Annual Report and Consolidated
Financial Statements 2022
Annual Report and Consolidated Financial Statements 2021 Conroy Gold and Natural Resources Plc
1
Contents
Chairman’s Statement
Company Information
Board of Directors
Directors’ Report
Independent Auditor’s Report
Consolidated Income
Statement
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Company Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Company Statement of
Changes in Equity
Consolidated Statement
of Cash Flows
Company Statement
of Cash Flows
Notes to and forming part of
the Consolidated and Company
Financial Statements
2
5
6
8
17
24
25
26
27
28
29
30
31
32
2
Chairman’s Statement
Professor Richard Conroy
Chairman
Project Inis – Drilling Clontibret gold deposit
Dear Shareholder,
I have great pleasure in
presenting the Company’s
Annual Report and
Consolidated Financial
Statements for the year
ended 31 May 2022, which
was a transformational
year for the Company.
During the year the Company agreed
and completed a joint venture (“JV”)
agreement to develop the district scale
gold trend which the Company has
discovered in the Longford-Down Massif
in Ireland with the primary aim being the
development of a mine at Clontibret in
County Monaghan and/or elsewhere in
the Longford-Down Massif.
The Joint Venture agreement is an
earn-in agreement with the long
established mining company, Demir
Export AŞ (“Demir Export”). Demir Export
has interests in iron, coal, gold and
base metals in Turkey and has a strong
in-house technical team with mining
and exploration expertise. Demir Export
brings over 60 years of mine operating
experience to bear on the project and
the company places a strong emphasis
on the adoption of international
environmental, health and safety
management standards.
The investment by Demir Export is
directly into operating companies,
wholly owned subsidiaries of Conroy
Gold and Natural Resources, which have
been established to hold and operate
the various licences in the JV. These
companies are: Conroy Gold (Clontibret)
Limited, which holds the Clontibret
Licence; Conroy Gold (Armagh) Ltd,
which holds the Licences and Mines
Royal options in Northern Ireland; and
Conroy Gold (Longford Down) Limited,
which holds the remaining prospecting
licences in the Republic of Ireland.
In addition, three new prospecting
licenses in the Longford-Down Massif
have been granted to Conroy Gold and
Natural Resources (PL3131, PL4554, and
PL4559). It is intended that application
will be made for these licences to be
transferred to Conroy Gold (Longford-
Down) Limited, which would bring the
number of licences held by the JV in the
Longford-Down Massif to fifteen and the
total area held by the Joint Venture in the
Longford-Down Massif to approximately
1000 km².
Under the terms of the JV agreement a
cash payment of €1 million was made
to the Company upon completion of the
JV agreement in March 2022. Further
expenditure of over €4.5 million by
Demir Export in work commitments is
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 3
Project Inis – Core shed, Professor Richard Conroy (Chairman),
Kevin McNulty (Senior Geologist) and Cathal Jones (Finance
Consultant)
Technical team core shed presentations
required for Demir Export to earn a 25%
interest in each project. Subsequent
expenditure of €4.5m plus by Demir
Export will earn an additional 15%
interest. The additional expenditure
required to reach construction ready
status for mine development will earn an
additional 17.5% interest to bring Demir
Export’s total holding to 57.5% in any
given development.
Thereafter the Company may continue
to retain a 42.5% interest in the mine
development by participating pro rata
in the expenditures required for mine
development, or avail itself of a number
of alternatives, such as being carried for
these expenditures through a “carry loan”
for a 25% interest with a payback over a
six year period from the net profit due to
the Company.
The Company has as a result, during the
year, moved from its activities primarily
being mineral exploration to having mine
development as its main focus. This is
a major, and transformational, event in
the Company’s history. We are confident
that the Company has enough data and
background knowledge to warrant this
shift in emphasis and in Demir Export
we have an experienced JV partner
who have already, in a short space of
time, contributed significantly to the JV
partnership.
Although the primary aim of the joint
venture is the development of a mine
on the Clontibret gold deposit and/or
elsewhere in the Longford-Down Massif,
exploration along the 65km (40 mile)
gold trend will continue. A number of
other gold targets, in addition to the
Clontibret gold deposit, have already
been discovered and we expect the
exploration programmes to discover
further gold targets. Possible base metal
targets in the Longford-Down Massif will
also be followed up.
An EGM was held during the period
under review at which shareholder’s
approval was sought, and granted, for
the joint venture. Completion of the
joint venture was also conditional on
the necessary regulatory consents being
granted in the Republic of Ireland and
Northern Ireland for the transfer of the
relevant licences to the various joint
venture companies which were set up
under the joint venture agreement. These
regulatory consents were received in the
first quarter of 2022.
During the year and post period,
exploration at Clontibret and elsewhere
in the Longford-Down Massif has
continued. Excellent results included
the widest yet gold intercept drilled
to date at Clontibret – 94.5m grading
1.0g/t Au, including 45m grading 1.5g/t
Au, in the stockwork zone. The drill hole
also intersected lodes which assayed 6m
grading 4.4g/t Au, 2.7m grading 5g/t Au
and 1.55m grading 4.0g/t Au. An initial
c.3000m joint venture step out drilling
programme also commenced in April
2022 at Clontibret and results to date
have included the discovery of four new
gold zones and further continuity of the
gold mineralization in the stockwork,
including an intersection of 22m@0.6g/t
gold (as announced by the Company on 1
September 2022).
Other exploration work, including
drilling, deep overburden sampling and
geophysics work, was also carried out
during the year with highly encouraging
results.
The current drill programme at Clontibret,
which is being carried out in conjunction
with Demir Export, is designed to build
upon the previous work carried out by
Conroy over many years, by enhancing
our knowledge of the Clontibret deposit
and increasing the existing JORC resource
figure.
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 4
Ramazan Yön, CEO Demir Export and
Professor Richard Conroy, Conroy Chairman,
at PDAC Canada
Project Inis site visit, Professor Richard Conroy (Chairman), Dr. Sorċa Conroy
(Strategy Consultant), Tamer Talu (Demir Export Consultant - Strategy & Business
Development) and Cathal Jones (Finance Consultant)
Environmental, Social
and Governance issues
Great emphasis is placed by the Company
on Environmental, Social and Governance
issues. The Company is committed to
high standards of corporate governance
and integrity in all of its activities and
operations including rigorous health
and safety compliance, environmental
consciousness and the promotion of
a culture of good ethical values and
behaviour.
The Company 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.
It is a requirement of the Chairman
of the Board to regularly monitor and
review the Company’s ethical standards
and cultural environment and where
necessary, take appropriate action to
ensure proper standards are maintained.
COVID-19
COVID-19 measures continued to be
taken by the Company during the year in
accordance with government guidelines
to protect the health, safety and well-
being of its employees, contractors and
partners.
Financials
The loss after taxation from continuing
operations for the financial year ended
31 May 2022 was €183,129 (31 May
2021: profit of €211,010).
As at 31 May 2022, the Group had
cash reserves of €1,216,097 (31
May 2021: €1,513,286) and net
assets of €19,804,072 (31 May 2021:
€19,987,222).
Directors and Staff
I would like to express my deep
appreciation for the support and
dedication of the Directors, staff and
consultants which has made possible the
excellent progress and success which the
Company has achieved during the year,
in particular to those that helped with
the successful conclusion of the joint
venture with Demir Export.
Professor Richard Conroy
Chairman
29 November 2022
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc Company Information
5
Directors
Professor Richard Conroy*
Chairman
Maureen T.A. Jones*
Managing Director
Professor Garth Earls+§
Non-executive Director
Brendan McMorrow*+§
Non-executive Director
Howard Bird*§
Non-executive Director
* Member of the Executive Committee
§ Member of the Remuneration Committee
+ Member of the Audit Committee
Company registration number
232059
Company secretary
Maureen T.A. Jones
Registered office
3300 Lake Drive
Citywest Business Campus
Dublin 24, D24 TD21, Ireland
Nominated adviser (NOMAD)
Allenby Capital Limited
5 St. Helens Place
London, EC3A 6AB, United Kingdom
Broker
First Equity Ltd
Salisbury House, Finsbury
London, EC2M 5QQ, United Kingdom
Statutory audit firm
Deloitte Ireland LLP
Chartered Accountants
and Statutory Audit Firm
6 Lapps Quay
Cork, T12 VY7W, Ireland
Banker
AIB
1-4 Lower Baggot Street
Dublin 2, D02 X342, Ireland
Registrar
Avenir Registrars
No. 1 Main Street
Blessington
Co. Wicklow, W91 V82T, Ireland
www.avenir-registrars.ie
Public relations
Lothbury Financial Services
Floor 6, 131 Cannon Street
London, EC4N 5AX, United Kingdom
Hall Communications
1 Northumberland Road
Dublin 4, D04 F578, Ireland
Legal advisers
William Fry Solicitors
2 Grand Canal Square
Dublin 2, D02 A342, Ireland
Roschier, Attorneys Ltd.
Kasarmikatu 21A
FI-00130 Helsinki, Finland
HPP Attorneys Ltd
Bulevardi 1 A
FI-00100
Helsinki
Head office
Conroy Gold and
Natural Resources P.L.C.
3300 Lake Drive
Citywest Business Campus
Dublin 24, D24 TD21, Ireland
www.conroygold.com
London Stock Exchange
AIM Market Symbol: CGNR
SEDOL: BZ4BW18
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 2022 Conroy Gold and Natural Resources Plc 6
Board of Directors
Conroy Gold and Natural Resources P.L.C.
Board of Directors
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 which was
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. Since then, Professor Richard Conroy has utilised his extensive
experience in the exploration industry in his role as Chairman of the Board.
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 and ensures all filings and requirements of the
Companies Acts are fulfilled.
Experience
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.
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 brings a vast amount of
managerial experience to the Board along with extensive experience of the exploration industry.
6
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
7
Conroy Gold and Natural Resources P.L.C.
Board of Directors (continued)
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. He was appointed to the Board on 15 November 2016.
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. This experience is invaluable to
the Company to assist in his role of technical advisor.
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 Chief
Executive Officer of Ormonde Mining P.L.C., a natural resources exploration 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.
Howard Bird - Non-executive Director
Howard 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 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. Howard has extensive worldwide experience and was involved in
programmes that have led to the discovery of over 100 kimberlites, working in Canada, Australia, Brazil, South Africa,
Angola, Zimbabwe, Democratic Republic of Congo, Botswana and Gabon.
Together, the Directors form the Board of Directors with a gender mix of four and one. The mix of experience that the
Directors bring to the Board include financial and managerial experience, mining, development and natural resources
experience which are crucial to the business of the Company and crucial to the smooth running of a Board of Directors
and company.
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Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
8
Directors’ Report
Conroy Gold and Natural Resources P.L.C.
Directors’ report
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 2022.
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 3 to 5. 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. Please refer to the section on risks and uncertainties on pages 15 and
16 for further details.
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 2022
The consolidated income statement for the financial year ended 31 May 2022 and the consolidated statement of financial
position at that date are set out on pages 24 and 26. The loss for the financial year amounted to €256,484 (31 May 2021:
profit of €211,010) and net assets at 31 May 2022 were €19,730,738 (31 May 2021: €19,987,222). 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 accordingly has no operating income. Consequently, the Group is not
expected to report profits until it is in a position 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
Post year end, the Company announced that it had received notice of conversion from Hard Metal Machine Tools Limited
(the ‘’Lender’’) in relation to convertible loan notes which were issued on 15 July 2019 and 30 October 2019. The loan
and all accrued interest was converted into new ordinary shares in the Company. On the date of the shares being
admitted to trading, Mr. Philip Hannigan had a beneficial interest in ordinary shares representing 19.19% of the issued
share capital of the Company.
On 1 September 2022 and 6 October 2022, the Company announced the results from the four drill holes in the 3,000
metre eight-hole step-out drilling programme on its Clontibret Gold deposit in Ireland that was carried out in conjunction
with the Company’s joint venture partner, Demir Export A.S.
There were no further important events to note post year end.
8
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
9
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Directors
Please refer to pages 1, 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 17 (h)), there
have been no contracts or arrangements entered into during the financial year ended 31 May 2022 in which a Director
of the Company had a material interest. Refer to Note 17 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 connected persons in the share capital of the Company were as follows:
31 May
2022
31 May
2022
31 May
2021
31 May
2021
Director
Date of signing
financial statements
Ordinary Shares
of €0.001 each
Date of
signing
financial
statements
Warrants
Professor Richard Conroy
Maureen T.A. Jones
Professor Garth Earls
Brendan McMorrow
Howard Bird
* Of the 3,194,036 (31 May 2021: 3,194,036) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (31 May 2021: 192,942) are held
by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest.
3,194,036*
368,329
-
26,060
-
519,713
125,761
-
-
-
519,713
125,761
-
26,060
-
Ordinary
Shares
of €0.001 each
3,194,036
368,329
-
26,060
-
Warrants
Ordinary
Shares
of €0.001 each
3,194,036*
368,329
-
26,060
-
Warrants
519,713
125,761
-
26,060
-
Details of warrants are as follows:
Director
Date of
signing
financial
statements
Warrants
Date of
signing
financial
statements
Price €
31 May
2022
31 May
2022
31 May
2021
31 May
2021
Expiry Date
Warrants
Price € Warrants
Price €
Professor Richard Conroy
Professor Richard Conroy
Professor Richard Conroy
Maureen T.A. Jones
Maureen T.A. Jones
Maureen T.A. Jones
Brendan McMorrow
121,198
-
398,515
39,090
86,671
-
26,060
4.33
-
0.50
0.50
4.33
-
0.50
121,198
-
398,515
39,090
86,671
-
26,060
4.33
-
0.50
0.50
4.33
-
0.50
121,198
-
398,515
39,090
86,671
-
26,060
4.33
-
0.50
0.50
4.33
-
0.50
16 November 2022
15 November 2020
16 March 2023
16 March 2023
16 November 2022
15 November 2020
16 March 2023
9
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
10
Directors’ Report (continued)
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Directors’ shareholdings and other interests (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
Date of signing financial
statements
Mr. Philip Hannigan
Professor Richard Conroy
Mr. Patrick O’Sullivan
Paul and Marial Johnson
Ordinary Shares
of €0.001 each
8,588,075
3,194,036*
3,000,000
1,686,255
Date of signing
financial
statements
%
19.19
7.14
6.70
3.77
31 May
2022
Ordinary Shares
of €0.001 each
2,011,577
3,194,036*
3,000,000
1,686,255
31 May
2022
%
5.12
8.13
7.64
4.29
31 May
2021
31 May
2021
Ordinary Shares
of €0.001 each
2,011,577
3,194,036*
3,000,000
1,686,255
%
5.12
8.13
7.64
4.29
*Of the 3,194,036 (31 May 2021: 3,194,036) ordinary shares beneficially held by Professor Richard Conroy, 192,942 (31 May 2021: 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:
•
•
•
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;
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
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:
•
select suitable accounting policies for the Group and Company financial statements and then apply them
consistently;
• make judgements and estimates that are reasonable and prudent;
•
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
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.
•
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Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
11
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Statement of Directors’ responsibilities in respect of the annual report and the consolidated financial statements
(continued)
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 Group and the Company 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 recorded a loss of €256,484 (31 May 2021: profit of €211,010) for the financial year ended
31 May 2022. The Group and the Company had net assets of €19,730,738 (31 May 2021: €19,987,222) at that date. The
Group had net current liabilities of €2,113,516 (31 May 2021: €1,790,142) and the Company had net current liabilities of
€1,476,293 (31 May 2021: €1,271,009) at that date. The Group had cash and cash equivalents of €1,216,097 at 31 May
2022 (31 May 2021: €1,513,286). The Company had cash and cash equivalents of €964,997 at 31 May 2022 (31 May 2021:
€1,513,286).
The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow,
Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick, C. David Wathen, 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 €3,069,148 (31 May 2021: €3,119,148) 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 2023. As set out in the Chairman’s
statement, the Group and the Company expects to incur capital expenditure in 2022 and 2023, consistent with its strategy
as an exploration company. The Directors recognise that the Group’s net current liabilities of €2,113,516 is a material
uncertainty that may cast significant doubt on the Group and 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 assets, the results obtained from the exploration
programme, the prospects for raising additional funds as required and the joint venture arrangement with Demir Export,
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. The Board is satisfied that its corporate culture and
culture of its employees aligns the Company’s objectives, strategy and business model. 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.conroygoldandnaturalresources.com/corporate-governance.
11
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 12
Directors’ Report (continued)
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Board of Directors
The Board of Directors is made up of two executive and three non-executive Directors. Biographies of each of the
Directors are set out on pages 6 and 7.
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. Due to COVID-19, a number of these meetings were held by way of Zoom and teleconference calls.
Board of Directors’ meetings were held on 8 occasions from 1 June 2021 to 31 May 2022 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
Howard Bird
Board
8
8
8
8
8
6
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 Director’s 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 Director’s meetings, and any further supporting papers and information are readily available to all Directors on
request. The Board of Director’s papers include the minutes of the Audit committee of the Board of Directors which have
been held since the previous Board of Director’s meeting, and, the Chairman of each committee is available to give a
report on the committee’s proceedings at Board of Director’s 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 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 Chairman and the Board, consider and
review the independence of the Directors on an annual basis.
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.
12
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 13
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Board of Directors (continued)
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:
•
Commitment;
•
Independence;
• Relevant experience;
•
•
•
Impartiality;
Specialist knowledge; and
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.
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, is comprised exclusively of non-executive Directors. The Remuneration and
Executive Committees were both re-constituted during the financial year and its membership is set out under Company
Information on page 1 of this report.
Remuneration Committee
The Remuneration Committee 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 Director is excused from
the meetings to determine his 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. No meetings of the remuneration committee were
held in the period under review.
13
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
14
Directors’ Report (continued)
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Board of Directors (continued)
Executive Committee
The Executive Committee supports the Managing Director in carrying out the duties delegated to her by the Board of
Directors. It also ensures that regular reports are presented to the Board of Directors, that effective internal controls are
in place and functioning and that there is an effective risk management process in operation throughout the Company.
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
Howard Bird
Audit
Committee
3
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 Auditor the results and scope of the audit. The external auditor has 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 the external auditor and on their
remuneration and discusses the nature and scope of the audit with the external auditor. 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 auditor of all relationships with the Group and any other parties that could affect independence or the perception of
independence. Services in relation to tax were provided during the year under review.
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 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
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.
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 enables 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:
•
•
•
The Board of Directors establishes risk policies as appropriate, for implementation by executive management;
All commitments for expenditure and payments are subject to approval by personnel designated by the Board
of Directors; and
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.
14
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 15
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
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 and is considered as part of all Board meetings.
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, global 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 primary
area that is expected to impact the Group is in the area of climate change and the impact of this risk will continue to be
monitored by the Directors and management. Management will continue to closely monitor any regulatory updates in
this area and its potential impact on the Group. 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 19 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 inflation, 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.
15
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
16
Directors’ Report (continued)
Conroy Gold and Natural Resources P.L.C.
Directors’ report (continued)
Risks and uncertainties (continued)
Pandemic Risk
The COVID-19 pandemic continued to have some impact on the Company’s activities during the financial year. Since the
outbreak of the COVID-19 pandemic, the Company has taken necessary measures in accordance with Government’s
guidelines to protect the health, safety and wellbeing of its employees, contractors and partners in Ireland and Finland
including for a period, staff working remotely. The field and laboratory work was not impacted as much in this financial
year and the Company’s exploration and development programme continued.
Russia/Ukraine war Risk
Since February 2022, the world has been watching closely the situation between Russia and the Ukraine and the impact
on Europe and the rest of the world. The main impacts seen to date are on the energy prices and any supply issues that
may occur in the energy sector as a result of restrictions imposed. Directors and management will continue to closely
monitor the situation and in particular the impact which it may have on the operations of the business.
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.conroygoldandnaturalresources.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 (31 May 2021: €Nil).
Accounting records
The Board of Directors are responsible for ensuring adequate accounting records, as outlined in Sections 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 auditor
So far as each of the Directors in office at the date of approval of the financial statements is aware:
•
•
There is no relevant audit information of which the Company’s auditor is unaware; and
The Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware
of any relevant audit information and to establish that the Company’s auditor is 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.
Auditor
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)
29 November 2022
16
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 17
Independent Auditors’ Report
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 (the ‘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 2022 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 frameworks 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 the preparation of the group financial
statements is the Companies Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the
European Union (“the relevant financial reporting framework”).
The relevant financial reporting framework that has been applied in the preparation of the parent company
financial statements is the Companies Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the
Financial Reporting Council (“the relevant financial reporting framework”).
BBaassiiss ffoorr ooppiinniioonn
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 (IAASA), as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
17
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 18
Independent auditor’s report to the members of Conroy Gold and Natural Resources
Plc
Report on the audit of the financial statements
Independent Auditors’ Report (continued)
Opinion on the financial statements of Conroy Gold and Natural Resources Plc (the
‘company’) (continued)
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
MMaatteerriiaall uunncceerrttaaiinnttyy rreellaatteedd ttoo ggooiinngg ccoonncceerrnn
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.
We draw your attention to Note 1 in the financial statements, which indicates that during the year ended 31
May 2022, the group and parent company incurred a loss of €256,484 and, as of that date, the group and parent
company had net current liabilities of €2,113,516 and €1,476,293 respectively.
As stated in Note 1, these events or conditions indicate that a material uncertainty exists that may
cast significant doubt on the group’s and parent company’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Our evaluation of the directors’ assessment of the group and parent company’s ability to continue to adopt the
going concern basis of accounting included:
•
•
•
•
•
•
•
obtaining an understanding of the group and parent company’s relevant 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;
assessing the design and determining the implementation of these relevant controls;
evaluating directors’ plans and their feasibility by agreeing the inputs used in the cash flow forecast to
expenditure commitments and other supporting documentation;
challenging the reasonableness of the assumptions applied by the directors in their going concern
assessment;
obtaining confirmations received by the group and parent company from the directors and former
directors evidencing 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
and/or parent company has sufficient funds to repay;
assessing the mechanical accuracy of the cash flow forecast model; and
assessing the adequacy of the disclosures made in the financial statements.
.Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
SSuummmmaarryy ooff oouurr aauuddiitt aapppprrooaacchh
KKeeyy aauuddiitt mmaatttteerrss
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 investment in subsidiaries.
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
.
18
Annual Report and Consolidated Financial Statements 2022 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’) (continued)
19
MMaatteerriiaalliittyy
SSccooppiinngg
SSiiggnniiffiiccaanntt cchhaannggeess iinn
oouurr aapppprrooaacchh
The materiality that we used in the current year for both the group and parent
company was €577,000 which was determined on the basis of approximately 3%
of Shareholder’s Equity.
We identified one significant component, which was the parent company, Conroy
Gold and Natural Resources Plc.
As disclosed in note 8 to the financial statements, the parent company
transferred some licences and associated intangible assets to three new
subsidiaries during the year by way of a capital contribution. Consequently, our
current year audit of the financial statements of the parent company involved a
change in scope to consider the carrying value of the resulting investment in
subsidiaries as well as intangible assets. The focus of our key audit matter
determination has also changed on prior year, as a result.
KKeeyy AAuuddiitt MMaatttteerrss
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.
VVaalluuaattiioonn ooff iinnttaannggiibbllee aasssseettss aanndd iinnvveessttmmeenntt iinn ssuubbssiiddiiaarriieess
KKeeyy aauuddiitt mmaatttteerr
ddeessccrriippttiioonn
At 31 May 2022, the carrying value of exploration and evaluation assets included in
intangible assets in the group and parent company statement of financial position
amounted to €23,888,833 and €3,421,364 respectively. The parent company
statement of financial position also includes amounts relating to investment in
subsidiaries of €18,423,347.
We draw your attention to the disclosures made in Note 1, 7 and 8 to the financial
statements concerning the valuation of intangible assets and investment in
subsidiaries. The valuation of intangible assets for both the group and the parent
company and the underlying valuation of the investment in subsidiaries for the
parent company, are 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 valuation of intangible assets in the group statement of financial position and
the valuation of intangible assets and investment in subsidiaries in the parent
company statement of financial position were assessed as significant risks and given
the balances in total at the respective financial statement level also constitutes the
majority of the total assets recorded, we considered the valuation of intangible
assets and investment in subsidiaries a key audit matter.
19
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 20
Independent auditor’s report to the members of Conroy Gold and Natural Resources
Plc
Report on the audit of the financial statements
Independent Auditors’ Report (continued)
Opinion on the financial statements of Conroy Gold and Natural Resources Plc (the
‘company’) (continued)
HHooww tthhee ssccooppee ooff
oouurr aauuddiitt
rreessppoonnddeedd ttoo tthhee
kkeeyy aauuddiitt mmaatttteerr
We performed the following procedures:
• We evaluated the design and determined the implementation of relevant
controls in place over capitalisation and subsequent valuation of intangible
assets.
• We inspected documentation in respect of new licences held (as relevant);
• We 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’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
from the date of approval of the financial statements;
• We challenged the directors’ assessment of indicators of impairment in
relation to the carrying value of investment in subsidiaries; and
• We also considered the adequacy of the disclosure in the financial
statements.
KKeeyy oobbsseerrvvaattiioonnss
A significant uncertainty exists in relation to the ability of the group and parent
company to realise the exploration and evaluation assets capitalised to
intangible assets and consequently the investment made in subsidiaries.
As noted above, we draw your attention to the disclosures made in Note 1, 7 and 8
to the financial statements concerning the valuation of intangible assets and
investment in subsidiaries. The valuation of intangible assets for both the group and
the parent company and the underlying valuation of the investment in subsidiaries
for the parent company, are 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
in relation to these
uncertainties and the ultimate outcome cannot, at present, be determined. Our
opinion is not modified in respect of this matter.
include any adjustments
20
Annual Report and Consolidated Financial Statements 2022 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’) (continued)
21
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.
OOuurr aapppplliiccaattiioonn ooff mmaatteerriiaalliittyy
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 €577,000 (2021: €625,000) which is
approximately 3% of Shareholder’s Equity. We have considered Shareholder’s Equity to be the critical
component for determining materiality as we determined the Shareholder’s 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 group and parent company and their environment, history of misstatements, complexity
of the group and parent company and reliabity of control environment.
Shareholder's
Equity 19.7m
Shareholders
Equity
Materiality
Materialty
€577,000
Audit Committe
Reporting
Threshold
€28,850
We agreed with the Audit Committee that we would report to them any audit differences in excess of
€28,850 (2021: €31,250), 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.
AAnn oovveerrvviieeww ooff tthhee ssccooppee ooff oouurr aauuddiitt
We scoped our audit 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 the value of total assets in the parent company statement of financial
position accounts for 94% of the value of total assets in the consolidated statement of financial position. The
remaining 5 components were subject to specified audit procedures where the extent of our testing was
based on our assessment of the risks of material misstatement to the group financial statements. The parent
company transferred some licences and associated intangible assets to three new subsidiaries during the year
by way of a capital contribution. Consequently, our current year audit of the financial statements of the
parent company involved a change in scope to consider the carrying value of the resulting investment in
subsidiaries as well as intangible assets.
21
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 22
Independent auditor’s report to the members of Conroy Gold and Natural Resources
Plc
Report on the audit of the financial statements
Independent Auditors’ Report (continued)
Opinion on the financial statements of Conroy Gold and Natural Resources Plc (the
‘company’) (continued)
OOtthheerr iinnffoorrmmaattiioonn
The other information comprises the information included in the Annual Report and Consolidated Financial
Statements, other than the financial statements and our auditor’s report thereon. The directors are responsible
for the other information contained within the Annual Report and Consolidated Financial Statements.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the 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.
RReessppoonnssiibbiilliittiieess ooff ddiirreeccttoorrss
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.
AAuuddiittoorr’’ss rreessppoonnssiibbiilliittiieess ffoorr tthhee aauuddiitt ooff tthhee ffiinnaanncciiaall ssttaatteemmeennttss
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.
A further description of our responsibilities for the audit of the financial statements is located on IAASA’s
website at: http://www.iaasa.ie/Publications/Auditing-standards/International-Standards-on-Auditing-for-use-
in-Ire/Description-of-the-auditor-s-responsibilities-for. This description forms part of our auditor’s report.
22
Annual Report and Consolidated Financial Statements 2022 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’) (continued)
23
RReeppoorrtt oonn ootthheerr lleeggaall aanndd rreegguullaattoorryy rreeqquuiirreemmeennttss
OOppiinniioonn oonn ootthheerr mmaatttteerrss pprreessccrriibbeedd bbyy tthhee CCoommppaanniieess AAcctt 22001144
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 financial statements are 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.
MMaatttteerrss oonn wwhhiicchh wwee aarree rreeqquuiirreedd ttoo rreeppoorrtt bbyy eexxcceeppttiioonn
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' report
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report
to you if, in our opinion, the disclosures of directors’ remuneration and transactions specified by law are not
made.
UUssee ooff oouurr rreeppoorrtt
This report is made solely to the parent 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 parent
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 parent company and the parent company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.
KKeevviinn BBuuttlleerr
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
6 Lapp’s Quay
Cork
Date: 29 November 2022
23
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 24
Conroy Gold and Natural Resources P.L.C.
Consolidated income statement
for the financial year ended 31 May 2022
Continuing operations
Operating expenses
Movement in fair value of warrants
Share-based payment expense
Operating (loss)/profit
Finance income – interest
Interest expense
Net finance cost
(Loss)/profit before taxation
Income tax expense
(Loss)/profit for the financial year
(Loss)/earnings per share
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Note
2022
€
2
18
18
13
3
5
6
6
(832,340)
585,954
-
(246,386)
41
(10,139)
(10,098)
(256,484)
-
(256,484)
(0.0065)
(0.0065)
2021
€
(752,619)
1,055,490
(71,596)
231,275
13
(20,278)
(20,265)
211,010
-
211,010
0.0065
0.0065
The total (loss)/profit for the financial year is entirely attributable to equity holders of the Company.
_____________________
Professor Richard Conroy
Chairman
___________________
Maureen T.A. Jones
Managing Director
24
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 25
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of comprehensive income
for the financial year ended 31 May 2022
2022
€
2021
€
(Loss)/profit for the financial year
(256,484)
211,010
Income recognised in other comprehensive income
-
-
Total comprehensive (loss)/profit for the financial year
(256,484)
211,010
The total comprehensive (loss)/profit for the financial year is entirely attributable to equity holders of the
Company.
25
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 26
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of financial position
as at 31 May 2022
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
Non-controlling interests
Convertible shares
Total non-controlling interests
Liabilities
Non-current liabilities
Convertible loans
Warrant liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Related party loans
Total current liabilities
Total liabilities
Note
8
9
11
10
15
15
15
18
14
13
13
12
12
31 May
2022
€
23,888,833
7,589
23,896,422
1,216,097
429,329
1,645,426
31 May
2021
€
22,988,974
9,474
22,998,448
1,513,286
458,769
1,972,055
25,541,848
24,970,503
10,543,694
15,256,556
30,617
42,664
79,929
(6,222,722)
19,730,738
1,406,899
1,406,899
388,219
257,050
645,269
3,621,943
136,999
3,758,942
4,404,211
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
-
-
378,080
843,004
1,221,084
3,625,198
136,999
3,762,197
4,983,281
Total equity, non-controlling interests and liabilities
25,541,848
24,970,503
The financial statements were approved by the Board of Directors on 29 November 2022 and authorised for issue on
29 November 2022. They are signed on its behalf by:
____________________
Professor Richard Conroy
Chairman
_________________
Maureen T.A. Jones
Managing Director
26
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 27
Conroy Gold and Natural Resources P.L.C.
Company statement of financial position
as at 31 May 2022
Assets
Non-current assets
Investment in subsidiaries
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
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
Warrant liabilities
Total non-current liabilities
Current liabilities
Trade and other payables
Related party loans
Total current liabilities
Total liabilities
Note
7
8
9
11
10
15
15
15
18
13
13
12
12
31 May
2022
€
18,423,347
3,421,364
7,589
21,852,300
964,997
1,198,558
2,163,555
31 May
2021
€
3
22,469,838
9,474
22,479,315
1,513,286
977,902
2,491,188
24,015,855
24,970,503
10,543,694
15,256,556
30,617
42,664
79,929
(6,222,722)
19,730,738
388,219
257,050
645,269
3,502,849
136,999
3,639,848
4,285,117
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
378,080
843,004
1,221,084
3,625,198
136,999
3,762,197
4,983,281
Total equity and liabilities
24,015,855
24,970,503
The loss for the financial year was €256,484 (31 May 2021: profit of €211,010).
The financial statements were approved by the Board of Directors on 29 November 2022 and authorised for issue on
29 November 2022. They are signed on its behalf by:
_____________________
Professor Richard Conroy
Chairman
_________________
Maureen T.A. Jones
Managing Director
27
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 28
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of changes in equity
for the financial year ended 31 May 2022
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share-based
payment
reserve
€
Other
reserve
Retained
deficit
Total
equity
€
€
€
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
-
-
-
-
-
(256,484)
(256,484)
10,543,694
15,256,556
30,617
42,664
79,929
(6,222,722)
19,730,738
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share-based
payment
reserve
€
Other
reserve
Retained
deficit
Total
equity
€
€
€
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
13,049
4,070,403
-
-
-
-
-
-
(1,898,494)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
71,596
-
4,083,452
(125,657)
(125,657)
-
-
(1,898,494)
71,596
(532,211)
-
-
-
532,211
-
211,010
211,010
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
Balance at 1 June 2021
Loss for the financial
year
Balance at 31 May
2022
Balance at 1 June 2020
Share issue (see Note
15)
Share issue costs
Warrant issue
Warrant exercise
Transfer from share-
based payment reserve
to retained deficit
Profit for the financial
year
Balance at 31 May
2021
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 15.
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 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.
28
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 29
Conroy Gold and Natural Resources P.L.C.
Company statement of changes in equity
for the financial year ended 31 May 2022
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share-based
payment
reserve
€
Other
reserve
Retained
deficit
Total
equity
€
€
€
Balance at 1 June
2021
Loss for the
financial year
Balance at 31 May
2022
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
-
-
-
-
-
(256,484)
(256,484)
10,543,694
15,256,556
30,617
42,664
79,929
(6,222,722)
19,730,738
Share
capital
Share
premium
€
€
Capital
conversion
reserve fund
€
Share-based
payment
reserve
€
Other
reserve
Retained
deficit
Total
equity
€
€
€
Balance at 1 June
2020
Share issue (see
Note 15)
Share issue costs
Warrant issue
Warrant exercise
Transfer from
share-based
payment reserve to
retained deficit
Profit for the
financial year
Balance at 31 May
2021
10,530,645
13,084,647
30,617
574,875
8,333
(6,583,802)
17,645,315
13,049
4,070,403
-
-
-
-
-
-
(1,898,494)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
71,596
-
4,083,452
(125,657)
(125,657)
-
-
(1,898,494)
71,596
(532,211)
-
-
-
532,211
-
211,010
211,010
10,543,694
15,256,556
30,617
42,664
79,929
(5,966,238)
19,987,222
29
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 30
Conroy Gold and Natural Resources P.L.C.
Consolidated statement of cash flows
for the financial year ended 31 May 2022
Cash flows from operating activities
(Loss)/profit for the financial year
Adjustments for non-cash items:
Movement in fair value of warrants
Interest expense
Depreciation
Share-based payment
Payments from/(payment to) Karelian Diamond Resources P.L.C.
Increase in receivables
Decrease in payables
Net cash used in operating activities
Cash flows from investing activities
Expenditure on intangible assets
Purchase of property, plant and equipment
Net Cash used in investing activities
Cash flows from financing activities
Convertible shares
Share issue costs
Issue of share capital
Payments to related parties
Net cash (used in)/provided by financing activities
(Decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2022
€
(256,484)
(585,954)
10,139
1,885
-
(830,414)
70,000
(40,560)
(3,255)
(804,229)
(899,859)
-
(899,859)
1,406,899
-
-
-
1,406,899
(297,189)
1,513,286
1,216,097
2021
€
211,010
(1,055,490)
20,278
1,885
71,596
(750,721)
(228,402)
(368,821)
(32,105)
(1,380,049)
(658,230)
(667)
(658,897)
-
(125,657)
3,643,044
(82,425)
3,434,962
1,396,016
117,270
1,513,286
30
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc
31
Conroy Gold and Natural Resources P.L.C.
Company statement of cash flows
for the financial year ended 31 May 2022
Cash flows from operating activities
(Loss)/ profit for the financial year
Adjustments for non-cash items:
Movement in fair value of warrants
Interest expense
Depreciation
Share-based payment
Increase in receivables
Decrease in payables
Payments from/(payments to) Karelian Diamond Resources P.L.C.
Net cash used in operating activities
Cash flows from investing activities
Investment from subsidiaries
Expenditure on intangible assets
Payments to acquire property, plant and equipment
Net Cash used in investing activities
Cash flows from financing activities
Share issue costs
Issue of share capital
Payments to related parties
Net cash (used in)/ provided by financing activities
(Decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
2022
€
(256,484)
(585,954)
10,139
1,885
-
(830,414)
(290,656)
(122,348)
70,000
(1,173,418)
1,000,000
(374,870)
-
625,130
-
-
-
-
(548,288)
1,513,286
964,997
2021
€
211,010
(1,055,490)
20,278
1,885
71,596
(750,721)
(531,306)
(32,105)
(228,402)
(1,542,534)
-
(495,745)
(667)
(496,412)
(125,657)
3,643,044
(82,425)
3,434,962
1,396,016
117,270
1,513,286
31
Annual Report and Consolidated Financial Statements 2022 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 2022
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 2022 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
29 November 2022.
Going Concern
The Group and the Company recorded a loss of €256,484 (31 May 2021: profit of €211,010) for the financial year
ended 31 May 2022. The Group and the Company had net assets of €19,730,738 (31 May 2021: €19,987,222) at
that date. The Group had net current liabilities of €2,113,516 (31 May 2021: €1,790,142) and the Company had net
current liabilities of €1,476,293 (31 May 2021: €1,271,009) at that date. The Group had cash and cash equivalents
of €1,216,097 at 31 May 2022 (31 May 2021: €1,513,286). The Company had cash and cash equivalents of €964,997
at 31 May 2022 (31 May 2021: €1,513,286). The Directors, namely Professor Richard Conroy, Maureen T.A. Jones,
Professor Garth Earls, Brendan McMorrow, Howard Bird and former Directors, namely, James P. Jones, Séamus P.
Fitzpatrick, C. David Wathen, 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 €3,069,148 (31 May 2021: €3,119,148)
which are included in net current liabilities, within 12 months of the date of approval of the financial statements,
unless the Group has sufficient funds to repay.
On 31 March 2022, the Company announced that the Joint Venture Agreement with Demir Export was completed,
all outstanding conditions having been met and a payment of €1 million made to the Company. The 3000 metre
drilling programme as part of the Joint Venture Agreement started in the second half of April 2022.
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 30 November 2023. The Directors have
fully considered both current and future capital expenditure commitments and the options to fund such
commitments in the twelve month period to November 2023.
32
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 33
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 2022 (continued)
1 Accounting policies (continued)
Going Concern (continued)
The Directors recognise that the Group’s net current liabilities of €2,113,516 (31 May 2021: €1,790,142) is a material
uncertainty that may cast significant doubt on the Group and 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, the results obtained from the
exploration programme, the prospects for raising additional funds as required and the completed Joint Venture
Agreement, 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”) and the requirements of the Companies Act 2014. The
Company’s financial statements have been prepared in accordance with Financial Reporting Standard 101: Reduced
Disclosure Framework (“FRS101”) and the requirements of the Companies Act 2014.
Recent accounting pronouncements
(a) New and amended standards adopted by the Group and the Company
The Group and the Company have adopted the following amendments to standards for the first time for its annual
reporting year commencing 1 June 2021:
•
•
Amendments to IFRS 4, IFRS 7, IFRS 9, IFRS 16, and IAS 39 regarding replacement issues in the context of the
IBOR reform – Phase 2 - Effective date 1 January 2021;
Amendments to IFRS 4 Insurance Contracts- deferral of IFRS 9 – Effective 1 January 2021;
The adoption of the above amendments to standards had no significant impact on the financial statements of the
Group and the Company either due to being not applicable or immaterial.
(b) New standards and interpretations not yet adopted by the Group and the Company
Certain new accounting standards and interpretations have been published that are not mandatory for 31 May 2022
reporting periods and have not been early adopted by the Group and the Company.
The following amendments to standards adopted and endorsed by the EU have been issued by the International
Accounting Standards Board to date and are not yet effective for the financial year from 1 June 2021. The Board of
Directors is currently assessing whether these standards once adopted by the Group and the Company will have any
impact on the financial statements of the Group and the Company.
•
•
•
•
•
•
•
IFRS 4 amendments regarding the expiry date of the deferral approach – Effective date 1 January 2023;
IAS 8 amendments regarding the definition of accounting estimates – Effective date 1 January 2023;
IAS 1 amendments regarding the disclosure of accounting policies - Effective date 1 January 2023;
IFRS 17 Insurance contracts – Effective date deferred to 1 January 2023;
Amendment to IFRS 16 about providing lessees with an extension of one year to exemption from assessing
whether a COVID-19-related rent concession is a lease modification – Effective date 1 April 2021;
IFRS 3 amendments updating a reference to the Conceptual Framework – Effective date 1 January 2022;
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; and
33
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
Accounting policies (continued)
1
Recent accounting pronouncements (continued)
(b) New standards and interpretations not yet adopted by the Group and the Company (continued)
•
IAS 37 amendments regarding the costs to include when assessing whether a contract is onerous – Effective date
1 January 2022.
IFRS 1 amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (subsidiary as a first-time
adopter) – Effective date 1 January 2022; and
IFRS 9 amendments resulting from Annual Improvements to IFRS Standards 2018–2020 (fees in the ‘’10 per cent’’
test for derecognition of financial liabilities) – Effective date 1 January 2022;
•
•
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 is currently assessing whether these standards once endorsed by the EU
will have any impact on the financial statements of the Group and the Company.
•
•
•
•
Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint
venture – Postponed indefinitely;
Amendments to IAS 12 Income taxes: Deferred tax related to assets and liabilities arising from a single
transaction – Effective date 1 January 2023;
Amendments to IFRS 16 Leases: Lease liability in a sale and leaseback – Effective date 1 January 2024; and
Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current
and classification of liabilities as current or non-current – Effective date 1 January 2024.
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.
Intangible assets
(a)
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.
All such costs are necessary for exploration and evaluation activities. E&E capitalised costs are not amortised prior
to the conclusion of appraisal activities.
34
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 35
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 2022 (continued)
1
Accounting policies (continued)
(a) Intangible assets (continued)
(i) Capitalisation (continued)
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.
(ii) Impairment
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 has 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 exists 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 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 for the years ended 31
May 2022 and 31 May 2021. 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.
(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.
35
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
1
Accounting policies (continued)
(c) Income taxation expense (continued)
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
The Group classifies instruments issued as financial liabilities or equity instruments in accordance with the substance
of the contractual terms of the instruments. When the warrants issued (see note 18 for details) have an exercise
price in sterling, they are derivative in nature and are liability classified. They do not qualify for equity classification
as any cash settlement on exercise of these warrants will be received in a foreign currency. Where warrants are
issued in the functional currency of the Group and meet the other necessary conditions, they are recognised as
equity instruments. The warrant liabilities are recognised at their fair value on initial recognition and subsequently
are measured at fair value through profit or loss. Any change in direct costs associated with the issuance of warrants
are taken as an immediate charge or credit through the income statement. See note 13 for further details.
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). In both instances a recognised valuation methodology for the pricing of financial instruments is
used (Binomial Lattice Model or Black Scholes Model).
(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.
(g) Trade and other receivables and payables
Trade and other receivables are measured at their transaction price and subsequently measured at amortised cost.
Trade and other payables are measured at initial recognition at fair value, and subsequently measured at amortised
cost.
36
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 37
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 2022 (continued)
1
Accounting policies (continued)
(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. When the initial carrying amount is allocated, the equity component is assigned
the residual amount after deducting from the fair value of the instrument as a whole the amount separately
determined for the liability component. 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 on the liability component 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 warrants
are recognised as a deduction from retained earnings, net of any tax effects. Effective 6 July 2022, share issue costs
can be deducted from share premium. Costs in relation to the issuance of warrants will continue to be deducted
from retained earnings.
(l) Impairment – financial assets measured at amortised cost
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 (“ECL”) as
required under a simplified approach for trade receivables that do not contain a financing component. The
Company’s approach to 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.
37
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
1
Accounting policies (continued)
(m) Significant accounting judgements and key sources of estimation uncertainty
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 position was
€23,888,833 (31 May 2021: €22,988,974) at 31 May 2022 (Note 8). The Board of Directors carried out an assessment,
in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources relating to likelihood of licence
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. Licenses were transferred to the three new subsidiaries during the year and all previously capitalised
expenditure were transferred to the subsidiaries. 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 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 pages 32 and 33 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.
38
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 39
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 2022 (continued)
1 Accounting policies (continued)
(m) Significant accounting judgements and key sources of estimation uncertainty (continued)
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.
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. While uncertainty exists, primarily due to the nature
of the mining and exploration business, this assessment includes a review of the possible outcomes that can be
reasonably expected in the forthcoming financial period.
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 an operating expense with
a corresponding increase in the “Share-based payment reserve”, within equity, where the exercise price is granted
in EUR or recognised as a liability where a different currency is quoted as the exercise price 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 Black Scholes 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.
39
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
2 Operating expenses
(a) Analysis of operating expenses
Operating expenses
Transfer to intangible assets
Operating expenses are analysed as follows:
Wages, salaries and related costs
Professional fees
Other operating expenses
Auditor’s remuneration
Depreciation
2022
€
1,150,229
(317,889)
832,340
508,895
425,395
184,554
29,500
1,885
1,150,229
2021
€
1,111,737
(359,118)
752,619
453,345
317,698
309,309
29,500
1,885
1,111,737
Of the above costs, a total of €317,889 (31 May 2021: €359,118) 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. €112,976 (31
May 2021: €97,022) is charged to the Statement of Comprehensive Income in relation to Directors’ salaries.
(b) Wages, salaries and related costs as disclosed above is analysed as follows:
The following amounts has been charged to Profit and Loss account:
Wages and salaries
Social insurance costs
2022
€
486,176
22,719
508,895
2021
€
432,059
21,286
453,345
The amount of wages, salaries and related costs capitalised as intangible assets during the financial year was
€311,481 (31 May 2021: €307,275).
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
2022
6
2
8
2021
6
2
8
The Group has an externally funded defined contribution scheme in order to satisfy the pension arrangements in
respect of certain management personnel.
No contributions were made during the year ended 31 May 2022 and 31 May 2021.
40
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 41
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 2022 (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
Howard Bird
Fees
€
22,220
9,523
9,523
9,523
9,523
60,312
Salary
€
179,250
114,851
-
-
-
294,101
Share-based
payment charge
€
-
-
-
-
-
-
Pension
contributions
€
-
-
-
-
-
-
Total
€
201,470
124,374
9,523
9,523
9,523
354,413
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
Howard Bird
Fees
€
15,211
7,142
7,142
7,142
7,142
43,779
Salary
€
136,784
86,264
-
-
-
223,048
Share-based
payment charge
€
-
-
-
-
-
-
Pension
contributions
€
-
-
-
-
-
-
Total
€
151,995
93,406
7,142
7,142
7,142
266,827
During the year ended 31 May 2021, the Directors made the decision to decrease their remuneration due to the
impact of Covid-19. During the year ended 31 May 2022, Directors' remuneration has returned to the pre-agreed
rates. No actual increases occurred during the year ended 31 May 2022.
3 (Loss)/profit before taxation
The (loss)/profit before taxation is arrived at after charging the following items, those items 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:
•
Auditor’s remuneration - Company
The analysis of the auditor’s remuneration is as follows:
•
Audit of financial statements
Audit of financial statements
2022
€
1,885
2021
€
1,885
35,000
29,500
30,000
28,500
Fees of €33,630 (31 May 2021: €5,500 for tax advisory services) were incurred for tax advisory and other non-audit
services in respect of the current financial years. Included within the Group audit fee (above) is the amount incurred
by the Company.
41
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
4
Directors’ remuneration
Aggregate emoluments paid to or receivable by Directors in respect of qualifying
services
2022
€
2021
€
354,413
266,827
During the year ended 31 May 2022 and 31 May 2021, one Director was a member of a defined contribution scheme
but no amounts were paid and accordingly, no other disclosures are required by Section 305 of the Companies Act
2014.
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 (31 May 2021: €Nil).
5
Income tax expense
No taxation charge arose in the current or prior financial year due to losses being carried forward in the current
financial year and losses incurred in the prior financial year.
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)/profit 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
Losses utilised
Tax charge for the financial year
2022
€
(256,484)
12.5%
(32,061)
-
32,061
-
-
2021
€
211,010
12.5%
26,376
-
-
(26,376)
-
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 €22,749,957 at 31 May
2022 and €22,493,473 at 31 May 2021 .
42
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
43
6 (Loss)/earnings per share
(Loss)/earnings for the financial year attributable to equity holders 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
(Loss)/earnings per ordinary share
Diluted earnings/(loss) per share
The effect of share options and warrants is anti-dilutive.
7 Subsidiaries
2022
€
2021
€
(256,484)
211,010
No. of shares
No. of shares
39,262,880
-
39,262,880
26,213,872
13,049,008
39,262,880
39,262,880
32,257,188
(0.0065)
0.0065
Conroy Gold Longford-Down Limited
Conroy Gold Clontibret Limited
Conroy Gold Armagh Limited
Armagh Gold Limited
Conroy Gold Limited
% Owned
100%
100%
100%
100%
100%
31 May
2022
€
9,034,144
5,703,992
3,685,208
3
1
18,423,348
31 May
2021
€
-
-
-
3
1
4
Trans International Mineral Exploration Limited, a prior subsidiary held, was dissolved during the year ended 31 May
2021.
The Company holds 2 ordinary shares of €0.30 each in Conroy Gold Limited.
The registered office of the above subsidiaries is 3300 Lake Drive, Citywest Business Campus, Dublin 24, D24 TD21,
Ireland.
43
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
8
Intangible assets
Exploration and evaluation assets
Group: Cost
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
•
•
At 31 May
Company: Cost
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
Transfer of intangible assets to subsidiaries
•
•
Sale of intangible assets to subsidiaries
Transfer of current year costs to subsidiaries
At 31 May
31 May 2022
€
22,988,974
30,986
868,873
23,888,833
31 May 2022
€
22,469,838
30,986
523,623
(18,423,344)
(1,000,000)
(179,739)
3,421,364
31 May 2021
€
22,330,743
299,113
359,118
22,988,974
31 May 2021
€
21,974,093
136,627
359,118
-
-
22,469,838
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 Irish licenses in relation to Clontibret, Long-ford Down and Armagh were transferred to the three new
subsidiaries during the year. See Note 7. All prior costs capitalised in line with IFRS 6 as above, in relation to these
three licenses, were transferred to the subsidiaries where the licenses are now held. Costs incurred in the current
year in relation to the three licenses were also transferred to the subsidiaries.
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. Please refer to Note 16 for details of further work commitments.
44
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
45
31 May
2022
€
20,506,725
28,752
550,984
21,086,461
31 May
2022
€
2,482,249
2,234
317,889
2,802,372
31 May
2022
€
19,987,589
28,752
205,734
(18,423,344)
(1,000,000)
(179,739)
618,992
31 May
2022
€
2,482,249
2,234
317,889
2,802,372
31 May
2021
€
19,920,213
281,261
305,251
20,506,725
31 May
2021
€
2,410,530
17,851
53,868
2,482,249
31 May
2021
€
19,563,563
118,776
305,250
-
-
19,987,589
31 May
2021
€
2,410,530
17,851
53,868
2,482,249
8
Intangible assets (continued)
Mineral interests are categorised as follows:
Group: Ireland
Cost
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
•
•
At 31 May
Group: Finland
Cost
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
•
•
At 31 May
Company: Ireland
Cost
•
•
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
Transfer of intangible assets to subsidiaries
Sale of intangible assets to subsidiaries
Transfer of current year costs to subsidiaries
At 31 May
Company: Finland
Cost
At 1 June
Expenditure during the financial year
License and appraisal costs
Other operating expenses
•
•
At 31 May
45
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
9 Property, plant and equipment
In respect of the current financial year:
Group and Company
Cost
At 1 June 2021
Additions
At 31 May 2022
Accumulated depreciation
At 1 June 2021
Charge for the financial year
At 31 May 2022
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
138,121
-
138,121
128,647
1,885
130,532
Total
€
155,875
-
155,875
146,401
1,885
148,286
Carrying amount at 31 May 2022
-
7,589
7,589
In respect of the previous financial year:
Group and Company
Cost
At 1 June 2020
Additions
At 31 May 2021
Accumulated depreciation
At 1 June 2020
Charge for the financial year
At 31 May 2021
Motor Vehicles
€
Plant & Office
Equipment
€
17,754
-
17,754
17,754
-
17,754
137,454
667
138,121
126,762
1,885
128,647
Total
€
155,208
667
155,875
144,516
1,885
146,401
Carrying amount at 31 May 2021
-
9,474
9,474
46
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
47
10 Other receivables
Group
Amount owed by Karelian Diamond Resources P.L.C.
Other receivables
VAT receivable
Warrants exercised receivable
Company
Amounts owed from Conroy Gold Limited
Amount due from Karelian Diamond Resources P.L.C.
Vat receivable
Amounts owed from Conroy Gold Clontibret Limited
Amounts owed from Conroy Gold Longford-down Limited
Other receivables
Amounts owed from Conroy Gold Armagh Limited
Warrants exercised receivable
31 May
2022
€
199,806
90,670
138,853
-
429,329
31 May
2022
€
519,133
199,806
135,202
107,596
101,411
90,790
44,620
-
1,198,558
31 May
2021
€
169,933
249,764
37,299
1,773
458,769
31 May
2021
€
519,133
169,933
37,299
-
-
249,764
-
1,773
977,902
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. The Company has confirmed that it will not call on these balances
within twelve months from the date of signing of these financial statements. However, as these amounts are
receivable from the Group companies, the Directors are confident that the probability of default is negligible.
Karelian Diamond Resources P.L.C. is not a group company but considered related due to common directors,
registered office, the sharing of personnel and office facilities. Due to this relationship, expenses are shared and
allocated to one another and payment of these is through an intercompany account.
11 Cash and cash equivalents
Group
Cash held in bank accounts
31 May
2022
€
1,216,097
1,216,097
31 May
2021
€
1,513,286
1,513,286
47
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
11 Cash and cash equivalents (continued)
Company
Cash held in bank accounts
12 Current liabilities
Trade and other payables
Group
Other creditors and accruals
Amounts falling due within one year:
Accrued Directors’ remuneration
Fees and other emoluments
Pension contributions
Accrued former Directors’ remuneration
Fees and other emoluments
Pension contributions
Company
Other creditors and accruals
Amounts falling due within one year:
Accrued Directors’ remuneration
Fees and other emoluments
Pension contributions
Accrued former Directors’ remuneration
Fees and other emoluments
Pension contributions
31 May
2022
€
964,997
964,997
31 May
2022
€
552,795
2,368,045
164,675
507,345
29,083
3,621,943
31 May
2022
€
433,701
2,368,045
164,675
507,345
29,083
3,502,849
31 May
2021
€
1,513,286
1,513,286
31 May
2021
€
506,050
2,368,045
164,675
507,345
79,083
3,625,198
31 May
2021
€
506,050
2,368,045
164,675
507,345
79,083
3,625,198
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.
The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow,
Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick, C. David Wathen, 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 €3,069,148 (31 May 2021: €3,119,148) 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.
48
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 49
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 2022 (continued)
12
Current liabilities (continued)
Related party loans – Group and Company
Related party loans
Opening balance 1 June
Loan conversion to equity
Loan repayments
Closing balance 31 May
31 May
2022
€
136,999
-
-
136,999
31 May
2021
€
659,832
(440,408)
(82,425)
136,999
The related party loans amounts relate to monies owed to Professor Richard Conroy amounting to €101,999 (31
May 2021: €101,999), Maureen T.A. Jones amounting to €Nil (31 May 2021: €Nil), Séamus P. Fitzpatrick (former
Director) amounting to €35,000 (31 May 2021: €35,000) and Dr. Sorċa Conroy (former Director) amounting to €Nil
(31 May 2021: €Nil). During the prior year, as part of the share issuance on 16 March 2021, the following amounts
were converted to equity from the respective Directors’ loans in exchange for a total of 1,147,726 shares in the
Company; €225,000 was converted on the loan of Dr. Sorċa Conroy, €180,919 was converted on the loan of Professor
Richard Conroy and €34,489 was converted on the loan of Séamus P. Fitzpatrick. The Directors and former Directors
have confirmed that they will not seek repayment of the remaining loan balances owed to them by the Group and
Company at 31 May 2022 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. Séamus P. Fitzpatrick is a former director in
the Company having left the board in August 2017 (and is a shareholder of the Company owning less than 3% of the
issued share capital of the Company).
13 Non-current liabilities
Warrant liabilities
During the year ended 31 May 2022, no new warrants were issued. During the prior year, 11,005,065 warrants were
issued with a sterling exercise price and a range of expiry times from six to twenty-four months. The fair value at
grant date amounted to €1,921,971 and was recorded as warrant liabilities with a corresponding charge to share
premium for those warrants issued as part of the share issuance. At 31 May 2022, the warrants in issue were again
fair valued resulting in a movement in fair value of €585,954 being recorded in the income statement and as a
reduction in warrant liabilities. See note 18 for further details.
Convertible loan
During the year ended 31 May 2020, 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. 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. The convertible loans amount to €388,219 (31 May 2021: €378,080) at 31 May 2022.
Opening Balance
Interest payable
49
31 May
2022
€
378,080
10,139
388,219
31 May
2021
€
357,802
20,278
378,080
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
14
Non-controlling interests
Convertible shares
Under the terms of the joint venture and related agreements entered into between the Company and Demir Export
on 31 December 2021, in return for fulfilling funding and other obligations as set out in the agreements, Demir
Export will earn an equity interest in the following wholly owned subsidiaries of the Company: Conroy Gold
(Clontibret) Limited, Conroy Gold (Longford Down) Limited and Conroy Gold (Armagh) Limited. The investment by
Demir Export is effected by the issuance of convertible shares in each subsidiary company which have no voting or
participation rights.
When all of the conditions (including, inter-alia a minimum of €5.5 million in cash investment) in relation to the
first phase of the joint venture operation (Phase 1) have been fulfilled, the convertible shares will be converted
into ordinary shares in each subsidiary company such that Demir Export will hold a 25% ordinary equity interest in
each company. Demir Export can earn further equity in each subsidiary company by meeting the commitments set
down in Phases 2 and 3 of the joint venture.
At 31 May 2022, Demir Export had invested €1,406,899 in the subsidiary companies with convertible shares issued
for the first €1,000,000 of this investment and the balance to be issued post year end in line with the agreement.
This amount is recorded as a non-controlling interest at the year end.
The joint venture agreements provide that in certain limited circumstances, Demir Export will be entitled to a net
smelter royalty in the licences, capped at the level of investment made, in lieu of their convertible shares should it
exit or terminate its involvement in the joint venture during the current Phase 1 stage.
Conroy Gold Clontibret Limited
Conroy Gold Longford Down Limited
Conroy Gold Armagh Limited
15
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
2022
€
1,206,899
100,000
100,000
1,406,899
31 May
2022
€
11,995,569
6,135,597
4,368,834
22,500,000
31 May
2021
€
-
-
-
-
31 May
2021
€
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.
50
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 51
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 2022 (continued)
15 Called up share capital and share premium – Group and Company (continued)
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
39,262,880
End of financial year
39,262,880
39,263
39,263
30,617
10,504,431
15,256,556
30,617
10,504,431
15,256,556
Issued and fully paid – Prior financial year
Number of
ordinary
shares
26,213,872
1,358,333
3,200,000
100,000
1,387,500
60,000
125,000
6,818,175
-
Called up
share capital
€
Capital
conversion
reserve fund
€
Called up
deferred share
capital
€
Share premium
€
26,214
1,358
3,200
100
1,388
60
125
6,818
-
30,617
-
-
-
-
-
-
-
-
10,504,431
-
-
-
-
-
-
-
13,084,647
239,654
883,964
17,644
246,413
23,240
50,030
2,609,458
-
(1,898,494)
Start of financial year
Share issue (a)
Share issue (b)
Share issue (c)
Share issue (d)
Share issue (e)
Share issue (f)
Share issue (g)
Adjustment for
valuation of warrants
End of financial year
39,262,880
39,263
30,617
10,504,431
15,256,556
(a) On 31 July 2020, the Company raised €241,012 (£217,333), through a placing of 1,358,333 ordinary shares €0.001
in the capital of the Company at a price of £0.1600 per share following the exercise of warrants.
(b) On 11 August 2020, the Company raised €887,164 (£800,000), through a placing of 3,200,000 ordinary shares
€0.001 in the capital of the Company at a price of £0.2500 per share.
(c) On 17 August 2020, the Company raised €17,744 (£16,000), through a placing of 100,000 ordinary shares €0.001
in the capital of the Company at a price of £0.1600 per share following the exercise of warrants.
(d) In November 2020, the Company raised €247,801 (£222,000), through a four separate warrant exercises over
1,387,500 ordinary shares €0.001 in the capital of the Company at an exercise price of £0.1600 per share.
(e) On 8 January 2021, the Company raised €23,300 (£21,000), through a warrant exercise over 60,000 ordinary
shares €0.001 in the capital of the Company at a price of £0.3500 per share.
(f) On 15 February 2021, the Company raised €50,155 (£43,750), through a warrant exercise over 125,000 ordinary
shares €0.001 in the capital of the Company at a price of £0.3500 per share.
51
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
15 Called up share capital and share premium – Group and Company (continued)
(g) On 16 March 2021, the Company raised €2,616,276 (£2,250,000), through a placing and subscription of 5,670,449
ordinary shares €0.001 in the capital of the Company at a price of £0.3300 per share and the issue of 1,147,726
ordinary shares €0.0001 in the capital of the Company as part of a capitalisation of debt owed to certain parties. As
part of this share issuance, shares were issued to Directors and former Directors in exchange for repayment of their
loans. This amounted to €440,408. See note 12 for further details.
Warrants: At 31 May 2022, warrants over 10,793,116 (31 May 2021: 10,793,116) shares exercisable at prices from
£0.35 (31 May 2021: £0.35) to €4.33 (31 May 2021: €4.33) per share, with various exercisable dates up to 15
February 2023 (31 May 2021: 15 February 2023) were outstanding. Refer to Note 18 for further details.
Share Price: The share price at 31 May 2022 was £0.3050 (31 May 2021: £0.2260). During the financial year, the
price ranged from £0.1963 to £0.4350 (31 May 2021: from £0.0975 to £0.4560).
16
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 2022, the Group had work commitments of €328,055 (31 May 2021: €520,000) for year to May 2023, in
respect of these prospecting licences held. These commitments will be funded by Demir Export A.S., the JV partner
on Longford Down Massif as per the agreed terms of the JV agreement.
The Group also hold prospecting license in Finland which are currently under application for extending, however
there are no work or financial commitments in respect of these licenses as at 31 May 2022 (31 May 2021: €Nil)
17
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. The loans do not incur interest, are not secured and will not be
called upon within twelve months from the date of signing of these consolidated financial statements.
(b) For the financial year ended 31 May 2022, the Company incurred costs totalling €99,873 (31 May 2021:
€54,872) 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. This intercompany account does not incur
interest and no final settlement of the balance has been agreed. Both entities will continue to incur and share
costs as with prior years.
These costs are analysed as follows:
Office salaries
Rent and rates
Other operating expenses
2022
€
72,469
15,850
11,554
99,873
2021
€
49,048
-
5,824
54,872
52
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 53
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 2022 (continued)
17 Related party transactions (continued)
(c) At 31 May 2022, the Company recorded a receivable of €199,806 from Karelian Diamond Resources P.L.C. (31
May 2021: €169,933). Amounts from Karelian Diamond Resources P.L.C. are included within “Trade and other
receivables” in the current and prior financial year statements. During the financial year ended 31 May 2022,
€70,000 was paid by (31 May 2021: €173,530 paid to) Karelian Diamond Resources P.L.C. to the Company. During
the financial year ended the Company charged Karelian Diamond Resources P.L.C. €99,873 (31 May 2021: €54,872)
in respect of the allocation of certain costs as detailed in (b) above. The Group and the Company will not seek
repayment of amounts owed to it by Karelian Diamond Resources P.L.C. within 12 months of the date of approval
of the consolidated financial statements. No interest is incurred on this intercompany account and there are no
other terms or conditions attached.
(d) At 31 May 2022, Conroy Gold Limited owed €519,133 (31 May 2021: €519,133) to the Company.
(e) At 31 May 2022, the Company was owed €13,933 (31 May 2021: €22,903) 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 €35,885 (31 May
2021: €28,961) is owed by Conroy P.L.C., a company in which Professor Richard Conroy has a controlling interest.
Amounts totalling €3,076 (31 May 2021: €5,290) were owed by companies in which Professor Richard Conroy and
Maureen T.A. Jones hold a 50% interest each. 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.
(f) At 31 May 2022, the Company was owed €107,596 (31 May 2021:€Nil) by Conroy Gold Clontibret Limited,
€101,412 (31 May 2021:€Nil) by Conroy Gold Longford-Down Limited and €44,620 (31 May 2021:€Nil) by Conroy
Gold Armagh Limited. These balances relate to administration expenses that are recharged to the subsidiaries from
the Company as per the agreements with the companies.
(g) Details of key management compensation which comprises Directors’ remuneration is as set out in detail in
Note 2.
(h) Professor Garth Earls invoiced the Group for €9,785 (31 May 2021: €24,068) during the financial year for
professional services rendered to the Group. At 31 May 2022, Professor Garth Earls was owed €33,331 (31 May
2021: €33,331) in respect of these services. Brendan McMorrow invoiced the Group for €14,725 (31 May 2021:
€24,500) during the financial year for professional services rendered to the Group. At 31 May 2022, Brendan
McMorrow was owed €26,189 (31 May 2021: €26,189) in respect of these services.
(i) The Company raised €350,000 through the issue of two unsecured Convertible Loan Notes to Hard Metal Machine
Tools Limited (the “Lender”) during the year ended 31 May 2020. The Lender is a company 99% owned by an existing
shareholder of the Company. Refer to Note 13 for details of the interest charged and the conditions attached to the
loans.
53
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
18 Share-based payments
The Company has an equity-settled share-based payment arrangement with non-market performance conditions.
At 31 May 2022, there were no share options outstanding (31 May 2021: €Nil).
Warrants granted generally have a vesting period of two years. Details of the warrants outstanding during the
financial year are below.
2022
No. of share
warrants
10,793,116
2022
Weighted
average exercise
price
€
0.646
-
-
-
10,793,116
-
-
-
0.646
2021
No. of share
warrants
3,424,109
(605,225)
(3,030,833)
11,005,065
10,793,116
2021
Weighted
average exercise
price
€
1.139
3.545
0.199
0.528
0.646
At 1 June
Lapsed during the financial year
(Note 15)
Exercised during the financial year
(Note 15)
Granted during the financial year
(Note 15)
At 31 May
As a result of the valuation performed at the year end, the fair value of the sterling based warrants was €257,050
(31 May 2021: 843,004) and accordingly €585,954 was credited to the Income Statement as a movement in the fair
value of warrants.
The Company estimated the fair value of warrants using the Black Scholes Model. The determination of the fair
value of the warrants on the date of grant using the Black Scholes Model is affected by the Company’s share price
as well as assumptions regarding a number of other variables. These variables include the expected term of the
warrants, the share price volatility, the risk-free interest rate and the expected dividends.
The following key input assumptions were used to calculate the fair value of the sterling based warrants:
Dividend yield
Share price volatility
Risk free interest rate
Expected life (in years)
2022
Warrants
0%
79%
1.24%
2
2021
Warrants
0%
100%
0.1%
2
During the year ended 31 May 2022, no warrants were lapsed. During the prior year, amounts relating to warrants
which lapsed during the prior year and which were reclassified to retained earnings were €434,729.
54
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
55
19 Financial instruments
Financial risk management objectives, policies and processes
The Group has exposure to the following risks from its use of financial instruments:
(a)
(b)
(c)
(d)
(e) Credit risk.
Inflation;
Interest rate risk;
Foreign currency risk;
Liquidity risk; and
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. 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) Inflation
The Group is exposed to the risk associated with inflation such as the impact of increased operating expenses
including rent, light & heat and wages and salaries. The Chairman and Managing Director monitor costs on an
ongoing basis.
(b) 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 2022 or 31 May 2021 and no sensitivity analysis has been performed. The Group did not enter into any
hedging transactions with respect to interest rate risk.
(c) 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 2022 and 31 May 2021, 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 2022:
Cash and cash equivalents
Convertible shares
Convertible loans
Trade and other payables
Other receivables
Amount due from related party
Related party loans
Total exposure
Not at risk
€
1,152,495
(1,406,899)
-
(3,572,721)
229,523
199,806
(136,999)
(3,534,795)
Total
€
1,216,097
(1,406,899)
(388,219)
(3,621,943)
229,523
199,806
(136,999)
(3,908,634)
Sterling exposure
denominated in €
63,602
-
(388,219)
(49,222)
-
-
-
(373,839)
55
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 56
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 2022 (continued)
19 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(c) Foreign currency risk (continued)
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 2021:
Other receivables
Amount due from related party
Cash and cash equivalents
Trade and other payables
Related party loans
Convertible loans
Total exposure
Sterling exposure
denominated in €
-
-
1,348,838
(162,707)
-
(378,080)
808,051
Not at risk
€
277,764
169,933
164,448
(3,463,143)
(136,999)
-
(2,987,997)
The following are the significant exchange rates that applied against €1 during the financial year:
GBP
Average rate
2022
0.844
Average rate
2021
0.888
Spot rate
31 May
2022
0.852
Total
€
277,764
169,933
1,513,286
(3,625,850)
(136,999)
(378,080)
(2,179,946)
Spot rate
31 May
2021
0.858
Sensitivity analysis
A 10% strengthening of Euro against Sterling, based on outstanding financial assets and liabilities at 31 May 2022
would have decreased the reported loss by €37,384 (31 May 2021: increased the reported loss by €80,805) 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.
(d) 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 2022 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
€
3,621,943
3,621,943
552,795 3,069,148**
-
-
388,219
402,500
-
-
- 388,219***
4,010,162
4,024,443
552,795 3,069,148**
-
388,219***
56
Annual Report and Consolidated Financial Statements 2022 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 2022 (continued)
57
19 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(d) Liquidity risk (continued)
Contractual maturities of financial liabilities as at 31 May 2021 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
€
3,762,197
3,762,197
506,050* 3,256,147**
-
-
378,080
402,500
-
-
- 378,080***
4,140,277
4,164,697
506,050* 3,256,147**
-
378,080***
*The amount of €552,795 (31 May 2021: €506,050) relates to other creditors and accruals.
**The Directors, namely Professor Richard Conroy, Maureen T.A. Jones, Professor Garth Earls, Brendan McMorrow,
Howard Bird and former Directors, namely James P. Jones, Séamus P. Fitzpatrick, C. David Wathen, 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 €3,069,148 (31 May 2021: €3,119,148) within 12 months of the date of approval of the
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 €101,999 (31
May 2021: €101,999), Maureen T.A. Jones amounting to €Nil (31 May 2021: €Nil), Séamus P. Fitzpatrick (former
Director) amounting to €35,000 (31 May 2021: €35,000) and Dr. Sorċa Conroy (former Director) amounting to €Nil
(31 May 2021: €Nil).
***More information regarding the convertible loans is detailed in Note 13.
The Group had cash and cash equivalents of €1,216,097 at 31 May 2022 (31 May 2021: €1,513,286).
(e) 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 its obligation.
Credit risk is the risk of financial loss to the Group if a cash deposit, amount owed by related party and other
receivables 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 2022 and 31 May 2021 was:
Cash and cash equivalents
Amount owed by Karelian Diamond Resources Plc
Other receivables
31 May
2022
€
1,216,097
199,806
90,670
1,506,573
31 May
2021
€
1,513,286
169,933
277,764
1,960,983
The Group’s cash and cash equivalents are held at AIB Bank which has a credit rating of “BBB+” (31 May 2021: BBB+)
as determined by Fitch, and Bank of Ireland which a credit rating of “F2’’ (31 May 2021: BBB+) as determined by
Fitch.
57
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 58
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 2022 (continued)
19 Financial instruments (continued)
Financial risk management objectives, policies and processes (continued)
(e) Credit risk (continued)
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 2022 and 31 May 2021, all cash is
accessible on demand and held with counterparties with a credit rating of BBB+ or higher. Having considered the
credit rating of the counterparties and the outstanding balances, management have determined that for both
financial years presented, the amount of ECL is immaterial.
The amount receivable from Conroy Gold Clontibret Limited, Conroy Gold Longford Down Limited, Conroy Gold
Armagh Limited and Conroy Gold Limited which relates mainly to the cash advances and payment of expenses
incurred in the name of Conroy Gold Clontibret Limited, Conroy Gold Longford Down Limited, Conroy Gold Armagh
Limited and 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.
(f) Fair values versus carrying amounts
Due to the short-term nature of the Group’s current financial assets and liabilities held at amortised cost at 31 May
2022 and 31 May 2021, 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.
(g) 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.
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 15). The Group is not subject to any externally imposed capital requirements.
58
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 59
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 2022 (continued)
20 Post balance sheet events
Post year end, the Company announced that it has received notice of conversion from the Lender in relation to the
convertible loan notes which were issued as on 15 July 2019 and 30 October 2019. The loan and all accrued interest
will be converted into new ordinary shares in the Company. The Company has made the application to the London
Stock Exchange for the new ordinary shares to be admitted to trading on AIM. Upon admission to the AIM, Mr.
Philip Hannigan will have a beneficial interest in ordinary shares in the Company representing 19.19% of the issued
share capital of the Company.
The Company announced the results from the four drill holes in the 3,000 metre eight-hole step-out drilling
programme on its Clontibret Gold deposit in Ireland that was carried out in conjunction with the Company’s joint
venture partner, Demir Export A.S.
The Company announced the issue of new ordinary shares to its former non-executive director, Charles David
Wathen, in lieu of his outstanding fees. The Company made the application to the London Stock Exchange for the
new ordinary shares issued to be admitted to trading on AIM and these shares were admitted to trading on AIM on
23 August 2022. As a result of these issues of ordinary shares post year-end, the total number of ordinary shares in
issue at the date of signing of these financial statements is 44,756,101.
There were no further material events after the reporting year requiring adjustment to or disclosure in these audited
consolidated and company’s financial statements.
21 Approval of the audited consolidated financial statements for the financial year ended 31 May 2022
These audited consolidated financial statements were approved by the Board of Directors on 29 November 2022. A
copy of
the Company’s
website www.conroygold.com and will be available from the Company’s registered office at 3300 Lake Drive,
Citywest Business Campus, Dublin 24, D24 TD21, Ireland.
statements will be
available on
consolidated
financial
audited
the
59
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc 60
Annual Report and Consolidated Financial Statements 2022 Conroy Gold and Natural Resources Plc