1,885
948,938
Of the above costs, a total of €369,107 (2019: €391,365) is capitalised to intangible assets based on a review of the
nature and quantum of the underlying costs. The costs capitalised to intangible assets mainly relate to salaries of
geological and on-site staff together with an appropriate portion of executive management salaries.
479,953
536,285
28,365
1,884
1,046,487
(b) Wages, salaries and related costs as disclosed above is analysed as follows:
Wages and salaries
Social insurance costs
Retirement benefit costs
463,603
16,350
-
479,953
2020
€
2019
€
525,134
18,609
22,001
565,744
The amount of wages, salaries and related costs capitalised as intangible assets during the financial year was
€319,804 (2019: €351,456).
The average number of persons employed during the financial year (including executive Directors) by activity was as
follows:
Exploration and evaluation
Corporate management and administration
2019
5
3
8
The Group contributes to an externally funded defined contribution scheme to satisfy the pension arrangements in
respect of certain management personnel.
2020
6
2
8
The total pension cost charged for the financial year was €Nil (2019: €22,001).
37
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
38
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
2 Operating expenses (continued)
An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts
transferred to intangible assets) is as follows:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Fees
€
19,443
8,333
8,332
8,333
44,441
Salary
€
153,125
96,250
-
-
249,375
Share-based
payment charge
€
-
-
-
-
-
Pension
contributions
€
-
-
-
-
-
Total
€
172,568
104,583
8,332
8,333
293,816
An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts
transferred to intangible assets) is as follows:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Dr. Karl D. Keegan (resigned
on 7 December 2018)
James P. Jones (resigned on 4
August 2017)
Fees
€
22,220
9,523
9,523
9,523
5,555
-
56,344
Salary
€
179,250
114,251
-
-
-
12,346*
305,847
Share-based
payment charge
€
-
-
-
-
Pension
contributions
€
-
22,001
-
-
Total
€
201,470
145,775
9,523
9,523
-
-
-
-
5,555
-
22,001
12,346
384,192
*These payments relate to VHI charges.
At 31 May 2020, the total share-based payment charge was €Nil (2019: €Nil).
3 Loss before taxation
The loss before taxation is arrived at after charging the following items, which are stated at amounts prior to the
transfer to intangible assets:
Depreciation
Auditor’s remuneration - Group
The analysis of the auditor’s remuneration is as follows:
•
Audit of financial statements
Auditor’s remuneration - Company
The analysis of the auditor’s remuneration is as follows:
•
Audit of financial statements
2020
€
1,884
2019
€
1,885
28,365
23,500
27,365
20,000
No fees were incurred for other assurance, tax advisory or other non-audit services in respect of the current or
prior financial years. Included within the Group audit fee (above) is the amount incurred by the Company.
38
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
39
4 Directors’ remuneration
Aggregate emoluments paid to or receivable by Directors in respect of qualifying
services
Aggregate amount of gains by Directors on exercise of share options during the
financial year
Aggregate amount of money or value of other assets including shares, but excluding
share options, paid to or receivable by the Directors under long term incentive
schemes in respect of qualifying services
Aggregate contributions paid, treated as paid, or payable during the financial year
to a retirement benefit scheme in respect of qualifying services of Directors:
•
•
Defined contribution scheme – for 1 Director (2019: 1)
Defined benefit scheme
Compensation paid, or payable, or other termination payments in respect of loss of
office to Directors of the Company in the financial year:
•
•
Officer or Director of the Company
Other offices
2020
€
2019
€
293,816
362,191
-
-
-
-
-
-
-
-
22,001
-
-
-
No amounts have been paid to past Directors of the Company or its holding undertakings (2019: €Nil). During the
year ended 31 May 2019, VHI charges of €12,346 were paid by the Company for the former Director of the Company,
James P. Jones. No compensation has been paid for the loss of office or other termination benefit in respect of the
loss of office of Director or other offices (2019: €Nil).
5
Income tax expense
No taxation charge arose in the current or prior financial year due to losses incurred.
Factors affecting the tax charge for the financial year:
The total tax charge for the financial year is different to the standard rate of Irish corporation tax. This is due to the
following:
Loss on ordinary activities before tax
Irish standard tax rate
Tax credit at the Irish standard rate
Effects of:
Expenses not deductible for tax purposes
Losses carried forward for future utilisation
Tax charge for the financial year
2020
€
(677,380)
12.5%
(84,673)
-
84,673
-
2019
€
(557,569)
12.5%
(69,696)
-
69,696
-
39
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
40
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
5
Income tax expense (continued)
No deferred tax asset has been recognised on accumulated tax losses as it cannot be considered probable that future
taxable profit will be available against which the deferred tax asset can be utilised.
Unutilised losses may be carried forward from the date of the origination of the losses but may only be offset against
taxable profits earned from the same trade. Unutilised losses carried forward amounted to EUR22,027,103 at 31
May 2019.
6 Loss per share
Loss for the financial year attributable to equity holder of the Company
Basic earnings per share
Number of ordinary shares at start of financial year
Number of ordinary shares issued during the financial year
Number of ordinary shares at end of financial year
Weighted average number of ordinary shares for the purposes of basic
earnings per share
Basic loss per ordinary share
Diluted loss per share
2020
€
(677,380)
2019
€
(557,569)
No. of shares
No. of shares
23,693,039
2,520,833
26,213,872
20,056,674
3,636,365
23,693,039
24,404,398
22,875,878
(0.0278)
(0.0244)
Weighted average number of diluted ordinary shares for the
purposes of diluted loss per share
Diluted loss per ordinary share
24,404,398
22,875,878
(0.0278)
(0.0244)
As at 31 May 2020, Nil options and 3,424,109 warrants (2019: Nil options and 788,692 warrants), were excluded from
the computation of the dilutive loss per share as their strike price was greater than the average share price in the
respective years. However, as the Company incurred the loss for the financial year ended 31 May 2020, the warrants
were not included in the calculation.
7 Subsidiaries
% Owned
Shares in subsidiary companies (Unlisted shares) at
cost:
Conroy Gold Limited
Trans International Mineral Exploration Limited
100%
100%
31 May
2020
€
-
2
31 May
2019
€
-
2
The registered office of the above non-trading subsidiaries is 3300 Lake Drive, Citywest Business Campus, Dublin 24,
D24 TD21, Ireland.
40
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
41
8
Intangible assets
Exploration and evaluation assets
Group: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
•
• Other operating expenses (Note 2)
At 31 May
Company: Cost
At 1 June
Expenditure during the financial year
Licence and appraisal costs
•
• Other operating expenses (Note 2)
At 31 May
31 May 2020
€
21,772,045
189,591
369,107
22,330,743
31 May 2020
€
21,422,925
182,061
369,107
21,974,093
31 May 2019
€
21,000,286
380,394
391,365
21,772,045
31 May 2019
€
20,654,326
377,234
391,365
21,422,925
Exploration and evaluation assets relate to expenditure incurred in the development of mineral exploration
opportunities. These assets are carried at historical cost and have been assessed for impairment in particular with
regard to the requirements of IFRS 6: Exploration for and Evaluation of Mineral Resources relating to remaining
licence or claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities
over specific claims and available data which may suggest that the recoverable value of an exploration and evaluation
asset is less than its carrying amount.
The Board of Directors have considered the proposed work programmes for the underlying mineral resources. They
are satisfied that there are no indications of impairment.
The Board of Directors note that the realisation of the intangible assets is dependent on further successful
development and ultimate production of the mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability.
41
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
42
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
8
Intangible assets (continued)
Mineral interests are categorised as follows:
Group: Ireland
Cost
At 1 June
Expenditure during the financial year
•
Licence and appraisal costs
• Other operating expenses
•
At 31 May
Equity settled share-based payments
Group: Finland
Cost
At 1 June
Expenditure during the financial year
•
Licence and appraisal costs
• Other operating expenses
•
At 31 May
Equity settled share-based payments
Company: Ireland
Cost
At 1 June
Expenditure during the financial year
•
Licence and appraisal costs
• Other operating expenses
•
At 31 May
Equity settled share-based payments
Company: Finland
Cost
At 1 June
Expenditure during the financial year
•
Licence and appraisal costs
• Other operating expenses
•
At 31 May
Equity settled share-based payments
42
31 May
2020
€
19,426,207
180,265
313,741
-
19,920,213
31 May
2020
€
2,345,838
9,326
55,366
-
2,410,530
31 May
2020
€
19,077,087
172,735
313,741
-
19,563,563
31 May
2020
€
2,345,838
9,326
55,366
-
2,410,530
31 May
2019
€
18,713,795
379,752
332,660
-
19,426,207
31 May
2019
€
2,286,491
642
58,705
-
2,345,838
31 May
2019
€
18,367,835
376,592
332,660
-
19,077,087
31 May
2019
€
2,286,491
642
58,705
-
2,345,838
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
43
9 Property, plant and equipment
In respect of the current financial year:
Group and Company
Cost
At 1 June 2019
Additions
At 31 May 2020
Accumulated depreciation
At 1 June 2019
Charge for the financial year
At 31 May 2020
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
136,225
1,229
137,454
124,878
1,884
126,762
Total
€
153,979
1,229
155,208
142,632
1,884
144,516
Net book value at 31 May 2020
-
10,692
10,692
In respect of the previous financial year:
Group and Company
Cost
At 1 June 2018
Additions
At 31 May 2019
Accumulated depreciation
At 1 June 2018
Charge for the financial year
At 31 May 2019
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
136,225
-
136,225
122,993
1,885
124,878
Total
€
153,979
-
153,979
140,747
1,885
142,632
Net book value at 31 May 2019
-
11,347
11,347
43
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
44
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
10 Other receivables
Group
Other debtors
Vat receivable
Company
Other debtors
Vat receivable
Amounts owed from Conroy Gold Limited
31 May
2020
€
71,219
18,729
89,948
31 May
2020
€
71,219
18,729
356,648
446,596
31 May
2019
€
52,208
53,973
106,181
31 May
2019
€
52,208
53,973
349,118
455,299
The realisation of amounts owed by Group companies to the Company is dependent on the further successful
development and ultimate production of the mineral resources and the availability of sufficient finance to bring the
resources to economic maturity and profitability. However, as these amounts are receivable from the Group
companies, the Directors are confident that the probability of default is close to zero.
11
Cash and cash equivalents
Group and Company
Cash held in bank accounts
12
Current liabilities – as restated
Trade and other payables
Group and Company
Amounts falling due within one year
Accrued Directors’ remuneration
Fees and other emoluments
Pension contributions
Accrued former Directors’ remuneration
31 May
2020
€
117,270
117,270
31 May
2020
€
2,324,218
164,675
31 May
2019
€
77,299
77,299
31 May
2019
€
2,043,099
164,675
Fees and other emoluments
Pension contributions
Other creditors and accruals
Amounts owed to Karelian Diamond Resources P.L.C.
643,294
79,083
557,322
54,241
3,541,714
It is the Group’s practice to agree terms of transactions, including payment terms with suppliers. It is the Group’s
policy that payment is made according to the agreed terms. The carrying value of the trade and other payables
approximates to their fair value.
642,476
79,083
616,783
58,469
3,885,704
44
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
45
12 Current liabilities – as restated (continued)
Trade and other payables (continued)
The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls and Brendan McMorrow
and former Directors, namely James P. Jones, Séamus P. Fitzpatrick, C. David Wathen, Louis J. Maguire, Dr. Sorċa
Conroy and Michael E. Power, have confirmed that they will not seek repayment of amounts owed to them by the
Group and the Company of €3,197,755 (2019: €2,917,454) for a minimum period of 12 months from the date of
approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
In addition, please refer to Note 16(c) in relation to amounts payable by Karelian Diamond Resources P.L.C.
Related party loans – Group and Company
Related party loans
Opening balance 1 June
Loan advance
Loan repayment
Closing balance 31 May
31 May
2020
€
551,832
108,000
-
659,832
31 May
2019
€
185,343
366,489
-
551,832
The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €315,918 (2019:
€282,918), Maureen T.A. Jones amounting to €49,425 (2019: €49,425), Séamus P. Fitzpatrick (former Director)
amounting to €69,489 (2019: €69,489) and Dr. Sorċa Conroy (former Director) amounting to €225,000 (2019:
€150,000). The Directors’ and former Directors’ have confirmed that they will not seek repayment of amounts owed
to it by the Group and Company at 31 May 2020 within 12 months of the date of approval of the consolidated
financial statements, unless the Group has sufficient funds to repay. There is no interest payable in respect of these
loans, no security has been attached to these loans and there is no repayment or maturity terms. Dr. Sorċa Conroy
and Séamus P. Fitzpatrick are both former directors in the Company having left the board in August 2017 (and are
shareholders of the Company owning less than 3% of the issued share capital of the Company). Neither Dr. Sorċa
Conroy, nor Séamus P. Fitzpatrick are classified as related parties under the AIM Rules for Companies.
13 Non-current liabilities – as restated
Convertible loan notes
The Company raised €350,000 through the issue of two unsecured convertible loan notes (“Convertible Loan Notes”)
to Hard Metal Machine Tools Limited (the “Lender”). Both Convertible Loan Notes have a term of three years and
attract interest at a rate of 5% per annum which is payable on the redemption or conversion of the Convertible Loan
Notes. The Convertible Loan Notes are unsecured. The first Convertible Loan Note has a monetary amount of
€250,000 and was issued on 15 July 2019. This Convertible Loan Note, including the total amount of accrued but
unpaid interest, is convertible at the conversion price of £0.07 at any time. Interest incurred on this Convertible Loan
Note is €12,785 for the period. The second Convertible Loan Note has a monetary amount of €100,000 and was
issued on 30 October 2019. This Convertible Loan Note, including the total amount of accrued but unpaid interest,
is convertible at the conversion price of £0.06 at any time. Interest incurred on this Convertible Loan Note is €3,350
for the period.
45
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
46
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
14 Called up share capital and share premium – Group and Company
Authorised:
11,995,569,057 ordinary shares of €0.001 each
306,779,844 deferred shares of €0.02 each
437,320,727 deferred shares of €0.00999 each
31 May
2020
€
11,995,569
6,135,597
4,368,834
22,500,000
31 May
2019
€
11,995,569
6,135,597
4,368,834
22,500,000
The deferred shares do not entitle the holder to receive a dividend or other distribution. Furthermore, the deferred
shares do not entitle the shareholder to receive notice of or vote at any general meeting of the Company, and do
not entitle the shareholder to any proceeds on a return of capital or winding up of the Company.
Issued and fully paid – Current financial year
Number of
ordinary
shares
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
Start of financial year
Share issue (b)
23,693,039
2,520,833
End of financial year
26,213,872
23,693
2,521
26,214
30,617
-
10,504,431
-
12,727,194
357,453
30,617
10,504,431
13,084,647
Issued and fully paid – Prior financial year
Number of
ordinary
shares
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
Start of financial year
Share issue (a)
20,056,674
3,636,365
End of financial year
23,693,039
20,057
3,636
23,693
30,617
-
10,504,431
-
12,174,285
552,909
30,617
10,504,431
12,727,194
(a) On 24 August 2018, the Company raised (€556,545) £500,000, through a placing of 3,636,365 ordinary shares of
€0.001 in the capital of the Company at a price of £0.1375 per share.
(b) On 22 May 2020, the Company raised (€359,974) £302,500, through a placing of 2,520,833 ordinary shares
€0.001 in the capital of the Company at a price of £0.1200 per share.
(c) At 31 May 2020, warrants over 3,424,109 (2019: 8,631,830) shares exercisable at prices from £0.16 (2019: £0.25)
sterling to €4.33 (2019: €4.33) per share, with various exercisable dates up to 16 November 2022 (2019: 16
November 2022) were outstanding. Refer to Note 17 for further details.
(d) The share price at 31 May 2020 was £0.11000 (2019: £0.05375). During the financial year, the price ranged from
£0.04100 to £0.17500 (2019: from £0.05375 to £0.175000).
46
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
47
15 Commitments and contingencies
Exploration and evaluation activities
The Group has received prospecting licences under the Republic of Ireland Mineral Development Acts 1940 to 1995
for areas in Monaghan and Cavan. It has also received licences in Northern Ireland for areas in Armagh in accordance
with the Mineral Development Act (Northern Ireland) 1969.
At 31 May 2020, the Group had work commitments of €388,000 (2019: €275,000) for the forthcoming financial year,
in respect of prospecting licences held.
16 Related party transactions
(a) Details as to shareholders and Directors’ loans and share capital transactions with Professor Richard Conroy,
Maureen T.A. Jones, Séamus P. Fitzpatrick (former Director) and Dr. Sorċa Conroy (former Director) are outlined in
in Note 12 of the consolidated financial statements.
(b) For the financial year ended 31 May 2020, the Company incurred costs totalling €40,818 (2019: €148,293) on
behalf of Karelian Diamond Resources P.L.C., which has certain common shareholders and Directors. These costs
were recharged to Karelian Diamond Resources P.L.C.
These costs are analysed as follows:
Office salaries
Other operating expenses
Rent and rates
2020
€
80,144
9,851
(49,177)*
40,818
2019
€
108,541
12,397
27,355
148,293
*This amount is rechargeable from Karelian Diamond Resources P.L.C.
(c) At 31 May 2020, the Company owed €58,469 to Karelian Diamond Resources P.L.C. (2019: €54,241). Amounts
owed to Karelian Diamond Resources P.L.C. are included within “Trade and other payables” in the current and
previous financial year statements. During the financial year ended 31 May 2020, €45,046 (2019: €89,397) was paid
by Karelian Diamond Resources P.L.C. to the Company. During the financial year ended the Company charged
Karelian Diamond Resources P.L.C. €40,818 (2019: €148,293) in respect of the allocation of certain costs as detailed
in (b) above. Karelian Diamond Resources P.L.C. has confirmed that it will not seek repayment of amounts owed to
it by the Group and the Company within 12 months of the date of approval of the consolidated financial statements,
unless the Group has sufficient funds to repay.
(d) At 31 May 2020, Conroy Gold Limited owed €356,648 (2019: €349,118) to the Company. The movement in the
balance relates to a payment of expenses for an amount of €7,530 incurred in the name of Conroy Gold Limited by
the Company. The Company has confirmed that it will not seek repayment of amounts owed for a minimum period
of 12 months from the date of approval of the financial statements, unless Conroy Gold Limited has sufficient funds
to repay such amounts.
(e) At 31 May 2020, the Company was owed €8,970 (2019: €8,970) by Trans-International Oil Exploration Limited.
Professor Richard Conroy and Maureen T.A. Jones are directors of Trans-International Oil Exploration Limited.
Professor Richard Conroy holds 50.7% of the share capital of this company. A further €15,866 (2019: €15,866) is
owed by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest. Amounts totalling
€5,290 (2019: €5,288) were owed by companies in which Professor Richard Conroy and Maureen T.A. Jones hold a
50% interest each. €Nil (2019: €2,891) is owed by Archaean Gold P.L.C., a company in which Professor Richard
Conroy and Maureen T.A. Jones are Directors. The amounts owed by the various companies are included within
“Other receivables” in the current and previous financial year’s consolidated statement of financial position and
company’s statement of financial position.
47
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
48
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
16 Related party transactions (continued)
(f) Details of key management compensation which comprises Directors’ remuneration are outlined below.
An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts
transferred to intangible assets) is as follows:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Fees
€
19,443
8,333
8,332
8,333
44,441
Salary
€
153,125
96,250
-
-
249,375
Share-based
payment charge
€
-
-
-
-
-
Pension
contributions
€
-
-
-
-
-
Total
€
172,568
104,583
8,332
8,333
293,816
An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts
transferred to intangible assets) is as follows:
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Dr. Karl D. Keegan (resigned
on 7 December 2018)
James P. Jones (resigned on 4
August 2017)
Fees
€
22,220
9,523
9,523
9,523
5,555
-
56,344
Salary
€
179,250
114,251
-
-
-
12,346*
305,847
Share-based
payment charge
€
-
-
-
-
Pension
contributions
€
-
22,001
-
-
Total
€
201,470
145,775
9,523
9,523
-
-
-
-
5,555
-
22,001
12,346
384,192
*These payments relate to VHI charges.
(g) Professor Garth Earls invoiced the Group for €29,192 (2019: €44,654) during the financial year for professional
services rendered to the Group. At 31 May 2020, Professor Garth Earls was owed €23,808 (2019: €32,527) in respect
of these services. Brendan McMorrow invoiced the Group for €7,727 (2019: €16,200) during the financial year for
professional services rendered to the Group. At 31 May 2020, Brendan McMorrow was owed €24,998 (2019:
€16,200) in respect of these services.
(h) The Company raised €350,000 through the issue of two unsecured Convertible Loan Notes to Hard Metal
Machine Tools Limited (the “Lender”). The Lender is a company 99% owned by an existing shareholder of the
Company. Refer to Note 13 for further details.
17 Share-based payments
The Company has an equity-settled share-based payment arrangement with non-market performance conditions.
Options granted generally had a vesting period of ten years. At 31 May 2020, there were no share options
outstanding (2019: €Nil).
48
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
49
17 Share-based payments (continued)
Warrants granted generally have a vesting period of two years. Warrants granted during the financial year vested
immediately. Details of the warrants outstanding during the financial year are below.
At 1 June
Lapsed during the financial year
(Note 14)
Exercised during the financial year
(Note 14)
Granted during the financial year
(Note 14)
At 31 May
2020
No. of share
warrants
8,631,830
2020
Weighted
average exercise
price €
0.620
2019
No. of share
warrants
13,718,315
2019
Weighted
average exercise
price €
0.552
(7,843,137)
0.245
(5,086,485)
-
2,635,416
3,424,109
-
0.178
1.139
-
-
8,631,830
0.417
-
-
0.620
The Company estimated the fair value of stock options and warrants awards using the Binomial Lattice Model. The
determination of the fair value of share-based payment awards on the date of grant using the Binomial Lattice
Model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables.
These variables include the expected term of the awards, the expected stock price volatility over the term of the
awards, the risk-free interest rate associated with the expected term of the awards and the expected dividends.
The Company’s Binomial Lattice Model included the following weighted average assumptions for the Company’s
employee stock option and warrants:
Dividend yield
Expected volatility
Risk free interest rate
Expected life (in years)
2020
Stock options
N/a
N/a
N/a
N/a
2020
Stock warrants
0%
95%
0.4%
0.75
2019
Stock options
N/a
N/a
N/a
N/a
2019
Stock warrants
0%
90%
0.4%
2
This calculation results in a share-based payment reserves payment of €97,482 (2019: €Nil). Amounts relating to
warrants which lapsed during the year and which are reclassified to retained earnings were €273,900 (2019:
€244,196).
18 Financial instruments
Financial risk management objectives, policies and processes
The Group has exposure to the following risks from its use of financial instruments:
(a)
Interest rate risk;
(b) Foreign currency risk;
(c) Liquidity risk; and
(d) Credit risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Group’s activities.
49
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
50
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
The Group Audit Committee oversees how management monitors compliance with the Group’s risk management
policies and procedures and framework in relation to the risks faced.
(a) Interest rate risk
The Group currently finances its operations through shareholders’ funds. Short term cash funds are invested, if
appropriate, in short-term interest-bearing bank deposits. There were no short-term interest-bearing bank deposits
at 31 May 2020 or 2019. The Group did not enter into any hedging transactions with respect to interest rate risk.
(b) Foreign currency risk
The Group is exposed to currency risk on purchases, loans and bank deposits that are denominated in a currency
other than the functional currency of the entities of the Group.
It is Group policy to ensure that foreign currency risk is managed wherever possible by matching foreign currency
income and expenditure. During the financial years ended 31 May 2020 and 31 May 2019, the Group did not utilise
foreign currency forward contracts or other derivatives to manage foreign currency risk.
The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates
was as follows at 31 May 2020:
Other debtors
Cash and cash equivalents
Trade and other payables
Related party loans
Convertible loans
Total exposure
Sterling exposure
denominated in €
-
56,986
(148,701)
-
(357,802)
(449,517)
Not at risk
€
71,219
60,284
(3,725,641)
(659,832)
-
(4,253,970)
Total
€
71,219
117,270
(3,874,342)
(659,832)
(357,802)
(4,703,487)
The Group’s foreign currency risk exposure in respect of the principal foreign currencies in which the Group operates
was as follows at 31 May 2019:
Other debtors
Cash and cash equivalents
Trade and other payables
Related party loans
Total exposure
Sterling exposure
denominated in €
-
11,099
(139,047)
-
(127,948)
Not at risk
€
52,208
66,200
(3,394,203)
(551,832)
(3,827,627)
The following are the significant exchange rates that applied against €1 during the financial year:
GBP
Average rate
2020
0.875
Average rate
2019
0.881
Spot rate
31 May
2020
0.899
Total
€
52,208
77,299
(3,533,250)
(551,832)
(3,955,575)
Spot rate
31 May
2019
0.887
Sensitivity analysis
A 10% strengthening of Euro against Sterling, based on outstanding financial assets and liabilities at 31 May 2020
would have decreased the reported loss by €44,952 (2019: decreased the reported loss by €12,795) as a
consequence of the retranslation of foreign currency denominated financial assets and liabilities at those dates. A
weakening of 10% of the Euro against Sterling would have had an equal and opposite effect. It is assumed that all
other variables, especially interest rates, remain constant in the analysis.
50
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
51
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(c) Liquidity risk
Liquidity is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and adverse conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group manages liquidity risk by regularly monitoring cash flow projections. The nature of the Group’s
exploration and appraisal activities can result in significant differences between expected and actual cash flows.
Contractual maturities of financial liabilities as at 31 May 2020 were as follows:
Item
Trade and other
payables (including
related party loans)
Convertible loans
Carrying
amount €
Contractual
cash flows €
6 months
or less €
6 -12
months €
1-2 years
€
2-5 years
€
4,545,536
4,545,536
616,783* 3,928,753**
-
-
357,802
402,500
-
-
- 357,802***
4,903,338
4,948,036
616,783* 3,928,753**
- 357,802***
Contractual maturities of financial liabilities as at 31 May 2019 were as follows:
Item
Trade and other
payables (including
related party loans)
Carrying
amount €
Contractual
cash flows €
6 months
or less €
6 -12
months €
1-2 years
€
2-5 years
€
4,093,546
4,093,546
557,322*
3,536,224**
-
-
*The amount of €616,783 (2019: €557,322) relates to other trade payables.
**The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls and Brendan
McMorrow and former Directors, namely James P. Jones, Séamus P. Fitzpatrick, C. David Wathen, Louis J. Maguire,
Dr. Sorċa Conroy and Michael E. Power, have confirmed that they will not seek repayment of amounts owed to them
by the Group and the Company of €3,197,755 (2019: €2,917,454) within 12 months of the date of approval of the
financial statements, unless the Group has sufficient funds to repay.
**In addition, Karelian Diamond Resources P.L.C. has confirmed that it will not seek repayment of amounts owed to
it by the Group and the Company at 31 May 2020 of €58,469 (2019: €54,241) within 12 months of the date of
approval of the consolidated financial statements, unless the Group has sufficient funds to repay.
**The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €315,918
(2019: €282,918), Maureen T.A. Jones amounting to €49,425 (2019: €49,425), Séamus P. Fitzpatrick (former
Director) amounting to €69,489 (2019: €69,489) and Dr. Sorċa Conroy (former Director) amounting to €225,000
(2019: €150,000).
***More information about convertible loans is detailed in Note 13.
The Group had cash and cash equivalents of €117,270 at 31 May 2020 (2019: €77,299).
51
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
52
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
18 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(d) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing
to discharge on obligation.
Credit risk is the risk of financial loss to the Group if a cash deposit is not recovered. Group deposits are placed only
with banks with appropriate credit ratings.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at 31 May 2020 and 31 May 2019 was:
Cash and cash equivalents
Other debtors
31 May
2020
€
117,270
71,219
188,489
31 May
2019
€
77,299
52,208
129,507
The Group’s cash and cash equivalents are held at AIB Bank which has a credit rating of “BBB” as determined by
Fitch, and Bank of Ireland which a credit rating of “BBB“ as determined by Fitch.
Expected credit loss
The Group measures credit risk and expected credit losses on financial assets measured at amortised cost using
probability of default, exposure at default and loss given default. Management consider both historical analysis and
forward-looking information in determining any expected credit loss. At 31 May 2020 and 31 May 2019, all cash is
accessible on demand and held with counterparties with a credit rating of BBB or higher. Management consider the
probability of default to be close to zero as these instruments have a low risk of default and the counterparties have
a strong capacity to meet their contractual obligations in the near term.
The amount receivable from Conroy Gold Limited which relates mainly to the cash advances and payment of
expenses incurred in the name of Conroy Gold Limited, is a receivable at the Company level but not at the Group
level and therefore is not subject to expected credit losses at the Group level. See Note 10 for further details.
However, as these amounts are receivable from the Group companies, the Directors of the Company are confident
that the probability of default is close to zero.
As a result of the above, no loss allowance has been recognised based on lifetime expected credit losses as any such
impairment would be wholly insignificant to the Company.
(e) Fair values versus carrying amounts
Due to the short-term nature of the Group’s current financial assets and liabilities at 31 May 2020 and 31 May 2019,
the fair value equals the carrying amount in each case. The carrying value of non-current financial assets and
liabilities is a reasonable approximation of fair value.
(f) Capital management
The Group’s objective is to discover and develop world class ore bodies in order to create value for its shareholders.
The Group’s strategy is to explore in politically stable and geographically attractive countries such as Ireland and
Finland. The Group ensures as far as possible to obtain adequate working capital to carry out its work obligations
and commitments. The Group’s overall strategy remains unchanged from the prior period.
52
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
53
18 Financial instruments (continued)
(f) Capital management (continued)
The Group has historically funded its activities through share issues and placings and loans. The Group’s capital
structure is kept under review by the Board of Directors and it is committed to capital discipline and continues to
maintain flexibility for future growth.
The capital structure of the Group consists of equity of the Group (refer to the statement of changes in equity and
Note 14). The Group is not subject to any externally imposed capital requirements.
19 Post balance sheet events
On 20 July 2020, the Company entered into a non-binding Heads of Terms regarding a proposed joint venture
between the Company and Anglo Asian Mining plc. The joint venture’s goal is the development of a gold mine and
further exploration and development of a series of gold targets along the 65km (40 mile) district scale gold trend
that the Company has discovered in the Longford – Down Massif in Ireland. Concurrent with the signing, the
Company issued to Anglo Asian warrants to subscribe for 325,000 ordinary shares of €0.001 each in the capital of
the Company at an exercise price of 16 pence per Ordinary Share with an initial exercise period of 6 months from
the date of the signing.
On 28 July 2020, the Company appointed Howard Bird as a non-executive Director.
On 31 July 2020, the Company received a notice to exercise warrants to subscribe for 1,358,333 ordinary shares of
€0.001 each at a price of 16 pence per Ordinary Share for which funds of €241,013 (£217,333) have been received.
On 11 August 2020, the Company raised €887,164 (£800,000) through a placing of 3,200,000 ordinary shares of
€0.001 in the capital of the Company at a price of £0.25 sterling per placing share.
On 17 August 2020, the Company received a notice to exercise warrants to subscribe for 100,000 ordinary shares
of €0.001 each at a price of 16 pence per Ordinary Share for which funds of €17,743 (£16,000) have been received.
In November 2020, before the signing date, the Company announced that it has received a notice to exercise
warrants over a total of 1,387,500 ordinary shares of €0.001 each at an exercise price of 16 pence per Ordinary
Share, for which funds of €247,800 (£222,000) have been received by the Company.
COVID-19 continues to limit field and laboratory work given the restrictions on operations and movement and other
work also continues in relation to the Company’s exploration and development programme. There were no other
events after the reporting year requiring adjustment to or disclosure in, these audited consolidated financial
statements.
There were no other events after the reporting year requiring adjustment to or disclosure in these audited
consolidated financial statements.
53
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
54
Conroy Gold and Natural Resources P.L.C.
Notes
to and forming part of the consolidated and company financial statements for the
financial year ended 31 May 2020 (continued)
20 Prior year adjustment
The Company and Consolidated Statement of Financial Position as at 31 May 2019 previously presented related
party loans amounting to €551,832 within non-current liabilities. Following a review of the applicable terms and
conditions, the Directors determined that these amounts should, more appropriately, be classified within current
liabilities. The Company and Consolidated Statements of Financial Position as at 31 May 2019 have therefore been
adjusted to reflect the impact of this reclassification.
In line with the requirements of IAS 8 Accounting policies, changes in accounting estimates and errors, the
comparative figures for the year ended 31 May 2019 have been restated as follows:
Balance Sheet
Non-current liabilities
Related party loans
Total non-current liabilities
Current liabilities
Trade and other payables
Related party loans
Total current liabilities
As previously
stated 31 May
2019
€
Effect of
restatement 31
May 2019
€
As
restated 31 May
2019
€
551,832
551,832
(551,832)
(551,832)
-
-
3,541,714
-
3,541,714
-
551,832
551,832
3,541,714
551,832
4,093,546
There is no impact on Net Assets, Total equity and liabilities or the Company and Consolidated Statements of
Comprehensive Income.
21 Approval of the audited consolidated financial statements for the financial year ended 31 May 2020
These audited consolidated financial statements were approved by the Board of Directors on 30 November 2020. A
copy of the audited consolidated financial statements will be available on the Company’s website
www.conroygoldandnaturalresources.com and will be available from the Company’s registered office at 3300 Lake
Drive, Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
54
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc
55
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc 56
Annual Report and Consolidated Financial Statements 2020 Conroy Gold and Natural Resources Plc