260124 Corcel Annual Report Cover.qxp 03/12/2020 18:55 Page 1
Registration Number: 05227458
Corcel Plc (formerly Regency Mines Plc)
Annual Report and Accounts 2020
Contents
Pages
STRATEGIC REPORT ........................................................................................................................................2
COMPANY INFORMATION AND ADVISERS .....................................................................................................2
CHAIRMAN AND CEO STATEMENT ..................................................................................................................3
STRATEGIC REVIEW .........................................................................................................................................6
GOVERNANCE .................................................................................................................................................11
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT ............................................................................11
QCA CODE 2018 PRINCIPLES ........................................................................................................................12
BOARD OF DIRECTORS..................................................................................................................................16
CORPORATE GOVERNANCE FRAMEWORK.................................................................................................17
MATTERS RESERVED FOR THE BOARD ......................................................................................................18
BOARD ACTIVITIES 2020 ................................................................................................................................19
BOARD COMMITTEES.....................................................................................................................................19
DIRECTORS’ REPORT.....................................................................................................................................20
STATEMENT OF DIRECTORS’ RESPONSIBILITIES.......................................................................................24
INDEPENDENT AUDITOR’S REPORT.............................................................................................................25
FINANCIAL STATEMENTS ..............................................................................................................................29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................29
CONSOLIDATED INCOME STATEMENT.........................................................................................................30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..................................................................31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................32
CONSOLIDATED STATEMENT OF CASH FLOWS .........................................................................................34
COMPANY STATEMENT OF FINANCIAL POSITION.......................................................................................35
COMPANY STATEMENT OF CHANGES IN EQUITY.......................................................................................36
COMPANY STATEMENT OF CASH FLOWS....................................................................................................38
NOTES TO FINANCIAL STATEMENTS ............................................................................................................39
CORCEL PLC 1
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 2
Bankers
Coutts & Co
440 Strand
London WC2R 0QS
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey GU9 7DR
Tel: 012 5282 1390
Strategic Report
Company Information and Advisers
Directors
James Parsons
Executive Chairman
Scott Kaintz
Chief Executive Officer
Nigel Burton
Senior Independent
Non-Executive Director
Ewen Ainsworth
Independent Non-Executive
Director
All of
Corcel Plc
(WeWork), 71-91 Aldwych House
London WC2B 4HN
Telephone
020 7747 9960
Website
www.corcelplc.com
Registered Company Number
05227458
Secretary
AMBA Secretaries Limited
400 Thames Valley Park Drive
Reading, Berkshire RG6 1PT
Registered Office
Salisbury House
Suite 425, London Wall
London EC2M 5PS
Solicitors
Gateley Plc
1 Paternoster Sq.
London EC4M 7DX
Nominated Adviser
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London W4 5YA
Accountants
Silvertree Partners LLP
3rd Floor, 14 Hanover Street
London EC2A 4EB
Tax Advisers
Cameron & Associates Limited
35-37 Lowlands Road
Harrow-on-the-Hill
Middlesex HA1 3AW
Auditor
PKF Littlejohn LLP
15 Westferry Circus, Canary
Wharf
London E14 4HD
Broker
Monecor (London) Limited
ETX Capital
One Broadgate
London EC2M 2QS
2 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 3
Chairman and CEO Statement
Overview
The twelve months period to 30 June 2020 has seen the Corcel Plc (previously Regency Mines Plc) (“the
Company”, “Corcel”) story materially transformed.
We are delighted to report that Corcel today, despite a highly challenging period driven by the global pandemic,
is progressing a balanced portfolio of mineral exploration projects, coupled with UK based energy generation
and storage at the intersection of battery metals mining and their end use in both energy storage and the electric
vehicle revolution. We believe Corcel, with its revamped strategy, fresh capital structure and re-energised team
following the December 2019 relaunch, is now well positioned to take advantage of the growing trends
underpinning the world’s transition to a low carbon economy.
We therefore are pleased to present the Annual Report and Accounts for the year to 30 June 2020.
Battery Metals Exploration: PNG and Canada
The Company made good progress at its legacy Mambare nickel-cobalt project in Papua New Guinea, where it
was focused on both resolving a historic partner dispute and re-initiating exploration activity, with a view to
securing a mining lease covering the project. Nickel is a core battery metal with a supply crunch widely expected
in the mid-2020s as the electric vehicle revolution gains pace.
On 7 April 2020, the Company successfully resolved a historic partner dispute and announced the terms of a
settlement covering historic expenditures, which saw the Company reduce its immediate interest in Mambare
to 41% and pay USD 50,000 in cash, issue 4,909,610 new ordinary shares and issue 4,909,610 warrants to its
partner, Battery Metals Pty Ltd, who simultaneously waived all claims. The parties at the same time executed
an amendment to their development agreement and are now aligned and working productively together.
The Company also conducted, during the period, the first exploration activities at Mambare since 2012, including
230km of line-cutting, followed by a ground penetrating radar programme, executed to support 200km of surveys.
This program was designed to both increase understanding of the critical and previously underexplored plateau,
while facilitating the application of a mining lease and associated permitting. The Company, through its partners,
is currently engaging with the permitting authorities, government and local communities in PNG to renew the
EL1390 exploration licence and to secure a new mining lease. The Company announced on 14 July 2020 that
the Joint Venture partner had reported a successful Warden’s Hearing, an important milestone in the process of
applying for a mining license in PNG, and the first of its kind in the Oro province. The Company is targeting the
development of a direct shipping ore operation, with short lead times, low capital requirements, no processing
plant and associated chemicals and no pipeline or tailings.
With a view to acquiring battery metal resources, prior to the expected structural price increases, and introducing
a second PNG project that is potentially highly complementary to Mambare, the Company announced on 7 April
2020 the partial purchase of the corporate debt of Resource Mining Corporation Pty Ltd (ASX: RMI) (“RMI”), the
100% owner of the WoWo Gap nickel-cobalt project in Papua New Guinea (“PNG”). RMI currently has a renewal
application pending covering the EL1165 exploration license encompassing the WoWo gap project. The
acquisition involved the Company purchasing AUD 1.7 million of debt in RMI for a consideration of £178,096
cash and 13,288,982 new ordinary shares of the Company (representing a 62% discount to the face value of
the debt or at full face value an effective issue price of Regency Mines Plc shares of 5 pence, a 376% premium
to the prevailing share price. The Company is looking for ways to coordinate and explore synergies between
the two PNG projects and teams, with a view to pursuing regional organic growth and development in an
operationally effective and cost-efficient manner. After the year-end, on 28 October 2020, the Company
announced that it had exercised its option to acquire the balance of the RMI debt on the same terms, and on
17 November 2020 announced that the transaction had completed. Hence, the Company is currently positioned
as senior lender to RMI with some AUD 4 million of debt.
The Company also, after the period end, completed its 2020 field programme at the Dempster Vanadium project
in the Yukon. This included a soil geochemical survey to define drill targets ready for a potential 2021 drill
programme, primarily focused on a 3km segment, where no work had been done previously. Results are
expected in the near term from the laboratory in Canada, where COVID-19 related delays had been encountered.
CORCEL PLC 3
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Chairman and CEO Statement
continued
Flexible Grid Solutions
The Company sees significant opportunity in projects, which support both grid load / frequency, balancing
alongside flexible distributed clean energy production and storage. These energy storage and production
projects, with their low-risk near-term cash flow potential, will offer Corcel investors an attractive balance to the
significant blue-sky upside of the Company's battery metals projects.
With a view to expanding the Company’s exposure to this opportunity set, the Company purchased on 19 June
2020, a 50% interest in Weirs Drove Development Ltd (“WDD”), a developer of energy storage and solar projects
in the United Kingdom. The WDD portfolio comprises a number of battery storage projects, including the flagship
energy storage project in Burwell, Cambridgeshire which benefits from an offtake offer from Limejump Ltd, a
subsidiary of Shell New Energies. The transaction consideration was a combination of £25,000 in cash and a
further £100,000 loan upon the first WDD energy storage project reaching “shovel ready” status.
WDD has made progress at the Burwell site and, as announced on 22 September 2020, has secured both local
planning permission and the required grid connection. The Company is now in the process of finalising the land
lease, assessing final project economics and validating procurement timelines, all with a view to either initiating
discussions with project funders (likely at an SPV level) or considering a quick sale of the project to a third party.
The Company expects to update shareholders on progress shortly.
The Company is also delighted to be supported by ion Ventures, a privately owned developer of clean energy
projects who provide first class technical advice under a MOU signed in December 2019.
During the period, the Company was also maturing a site in the Southport Energy Centre, located North of
Liverpool however, the Burwell site in Cambridgeshire and other flexible power generation and storage
opportunities now remain the Company’s primary focus in the UK.
Other Investments
During the period, the Company divested of its shareholdings in Curzon Energy Plc and Red Rock Resources
Plc. The Company does not currently intend to hold significant positions in other listed Companies.
Corporate
The Company underwent a complete restructuring of its balance sheet and strategy in December 2019 coupled
with a refreshing of the Board, including the introduction of James Parsons as Executive Chairman. The previous
Chairman of the Company, Andrew Bell, retired from the Board on 12 September 2019 after a period of transition.
As part of the restructuring, various debtors converted £1.1 million of debt to equity, while creating a balance of
new loan notes totalling £0.762 million with an 8% interest rate and no payments due until December 2021. The
Company’s Chairman is a shareholder and Director of C4 Energy Limited, who as announced on 5 December
2019, hold an option to acquire the entire outstanding debt. This debt restructuring was accompanied by the
raising of £0.830 million of new equity capital. Further capital raises of £0.470 million and £0.210 million were
completed in April and June 2020, alongside the acquisitions of the RMI debt and the interest in WDD. The loan
notes, which were restructured in December 2019 had previously been refinanced in July 2019.
After the period end, the Company (previously known as Regency Mines Plc) changed its name to Corcel Plc.
The purpose of the name change was to more closely reflect the Company's strategy to develop its businesses
across the battery metals exploration and flexible grid solutions space.
Discussion of Results
The Group incurred a loss of £1.482 million in the period ended 30 June 2020. Exploration expenses increased
to £0.205 million (2019: £0.069 million), reflecting increased levels of activity at the Mambare project in PNG.
Finance costs over the year totalled to £0.247 million, reflecting interest and finance fees (2019: £0.377million).
Overall, administrative costs increased slightly for the year to £0.838 million (2019: £0.653 million), reflecting
the costs associated with the transition of the Board during the period.
4 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 5
Prospects
Overall, after a focused period of restructuring, rebranding and clean up, and despite the highly challenging
external environment, we believe shareholders have good cause to be optimistic about the future of Corcel Plc.
We thank our shareholders for their support and wish them, our advisors, staff and their families safe passage
through these turbulent times.
We both remain committed to building Corcel into a substantial value generating business supporting the
transition to electric vehicles and a lower carbon economy.
James Parsons
Executive Chairman
Scott Kaintz
Chief Executive Officer
CORCEL PLC 5
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 6
Strategic Review
Overview of the Business
The Company is listed on London’s AIM market (AIM:CRCL) and manages a portfolio of battery metals
exploration and development projects coupled with flexible energy storage and production assets in the United
Kingdom.
Business Strategy
The Company seeks to operate at the intersection of battery metals in the ground and some of the most critical
end use cases of batteries in the form of industrial energy storage projects and flexible power generation. With
the world focused on decarbonization of the global economy, an increase in the use of renewables and the
electrification of transport are the projected outcomes, and this is expected to dramatically increase demand for
batteries in the coming years. Corcel looks to position itself to benefit from these trends by acquiring and
developing battery metal assets prior to their actual values being recognised in the broader market, and by
investing and developing the energy and energy storage projects the UK grid requires in order to accommodate
the growth of renewables and the increased demand of electric vehicles.
Principal Risks and Risk Management
Exploration and development is an inherently high-risk business, whereas developing energy storage and
production projects is significantly less risky, outlined here are some of the primary risks identified:
Exploration Risk
The Group’s business is mineral exploration, evaluation and development, which are speculative activities. There
is no certainty that Corcel will proceed to the development of any of its projects or otherwise realise their full
value. The Group aims to mitigate this risk, when evaluating new business opportunities by targeting areas of
potential, where there is at least some historical drilling or geological data available and where leading exploration
consultants believe there is strong evidence of world class battery metal deposits.
Resource Risk
All mineral projects have risk associated with defined grade and continuity. Mineral Reserves and Resources
are calculated by the Group in accordance with accepted industry standards and codes but are always subject
to uncertainties in the underlying assumptions, which include geological projections and commodity price
assumptions. This may include variations in the style of mineralisation encountered as well as the failure to
discover economic deposits. Use of recognised international mining consultants ensures that the resources
produced by the Company use the most modern techniques and interpretation methods in order to minimise
the associated levels of uncertainty.
Environmental Risk
Exploration of a project can be adversely affected by environmental legislation and the unforeseen results of
environmental studies carried out during evaluation of a project. Any disturbance to the environment, during
exploration on any of the licence areas, will be rehabilitated in accordance with the prevailing local regulations.
Environmental consultants, where utilised, provide an extra level of focus on these risks, ensuring the Company
operates within local regulations and with an eye towards long-term environmental impacts.
Developer Risk
Development of energy projects may rely on third parties to both identify sites and to pursue the initial
development of grid connections, planning permission and lease arrangements. Reliance on third parties has
the advantage of offering exposure to the widest number of projects to be included in the Company’s pipeline,
however this exposes the Company to the risk that outsourced developers will not bring quality projects to the
Company or will not be able to develop them to shovel ready status in a professional manner. These risks can
be mitigated by performing due diligence on developer groups prior to engagement and by seeking to work only
with experienced developers with a significant track record of identifying and commissioning energy storage
and production projects.
6 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 7
Financing & Liquidity Risk
The Group has an ongoing requirement to fund its activities through the equity capital markets. There is no
certainty such funds will be available when required by the business. To date, the Group has managed to raise
the required funds, primarily through equity placements and debt facilities.
The cost of available capital may fluctuate significantly and can include high interest rates and the requirement
to offer new equity at a discount to current prices. The Company can be affected by international financial markets
and risk appetites, low projections of future world GDP growth may depress commodity prices and perceived
future levels of demand. Supply and demand of individual commodities may also impact valuations of current
and future resources and projects in the Group portfolio.
Corporate finance planning and analysis facilitates multiple avenues to access capital and assists in lowering
overall finance costs. Expansion of capital reserves and cost reduction efforts provides the Company with
additional resilience during sector downturns. The Directors have prepared cash flow forecasts for at least the
next 12 months from the date of this report and are confident that the Company can raise additional equity funds,
if required. Nevertheless, in the event that the Group is unable to secure further financial resources it may have
a detrimental impact on the Group’s activities and viability of its licences and projects and its ability to monetise
and realise value from them.
Political Risk
All countries carry political risk that can lead to interruption of project activities. Politically stable countries can
have enhanced environmental and social risks, risks of strikes and changes to taxation, whereas less developed
countries can have, in addition, risks associated with changes to the legal framework, civil unrest and
expropriation of assets. The Company has working knowledge of the countries in which it holds exploration
licences and has appointed experienced local operators to assist the Company in its activities in order to help
reduce possible political risks wherever possible.
COVID-19
The Company recognises the uncertainty and volatility caused by the ongoing COVID-19 crisis. The health and
safety of our staff and associates is of primary concern and we have taken steps to mitigate this risk by avoiding
face to face meetings and through the greater adoption of video-conferencing and remote meetings. This year’s
AGM will reflect the current business environment and ongoing risks associated with the COVID-19 pandemic.
Operationally, COVID-19 has not caused significant disruptions to the Company’s projects during the year,
however the inability to travel to site and for related meetings, has likely impacted the speed in which the
Company has advanced some of its initiatives, including several, which rely on governmental processes. With
vaccines now anticipated during the course of 2021, the Company expects some easing of these obstacles over
the coming year.
Internal Controls & Risk Management
The Directors are responsible for the Group’s system of internal financial controls. Although no system of internal
financial control can provide absolute assurance against material misstatement or loss, the Group’s system is
designed to provide reasonable assurance that problems are identified on a timely basis and dealt with
appropriately. In carrying out their responsibilities, the Directors have put in place a framework of controls to
ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective
action is taken and that risk is identified as early as practically possible, and they have reviewed the effectiveness
of internal financial controls.
Key Performance Indicators (KPIs)
At this stage in the Company’s development, with no production or reoccurring revenues, the Directors take the
view that KPIs would not provide materially useful information to investors at this time. As the business develops
further, the addition of KPIs will be considered and added as appropriate.
CORCEL PLC 7
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 8
Strategic Review
continued
Corporate Responsibility
Corcel aims to be socially and environmentally responsible, following and exceeding standards set for exploration
and investment companies around the world. As a responsible operator, the Company has developed a
Corporate Social Responsibility (“CSR”) policy that aims to align exploration and investment activities with the
expectation of local stakeholders in relation to environmental, economic and social impacts. As an explorer,
Corcel’s impact on local communities is the most significant area of focus. The firm’s CSR framework places
the emphasis on stakeholder engagement and information dissemination, ensuring the local community is aware
of the Company plans and activities where appropriate.
Governance
The Board considers sound governance as a critical component of the Company’s success and the highest
priority. The Company has a newly revamped and engaged Board, with a strong non-executive presence drawn
from varied backgrounds and with well-functioning governance committees. Through the Company’s
compensation policies and variable components of employee remuneration, the Remuneration Committee of
the Board seeks to ensure that the Company’s values are reinforced in employee behaviour and that effective
risk management is promoted.
Analysis by Gender
Category
Directors
Other Employees
Male
Female
4
0
0
1
Employees and Employee Development
The Company is dependent upon the qualities and skills of its employees and their commitment plays a major
role in the Company’s business success. Employees’ performance is aligned to the Company’s goals through
an annual performance review process and via incentive programmes. The Company provides employees with
information about its activities through regular briefings and other media. The Company operates a share option
scheme, operated at the discretion of the Remuneration Committee and an employee Share Incentive Plan,
operated by the Trustees of the scheme.
Diversity and Inclusion
The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-
related-disability, sexual orientation or marital status. The Company gives due consideration to all applications
and provides training and the opportunity for career development wherever possible. The Board does not tolerate
discrimination of any form, positive or negative, and all appointments are based solely on merit.
Health and Safety
The Company includes Health and Safety (“H&S”) procedures and frameworks in all of its planning and field
activities, with an emphasis on top-down as well as bottom-up ownership and responsibility, quality training of
all personnel, and risk assessments that go beyond mere regulatory compliance. Comprehensive Risk
Assessments of Health and Safety Systems have been developed to identify existing risks, to implement relevant
mitigation measures and to identify new risks before they may be directly applicable to our operations. Corcel’s
H&S strategy includes project and location specific training, H&S inductions, Emergency Response Plans and
field team reporting procedures applied to Corcel’s projects worldwide.
Section 172 Statement
Section 172 (1) of the Companies Act 2006 obliges the Directors to promote the success of the Company for
the benefit of the Company’s members as a whole.
8 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 9
The section specifies that the Directors must act in good faith, when promoting the success of the Company
and in doing so have regard (amongst other things) to:
a.
b.
c.
d.
e.
f.
the likely consequences of any decision in the long term,
the interests of the Company’s employees,
the need to foster the Company’s business relationship with suppliers, customers and others,
the impact of the Company’s operations on the community and environment,
the desirability of the Company maintaining a reputation for high standards of business conduct, and
the need to act fairly as between members of the Company.
Decision Making and Implementation
The Board is collectively responsible for the decisions made towards the long-term success of the Company
and how the strategic, operational and risk management decisions have been implemented throughout the
business is detailed in this Strategic Review on pages 6 to 10.
Employee Engagement
The Board recognises that employees are one of the key resources, which enables delivering Company’s vision
and goals. Annual pay and benefit reviews are carried out to determine whether all levels of employees are
benefited equally and to retain and encourage skills vital for the business. The Remuneration Committee
oversees and make recommendations of executive remuneration and any long-term share awards. The Board
encourages management to improve employee engagement and to provide necessary training in order to use
their skills in the relevant areas in the business. The Board periodically reviews the health and safety measures
implemented in the business premises and improvements are recommended for better practices.
The employees are informed of the results and important business decisions and are encouraged to feel engaged
and to improve career potential.
Suppliers, Customers and Regulatory Authorities
The Board acknowledges that a strong business relationship with suppliers and customers is a vital part of the
growth. Whilst day to day business operations are delegated to the executive management, the Board sets
directions with regard to new business ventures. The Board uphold ethical behaviour across all sectors of the
business and encourages management to seek comparable business practices from all suppliers and customers
doing business with the Company. We value the feedback we receive from our stakeholders and we take every
opportunity to ensure that where possible their wishes are duly considered.
Community and Environment
The Board recognises that the long-term success of the Company will be enhanced by good relations with
different internal and external groups and to understand their needs, interest and expectations.
Corcel is committed to sustainable natural resource investment and development worldwide and recognises a
responsibility to protect the environments in which it operates. The Company seeks to manage and mitigate
environmental risks as well as to minimise the overall impact of our operations on the people and countries in
which we operate. The Board encourages that good relations are cultivated with local governments and
communities, aiming to better understand various parties’ aspirations and ensure that the Company’s business
activities are compliant not only with local and global laws, including environmental laws, but also where possible
take account of local expectations and priorities.
CORCEL PLC 9
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 10
Strategic Review
continued
Maintaining High Standards of Business Conduct
The Board places great importance on this aspect of corporate life, where failure could put the Company at risk,
and seeks to ensure that this flows through all its business interactions and at all levels of the Company. The
Board upholds the importance of sound ethical values and behaviour not only because it is important to the
Company to successfully achieve its corporate objectives and to transmit this culture throughout the organisation
but also to set a benchmark and send a signal of what it will and will not do in some of the jurisdictions in which
the Company operates.
The Company is incorporated in the UK and governed by the Companies Act 2006, the Group’s business
operations are carried out within the UK and Internationally, which requires the Company to conform with the
various statutory and regulatory provisions in the UK as well as in other locations in which it operates. The
Company has adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the ‘QCA Code’)
and the Board recognises the need to maintain a high standard of corporate governance as well as to comply
with AIM Rules to safeguard the interest of the Company’s stakeholders. The corporate governance
arrangements that the Board has adopted, together with a punctilious observance of applicable regulatory
requirements also form part of the corporate culture, requiring a standard of behaviour when interacting with
contractors, business partners, service providers, regulators and others. For example, the Company has adopted
an Anti-Corruption and Bribery Policy, Whistleblowing Policy, HR and H&S Policies that dictate acceptable
behaviour as well as the Share Dealing Code for Directors and employees, required for the AIM listed companies
and in accordance with the requirements of the Market Abuse Regulation, which came into effect in 2016. Staff
training on anti-corruption and anti-bribery is monitored and refresher courses are provided as when required to
ensure that the issues of bribery and corruption remain at the forefront of peoples’ mind.
Shareholder Engagement
The Board places equal importance on all shareholders and recognises the significance of transparent and
effective communications with shareholders. As an AIM listed company, there is a need to provide fair and
balanced information in a way that is understandable to all stakeholders and particularly our shareholders.
The Board recognises that it is accountable to shareholders for the performance and activities of the Company
and is committed to providing effective communication with its shareholders. Significant developments are
disseminated through stock exchange announcements. The changes to the Board and Board Committees,
changes to major shareholder information, QCA Code disclosure updates are promptly published on the website
to enable the shareholders to be kept abreast of the Company’s affairs. The Company’s Annual Report and
Notice of Annual General Meetings (AGM) are available to all shareholders and the Interim Report and other
investor presentations are also available for the last five years and can be downloaded from the Company’s
website. In addition, press releases and Twitter at @CorcelPlc as well as Company interviews, broker notes,
video updates and presentations, all of which are available on the Company’s website www.corcelplc.com, where
the shareholders may sign up to receive news releases directly by e-mail.
Shareholders are also encouraged to attend the Company’s Annual General Meetings, where they can formally
ask questions, raise issues and vote on the resolutions as well as engage in a more informal one-to-one dialogue
with the Executive Directors.
The Board is mindful that, with the COVID-19 pandemic, 2020 has been a difficult year, with shareholders being
unable to attend the Company’s AGM and other investor events that would ordinarily be held throughout the
course of the year. The Company continues to work hard to engage with shareholders through the regulatory
RNS announcements, the website and other forms of electronic communication.
The Strategic Report has been approved and signed on behalf of the Board.
James Parsons
Executive Chairman
30 November 2020
10 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 11
Governance
Chairman’s Corporate Governance Statement
On behalf of the Board, I am pleased to present the Corporate Governance Report for the year ended 30 June
2020. We at Corcel believe that having a solid corporate governance structure throughout the business is a vital
factor in achieving our strategic goals and creating value for our shareholders. The Board is committed to
maintaining high standards of corporate governance and in this it is guided by the Quoted Companies Alliance’s
Corporate Governance Code (the “QCA Code”). The Directors believe the QCA Code to be the most
appropriately recognised corporate governance code for the Company. During the year under review, the Board
continued to uphold the principles of the QCA Code across the business.
Corcel follows a medium to long-term corporate strategy with the objective of identifying and developing natural
resource investments with attractive risk-weighted return profiles, primarily in the battery metals and distributed
energy space. These may include early stage projects with higher risk and larger upside as well as more mature
and conservative investments with near-term cash flow potential. The Company delivers its business strategy
with tightly controlled overheads, supplementing its financial resources through corporate transactions, JVs and
partnerships as well as trading and disposals or exchanges for listed shares of non-core assets.
The Board upholds its responsibility to govern the Company in the best interests of all its stakeholders. The
Board takes charge of formulating, reviewing and approving the Company’s strategy, financial activities and
operational performance, whilst working closely with the executive team. The Board has established Audit and
Remuneration Committees to provide additional review and scrutiny in their respective areas. The Committees
report back to the Board and make appropriate recommendations with regard to the matters under their purview.
The Board, as a whole, is committed to instill a culture across the Company, delivering strong values and
behaviours. Emphasis has been placed on rebuilding and strengthening all segments across the business, whilst
working within a structured governance framework. Adding value to all stakeholders has been at the forefront of
the Board and executive management’s thinking. Corcel recognises all sectors of stakeholders in delivering our
strategy and we are mindful of our responsibilities and duties to our stakeholders. A statement detailing our
stakeholders and our engagement with them is included in the Strategic Report on pages 6 to 10.
James Parsons
Executive Chairman
30 November 2020
CORCEL PLC 11
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 12
QCA Code 2018 Principles
The Board is committed to maintaining high standards of corporate governance and in this it is guided by the
Quoted Companies Alliance’s Corporate Governance Code (the “QCA Code”). The QCA Code sets out ten
principles that are listed below together with a short explanation of how the Company applies each of the
principles and reasons for any non-compliance.
Further disclosures regarding the Company’s application of the QCA Code can be found on the Company’s
website.
Principle
Corcel’s Application
Establish a strategy and business model, which
promote long-term value for shareholders
Seek to understand and meet shareholder needs and
expectations
Take into account wider stakeholder and social
responsibilities and their implications for long-term
success
12 CORCEL PLC
Corcel follows a medium to long-term corporate
identifying and
the objective of
strategy with
developing natural
investments with
resource
attractive risk weighted return profiles. The Company
has embarked on early stage exploration projects with
higher risk and larger upside as well as more mature
and conservative investments with near-term cash
flow potential and actively exploring in leveraging its
existing portfolio of nickel-cobalt assets through
exposure to the ongoing revolution in batteries and
energy storage technologies. The Company seeks to
grow its business and make acquisitions and
disposals
to crystalise gains and enhance
shareholder value.
Company’s Business Model and Strategy is detailed
on pages 6 to 10 of the Strategic Review.
The Company seeks to understand the varied needs
and expectations of its shareholders and recognises
that in order to ensure a good match between the
shareholder profile and the Company’s Business
Model and the plans for implementation of that model,
it needs to manage shareholder communications
clearly regarding expectations and timelines. This is
achieved by giving regular updates on developments
via RNS announcements, Twitter service, Company
interviews and meetings, both informal and formal, in
order to serve the needs of private and institutional
investors as well as analysts.
The Company also engages with shareholders and
prospective investors via a periodic Newsletter,
Annual General Meeting and presentations at UK
Investor shows.
Corcel recognises its duties to stakeholders, including
employees, whether at parent company or joint
venture, and investment level business partners,
consultants and contractors as well as suppliers,
service providers and regulators. The Company strives
to be a responsible corporate citizen in all its territories
of operation and has established a range of processes
and systems to ensure that there is ongoing two-way
communication, control and feedback processes in
place to enable appropriate and timely responses to
stakeholder needs interests and expectations.
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 13
Principle
Corcel’s Application
Embed effective risk management, considering both
opportunities and threats, throughout the organisation
Maintain the Board as a well-functioning balanced
team led by the Chair
The Company continues to build an effective risk
management framework, which identifies the risks to
which the Company has been or could be exposed. The
Audit Committee overseas the Company’s financial
reporting, including accounting policies and internal
financial controls and is responsible for ensuring that
the financial performance of the Company is properly
monitored and reported to the Board.
Details on principal risks and internal controls
established for Risk management are set out on
pages 6 to 10 of the Strategic Review.
The QCA Code requires that the boards of AIM
companies have an appropriate balance between
Executive and Non-Executive Directors of which at
least two should be independent. The Board currently
comprises of four Directors with a 50/50 balance of
Executive and Non-Executive Directors. The Board
has two Independent Non-Executive Directors, of
which Nigel Burton is the senior Independent
Non-Executive Director.
reviewing and approving
The Board, led by the Chair, has the necessary skills
and knowledge
their duties and
to discharge
responsibilities effectively. The Board is responsible
for
the
formulating,
Company’s strategy,
financial activities and
operational performance. Day to day management is
delegated to the Executive Directors, responsible for
consulting the Board on all significant financial and
operational matters. The Board approves the annual
budget and amendments to it, issues of shares or
other securities and all significant acquisitions and
disposals.
The Board believes that it is in the best interests of
the Company to have the role of the Chairman as an
executive position, given the early stage of growth of
the business and the entrepreneurial skills required to
secure value growth. To further strengthen the
independence of the Board, Nigel Burton, assumed
the role of Senior Independent Non-Executive
Director at the time of James Parsons’ appointment
as Executive Chairman.
The Board meets as regularly as necessary and also
has established an Audit Committee and a
Remuneration Committee to provide support in these
specific areas. The attendance of the Board and
Committee meetings are set out in on page 17 of the
Annual Report.
Further details of the Companies application of
principal Five is set out in the QCA Code disclosures
published on the Company’s website.
CORCEL PLC 13
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 14
QCA Code 2018 Principles
continued
Principle
Ensure that between them the Directors have the
necessary up-to-date experience, skills and
capabilities
Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement
Promote a corporate culture that is based on ethical
values and behaviours
14 CORCEL PLC
Corcel’s Application
The Board consists of four Directors, two Executives and
two Independent Non-Executives, and the Company
believes that there is a strong balance of resource
sector, technical, financial, accounting, legal and public
markets skills. The profiles of the Board of Directors are
included on page 16 of the Annual Report.
Whilst the Board has not undertaken any formal
training, this is something that will be considered as the
business grows and the Board is further established.
The Directors have a wide knowledge of the business
and requirements of Directors’ fiduciary duties. The
Directors receive briefings and updates from the
Company’s advisors (legal, auditors, NOMAD and
broker) on developments and initiatives as they deem
appropriate. The Company’s auditors brief the Audit
regulatory
accounting
Committee
developments, impacting the Company. Individual
Directors may engage external advisors at the expense
of the Company upon approval by the Board in
appropriate circumstances.
and
on
The Company aims to ensure an open and respectful
dialogue with shareholders and other interested parties
for them to have the opportunity to express their views
and expectations for the Company. In this dialogue, the
importance of sound ethical values and behaviour is
emphasised, both because it is important if the
Company is to successfully achieve its corporate
objectives that this culture is transmitted through the
organisation, and also to set a benchmark and send a
signal of what it will and will not do in some of the
jurisdictions in which the Company operates.
The Board places great importance on this aspect of
corporate life, where failure could put the Company at
risk, and seeks to ensure that this flows through all its
business interactions and at all levels of the Company.
The Company has adopted an Anti-Corruption and
Bribery Policy, Whistleblowing Policy, HR and H&S
Policies that dictate acceptable behaviour as well as
the Share Dealing Code for Directors and employees,
required for the AIM listed companies and in
accordance with the requirements of the Market Abuse
Regulations..
The Company has a zero-tolerance approach to
bribery and corruption and has an Anti-Bribery Policy
in place to protect the Company, its employees and
those third parties to which the business engages with.
Employees are reminded of their obligations regularly.
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 15
Principle
Corcel’s Application
Maintain governance structures and processes that
are fit for purpose and support good decision-making
by the Board
The Company’s governance structure,
including
matters reserved for the Board is set out on pages 17
to 18 of the Annual Report.
Communicate how the Company is governed and is
performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board recognises that it is accountable to
shareholders for the performance and activities of the
Company and Group and to this end is committed to
providing
the
shareholders of the Company.
communication with
effective
The Company’s financial and operational performance
are summarised in the Annual Report and the Interim
Report, with regular updates on significant matters are
disseminated to the shareholders via Stock Exchange
announcements. Companies stakeholders are kept up
to date through descriptions of projects, press
comments, broker notes, video updates and various
presentations published on the Company’s website.
CORCEL PLC 15
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 16
Board of Directors
James Parsons
Executive Chairman
In addition to his role as Executive Chairman of Corcel, James is currently Executive Chairman of Ascent
Resources Plc and Non-Executive Chairman at Echo Energy Plc and Coro Energy Plc. James has over 20 years’
experience in the fields of strategy, management, finance and corporate development in the energy industry.
He started his career with the Royal Dutch Shell Group, where he spent 12 years with Shell working in Brazil,
the Dominican Republic, Scandinavia, the Netherlands and London. James was previously Chief Executive at
Sound Energy Plc for 8 years, is a qualified accountant and has a BA Honours in Business Economics.
Scott Kaintz
Chief Executive Officer
Scott Kaintz has 10 years of experience managing and operating small-cap natural resource development
companies. He has a degree in Russian Language and Russian Area Studies from Georgetown University and
MBA degrees from London Business School and Columbia Business School. He started his career as a US Air
Force Officer and analyst working across Europe, the Middle East and Central Asia. Scott has held operational
and managerial roles in the defense industry and worked in corporate finance and investment funds in London,
focusing primarily on capital raising efforts and debt and equity investments in small-cap companies. Scott is
also a Non-Executive Director of Red Rock Resources Plc, listed on AIM, and an Executive Director of Curzon
Energy Plc listed on the Standard List of the London Stock Exchange.
Nigel Burton
Senior Independent Non-Executive Director
Dr Nigel Burton has over 30 years’ experience in operational and financial management, debt and equity
financing, acquisition and integration of businesses, disposals, IPOs and trade sales. Following over 14 years
as an investment banker at leading City institutions, including UBS Warburg and Deutsche Bank, Nigel spent
15 years as CFO or CEO of a number of private and public companies. Nigel is currently Non-Executive
Chairman of Mobile Streams Plc and a Non-Executive Director of Digitalbox Plc and eEnergy Group Plc, all of
which are listed on AIM. Nigel is a Chartered Electrical Engineer and a Past President of the IET. He has a B.Sc.
(First Class Hons) in Electrical and Electronic Engineering and a PhD in Acoustic Imaging from University College
London.
Ewen Ainsworth
Independent Non-Executive Director
Ewen Ainsworth is an experienced AIM company Director. In addition to his role with Corcel, he is currently
Non-Executive Director at Ascent Resources Plc. He is currently CEO of Discovery Energy Limited, an advisory,
consultancy and investment company and has worked in a variety of senior and board-level roles in the natural
resource sector for over 30 years, most recently as Finance Director for San Leon Energy Plc and previously
Gulf Keystone Petroleum Limited. He qualified as a chartered management accountant, before moving into
leading commercial roles. He holds a degree in Economics and Geography from Middlesex University, and is a
member of the Energy Institute.
16 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 17
Corporate Governance Framework
Role of the Board
The Board has a responsibility to govern the Company rather than to manage it and in doing so act in the best
interests of the Company as a whole. Each member of the Board is committed to spending sufficient time to
enable them to carry out their duties as a Director. Non-Executive Directors receive formal letters of appointment
setting out the key terms, conditions and expectations of their appointment.
Responsibilities of the Board
The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities
and operating performance. Day to day management is devolved to the Chief Executive Officer, who is charged
with consulting the Board on all significant financial and operational matters.
Board of Directors
The Board of Directors currently comprises four Directors, James Parsons, Executive Chairman and Scott Kaintz,
Chief Executive Officer, together with two Independent Non-Executive Directors, Nigel Burton, Senior
Non-Executive Director and Ewen Ainsworth Non-Executive Director.
The Directors are of the opinion that the Board comprises a suitable balance and that the recommendations of
the QCA Code have been implemented to an appropriate level. The Board maintains regular contact with its
advisers and public relations consultants in order to ensure that the Board develops an understanding of the
views of major shareholders about the Company.
The Executive Chairman is part time and devotes at least two days per week to the business of the Company.
The Chief Executive Officer has two additional directorships, which are deemed not to conflict with the business
of the Company, or his time commitment. The Non-Executives have a lesser time commitment and it is
anticipated that each of the Non-Executive Directors will dedicate approximately 12 days a year to the Company.
All Directors have access to the advice of the Company’s solicitors and the Company Secretary, necessary
information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively and
all Directors have access to independent professional advice, at the Company’s expense as and when required.
Board Meetings
The Board meets regularly throughout the year. During the year ended 30 June 2020, the Board met 5 times in
relation to normal operational matters.
Board Meeting Attendance
The Directors’ attendance at scheduled and ad hoc Board meetings and Board Committees during the year
ended 30 June 2020 is detailed in the table below:
Director
James Parsons (chairman)*
Scott Kaintz
Nigel Burton
Ewen Ainsworth
Andrew Bell**
Total meetings
Board- Scheduled
Meetings (5)
4
5
5
5
1
5
Board Ad Hoc
Meeting (10)***
5
10
10
10
1
10
Audit
Committee (2)
–
–
2
2
–
2
Remuneration
Committee (2)
–
–
2
2
–
2
* James Parsons was appointed to the Board on 23 December 2019.
** Andrew Bell resigned from the Board on 12 September 2019.
*** Ad hoc meetings: Additional meetings called for a specific matter generally of a more administrative nature not requiring full Board
attendance
CORCEL PLC 17
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 18
Matters Reserved for the Board
•
•
•
•
•
•
•
•
•
•
•
•
Strategy and Management - responsibility for the overall leadership of the Company and setting the
Company’s values and standards, responsibility for the reputation of the Company, approval of the
Company’s strategic aims and objectives, approval of the Company’s annual operating and capital
expenditure budgets and any material changes to them, review of performance in the light of the
Company’s strategy, objectives, business plans and budgets and ensuring that any necessary corrective
action is taken, extension on the Company’s activities into new business or geographical areas, any
decision to cease to operate all or any material part of the Company’s business.
Structure and Capital - major changes to the Company’s corporate structure, changes to the Company’s
management and control structure, any changes to the Company’s listing.
Financial Reporting and Controls - approval of half yearly, interim management statements and any
preliminary announcements of final year results, approval of the annual report and accounts, approval of
any significant changes in accounting policies or practices, approval of treasury policies, including foreign
currency exposure and the use of financial derivatives.
Internal Controls - ensuring maintenance of a sound system of internal control and risk management,
including a. reviewing the effectiveness of the Company’s risk and control processes to support its strategy
and objectives; b. reviewing the Company’s risk register; and c. approving an appropriate statement for
inclusion in the Annual Report.
Contracts - major capital contracts, contracts, which are material, strategically or by reason of size,
entered into by the Company or any subsidiary in the ordinary course of business.
Communication - approval of resolutions and corresponding documentation to be put forward to
shareholders at a General Meeting, approval of all circulars and prospectuses.
Board Membership and Other Appointments
Remuneration - determining the remuneration policy for the Directors and other senior Executives,
determining the remuneration of the Non-Executive Directors, introduction of new share incentive plans
or major changes to existing plans, for approval.
Delegation of Authority - the division of responsibilities between the Chairman, the Chief Executive and
other Executive Directors, approval of terms of reference of Board Committees, receiving reports from
Board Committees on their activities.
Corporate Governance Matters - review of the Group’s overall corporate governance arrangements.
Policies - approval of the Group policies.
Other - approval of the appointment of the Company’s principal professional advisers, prosecution,
defence of settlement of litigation involving above £5m or being otherwise material to the interests of the
Group, approval of the overall levels of insurance for the Company, including Director’s and Officers’
Liability Insurance.
18 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 19
Board Activities 2020
The Board is responsible for full and effective control over the Company. The Board holds regular meetings at
which financial, operational and strategic goals are considered and decided upon.
2019-20 Board Activities:
•
•
•
•
•
•
•
Oversaw Board reformation and strengthened Corporate Governance
Strengthened Group Balance Sheet
Refocused the Business on Battery Metal Exploration and Development
Broadened Exposure to Flexible Energy Production and Storage
First Exploration Results at Mambare nickel/cobalt project since 2012
Investment in Weirs Drove Development – Broadening Flexible Grid Solutions portfolio
Completed Corporate Rebranding
2020-21 Board Focus:
•
•
•
•
•
•
Explore Creation of Substantial Regional Nickel/Cobalt Entity
Advance Burwell Energy Storage and Solar Project to Financial Close
Analyse and Consider additional Battery Metal projects
Increase Market Understanding of Existing Value Proposition
Continue Expansion and Development of Corcel Brand
Leverage Investors to the Growth of Batteries and Global Decarbonization
Board Committees
The Board has established the following committees, each of which has its own terms of reference:
Audit Committee
The Audit Committee considers the Group’s financial reporting, including accounting policies, and internal
financial controls. It is responsible for ensuring that the financial performance of the Group is properly monitored
and reported on. The Audit Committee meets at least twice a year, once with the auditors, and is comprised of
Ewen Ainsworth, Independent Non-Executive Director, and Nigel Burton, Senior Independent Non-Executive
Director, the Auditors and other personnel attend the Committee as requested by the Committee.
During the past year the Audit Committee has reviewed its terms of reference, which were approved by the
Board and can be found on the Company’s website. A review of the Companies policies is currently being
undertaken. The Committee will continue to build upon the risk management framework as the business grows
and develops.
It is the responsibility of the Committee to review the annual and half-yearly Financial Statements, to ensure
that they adequately comply with appropriate accounting policies, practices and legal requirements, to
recommend to the Board their adoption, and to consider the independence of and to oversee the management’s
appointment of the external auditors.
Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board on Executive Directors’
remuneration. It comprises the Senior Independent Non-Executive Director Nigel Burton as Chairman and Ewen
Ainsworth, the Independent Non-Executive Director. The Executive Directors and other senior personnel attend
meetings as requested by the Committee, which meets at least twice a year. The Remuneration Committee
considers the performance of the Executive Directors in line with those targets set at the beginning of the year
within the Company’s scorecard.
During the past year the Remuneration Committee has reviewed its terms of reference, which were approved
by the Board and can be found on the Company’s website.
CORCEL PLC 19
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 20
Directors’ Report
The Directors present their Annual Report on the affairs of the Group and the Parent Company, together with
the Group Financial Statements for the year ended 30 June 2020.
Principal Activities
The Company was incorporated for the purpose of pursuing development of and investment in mineral
exploration projects with a particular focus on base-metals. Company’s current portfolio includes exploration
and development of natural resources and battery metals and energy storage and distribution of power.
Strategic Report
The Company is required by the Companies Act 2006 to include a Strategic Report in its Annual Report. The
information that fulfils this requirement can be found in the Annual Report on pages 6 to 10.
Business Review and Future Developments
The business review and future developments are dealt with in the Chairman and CEO Statement and in the
Strategic Review on pages 3 to 10.
Fundraising and Share Capital
During the year, 2,596,363,636 shares were issued in settlement of corporate debt, 1,022,229,140 were issued
in settlement of convertible loan notes, and 564,058,369 shares were issued in settlement of outstanding
liabilities. 56 shares were issued in order to adjust the total number of shares prior share consolidation. A 1 for
100 share consolidation was effected and post consolidation 86,873,352 shares traded as of 24 December 2019
in their new consolidated form. During the year, cash of £1.511 million gross, before deducting the associated
transaction costs, (2019: £0.240 million), was raised by the issue of 109,968,183 (post consolidation) (2019:
399,999,998) new ordinary shares. Further details are given in note 17.
Results and Dividends
The Group’s results are set out in the Group Income Statement on page 30. The audited Financial Statements for
the year ended 30 June 2020 are set out on pages 29 to 78. The Group made a loss after taxation of £1.482 million
(2019: loss of £2.608 million). The Directors do not recommend the payment of a dividend (2019: nil).
Directors
The Directors who served during the period and following the year end are as follows:
James Parsons
Scott Kaintz
Nigel Burton
Ewen Ainsworth
Andrew R M Bell
Appointed
Resigned
23.12.2019
21.11.2011
24.06.2019
24.06.2019
12.09.2019
The interests of the Board in the shares of the Company as at 30 June 2020 were as follows:
James Parsons
Scott Kaintz
Ewen Ainsworth*
Nigel Burton
Ordinary shares
2,289,773
2,013,791
2,253,429
122,312
As percentage
of issued
share capital
1.21%
1.06%
1.19%
0.06%
Options
3,040,567
3,164,767
–
–
Warrants
781,250
594,508
1,281,250
–
* Discovery Energy Limited, a company controlled by Ewen Ainsworth is the beneficial holder of 141,901 shares.
* Discovery Energy Pension Scheme of Discover Energy Limited is the beneficial holder of 1,562,500 shares and 781,250 warrants.
20 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 21
The interests of the Board in the shares of the Company as at 30 June 2019 were on a pre-consolidation basis
as follows:
Andrew R M Bell
Edmund Bugnosen
Scott Kaintz
Ordinary shares
56,843,719
12,690,623
25,811,304
As percentage
of issued
share capital
Options
Warrants
3.75%
0.84%
1.70%
13,360,000
560,000
12,420,000
24,949,949
–
12,575,757
Substantial Shareholdings
On 30 June 2020, the following were registered as being interested in 3% or more of the Company’s Ordinary share
capital:
JIM Nominees Ltd – Designation JARVIS*
Base Asia Pacific Ltd
Interactive Investor Services Nominees Ltd – Designation SMKTNOMS*
Normura Custody Nominees Ltd – Designation CUSTNOMS*
HSBC Global Custody Nominee (UK) Ltd – Designation 941346*
Winterflood Securities Ltd – Designation WINSCREP*
* client accounts
Ordinary
shares of
£0.0001 each
51,718,029
13,288,982
11,900,177
10,146,999
9,719,330
9,611,774
Percentage
of issued
share capital
28.03
6.70
6.45
5.50
5.27
5.21
Management Incentives
In the year to 30 June 2020, the Company has granted 6,081,134 options over its ordinary shares (2019: nil).
As at 30 June 2020, 6,212,534 options were outstanding (2019: 270,600).
In addition, the Company operates a tax efficient Share Incentive Plan, a government approved scheme, the
terms of which provide for an equal reward to every employee, including Directors, who had served for three
months or more at the time of issue. The terms of the plan provide for:
•
•
•
each employee to be given the right to subscribe any amount up to £150 per month with Trustees, who
invest the monies in the Company’s shares;
the Company to match the employee’s investment by contributing an amount equal to double the
employee’s investment; and
the Company to award free shares to a maximum of £3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance if held for five years. Further details on share
options and Share Incentive Plan are set out in note 18 to the Financial Statements.
Directors’ Remuneration
The remuneration of the Executive Directors, paid during the year, was fixed on the recommendation of the
Remuneration Committee. The remuneration of the Non-Executive Directors, paid during the year, was fixed on
the recommendation of the Executive Directors. Remuneration levels reflected the need to maximise the
effectiveness of the Company’s limited resources during the year.
Fees paid to each Director, for the year ended 30 June 2020, are set out in note 8 to the Financial Statements.
Each Executive Director is entitled to participate in the Share Incentive Plan.
CORCEL PLC 21
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 22
Directors’ Report
continued
The Company also has a Group Personal Pension Scheme for all eligible employees, including the Executive
Directors. The Scheme is an insured, defined contribution arrangement with all members entitled to an employer
pension contribution equivalent to 8% of basic salary, subject to the individual agreeing to make a minimum
contribution to the Scheme equivalent to 2.4% of basic salary (subject to statutory and regulatory conditions).
The Scheme is available on a Salary Sacrifice basis, with 100% of the employer national insurance saving
passed on to the member by way of an enhanced employer contribution to the Scheme, of an equivalent amount.
The Company was previously closely associated with Red Rock Resources Plc, in which the Company has no
interest as at 30 June 2020 (2019: 0.67%). Red Rock Resources Plc had a 3.77% interest in the Company as
at 30 June 2020 (2019: 2.31%). Two Directors, Andrew Bell and Scott Kaintz, are also Directors of, and received
a salary from, Red Rock Resources Plc during the year. The amount of their remuneration for their role as
Directors of Red Rock Resources Plc is not required to be disclosed in the Company Financial Statements but
is fully disclosed in the Financial Statements of Red Rock Resources Plc.
Corporate Governance Statement and QCA Code
Corporate Governance Statement and QCA Corporate Governance principles are set out in the Annual Report
on pages 11 and 15.
Control Procedures
The Board has approved financial budgets and cash forecasts. In addition, it has implemented procedures to
ensure compliance with accounting standards and effective reporting.
Environmental Responsibility
The Company is aware of the potential impact that its subsidiary companies may have on the environment. The
Company ensures that it and its subsidiaries, at a minimum, comply with the local regulatory requirements and
the revised Equator Principles, the industry standard for environmental and social risk.
Employment Policies
The Group is committed to promoting policies, which ensure that high calibre employees are attracted, retained
and motivated, to ensure the on-going success for the business. Employees, and those who seek to work within
the Group, are treated equally, regardless of sex, marital status, creed, colour, race or ethnic origin.
Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective,
the Group provides training and support to employees and sets demanding standards for workplace safety.
Being an exploration company with very mobile staff personnel, the Company maintains and follows Emergency
Response and Evacuation Plans (“EREP”) in all its projects.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At
30 June 2020, the Group had cash and cash equivalents of £0.415 million and £0.790 million of borrowings and,
as at the date of signing these Financial Statements the, cash balance was £0.369 million. The Directors
anticipate having to raise additional funding over the course of the financial year.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of
Directors reducing or foregoing their salaries if required, the progress in activities post year-end and successful
fund raise of £0.750 million, the Directors consider that they will have access to adequate resources in the
12 months from the date of the signing of these Financial Statements. As a result, they consider it appropriate
to continue to adopt the going concern basis in the preparation of the Financial Statements.
22 CORCEL PLC
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 23
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to
reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise,
and to classify non-current assets as current. The Financial Statements have been prepared on the going
concern basis and do not include the adjustments that would result if the Group was unable to continue as a
going concern. Due to the factors described above, a material uncertainty exits, which may cast significant doubt
on the Group and the Company’s ability to act as a going concern. The auditors have made reference to this
within their Audit Report. More details surrounding this may be found in the Audit Report on page 25.
Events After the Reporting Period
Events after the reporting period are set out in note 25 to the Financial Statements.
Independent Auditors
At the AGM of the Company held in January 2020, Chapman Davis LLP were re-appointed as the auditors of
the Company to hold the office until the conclusion of the Annual General Meeting of 2020. In September 2020,
Chapman Davis resigned and were replaced by PKF Littlejohn LLP. The Directors will place a resolution before
the forthcoming Annual General Meeting to reappoint PKF Littlejohn LLP as auditors for the coming year.
Disclosure of Information to Auditors
Each of the persons who is a Director at the date of approval of this Annual Report confirms that:
•
•
so far as the Director is aware, there is no relevant audit information of which the Company’s auditors are
unaware; and
the Director has taken all the steps that he ought to have taken as a Director in order to make himself
aware of any relevant audit information and to establish that the Company’s auditors are aware of that
information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the
Companies Act 2006.
By order of the Board
James Parsons
Executive Chairman
30 November 2020
CORCEL PLC 23
260124 Corcel Annual Report pp01-pp24.qxp 03/12/2020 19:13 Page 24
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Directors’ Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and Company Financial Statements for each financial
year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare Group Financial
Statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European
Union (“EU”) and have elected under company law to prepare the Company Financial Statements in accordance
with IFRS as adopted by the EU.
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the
Group and Company for that period.
In preparing the Group and Company Financial Statements, the Directors are required to:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable IFRSs have been followed, subject to any material departures, disclosed and
explained in the Financial Statements; and
prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that
the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Group and the Company and enable them to ensure that the Financial Statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that:
•
•
so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is
unaware; and
the Directors have taken all the 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 auditor is aware of that
information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information,
included on the Corcel Plc website.
Legislation in the United Kingdom, governing the preparation and dissemination of Financial Statements, may
differ from legislation in other jurisdictions.
24 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 25
Independent Auditor’s Report to the members
of Corcel Plc (former Regency Mines Plc)
Opinion
We have audited the Financial Statements of Corcel Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’)
for the year ended 30 June 2020, which comprise the Consolidated and Parent Company Statements of Financial
Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company
Statements of Cash Flows and Notes to the Financial Statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union and as regards the
Parent Company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the Financial Statements give a true and fair view of the state of the Group’s and of the Parent Company’s
affairs as at 30 June 2020 and of the Group’s and Parent Company’s loss for the year then ended;
the Group Financial Statements have been properly prepared in accordance with IFRSs as adopted by
the European Union;
the Parent Company Financial Statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006; and
the Financial Statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Statements section of our report. We are independent of the Group and Parent Company in
accordance with the ethical requirements that are relevant to our audit of the Financial Statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Relating to Going Concern
We draw attention to Note 1.2 in the Financial Statements, which indicates that the Group is reliant on securing
further financing to meet committed expenditure requirements and working capital needs. As stated in Note 1.2,
these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the
Company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Emphasis of Matter
We draw attention to Note 14, which discloses the debt instrument in Resource Mining Corporation Limited,
purchased by the Company during the year and valued at £367,000 within the Financial Statements. The license
relating to the WoWo Gap project, Resource Mining Corporation Limited’s key project, is currently under renewal.
The good standing of this licence is critical for project development and subsequent value extraction, which is
key to the recoverability of the debt. Should the license not be renewed, an impairment may be required to the
value of the debt.
CORCEL PLC 25
Independent Auditor’s Report to the members
of Corcel Plc (former Regency Mines Plc)
continued
Our Application of Materiality
The materiality applied to the Group Financial Statements was £98,000, based on a percentage of net assets,
as it is from these net assets that the Group seeks to deliver returns for shareholders, in particular the value of
exploration and development projects the Group is interested in through its associates and joint ventures.
Performance materiality has been set at 70% of headline materiality, and the threshold for which we communicate
errors to management has been set at 5%. Materiality for the Company Financial Statements was set at £97,500,
based on a percentage of net assets.
We apply the concept of materiality in both planning and performing the audit, and in evaluating the effect of
misstatements. At the planning stage, materiality is used to determine the Financial Statements areas that are
included within the scope of the audit and the extent of the sample sizes during the audit. Materiality has been
reassessed during the fieldwork and closing stages of the audit, taking into consideration new information, which
arose. No alterations were made to materiality either during or at the conclusion of the audit.
An Overview of the Scope of Our Audit
In designing our audit, we looked at areas, which deemed to involve significant judgement and estimation by
the Directors, such as the key audit matter surrounding the carrying value of investments in joint ventures and
associates, and receivables from other Group Companies. Other judgemental areas are the accounting treatment
and valuation of financial assets, including the debt instrument purchased during the year, as well as the valuation
of share-based payment transactions. We also addressed the risk of management override of controls, including
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
Work on all significant components of the Group has been performed by us as group auditor.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the Financial Statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those, which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter
described in the Material Uncertainty Related to Going Concern section, we have determined the matters
described below to be the key audit matters to be communicated in our report.
How the Scope of our Audit Responded to the Key Audit
Matter
Our work in this area included:
•
•
•
Review of management’s assessment of
recoverability of
in
accordance with IFRS 9 criteria;
intragroup receivables
intercompany
loans by reference
Considerations of recoverability of investments
to
and
underlying net asset values, including the
recoverability potential of
the underlying
exploration projects (Mambare Nickel-Cobalt
Project; Dempster Vanadium Project);
Review of Board impairment papers in respect of
investments, including challenge and obtaining
corroboration for key assumptions used;
Key Audit Matter
Carrying value of Investments, Joint Ventures and
Balances
Associates
(Notes 10 & 11)
Intragroup
and
Investments in subsidiaries and intra-group loans
(Company only), as well as joint ventures and
associates (Group & Company), are the most
significant balances in the Financial Statements.
The Group & Company own a 50% interest in
DVY196 Holdings Corp, and a 41% interest in Oro
Nickel JV entity as at 30 June 2020, both of which
have material value in the Financial Statements.
26 CORCEL PLC
Key Audit Matter
How the Scope of our Audit Responded to the Key Audit
Matter
in advancing developments at
Given the continuing losses in these entities, and
delays
the
underlying projects, there is a risk that the
receivable
investment and any associated
balances cannot be recovered and that the
balances should be impaired.
•
•
reviewing any
Obtaining and
relevant
agreements relating to investments (shareholder
agreements;
license
agreements etc) to ensure all terms are
complied with; and
agreements;
JV
Review of disclosures made in respect of these
balances in accordance with IFRS.
We draw attention to the fact that the exploration
license held by Oro Nickel JV in respect of the
Mambare project is currently under renewal. If the
license were not to be renewed, this may result in an
impairment to the carrying value of the investment
in JV.
Other Information
The other information comprises the information, included in the annual report, other than the Financial Statements
and our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the Group
and Parent Company Financial Statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our
audit of the Financial Statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the Financial
Statements or a material misstatement of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ report for the financial year for which the
Financial Statements are prepared is consistent with the Financial Statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on Which We are Required to Report by Exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
the Parent Company Financial Statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
CORCEL PLC 27
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 28
Independent Auditor’s Report to the members
of Corcel Plc (former Regency Mines Plc)
continued
Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the
preparation of the Group and Parent Company Financial Statements and for being satisfied that they give a true
and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of
Financial Statements that are free from material misstatement, whether due to fraud or error.
In preparing the Group and Parent Company Financial Statements, the Directors are responsible for assessing
the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Directors either intend to
liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these Financial Statements.
A further description of our responsibilities for the audit of the Financial Statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of Our Report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the Company
and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Joseph Archer (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
London E14 4HD
Statutory Auditor
30 November 2020
28 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 29
Financial Statements
Consolidated Statement of Financial Position
as at 30 June 2020
Notes
30 June
2020
£’000
30 June
2019
£’000
ASSETS
Non-current assets
Investments in associates and joint ventures
Goodwill
Financial instruments - fair value through other
comprehensive income (FVTOCI)
Other receivables
Total non-current assets
Current assets
Cash and cash equivalents
Financial instruments with fair value through profit and loss (FVTPL)
Trade and other receivables
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital
Share premium account
Other reserves
Retained earnings
Total equity attributable to owners of the Parent
Non-Controlling interests
Total equity
LIABILITIES
Non-current liabilities
Lease liability
Long-term borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Lease liability
Short-term borrowings
Total current liabilities
Total equity and liabilities
11
10
12
14
19
13
14
17
15
15
15
1,947
25
4
1,690
3,666
415
5
175
595
1,950
42
178
1,318
3,488
64
5
115
184
4,261
3,672
2,726
23,032
908
(23,403)
3,263
13
3,276
30
760
790
183
12
–
195
4,261
1,999
21,113
(329)
(20,960)
1,823
18
1,841
–
–
–
309
–
1,522
1,831
3,672
These Financial Statements, on pages 29 to 78, were approved by the Board of Directors and authorised for issue on
30 November 2020 and are signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
CORCEL PLC 29
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 30
Consolidated Income Statement
for the year ended 30 June 2020
Gain on sale of financial instruments designated as FVTPL
Exploration expenses
Impairment of investments in joint ventures
Impairment of goodwill
Impairment of right-of-use asset
Impairment of loans and receivables
Administrative expenses
Foreign currency loss
Other income
Finance costs, net
Share of loss of associates and joint ventures
Loss for the year before taxation
Taxation
Loss for the year
Loss per share attributable to:
Equity holders of the Parent
Non-controlling interest
Notes
11
4
5
11
3
Year to
30 June
2020
£’000
–
(205)
–
(106)
(41)
(37)
(838)
(26)
21
(247)
(3)
(1,482)
–
(1,482)
(1,477)
(5)
(1,482)
Year to
30 June
2019
£’000
38
(69)
(1,503)
–
–
(26)
(653)
(43)
26
(377)
(1)
(2,608)
–
(2,608)
(2,587)
(21)
(2,608)
Earnings per share attributable to owners of the Parent*:
Basic
Diluted
*Adjusted for 100:1 share consolidation. More details in Note 9.
9 (2) pence (26) pence
9 (2) pence (26) pence
30 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 31
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2020
Loss for the year
Other comprehensive income
Items that will be not be reclassified subsequently to profit or loss
Decrease in revaluation reserves due to IFRS 9 adoption
Revaluation of FVTOCI investments
Unrealised foreign currency gain/(loss) on translation of foreign operations
Total other comprehensive income for the year
Total comprehensive loss for the year
Total comprehensive loss attributable to:
Equity holders of the Parent
Non-controlling interest
All of the Group’s operations are considered to be continuing.
30 June
2020
£’000
(1,482)
–
(42)
16
(26)
30 June
2019
£’000
(2,608)
(38)
(800)
(5)
(843)
(1,508)
(3,451)
(1,503)
(5)
(1,508)
(3,430)
(21)
(3,451)
The accompanying notes form an integral part of these Financial Statements.
CORCEL PLC 31
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 32
Consolidated Statement of Changes in Equity
for the year ended 30 June 2020
The movements in equity during the year were as follows:
Share
capital
£’000
1,926
As at 1 July 2018
Changes in equity for 2019
Loss for the year
Other comprehensive income
for the year
Transfer of FVTOCI reserve in relation
to impaired assets (note 12)
Gain on sale of FVTOCI investments
Unrealised foreign currency loss arising
on re-translation of
foreign operations
Total Other comprehensive income
for the year
Transactions with owners
Issue of shares
Share issue costs
Total transactions with owners
–
–
–
–
–
73
–
73
Total
Equity
attributable
Non-
Retained
earnings
£’000
Other to owners of controlling
reserves
£’000
the Parent
£’000
interests
£’000
Share
premium
account
£’000
20,380
(18,378)
479
4,407
–
–
–
–
–
745
(12)
733
(2,587)
–
(2,587)
–
5
–
5
–
–
–
(804)
–
(804)
5
(5)
(5)
(809)
(804)
–
–
–
818
(12)
806
39
–
(21)
–
–
–
–
–
–
–
Total
Equity
£’000
4,446
(2,608)
(804)
5
(5)
(804)
818
(12)
806
As at 1 July 2019
1,999
21,113
(20,960)
(329)
1,823
18
1,841
Changes in equity for 2020
–
Loss for the year
Acquisition of new subsidiary (note 11)
–
Partner buy-out on a subsidiary (note 11) –
Transfer of FVTOCI reserve in relation to
impaired assets (note 12)
–
Other comprehensive income
for the year
Revaluation of FVTOCI investments
Transfer of FVTOCI revaluation reserve
in relation to disposals
Unrealised foreign currency gain arising
on re-translation of
foreign operations
Total Other comprehensive income
for the year
–
–
–
–
Transactions with owners
Issue of shares
Share issue costs
Share options granted during the year
Total transactions with owners
727
–
–
727
–
–
–
–
–
–
–
–
2,228
(309)
–
1,919
(1,477)
–
–
–
–
–
(1,477)
–
–
(5)
12
(12)
(1,482)
12
(12)
(400)
400
–
–
(567)
–
(567)
–
–
–
–
(42)
567
16
541
–
273
23
296
908
(42)
–
16
(26)
2,955
(36)
23
2,942
3,263
–
–
–
–
–
–
–
–
–
13
–
(42)
–
16
(26)
2,955
(36)
23
2,942
3,276
As at 30 June 2020
2,726
23,032
(23,403)
See note 16 for a description of each reserve included above.
32 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 33
Consolidated Statement of Changes in Equity
continued
Other reserves
As at 1 July 2018
Revaluation of FVTOCI investments
Transfer of FVTOCI reserve relating to impaired
assets and disposals
Unrealised foreign currency gain on translation
of foreign operations
As at 1 July 2019
Revaluation of FVTOCI investments
Transfer of FVTOCI reserve relating to impaired
assets and disposals
Share options granted during the year
Warrants granted during the year
Unrealised foreign currency gain on translation
of foreign operations
As at 30 June 2020
FVTOCI
financial
asset
reserve
£’000
Share-
based
payment
reserve
£’000
Foreign
currency
translation
reserve
£
Warrant
reserve
£’000
Total
other
reserves
£
(121)
(800)
(3)
–
(924)
(42)
967
–
–
–
1
76
–
–
–
76
–
–
23
–
–
99
–
–
–
–
–
–
–
–
273
–
273
524
–
–
(5)
519
–
–
–
–
16
535
479
(800)
(3)
(5)
(329)
(42)
967
23
273
16
908
See note 16 for a description of each reserve included above.
CORCEL PLC 33
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 34
Consolidated Statement of Cash Flows
for the year ended 30 June 2020
Cash flows from operating activities
Loss before taxation
Increase in receivables
Increase in payables
Share-based payments
Currency adjustments
Finance cost, net (note 5)
Gain on sale of FVTPL investments
Share of loss in associates and joint ventures, net of tax (note 11)
Impairment of goodwill related to FGO (note 10)
Impairment of right-of-use asses
Impairment of investments in joint ventures
Impairment of loans and receivables
Net cash outflow from operations
Cash flows from investing activities
Proceeds from sale of FVTOCI and FVTPL investments (note 12 and 13)
Purchase of financial assets carried at amortised cost (note 14)
Acquisition of a new subsidiary (note 10)
Payments for investments in associates and joint ventures (note 11)
Net cash (outflow)/inflow from investing activities
Cash inflows from financing activities
Proceeds from issue of shares
Interest paid (note 21)
Proceeds of new borrowings, as received net of associated fees (note 21)
Repayment of borrowings (note 21)
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at end of period
Major non-cash transactions are disclosed in note 21.
Year to
30 June
2020
£
(1,482)
(28)
78
63
26
247
–
3
106
41
–
37
(909)
109
(220)
(34)
(5)
(150)
1,439
(5)
7
(30)
1,410
351
64
415
Year to
30 June
2019
£
(2,608)
(50)
28
11
42
377
(38)
1
–
–
1,503
26
(708)
165
–
–
–
165
229
–
252
–
481
(62)
126
64
The accompanying notes and accounting policies form an integral part of these Financial Statements.
34 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 35
Company Statement of Financial Position
Corcel Plc (Registration Number: 05227458)
as at 30 June 2020
ASSETS
Non-current assets
Investments in subsidiaries
Investments in associates and joint ventures
Financial assets with fair value through other comprehensive
income (FVTOCI)
Other receivables
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Total assets
EQUITY AND LIABILITIES
Called up share capital
Share premium account
Other reserves
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Long-term borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Short-term borrowings
Total current liabilities
Total equity and liabilities
Notes
30 June
2020
£
30 June
2019
£
10
11
12
14
19
14
17
15
15
15
–
2,067
4
1,740
3,811
389
175
564
–
2,067
178
1,892
4,137
34
94
128
4,375
4,265
2,726
23,032
373
(22,698)
3,433
1,999
21,113
(448)
(20,181)
2,483
760
760
182
–
182
4,375
–
–
260
1,522
1,782
4,265
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive
Income. The Company’s loss for the financial year was £1,949,687 (2019: loss of £3,395,962). The Company’s Total
comprehensive loss for the financial year was £1,991,647 (2019: loss £3,828,511).
These Financial Statements, on pages 29 to 78, were approved by the Board of Directors and authorised for issue on
30 November 2020 and are signed on its behalf by:
James Parsons
Executive Chairman
The accompanying notes form an integral part of these Financial Statements.
CORCEL PLC 35
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 36
Company Statement of Changes in Equity
for the year ended 30 June 2020
The movements in reserves during the year were as follows:
As at 30 June 2018
Changes in equity for 2019
Loss for the year
Other comprehensive income for the year
Revaluation of FVTOCI investments
Transfer of FVTOCI reserve relating to impaired
assets and disposals
Gain on sale of FVTOCI investments
Total other comprehensive income for the year
Transactions with owners
Issue of shares
Share issue and fundraising costs
Total transactions with owners
Share
capital
£’000
1,926
Share
premium
account
£’000
Retained
earnings
£’000
Other
reserves
£’000
20,380
(16,790)
(45)
–
–
–
–
–
73
–
73
–
–
–
–
–
745
(12)
733
(3,396)
–
–
5
5
–
–
–
–
(3)
(400)
–
(403)
–
–
–
Total
equity
£’000
5,471
(3,396)
(3)
(400)
5
(398)
818
(12)
806
As at 1 July 2019
1,999
21,113
(20,181)
(448)
2,483
(1,950)
–
(1,950)
–
(42)
(567)
(567)
–
–
–
–
567
525
–
273
23
296
373
(42)
–
(42)
2,955
(36)
23
2,942
3,433
Changes in equity for 2020
Loss for the year
Other comprehensive income for the year
Revaluation of FVTOCI investments
Transfer of FVTOCI reserve relating to impaired
assets and disposals
Total other comprehensive income for the year
Transactions with owners
Issue of shares
Share issue and fundraising costs
Share options granted during the year
Total transactions with owners
–
–
–
–
727
–
–
727
–
–
–
–
2,228
(309)
–
1,919
As at 30 June 2020
2,726
23,032
(22,968)
36 CORCEL PLC
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 37
Company Statement of Changes in Equity
continued
Other reserves
As at 30 June 2018
Changes in equity for 2019
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to impaired assets
and disposals
Revaluation of FVTOCI investments
Total Other comprehensive (expenses) / income
As at 1 July 2019
Changes in equity for 2020
Other comprehensive income for the year
Revaluation of FVTOCI investments
Transfer of FVTOCI reserve relating to impaired assets
and disposals
Share options granted during the year
Warrants issued during the year
Total Other comprehensive expenses
As at 30 June 2020
FVTOCI
financial
asset
reserve
£’000
(121)
(400)
(3)
(403)
(524)
(42)
567
–
–
525
1
Share-
based
payment
reserve
£’000
Warrants
reserve
£’000
76
–
–
–
76
–
–
23
–
23
99
–
–
–
–
–
–
–
–
–
–
273
273
273
Total
other
reserves
£’000
(45)
(400)
(3)
(403)
(448)
(42)
567
23
273
821
373
See note 16 for a description of each reserve included above.
CORCEL PLC 37
260124 Corcel Annual Report pp25-pp38.qxp 03/12/2020 18:59 Page 38
Company Statement of Cash Flows
for the year ended 30 June 2020
Cash flows from operating activities
Loss before taxation
Increase in receivables
Increase/(decrease) in payables
Share-based payments
Finance income
Currency gains / (losses)
Gain on sale of FVTPL investments
Impairment of loans and receivables
Net cash outflow from operations
Cash flows from investing activities
Payments for investments in associates and joint ventures
Purchase of financial assets carried at amortised cost
Payments made on behalf of subsidiaries
Proceeds from sale of FVTOCI financial instruments
Net cash (outflow)/inflow from investing activities
Cash inflows from financing activities
Proceeds from issue of shares, net of issue costs
Interest paid (note 21)
Proceeds of new borrowings (note 21)
Repayments of borrowings (note 21)
Net cash inflow from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at end of period
Major non-cash transactions are disclosed in note 21.
Year to
30 June
2020
£’000
(1,950)
(30)
92
63
247
26
–
678
(874)
(5)
(220)
(66)
109
(182)
1,439
(5)
7
(30)
1,411
355
34
389
Year to
30 June
2019
£’000
(3,396)
(53)
(1)
11
377
42
(38)
2,439
(619)
–
–
–
165
165
229
–
252
–
481
27
7
34
The accompanying notes and accounting policies form an integral part of these Financial Statements.
38 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 39
Notes to Financial Statements
for the year ended 30 June 2020
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group Financial Statements of Corcel Plc (“the Company”, “Corcel” or “the Parent Company”), for the year
ended 30 June 2020, were authorised for issue by the Board on 30 November 2020 and signed on the Board’s
behalf by James Parsons. Corcel Plc is a public limited company incorporated and domiciled in England and
Wales. The Company’s ordinary shares are traded on AIM.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with International Financial Reporting Standards
and IFRIC interpretations as endorsed by the EU (“IFRS”) and the requirements of the Companies Act applicable
to companies reporting under IFRS and presented in thousand Pounds Sterling (£’000), unless stated otherwise.
The principal accounting policies adopted are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At
30 June 2020 the Group had cash and cash equivalents of £0.415 million and £0.790 million of borrowings and
as at the date of signing these Financial Statements the cash balance was £0.369 million. The Directors
anticipate having to raise additional funding over the course of the financial year.
Having considered the prepared cashflow forecasts and Group budgets, which includes the possibility of
Directors reducing or foregoing their salaries if required, the progress in activities post year-end, including the
successful fund raise of £0.750 million and the Directors ability to secure funding from various sources, the
Directors consider that they will have access to adequate resources in the 12 months from the date of the signing
of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern
basis in the preparation of the Financial Statements.
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to
reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise
and to classify non-current assets as current. The Financial Statements have been prepared on the going
concern basis and do not include the adjustments that would result if the Group was unable to continue as a
going concern.
The auditors have made reference to going concern within their audit report by way of a material uncertainty.
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of
Comprehensive Income. The Company’s loss for the financial year was £1.949 million (2019: loss of £3.395 million).
The Company’s other comprehensive loss for the financial year was £1.991million (2019: loss £3.828 million).
Amendments to Published Standards Effective for the Year Ended 30 June 2020
New Standards, Amendments and Interpretations Effective for the Periods from 1 July 2019
The following new standards, amendments and interpretations are effective for the first time in these Financial
Statements. However, none have a material effect on the Group and the Company:
IFRS 16 Leases - Adoption of IFRS 16 resulted in the Group recognising right of use of assets and lease liabilities
for all contracts that are, or contain, a lease. For leases currently classified as operating leases, under previous
accounting requirements the Group did not recognise related assets or liabilities, and instead was expensing
the lease payments to profit or loss on a straight-line basis over the lease term, disclosing in its annual Financial
Statements the total commitments under the lease term.
CORCEL PLC 39
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 40
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.2 Basis of Preparation (continued)
IFRIC 23 is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused
tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. This interpretation
did not have a material effect of the reported results.
There were no new standards, amendments or interpretations effective for the first time for periods beginning
on or after 1 July 2019 that had a material effect on the Group’s Financial Statements.
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards and interpretations, which have
not been applied in these Financial Statements were in issue but not yet effective (and in some cases had not
been adopted by the EU):
•
•
•
•
Amendments to References to Conceptual Framework in IFRS Standards – effective from 1 January 2020;
Definition of Material (Amendments to IAS 1 and IAS 8) – effective from 1 January 2020;
Amendment to IFRS 3 Business Combinations – effective 1 January 2020*;
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Non-current – effective 1 January 2022*.
* subject to EU endorsement
The Directors do not expect that the adoption of these standards will have a material impact on the financial
information of the Group in future periods.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the current or the preceding financial
year.
1.3 Basis of Consolidation
The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and
entities controlled by the Company, its subsidiaries, made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so
as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control
is obtained, the acquisition date, until the date that control ceases. They are deconsolidated from the date on
which control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The
cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent
consideration and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the
acquisition are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the
acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair
values are recognised through profit or loss.
Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies
are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the
consolidated statement of comprehensive income. Any impairment recognised for goodwill is not reversed.
40 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 41
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
•
•
•
•
•
•
•
derecognises the assets (including goodwill) and liabilities of the subsidiary;
derecognises the carrying amount of any non-controlling interest;
derecognises the cumulative translation differences recorded in equity;
recognises the fair value of the consideration received;
recognises the fair value of any investment retained;
recognises any surplus or deficit in profit or loss; and
reclassifies the Parent’s share of components previously recognised in other comprehensive income to
profit or loss or retained earnings, as appropriate.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated between the Parent and non-
controlling interests, even if this results in the non-controlling interest having a deficit balance.
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity
transactions. Any differences between the adjustment for the non-controlling interest and the fair value of
consideration paid or received are recognised in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Investment in Associates
An associate is an entity over which the Company is in a position to exercise significant influence, but not control
or jointly control, through participation in the financial and operating policy decisions of the investee.
Investments in associates are recognised in the consolidated Financial Statements, using the equity method of
accounting. The Group’s share of post-acquisition profits or losses is recognised in profit or loss and its share
of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive
income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective
evidence of impairment. Losses in excess of the Group’s interest in those associates are not recognised unless
the Group has incurred obligations or made payments on behalf of the associate.
Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent
of the Group’s interest in the relevant associate. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the asset transferred in which case appropriate provision is made for
impairment.
Where the Company’s holding in an associate is diluted, the Company recognises a gain or loss on dilution in
profit and loss. This is calculated as the difference between the Company’s share of proceeds received for the
dilutive share issue and the value of the Company’s effective disposal.
In the Company accounts investments in associates are recognised and held at cost. The carrying value of the
investment is tested for impairment when there is objective evidence of impairment. Impairment charges are
included in the Company Statement of Comprehensive Income.
CORCEL PLC 41
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.4 Summary of Significant Accounting Policies (continued)
1.4.2 Interests in Joint Ventures
A joint venture is a joint arrangement whereby the partners who have joint control of the arrangement, have
rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of
the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of
the parties sharing control. The Group recognises its interest in the entity’s assets and liabilities, using the equity
method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet
at cost plus post-acquisition changes in the Group’s share of its net assets, less distributions received and less
any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly
controlled entity’s results after tax.
Any goodwill arising on the acquisition of a jointly controlled entity is included in the carrying amount of the jointly
controlled entity and is not amortised. To the extent that the net fair value of the entity’s identifiable assets,
liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to
the Group’s share of the entity’s profit or loss in the period in which the investment is acquired.
Financial Statements of the jointly controlled entity will be prepared for the same reporting period as the Group.
Where necessary, adjustments are made to bring the accounting policies used into line with those of the Group
and to reflect impairment losses where appropriate. Adjustments are also made in the Group’s Financial
Statements to eliminate the Group’s share of unrealised gains and losses on transactions between the Group
and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer
has joint control over, or significant influence in, the joint venture.
At 30 June 2020, the Group had following contractual arrangements, which were classified as investments in
associates and joint ventures:
•
•
Oro Nickel Ltd, a contractual arrangement with Battery Metals Pty Ltd, which represents a joint venture
established through an interest in a jointly controlled entity, in order to develop and exploit the Mambare
nickel project;
DVY196 Holdings Corp ("DVY"), 50% interest in a North American vanadium project.
1.4.3 Taxation
Corporation tax payable is provided on taxable profits at the prevailing UK tax rate. The tax expense represents
the sum of the current tax expense and deferred tax expense.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as
reported in the Statement of Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s
liability for current tax is measured using tax rates that have been enacted or substantively enacted by the
reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of
assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised
for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the
initial recognition, other than in a business combination, of other assets and liabilities in a transaction, which
affects neither the taxable profit nor the accounting profit.
42 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 43
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
and associates and interests in joint ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting
date.
Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly
to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other
comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets
and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:
•
•
the same taxable entity; or
different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise
and settle them simultaneously in each future period when the significant deferred tax assets and liabilities
are expected to be realised or settled.
1.4.4 Property, Plant and Equipment
Property, plant and equipment acquired and identified as having a useful life that exceeds one year is capitalised
at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated
residual values over their anticipated useful lives as follows:
Office furniture, fixtures and fittings – 33% per annum
Leasehold improvements
– 5% per annum
1.4.5 Foreign Currencies
Both the functional and presentational currency of Corcel Plc is Sterling (£). Each Group entity determines its
own functional currency and items included in the Financial Statements of each entity are measured using that
functional currency.
The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar (“AUD”), the
Papua New Guinea Kina (“PNG”) and the US Dollar (“USD”).
Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the
exchange rate prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the exchange rate prevailing at the reporting date.
Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing at the date, when the fair value was determined. Gains and losses arising on retranslation
are included in profit or loss for the period, except for exchange differences on non-monetary assets and
liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are
recognised directly in other comprehensive income.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated into the Group’s
presentational currency at exchange rates prevailing at the reporting date. Income and expense items are
translated at the average exchange rates for the period unless exchange rates have fluctuated significantly
during the year, in which case the exchange rate at the date of the transaction is used. All exchange differences
arising, if any, are recognised as other comprehensive income and are transferred to the Group’s foreign currency
translation reserve.
CORCEL PLC 43
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 44
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.4 Summary of Significant Accounting Policies (continued)
1.4.6 Exploration Assets
Exploration assets comprise exploration and development costs incurred on prospects at an exploratory stage.
These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic
feasibility studies and all technical and administrative overheads directly associated with those projects. These
costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision
for identified impairments. Costs associated with an exploration activity will only be capitalised if, in
management’s opinion, the results from that activity led to a material increase in the market value of the
exploration asset, which is determined by management to be following the economic feasibility stage. Generally,
costs associated with non-drilling activities, such as geophysical and geochemical surveys, are not capitalised.
Recoupment of exploration and development costs is dependent upon successful development and commercial
exploitation of each area of interest and will be amortised over the expected commercial life of each area once
production commences. The Group and the Company currently have no exploration assets where production
has commenced.
The Group adopts the “area of interest” method of accounting whereby all exploration and development costs,
relating to an area of interest, are capitalised and carried forward until abandoned. In the event that an area of
interest is abandoned, or if the Directors consider the expenditure to be of no value, accumulated exploration
costs are written off in the financial year in which the decision is made. All expenditure incurred prior to approval
of an application is expensed, with the exception of refundable rent, which is raised as a receivable.
Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the
relevant cost within non-current assets is recognised in the Income Statement.
1.4.7 Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 “Impairment of Assets” does not apply, are
reviewed at the end of each reporting period for impairment, when there is an indication that the assets might
be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable
amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their
value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the consolidated statement of comprehensive income.
When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in
the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised
to the extent of the carrying amount of the asset that would have been determined (net of amortisation and
depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately,
unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated
as a revaluation increase.
1.4.8 Share-Based Payments
Share Options
The Group operates equity-settled share-based payment arrangements whereby the fair value of services
provided is determined indirectly by reference to the fair value of the instrument granted.
The fair value of options granted to Directors and others in respect of services provided is recognised as an
expense in the income statement with a corresponding increase in equity reserves – the share-based payment
reserve until the award has been settled and then make a transfer to share capital. On exercise or lapse of share
options, the proportion of the share-based payment reserve relevant to those options is transferred to retained
earnings. On exercise, equity is also increased by the amount of the proceeds received.
44 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 45
The fair value is measured at grant date and charged over the vesting period during which the option becomes
unconditional.
The fair value of options is calculated using the Black-Scholes model, taking into account the terms and
conditions upon which the options were granted. The exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the market price of the entity’s equity
instruments. They are not considered when estimating the fair value of a share-based payment. Where the
vesting period is linked to a non-market performance condition, the Group recognises the goods and services it
has acquired during the vesting period based on the best available estimate of the number of equity instruments
expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened
vesting period, and the cumulative expense is ‘trued up’ for both the change in the number expected to vest and
any change in the expected vesting period.
Market conditions are performance conditions that relate to the market price of the entity’s equity instruments.
These conditions are included in the estimate of the fair value of a share-based payment. They are not taken
into account for the purpose of estimating the number of equity instruments that will vest. Where the vesting
period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual
vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the
cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised
over the originally estimated vesting period.
For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on
the basis of an observable market price.
Share Incentive Plan
Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is
determined indirectly by reference to the fair value of the free, partnership and matching shares granted on the grant
date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date
and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares the
charge is calculated as the excess of the mid-market price on the date of grant over the employee’s contribution.
1.4.9 Pension
The Group operates a defined contribution pension plan, which requires contributions to be made to a separately
administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account
as they become payable.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period, using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the
financial asset or liability.
1.4.11 Financial Instruments
The Group classifies its financial assets into one of the categories discussed below, depending on the purpose
for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's
accounting policy for each category is as follows:
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets
the negative intrinsic value. They are carried in the statement of financial position at fair value with changes in
fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense
line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group
does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair
value through profit or loss.
CORCEL PLC 45
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 46
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.4 Summary of Significant Accounting Policies (continued)
Amortised Cost
These assets comprise the types of financial assets, where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They
are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue
and are subsequently carried at amortised cost using the effective interest rate method, less provision for
impairment. Impairment provisions for current and non-current trade receivables are recognised based on the
simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit
losses. During this process the probability of the non-payment of the trade receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime
expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are
recorded in a separate provision account with the loss being recognised in the consolidated statement of
comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of
the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on
a forward-looking expected credit loss model. The methodology used to determine the amount of the provision
is based on whether there has been a significant increase in credit risk since initial recognition of the financial
asset. For those where the credit risk has not increased significantly since initial recognition of the financial
asset, twelve month expected credit losses along with gross interest income are recognised. For those for which
credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are
recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest
income on a net basis are recognised.
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and
cash equivalents in the consolidated statement of financial position. Cash and cash equivalents include cash in
hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three
months or less, and – for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are
shown within loans and borrowings in current liabilities on the consolidated statement of financial position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group held a number of strategic investments in listed and unlisted entities, which are not accounted for as
subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable
election to classify the investments at fair value through other comprehensive income rather than through profit
or loss as the Group considers this measurement to be the most representative of the business model for these
assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and
accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within
fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not
reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost
of the investment, in which case the full or partial amount of the dividend is recorded against the associated
investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other comprehensive income, are
recognised on settlement date with any change in fair value between trade date and settlement date being
recognised in the fair value through other comprehensive income reserve.
46 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 47
Financial Liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the
liability was acquired:
Other Financial Liabilities
Other financial liabilities include
•
•
•
Borrowings, which are initially recognised at fair value net of any transaction costs directly attributable to
the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost
using the effective interest rate method, which ensures that any interest expense over the period to
repayment is at a constant rate on the balance of the liability carried in the Consolidated Statement of
financial position. For the purposes of each financial liability, interest expense includes initial transaction
costs and any premium payable on redemption, as well as any interest or coupon payable while the liability
is outstanding.
Liability components of convertible loan notes are measured as described further below.
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest method.
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
•
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
CORCEL PLC 47
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 48
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.4 Summary of Significant Accounting Policies (continued)
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.
More information is disclosed in note 20.
1.4.12 Investments in the Company Accounts
Investments in subsidiary companies are classified as non-current assets and included in the Statement of
Financial Position of the Company at cost at the date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held
equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any,
in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to
profit and loss.
Investments in associates and joint ventures are classified as non-current assets and included in the statement
of financial position of the Company at cost at the date of acquisition less any identified impairment.
1.4.13 Share Capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the
definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.
1.4.14 Convertible Debt
The proceeds received on issue of the Group's convertible debt are allocated into their liability and equity
components. The amount initially attributed to the debt component equals the discounted cash flows using a
market rate of interest that would be payable on a similar debt instrument that does not include an option to
convert. Subsequently, the debt component is accounted for as a financial liability measured at amortised cost
until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the
conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of
income tax effects.
1.4.15 Warrants
Derivative contracts that only result in the delivery of a fixed amount of cash or other financial assets for a fixed
number of an entity’s own equity instruments are classified as equity instruments. Warrants relating to equity
finance and issued together with ordinary shares placement are valued by residual method and treated as directly
attributable transaction costs and recorded as a reduction of share premium account based on the fair value of
the warrants. Warrants classified as equity instruments are not subsequently re-measured (i.e., subsequent
changes in fair value are not recognised).
1.4.16 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker as required by IFRS 8 “Operating Segments”. The chief operating decision-maker
responsible for allocating resources and assessing performance of the operating segments has been identified
as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting
policies of the group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment
without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the
measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the
assessment of segment performance. When assessing segment performance and considering the allocation of
resources, the Board of Directors review information about segment non-current assets. For this purpose, all
non-current assets are allocated to reportable segments.
48 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 49
1.4.17 Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
•
Leases of low value assets; and
Leases with a duration of 12 months or less.
IFRS 16 was adopted 1 June 2019 without restatement of comparative figures.
On initial recognition, the carrying value of the lease liability also includes:
•
•
•
amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess
that option;
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis
of termination option being exercised.
Lease liabilities are subsequently measured at the present value of the contractual payments due to the lessor
over the lease term.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised, where the group is contractually required to dismantle, remove or
restore the leased asset.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group’s consolidated Financial Statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the
end of the reporting period. However, uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future
periods.
Significant Judgements and Accounting Estimates
In the process of applying the Group’s accounting policies, management has made the following judgements
and estimates, which have the most significant effect on the amounts recognised in the consolidated Financial
Statements:
Impairment of Investments in Associates and Joint Ventures
The carrying amount of investments in joint ventures is tested for impairment annually and this process is
considered to be key judgement along with determining whenever events or changes in circumstances indicate
that the carrying amounts for those assets may not be recoverable.
The resumption of activities in 2019/2020 on the ground in PNG amidst a significant strengthening of the
underlying fundamentals of nickel, have encouraged the Board to continue to hold the value of its stake in the
Mambare joint venture at the previous valuation of £1.77 million alongside the £1.3 million receivable. The
Company believes that the carrying values reflect the sizeable JORC resource and work done to date, as well
as the potential to progress the project to a mining license and Direct Shipping Ore “DSO” production in 2021
and beyond. The Company has assessed the viability of the project given current and expected nickel prices
and the anticipated cost of a DSO operation, and believes the project can be successfully taken into production
in the mid-term. The Board further believes that the likelihood of recovery of the receivable has also increased
over the past 12-24 months due to the progress made on the JV, and that full repayment of this figure is more
likely through either a disposal and trade sale prior to production, or through dividends once the project begins
shipping ore. More information is disclosed in note 11.
CORCEL PLC 49
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 50
Notes to Financial Statements
continued
1. Principal Accounting Policies continued
1.5 Significant Accounting Judgements, Estimates and Assumptions (continued)
The Company has also made judgements in respect of the success of licence renewals on the core projects.
During the year, the investment in Flexible Grid One (Ex Allied Energy) and loan receivable from Flexible Grid
One was fully impaired as the Company decided to no longer pursue development of the project. The loans to
Flexible Grid Solution (Ex EsTEQ) in relation to Flexible Grid One were written off based on judgements made
by management in respect of their repayment.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value of share options is determined using the
Black-Scholes model and the estimates used within this model are disclosed in note 18.
Valuation of a Receivable from Oro Nickel JV
The Directors believe that the receivable from the Oro Nickel Joint Venture will be fully recoverable in light of
the project’s ongoing progress towards a mining lease supporting a shipping ore operation at the site. Substantial
progress has been made on the mining lease application during the course of the year end, including the ground
penetrating radar survey conducted during the end of 2019 and early 2020. While the existing exploration
licenses remain under renewal at the year-end, the Company and the joint venture partners believe there remains
a high likelihood of renewal, given ongoing dialogue with the PNG authorities, and would expect to have these
renewed independently of any outcome of the mining lease application.
2. Segmental Analysis
Once the Group’s main focus of operations becomes production of battery metal mineral resources or flexible
production and storage of energy, the nature of management information, examined by the Board, will alter to
reflect the need to monitor revenues, margins, overheads and trade balances, as well as cash.
IFRS 8 requires the reporting of information about the revenues derived from the various areas of activity, the
countries in which revenue is earned regardless of whether this information is used in by management in making
operating decisions.
Battery
Metals
£’000
Flexible Grid
Solutions
(UK)
£’000
Corporate
and
unallocated
£’000
–
–
(178)
–
–
–
–
(3)
–
–
–
–
–
–
(21)
(41)
(106)
–
–
–
–
–
–
–
(27)
(817)
–
–
(26)
–
(37)
21
(247)
Total
£’000
–
–
(205)
(838)
(41)
(106)
(26)
(3)
(37)
21
(247)
(181)
(168)
(1,133)
(1,482)
Year to 30 June 2020
Revenue
Management services
Exploration expenses
Administrative expenses
Impairment of right of use asset
Impairment of goodwill
Currency (loss)/gain
Share of profits in joint ventures
Impairment of financial assets
carried at amortised cost
Other income
Finance cost – net
Net (loss) before tax from
continuing operations
50 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 51
Year to 30 June 2019
Revenue
Management services
Impairment of investment in joint ventures
Gain on sale of FVTPL financial instruments
Exploration expenses
Administrative expenses
Currency (loss)/gain
Share of profits in joint ventures
Impairment of financial assets carried
at amortised cost
Other income
Finance cost – net
Net (loss) before tax from
continuing operations
Battery
Metals
£’000
Flexible Grid
Solutions
(UK)
£’000
Corporate
and
unallocated
£’000
–
–
–
–
–
(134)
–
–
–
16
–
–
–
(1,503)
38
(70)
(519)
(43)
–
(26)
10
(377)
Total
£’000
–
–
(1,503)
38
(70)
(653)
(43)
(1)
(26)
26
(377)
(118)
(2,490)
(2,609)
–
–
–
–
–
–
–
(1)
–
–
–
(1)
Information by Geographical Area
Presented below is certain information by the geographical area of the Group’s activities. Investment sales
revenue and exploration property sales revenue are allocated to the location of the asset sold.
Papua
UK Australia New
£’000 £’000 Guinea
Year to 30 June 2020 £’000
USA
£’000
Canada
£’000
Revenue
Total segment revenue and
other gains
Non-current assets
Investments in associates and
joint ventures
Goodwill
Receivable from a joint venture
Purchased debt
FVTOCI financial instruments
Total segment non-current assets
–
–
–
25
–
–
–
25
–
–
–
–
–
–
–
–
–
–
1,654
–
1,323
367
–
3,344
–
–
–
–
–
–
–
–
–
–
293
–
–
–
4
297
Total
£’000
–
–
1,947
25
1,323
367
4
3,666
Papua
New
UK Australia Guinea
Year to 30 June 2019 £’000 £’000 £’000
USA
£’000
Canada
£’000
Total
£’000
Revenue
Gain on sale of investments
Total segment revenue and
other gains
Non-current assets
Investments in associates and
joint ventures
Goodwill
Receivable from a joint venture
FVTOCI financial instruments
Total segment non-current assets
–
38
38
–
42
–
31
73
–
–
–
–
–
–
49
49
–
–
–
1,657
–
1,318
–
2,975
–
–
–
–
–
–
96
96
–
–
–
293
–
–
2
295
–
38
38
1,950
42
1,318
178
3,488
CORCEL PLC 51
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 52
Notes to Financial Statements
continued
3. Loss on Ordinary Activities Before Taxation
Group
Loss on ordinary activities before taxation is stated after charging:
Auditor’s remuneration:
– fees payable to the Company’s auditor for the audit of consolidated and
Company Financial Statements
Directors’ emoluments (note 8)
2020
£’000
2019
£’000
25
437
16
184
As declared in note 8, Directors are remunerated in part by third parties with whom the Company and Group
have contractual arrangements.
4. Administrative Expenses
Group
2020
£’000
Group
2019
£’000
Company
2020
£’000
Company
2019
£’000
369
15
33
32
1
36
72
15
1
14
42
26
101
8
(2)
8
58
9
838
174
12
11
22
2
6
63
36
–
2
21
26
83
11
74
9
96
5
653
369
15
33
32
1
36
69
15
1
12
42
25
101
8
(5)
8
44
9
815
170
12
11
15
2
6
59
13
–
2
21
26
83
10
8
9
64
5
516
2020
£’000
(247)
(247)
2019
£’000
(377)
(377)
Staff costs
Payroll
Pension
Share-based payments
Consultants
Insurance
Employers NI
Professional services
Accounting
Legal
Business development
Marketing
Funding costs
Other
Regulatory compliance
Travel
Office and Admin
General
IT costs
Rent
Insurance
Total administrative expenses
5. Finance Costs, Net
Group
Interest expense
52 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 53
6. Taxation
Current period transaction of the Group
UK corporation tax at 19.00% (2018: 19.00%) on profits for the period
Deferred tax
Origination and reversal of temporary differences
Deferred tax assets derecognised
Tax (credit)
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation
Loss on ordinary activities at the average UK standard rate of 19% (2019: 19.00%)
Effect of non-deductible expense
Effect of tax benefit of losses carried forward
Tax losses brought forward
Current tax (credit)
2020
£’000
2019
£’000
–
–
–
–
(1,482)
(282)
136
267
(121)
–
–
–
–
–
(2,608)
(496)
460
35
–
–
Deferred tax amounting to £nil (2019: £nil), relating to the Group’s investments was recognised in the Statement
of Comprehensive Income. No deferred tax charge has been recognised due to uncertainty as to the timing of
future profitability of the Group. Unutilised trading losses are estimated at circa £3,085 thousand (2019: £3,389)
and capital losses estimated circa £nil (2019: £nil).
7. Staff Costs
The aggregate employment costs of staff for the Group (including Directors) for the year was:
Wages and salaries
Pension
Social security costs, net of allowances
Medical costs
Employee share-based payment charge
Total staff costs
The average number of Group employees (including Directors) during the year was:
Executives
Administration
2020
£’000
369
15
36
1
34
455
2019
£’000
174
12
6
2
11
205
2020
Number
2019
Number
4
1
5
3
1
4
During the year, for all Directors and employees, who have been employed for more than three months, the
Company contributed to a defined contributions pension scheme as described under Directors’ remuneration in
the Directors’ Report and a Share Incentive Plan (“SIP”) as described under Management incentives in the
Directors’ Report.
All emoluments presented for current and comparative years, except for pension, are short-term in nature.
CORCEL PLC 53
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 54
Notes to Financial Statements
continued
8. Directors’ Emoluments
Share-
Share
based
Directors’ Consultancy Incentive Payments
fees fees Plan
2020 £’000 £’000 £’000
Pension
(options) contributions
£’000
£’000
Executive Directors
A R M Bell*
J Parsons**
S Kaintz
Non-executive Directors
N Burton
E Ainsworth
43
85
145
45
17
335
–
–
–
–
23
23
–
–
7
–
–
7
–
16
7
–
–
23
1
–
11
–
–
12
Share-
based
Share
Directors’ Consultancy Incentive Payments
fees fees Plan
2019 £’000 £’000 £’000
£’000
Pension
(options) contributions
£’000
Executive Directors
A R M Bell
S Kaintz
Non-executive Directors
E Bugnosen
50
67
18
135
15
–
–
15
4
4
3
11
–
–
–
–
4
5
1
10
Social
security
costs
£’000
2
12
17
5
1
37
Social
security
costs
£’000
5
7
1
13
Total
£’000
46
113
187
50
41
437
Total
£’000
78
83
23
184
* Includes £30,000 ex-gratia termination payment to A R M Bell, who resigned as a company Director during the year.
** Includes 8% pension contribution paid in cash as a part of gross salary.
The number of Directors, who exercised share options in year, was nil (2019: nil).
During the year, the Company contributed to a Share Incentive Plan, more fully described in the Directors’ Report
on pages 20 to 23, where shares were issued to each employee, including Directors, making a total of
14,717,790 (2019: 14,160,000) partnership and matching shares. Those shares were issued in relation to
services provided by those employees during the reporting year.
The Company also operates a contributory pension scheme, more fully described in the Directors’ Report in the
section Directors’ Remuneration on page 22.
54 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 55
9. Earnings per Share
The basic earnings/(loss) per share is derived by dividing the loss for the year attributable to ordinary
shareholders of the Parent by the weighted average number of shares in issue. Diluted earnings/(loss) per share
is derived by dividing the loss for the year attributable to ordinary shareholders of the Parent by the weighted
average number of shares in issue plus the weighted average number of ordinary shares that would be issued
on conversion of all dilutive potential ordinary shares into ordinary shares.
Loss attributable to equity holders of the Parent Company, £’000
Weighted average number of ordinary shares of £0.0001 in issue,
used for basic EPS, adjusted for 100:1 share consolidation
Earnings per share – basic, £
Earnings per share – fully diluted, £
2020
(1,482)
2019
(2,587)
75,338,810
9,767,280
(0.02)
(0.02)
(0.26)
(0.26)
At 30 June 2020 and at 30 June 2019, the effect of all the instruments in issue is anti-dilutive as it would lead to
a further reduction of loss per share, therefore they were not included into the diluted loss per share calculation.
Options and warrants with conditions not met at the end of the period, that could potentially dilute basic EPS in
the future, but were not included in the calculation of diluted EPS for the periods presented:
(a) Share options granted to employees - total, of them
- Vested at the end of reporting period
- Not vested at the end of the reporting period
(b) Number of warrants in issue
Total number of contingently issuable shares that could potentially
dilute basic earnings per share in future and anti-dilutive potential
ordinary shares that were not included into the fully diluted EPS calculation
* 30 June 2019 numbers were retrospectively adjusted for 100:1 share consolidation.
2020
2019*
6,212,534
122,900
6,089,634
60,839,078
270,600
253,300
17,300
6,895,671
67,051,612
7,166,271
There were no ordinary share transactions after 30 June 2020, that could have changed the EPS calculations
significantly if those transactions had occurred before the end of the reporting period.
CORCEL PLC 55
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 56
Notes to Financial Statements
continued
10. Investments in Subsidiaries and Goodwill
Company
Cost
At 1 July 2018 and 1 July 2019
Additions
At 30 June 2020 and 30 June 2019
Impairment
At 1 30 June 2020 and 30 June 2019
Net book amount at 30 June 2020 and
at 30 June 2019
Investments in
subsidiaries
2020
£
Investments in
subsidiaries
2019
£
Goodwill
2020
£’000
Goodwill
2019
£’000
483
–
483
–
483
483
–
483
–
483
42
89
131
(106)
25
42
–
42
–
42
The Parent Company of the Group holds more than 50% of the share capital of the following companies, the
results of which are consolidated:
Company Name
Country of
registration
Class
Regency Mines Australasia Pty Limited
Australia
Ordinary
Regency Resources Inc*
USA
Ordinary
Proportion
held by
Group
100%
100%
Nature of business
Mineral exploration
Natural resources
Flexible Grid Solutions Limited
(former ESTEQ Limited)
Flexible Grid One Limited
(former Allied Energy Services Ltd
(indirectly owned through ESTEQ Limited))
Weirs Drove Development Limited
UK
Ordinary
100%
Holding company
UK
UK
Ordinary
Ordinary
100%
50%
Energy storage and
trading and grid backup
Energy storage
* Incorporated on 21 August 2014 and dissolved on 4 March 2020.
Regency Mines Australasia Pty Limited registered office is c/o Paragon Consultants PTY Ltd, PO Box 903,
Claremont WA, 6910, Australia.
Regency Resources Inc registered office is Corporation Trust Center, 1209 Orange Street, Wilmington, New
Castle County, Delaware 19801, United States of America.
Flexible Grid Solutions Limited registered office is Salisbury House, London Wall, London EC2M 5PS,
United Kingdom.
Flexible Grid One Limited registered office is Salisbury House, London Wall, London EC2M 5PS,
United Kingdom.
Weirs Drove Development Limited registered office is 20-22 Wenlock Road, London N1 7GU, United Kingdom.
56 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 57
Flexible Grid One Limited (FGO) (former Allied Energy Services Ltd (indirectly owned through Flexible Grid
Solutions Limited))
On 10 November 2017, Corcel formed a 100% owned subsidiary, Flexible Grid Solutions Limited, to act as the
vehicle for development of opportunities in the battery and energy storage technology sector across the UK. On
15 March 2018, Flexible Grid Solutions Limited committed to investing up to £250,000 into Flexible Grid One
Limited, representing an 80% interest in that entity. Non-controlling shareholders brought with them a
development pipeline, including land rights and connections for combined battery and gas and anaerobic
digestion generation plants to be constructed and operated across the UK. On 3 January 2020, the Company
announced the completion of a buy-out of the 20% minority shareholders in Flexible Grid One Limited through
the issuance of 2,461,538 new ordinary shares in the Company. The investment in Flexible Grid One Limited
was subsequently written off at year-end. Total value of goodwill, arising on all stages of the FGO acquisition,
amounted to £106,000 and was impaired during the reporting year.
Weirs Drove Development Limited (indirectly owned through Flexible Grid Solutions Limited)
On 19 June 2020, the Company announced an investment acquiring a 50% stake in Weirs Drove Development
Limited, a developer of UK based energy storage and flexible production projects. The cost of the transaction
was an initial investment and directly attributable acquisitions costs, totalling £37,750, with the agreement to
extend a further £100,000, following the project meeting all shovel ready criteria. At year end, these conditions
had not been met and so the Company will hold the project at the cost of the initial investment, pending further
developments. Goodwill in the amount of £25,250 was recognised in relation to this acquisition.
11. Investments in Associates and Joint Ventures
Carrying balance
At 1 July 2018
Additions
Share of loss in joint venture
Impairment of investment in associate
At 30 June 2019
Share of loss in joint venture
Impairment of investment in associate
Net book amount at 30 June 2020
Group
£’000
3,161
293
(1)
(1,503)
1,950
(3)
–
1,947
Company
£’000
1,774
293
–
–
2,067
–
–
2,067
At 30 June 2020, the Parent Company of the Group had a significant influence by virtue other than a shareholding
of over 20% or had joint control through a joint venture contractual arrangement in the following companies:
Company Name
Direct
Mining Equity Trust (MET),
LLC (Held indirectly through
Regency Resources Corp.)
Oro Nickel Ltd (Held indirectly
through Oro Nickel Vanuatu)
DVY196 Holdings Corp
Country of
registration
Class
Proportion
held by
Group at
Proportion
held by
Group at
30 June 2020 30 June 2019
Status at
30 June 2020
Accounting
year end
USA Ordinary
25.84%
25.84%
Inactive
Papua New
31 December
2019
Guinea Ordinary
UK Ordinary
41%
50%
50%
50%
Active
Active
30 June 2020
30 Sept 2020
Mining Equity Trust (MET) LLC registered office is Trolley Square, Suite 20 C, Wilmington, New Castle, Delaware
19806, United States of America.
Oro Nickel Ltd registered office is c/o Sinton Spence Chartered Accountants, 2nd Floor, Brian Bell Plaza, Turumu
Street, Boroko, National Capital District, Papua New Guinea.
CORCEL PLC 57
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 58
Notes to Financial Statements
continued
11. Investments in Associates and Joint Ventures continued
DVY196 Holdings Corp registered office is 3081 3rd Avenue, Whitehorse, Yukon, Canada Y1A 4Z7.
Summarised financial information for the Company’s associates and joint ventures, where available, is
given below:
For the year as at 30 June 2020:
Company
Oro Nickel Ltd
DVY196 Holdings Corp
Revenue
£’000
–
–
Loss
£’000
(7)
–
Assets
£’000
3,667
293
Liabilities
£’000
(3,034)
–
Net Assets
£’000
633
293
Carrying balance
At 1 July 2019
Share of loss in joint venture
Net book amount at 30 June 2020
Oro Nickel
£’000
DVY196
£’000
Total Group
£’000
1,657
(3)
1,654
293
–
293
1,950
(3)
1,947
12. Financial Instruments with Fair Value through Other Comprehensive
Income (FVTOCI)
30 June 2020
Group
£’000
30 June 2019
Group
£’000
30 June 2020
Company
£’000
30 June 2019
Company
£’000
FVTOCI financial instruments at the
beginning of the period
Transferred from Available-for-sale category
Additions
Disposals
Revaluations and impairment
FVTOCI financial assets at the end of the period
178
–
–
(42)
(132)
4
–
986
10
(18)
(800)
178
178
–
–
(42)
(132
4
–
586
10
(18)
(400)
178
Market Value of Investments
The market value as at 30 June 2020 of the investments’ available for sale listed and unlisted investments was
as follows:
Quoted on London AIM
Quoted on Standard List of LSE
Quoted on other foreign stock exchanges
At 30 June
30 June 2020
Group
£’000
30 June 2019
Group
£’000
30 June 2020
Company
£’000
30 June 2019
Company
£’000
–
–
4
4
31
96
51
178
–
–
4
4
31
96
51
178
58 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 59
13. Financial Instruments with Fair Value through Profit and Loss (FVTPL)
30 June 2020
Group
£
30 June 2019
Group
£
30 June 2020
Company
£
30 June 2019
Company
£
FVTPL financial instruments at the beginning
of the period
Transferred from Available-for-sale category
Disposals
Revaluations
FVTPL financial assets at the end of the
period (audited)
14. Trade and Other Receivables
Non-current
Amounts owed by Group undertakings
Purchased debt
Amounts owed by related parties
– due from associates and joint ventures
Total non-current
Current
Sundry debtors
Prepayments
Amounts owed by related parties
– due from key management
Total current
5
–
–
–
5
2020
£
–
367
1,323
1,690
150
25
–
175
–
113
(108)
–
5
–
–
–
–
–
Group
Company
2019
£
–
–
1,318
1,318
91
18
6
115
2020
£
51
367
1,322
1,740
150
25
–
175
–
108
(108)
–
–
2019
£
574
–
1,318
1,892
67
18
9
94
Trade and other receivables include a balance of:
•
•
£16,549 (2019: £18,948) owing to Red Rock Resources Plc, a related party entity as a result of having
common Directors.
£20,619 (2019: £5,503) owing to Curzon Energy Plc, a related party entity as a result of having a
common Director.
Debt Purchased from Resource Mining Corporation Limited
On 7 April 2020, the Company completed the acquisition of a AUD$1.7m (£907,000) debt position in ASX listed
Resource Mining Corporation Limited for consideration of £178,096 and 13,288,982 new ordinary shares of
Corcel. The Company’s share price on the date of transaction was £0.011. For this consideration the Company
also acquired a six-month option to buy the balance of Resource Mining Corporation Limited debt for the same
proportional term, AUD 640,000 in cash and 23,711,018 new ordinary shares in Corcel. The option was
exercised, for more details please see note 25. Resource Mining Corporation Limited’s exploration licenses in
Papua New Guinea remain under renewal at the time of this report.
CORCEL PLC 59
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 60
Notes to Financial Statements
continued
15. Trade and Other Payables
Trade and other payables
Amounts due to related parties:
– due to Red Rock Resources plc
Accruals
Trade and other payables
Borrowings (note 21)
Total
Group
Company
2020
£
140
8
35
183
760
943
2019
£
159
122
28
309
1,522
1,831
2020
£
139
8
35
182
760
942
2019
£
110
122
28
260
1,522
1,782
Trade and other payables include a balance of £7,962 (2019: £122,109) owing to Red Rock Resources Plc, a
related party entity as a result of having common Directors.
Long-term borrowings maturity
Due within 1-2 years (December 2021)
Total long-term borrowings
2020
£’000
760
760
2019
£’000
–
–
C4 Energy Notes – YA PN II – Riverfort
On 5 December 2019, the Company announced that YA PN II and Riverfort Global Opportunities Limited, holders
of Promissory Notes and Convertible Loan Notes, first announced on 6 June 2018, and updated on 22 July
2019, agreed to extinguish the entire remaining balance, through a subscription for New Loan Notes and a share
conversion. The partial conversion of the Promissory Notes resulted in the issuance of 25,963,636 new ordinary
shares of the Company, and the investors have agreed to lock up the resulting promissory conversion shares,
100% of the total for three months, 70% of the total shares for a subsequent six months, and 40% of the total
shares of the promissory conversion shares for a further six-month period. The approximate residual balance of
£286,756 of the promissory notes will be retired, and YA PN II Ltd and Riverfort Global Capital Ltd have
subscribed for new two-year loan notes payable on 23 December 2021, bearing 8% interest per annum with no
conversion rights.
Also on 5 December 2019, the Company was informed by YA II PN Ltd and Riverfort Global Capital Limited
that, following the subscription of New Loan Notes, both parties had granted an option over their interests in the
New Loan Notes, totalling £729,272, to C4 Energy Ltd, a UK incorporated private entity. James Parsons,
Chairman of Corcel Plc, is also a Director and shareholder of C4 Energy Ltd.
60 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 61
Convertible Loan Notes
On 5 December 2019, the Company announced that of the outstanding Convertible Loan Notes, first announced
on 14 January 2019, holders of £281,113 of these notes have agreed to convert these obligations into 10,222,291
new ordinary shares of the Company at a price of £0.0275 per share. The terms of 915,873 warrants, originally
issued to the Convertible Loan Note holders, were varied, and the new terms of these warrants allow exercise
into new ordinary shares of the Company at a price of £0.60 for a period of 36 months.
More details on all the borrowing are given in the note 22.
Right of Use Liability
IFRS 16 application resulted in recognition of lease liabilities in the amount of £41,402. A corresponding right of
use asset was recognised on the IFRS 16 adoption but during the reporting year was written off together with
other assets of Flexible Grid One Limited.
16. Reserves
Share Premium
The share premium account represents the excess of consideration received for shares issued above their
nominal value net of transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have arisen on the retranslation of
overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
FVTOCI Revaluation Reserve
The fair value through other comprehensive income (FVTOCI) reserve represents the cumulative revaluation
gains and losses in respect of FVTOCI investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding and
not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted, still outstanding and not exercised.
CORCEL PLC 61
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 62
Notes to Financial Statements
continued
17. Share Capital of the Company
The share capital of the Company is as follows:
Authorised, issued and fully paid
189,910,596 ordinary shares of £0.0001 each
(2019: 1,516,894,159 ordinary shares of £0.0001 each)
1,788,918,926 deferred shares of £0.0009 each
2,497,434,980 A deferred shares of £0.000095 each
8,687,335,200 B Deferred shares of £0.000099 each
As at 30 June
Movement in ordinary shares
As at 1 July 2018 – ordinary shares of £0.0001 each
Issued on 6 Dec 2018 at £0.005 per share (non-cash, settlement for the
option to acquire interest in North American Vanadium project)
Issued on 14 Jan 2019 at £0.0035 per share (non-cash, loan fees settlement)
Issued on 24 Jan 2019 at £0.005 per share (non-cash, settlement with
vendor of Vanadium project)
Issued on 24 Jan 2019 at £0.045 per share (non-cash, settlement of investor
relations communications expenses)
Issued on 15 Mar 2019 at £0.000823 per share (non-cash, loan conversion)
Issued on 25 Mar 2019 at £0.000729 per share (non-cash, loan conversion)
Issued on 15 Apr 2019 at £0.0006 per share (cash)
Issued on 18 Apr 2019 at £0.00075 per share (non-cash, SIP shares)
As at 30 June 2019 – ordinary shares of £0.0001 each
Issued on 18 Dec 2019 at £0.0001 per share (cash)
Issued on 23 Dec 2019 at £0.000275 per share (cash)
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, debt extinguished)
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, promissory
notes conversion)
Issued on 23 Dec 2019 at £0.000275 per share (non-cash, CLN conversion)
23 December 2019 share subdivision into
– 8,687,335,200 ordinary shares of £0.000001 each
– 8,687,335,200 B deferred shares of £0.000099 each
Total ordinary shares of £0.000001 each at 23 Dec 2019 prior to
share 100:1 consolidation
Share consolidation 100:1new ordinary shares of £0.0001 each
Issued on 3 Jan 2020 at £0.0305 per share (non-cash, partner buy out)
Issued on 31 Jan 2020 at £0.0443 per share (non-cash, director’s salary)
Issued on 31 Jan 2020 at £0.0458 per share (non-cash, director’s salary)
Issued on 31 Jan 2020 at £0.0467 per share (non-cash, director’s fees)
Issued on 31 Jan 2020 at £0.0278 per share (non-cash, settled creditor)
Issued on 7 Apr 2020 at £0.0083 per share (non-cash, settled creditor)
Issued on 7 Apr 2020 at £0.0110 per share (non-cash, debt purchase)
Issued on 7 Apr 2020 at £0.008 per share (cash)
Issued on 21 Apr 2020 at £0.0110 per share (non-cash, SIP shares)
Issued on 19 Jun 2020 at £0.0100 per share (cash)
Issued on 19 Jun 2020 at £0.0100 per share (non-cash, settled creditor)
2020
£’000
19
1,610
237
860
2,726
2019
£’000
152
1,610
237
–
1,999
Number
Nominal, £
791,239,654
79,124
5,000,000
22,571,428
53,109,600
5,333,333
97,292,904
121,107,242
399,999,998
21,240,000
1,516,894,159
56
3,021,818,173
530,030,036
500
2,258
5,311
533
9,729
12,111
40,000
2,123
151,689
0.01
302,182
53,003
2,596,363,636
1,022,229,140
(8,687,335,200)
259,636
102,223
(868,734)
8,687,335,200
86,873,352
2,461,538
122,312
49,028
141,901
168,421
4,909,610
13,288,982
58,750,000
1,145,452
21,000,000
1,000,000
8,687
8,687
246
12
5
14
17
491
1,329
5,875
115
2,100
100
As at 30 June 2020 – ordinary shares of £0.0001 each
189,910,596
18,991
62 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 63
The Company’s share capital consists of three classes of shares, being:
•
•
•
•
Ordinary shares with a nominal value of £0.0001, which are the company’s listed securities;
Deferred shares with a nominal value of £0.0009;
A Deferred shares with a nominal value of £0.000095;
B Deferred share with a nominal value of £0.000099
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the Company,
or bought back for £1 and then cancelled. These deferred shares are not quoted and carry no rights whatsoever.
Warrants
At 30 June 2020, the Company had 60,839,078 warrants in issue (2019: 689,567,098) with exercise price ranging
£0.01245-£0.60 (2019: £0.0010-£0.01). Out of those, 3,999,999 (2019: 609,090,906) have market performance
conditions that accelerate the expiry date. Weighted average remaining life of the warrants at 30 June 2020 was
979 days (2019: 524 days).
50,575,000 (post-consolidation) warrants were issued in the reporting year by the Group to its shareholders in
the capacity of shareholders and therefore are outside of IFRS 2 scope.
5,348,206 (post-consolidation) warrants were issued during the reporting period to counterparties as payment
for their services and fall within the scope of IFRS 2. The charges related to the warrants granted as a payment
for services are included within Administrative expenses lines of the Consolidated Income Statement in the
amount of £7,491 (2019: £nil) and Exploration expenses line of the Consolidated Income Statement in the
amount of £21,710 (2019: £nil). Details related to valuation of all warrants are disclosed below.
Group and Company
Outstanding at the beginning of the period
Granted during the period
Exercised during the period
Adjusted number of warrants in issue in line with 100:1 share consolidation
Lapsed during the period
Outstanding at the end of the period
2020
number of
warrants
689,567,098
86,834,317
–
(506,471,429)
(209,090,908)
2019
number of
warrants
434,665,467
480,476,190
–
–
(225,574,559)
60,839,078
689,567,098
Grant date
14 Jan 2019
15 Apr 2019
17 July 2019
31 Jan 2020
7 Apr 2020
7 Apr 2020
19 Jun 2020
Warrant
exercise price,
adjusted post
consolidation
Number of
warrants
before share
consolidation
Number of
post
consolidation
warrants
£0.60
£0.10
£0.25
£0.0285
£0.01245
£0.016
£0.016
91,587,303
399,999,998
20,000,000
–
–
–
–
915,873
3,999,999
200,000
438,596
4,909,610
29,375,000
21,000,000
Expiry date
12 Dec 2022
14 Apr 2021
1 July 2024
30 Jan 2023
6 Apr 2023
6 Apr 2023
18 Jun 2023
Total warrants in issue at 30 June 2020
511,587,301
60,839,078
CORCEL PLC 63
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 64
Notes to Financial Statements
continued
17. Share Capital of the Company continued
At 30 June 2020 the Company had the following warrants to subscribe for shares in issue:
The aggregate fair value recognised in warrants reserve in relation to the share warrants granted during the
reporting period was £272,785 (2019: £nil).
The following information is relevant in the determination of the fair value of warrants granted during the reporting
period. Black-Scholes valuation model was applied for all the warrants below:
Grant date Expiry date
17 July 2019 1 Jul 2024
31 Jan 2020 30 Jan 2023
7 Apr 2020 6 Apr 2023
7 Apr 2020 6 Apr 2023
19 Jun 2020 18 Jun 2023
Total at
30 June 2020
Number
of post Warrant
life,
years
consolidation
warrants
5
3
3
3
3
200,000
438,596
4,909,610
29,375,000
21,000,000
60,839,078
Warrant
exercise
price,
adjusted post
consolidation,
£
0.25
0.0285
0.01245
0.016
0.016
Share
price at
the grant
date,
£
0.065
0.0278
0.00825
0.0083
0.0103
UK risk-
free rate
at the
date of FV of 1
FV of all
grant, Volatility, warrant, warrants,
£
% % £
0.5 127.79 0.047
0.425 100.97 0.01708
0.192 100.58 0.004422
0.192 100.58 0.004001
0.0001 102.40 0.005555
9,400
7,491
21,710
117,529
116,655
272,785
Capital Management
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate
returns and ensure that the Group can fund its operations and continue as a going concern. The Group’s debt
and capital, includes ordinary share capital and financial liabilities, supported by financial assets. There are no
externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distributions to shareholders and share issues. There have been no changes in the
strategy adopted by management to control the capital of the Group since the prior year.
18. Share-Based Payments
Employee Share Options
In prior years, the Company established an employee share option plan to enable the issue of options as part
of the remuneration of key management personnel and Directors to enable them to purchase ordinary shares
in the Company. Under IFRS 2 “Share-based Payments”, the Company determines the fair value of the options
issued to Directors and employees as remuneration and recognises the amount as an expense in the Income
Statement with a corresponding increase in equity.
At 30 June 2020, the Company had outstanding options to subscribe for post-consolidation Ordinary shares
as follows:
Options issued
14 June 2016
exercisable at
£0.45 per share
expiring
29 January
2022
Number
Options issued
9 September
2016 exercisable
at £0.8 per share,
expiring on
9 September
2022,
Number
28,200
–
7,200
35,400
96,000
–
–
96,000
Options issued
5 December
2019,
exercisable
at £0.0275 per
share, expiring
on 5 December
2024
–
3,040,567
–
3,040,567
Options issued
31 January 2020
exercisable at
£0.0285
per share,
expiring on
31 January
2025
3,040,567
–
–
Total
Number
3,164,767
3,040,567
7,200
3,040,567
6,212,534
S Kaintz
J Parsons
Employees
Total
64 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 65
At 30 June 2019, the Company had outstanding options to subscribe for pre-consolidation Ordinary shares
as follows:
A R M Bell
S Kaintz
E Bugnosen
Employees
Total
2,960,000
2,820,000
560,000
720,000
7,060,000
Options issued
14 June 2016
exercisable at
0.45 pence per
share expiring
29 January 2022
Number
Options issued
9 September
2016 exercisable
at 0.8p per
share, expiring
on 9 September
2022, Number
Total
Number
13,360,000
12,420,000
560,000
720,000
10,400,000
9,600,000
–
–
20,000,000
27,060,000
Company and Group
Outstanding at the beginning of the period
Granted during the year
Adjusted in line with 100:1 share consolidation
Outstanding at the end of the period
2020
2019
Weighted
average
exercise
price
£
0.71
0.28
0.71
0.42
Number of
options
Number
27,060,000
–
–
27,060,000
Weighted
average
exercise
price
Pence
0.71
–
–
0.71
Number of
options
Number
27,060,000
6,081,134
(26,928,600)
6,212,534
The exercise price of options outstanding at 30 June 2020 and 30 June 2019, ranged between £0.0275 and
£0.80. Their weighted average contractual life was 4.462 years (2019: 3.014 years).
Of the total number of options outstanding at 30 June 2020, 122,900 (2019: 25,330,000) had vested and were
exercisable. The weighted average share price (at the date of exercise) of options, exercised during the year,
was nil (2019: nil) as no options were exercised during the reporting year (2019: nil).
The following information is relevant in the determination of the fair value of share options granted during the
reporting period to the Company Directors. Black-Scholes valuation model was applied to value the options with
the inputs detailed in the table below:
Option
exercise
price,
adjusted
post
consolidation,
£
0.0275
0.0285
Share
price at
the
grant
date,
£
0.0400
0.0278
Vesting
period,
years
3
3
Life of
the
option,
years
5
5
UK risk-
free rate
at the
date of FV of 1
grant, Volatility, option,
% % £
0.00557 100.3 0.027
0.425 101.0 0.01712
FV of all
options,
£
82,095
52,055
Number of
post
consolidation
Grant date options
5 Dec 2019 3,040,567
31 Jan 2020 3,040,567
Total at
30 June 2020 6,081,134
Share-based remuneration expense, related to the share options granted during the reporting period, is included
in the Administrative expenses line in the Consolidated Income Statement in the amount of £23,193 (2019: £nil).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan (SIP), a government approved
scheme, the terms of which provide for an equal reward to every employee, including Directors, who have served
for three months or more at the time of issue. The terms of the plan provide for:
•
each employee to be given the right to subscribe any amount up to £150 per month with Trustees, who
invest the monies in the Company’s shares;
CORCEL PLC 65
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 66
Notes to Financial Statements
continued
18. Share-Based Payments continued
•
•
the Company to match the employee’s investment by contributing an amount equal to double the
employee’s investment (“matching shares”); and
the Company to award free shares to a maximum of £3,600 per employee per annum.
The subscriptions remain free of taxation and national insurance if held for five years.
All such shares are held by SIP Trustees and the shares cannot be released to participants until five years after
the date of the award.
During the financial year, a total of 1,145,452 free, matching and partnership shares were awarded (2019:
21,240,000), resulting in a share-based payment charge of £9,772 (2019: £10,620), included into administrative
expenses line in the Consolidated Income Statement.
19. Cash and Cash Equivalents
Group
Cash in hand and at bank
Company
Cash in hand and at bank
30 June 2020
£’000
30 June 2019
£’000
415
64
30 June 2020
£’000
30 June 2019
£’000
389
34
Credit Risk
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and other
receivables. The Directors manage the Group’s exposure to credit risk by the application of monitoring
procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Directors
minimise credit risk by dealing exclusively with high credit rating counterparties.
Credit Risk Concentration Profile
The Group’s receivables do not have significant credit risk exposure to any single counterparty or any group of
counterparties, having similar characteristics. The Directors define major credit risk as exposure to a
concentration exceeding 10% of a total class of such asset.
The Company maintains its cash reserves in Coutts & Co, which maintains the following credit ratings:
Standard
Credit Agency and Poor’s
Long Term BBB
Short Term A-2
Moody’s
Baa2
P-2
Fitch
A
F1
30 June 2020
Cash Held,
£’000
–
389
JRC
A
–
The Company maintains its cash reserves in Westpac Business One, which maintains the following credit ratings:
Credit Agency
Long Term
Short Term
Standard
and Poor’s
AA-
A-1+
Moody’s
Aa2
P-1
30 June 2020
Cash Held,
£’000
–
1
Fitch
A+-
F1
66 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 67
20. Financial Instruments
20.1 Categories of Financial Instruments
The Group and the Company holds a number of financial instruments, including bank deposits, short-term
investments, loans and receivables and trade payables. The carrying amounts for each category of financial
instrument are as follows:
Group
30 June
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares (note 12)
Total financial assets carried at fair value, valued at observable market price
Fair value through profit and loss financial assets
Investments in warrant of a listed entity (note 13)
Total financial assets carried at fair value, valued using valuation techniques
Cash and cash equivalents
Loans and receivables
Receivable from JVs
Purchased debt (note 14)
Other receivables
Total financial assets held at amortised cost
Total financial assets
Total current
Total non-current
Company
30 June
Financial assets
Fair value through other comprehensive income financial assets
Quoted equity shares
Total FVTOCI financial assets
Cash and cash equivalents
Loans and receivables
Receivable from JVs
Purchased debt (note 14)
Receivable from subsidiaries
Other receivables
Total financial assets held at amortised cost
Total financial assets
Total current
Total non-current
2020
£’000
2019
£’000
4
4
5
5
415
1,322
367
174
1,863
2,287
594
1,693
2020
£’000
4
4
389
1,322
367
51
174
1,914
2,308
564
1,744
178
178
5
5
64
1,317
–
115
1,432
1,679
184
1,495
2019
£’000
178
178
34
1,317
–
574
94
1,985
2,197
128
2,069
CORCEL PLC 67
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 68
Notes to Financial Statements
continued
20. Financial Instruments continued
20.1 Categories of Financial Instruments (continued)
Financial Instruments Carried at Fair Value Using Valuation Techniques Other than Observable Market Value
Financial instruments valued using other valuation techniques can be reconciled from beginning to ending
balances as follows:
Group
30 June
Financial assets
Purchased debt
FVTPL
Total financial assets valued using valuation techniques
Financial liabilities
Loans and borrowings
Trade and other payables
Borrowings
Total financial liabilities
2020
£’000
367
5
372
183
760
943
2019
£’000
–
5
5
308
1,522
1,830
Trade Receivables and Trade Payables
Management assessed that other receivables and trade and other payables approximate their carrying amounts
largely due to the short-term maturities of these instruments.
Borrowings
The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the
reporting date, using the issuer’s borrowing rate. The loan is due in December 2021 and impact of the discounting
is immaterial and therefore not included into the valuation.
20.2 Fair Values
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped
into three levels of a fair value hierarchy. The three levels are defined, based on the observability of significant
inputs to the measurement, as follows:
•
•
•
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable; and
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
The carrying amount of the Group and the Company’s financial assets and liabilities is not materially different
to their fair value. The fair value of financial assets and liabilities is included at the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Where a quoted price in an active market is available, the fair value is based on the quoted price at the end of
the reporting period. In the absence of a quoted price in an active market, the Group uses valuation techniques
that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
68 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 69
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities:
Group and Company
30 June 2020
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Financial assets at fair value through other
comprehensive income – Quoted equity shares
Financial assets at fair value through profit and loss
4
–
–
–
–
5
Group and Company
30 June 2019
Level 1
£’000
Level 2
£’000
Level 3
£’000
Financial assets at fair value through other
comprehensive income – Quoted equity shares
Financial assets at fair value through profit and loss
178
–
–
–
–
5
4
5
Total
£’000
178
5
20.3 Financial Risk Management Policies
The Directors monitor the Group’s financial risk management policies and exposures and approve financial
transactions.
The Directors’ overall risk management strategy seeks to assist the consolidated Group in meeting its financial
targets, while minimising potential adverse effects on financial performance. Its functions include the review of
credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk and market risk, consisting
of interest rate risk, liquidity risk, equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets arises from the potential non-performance by counterparties
of contract obligations that could lead to a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of
systems for the approval, granting and renewal of credit limits, regular monitoring of exposures against such
limits and monitoring of the financial liability of significant customers and counterparties), ensuring, to the extent
possible, that customers and counterparties to transactions are of sound creditworthiness. Such monitoring is
used in assessing receivables for impairment.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating
or in entities that the Directors have otherwise cleared as being financially sound.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
Aggregates of such amounts are as detailed in note 14.
There are no amounts of collateral held as security in respect of trade and other receivables.
The consolidated Group does not have any material credit risk exposure to any single receivable or group of
receivables under financial instruments entered into by the consolidated Group.
CORCEL PLC 69
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 70
Notes to Financial Statements
continued
20. Financial Instruments continued
20.3 Financial Risk Management Policies (continued)
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The Group manages this risk through the following
mechanisms:
•
•
•
monitoring undrawn credit facilities;
obtaining funding from a variety of sources; and
maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance operations and that controls over
expenditures are carefully managed. All financial liabilities are due to be settled within the next twelve months.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk because interest rates on loans are fixed in
advance.
Equity Price Risk
Price risk relates to the risk that the fair value, or future cash flows of a financial instrument, will fluctuate because
of changes in market prices largely due to demand and supply factors for commodities, but also include political,
economic, social, technical, environmental and regulatory factors.
Foreign Exchange Risk
The Group’s transactions are carried out in a variety of currencies, including Australian Dollars, Canadian Dollars,
United Stated Dollars, Papua New Guinea Kina and UK Sterling. To mitigate the Group’s exposure to foreign
currency risk, non-Sterling cash flows are monitored. Fluctuation of +/- 10% in currencies, other than UK Sterling,
would not have a significant impact on the Group’s net assets or annual results.
The Group does not enter forward exchange contracts to mitigate the exposure to foreign currency risk as
amounts paid and received in specific currencies are expected to largely offset one another.
These assets and liabilities are denominated in the following currencies as shown in the table below:
Group
GBP
£’000
30 June 2020
Cash and cash equivalents 414
Amortised cost financial assets - Other receivables 175
FVTOCI financial assets 4
FVTPL financial assets - warrants –
Amortised costs financial assets - Non-current
receivables 1,322
Trade and other payables, excluding accruals 148
Short-term borrowings –
Long-term borrowings 760
AUD USD CAD Total
£’000 £’000 £’000 £’000
1 – – 415
– – – 175
– – – 4
5 – – 5
368 – – 1,690
– – – 148
– – – –
– – – 760
70 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 71
Group
GBP AUD USD CAD
£’000 £’000 £’000 £’000
30 June 2019
Cash and cash equivalents 63 1 – –
Amortised cost financial assets - Other receivables 115 – – –
FVTOCI financial assets 127 49 – 2
FVTPL financial assets - warrants – 5 – –
Amortised costs financial assets - Non-current
receivables 1,318 – – –
Trade and other payables, excluding accruals 280 – – –
Short-term borrowings 708 – 814 –
Long-term borrowings – – – –
Company
GBP AUD USD CAD
£’000 £’000 £’000 £’000
30 June 2020
Cash and cash equivalents 389 – – –
Amortised cost financial assets - Other receivables 175 – – –
FVTOCI financial assets 4 – – –
Amortised costs financial assets - Non-current
receivables 1,372 368 – –
Trade and other payables, excluding accruals 148 – – –
Short-term borrowings – – – –
Long-term borrowings 760 – – –
Company
GBP AUD USD CAD
£’000 £’000 £’000 £’000
30 June 2019
Cash and cash equivalents 34 – – –
Amortised cost financial assets - Other receivables 94 – – –
FVTOCI financial assets 4 – – –
Amortised costs financial assets - Non-current
receivables 1,892 – – –
Trade and other payables, excluding accruals 233 – – –
Short-term borrowings 708 – 814 –
Long-term borrowings – – – –
Total
£’000
64
115
178
5
1,318
280
1,522
–
Total
£’000
389
175
4
1,740
148
–
760
Total
£’000
34
94
4
1,892
233
1,522
–
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas
transactions.
CORCEL PLC 71
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 72
Notes to Financial Statements
continued
21. Reconciliation of Liabilities Arising from Financing Activities and Major
Non-Cash Transactions
Significant non-cash transactions from financing activities in relation to loans and borrowings are as follows:
30 June
2019
£’000
814
–
708
Riverfort Capital Ltd
and YA II PN Ltd loan
Riverfort Capital and
YA II PN Lts loan - new
Convertible loan notes
Cash
flows
Loans
Non-cash
flow
flow flow Forex
received Restructured Conversion movement
£’000
£’000
£’000
Non-cash
flow
Interest and
Non-cash Non-cash arrangement
fees
accreted
£’000
£’000
Cash
flows
Principal
repaid
£’000
Cash
flows
Interest
repaid
£’000
– (287) (714)
– 729 –
7 (442) (281)
15
–
–
15
172 – –
31 – –
44 (30) (6)
247 (30) (6)
30 June
2020
£’000
–
760
–
760
Total
1,522
7 – (995)
Significant non-cash transactions from financing activities in relation to raising new capital are disclosed in note 17.
Significant non-cash transactions from investing activities were:
•
13,288,982 shares issued at £0.011 per share by the Company for the total of £146,178 to acquire
discounted debt. More details are disclosed in note 13.
Significant non-cash transactions from operating activities were as follows:
•
•
•
Payment for services and Director remuneration (share-based payments in the form of options and
warrants), in the amount of £63,194 (2019: 10,62), disclosed in notes 17 and 18;
Impairment of other receivables in the amount of £36,599 (2019: £25,749);
Goodwill write off in the amount of £105,815 (2019: nil).
22. Significant Agreements and Transactions
Financing
•
On 22 July 2019, the Company announced that its outstanding Loan Notes totalling USD 1.254 million,
including a 4.5% implementation fee, which had been added to the outstanding principal, would be repaid
over a period of five years, will carry interest of 10% per annum and will incur a 2% fee upon redemption.
The Company has agreed to make an initial minimum payment of the lower of 10% or USD 65,000 by way
of a fundraising or issuance of securities when next undertaken. The Company has also agreed to pay the
noteholders at least 10% of any fundraising thereafter. Regular repayments of the outstanding Loan Notes
will commence in 2020 and are to be paid quarterly until 2024. In addition, warrants to subscribe for
20,000,000 shares at a subscription price of £0.0025 per share and valid until July 2024 were to be issued
to the lenders.
•
On 5 December 2019, the Company announced a corporate restructuring including Board changes,
a proposed placing, a proposed share consolidation and debt reduction and restructuring.
•
•
James Parsons proposed to join the Board of Regency Mines Plc as Executive Chairman following
completion of regulatory due diligence.
Regency Mines Plc proposed to raise £831,000 by way of a placing of 3,021,818,173 new ordinary
shares of £0.0001 at a price of £0.000275 per share. Alongside the placing an additional 530,030,036
shares representing obligations of £145,758.30 have been issued to Red Rock Resources Plc in full
extinguishment of outstanding obligations.
72 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 73
•
•
•
•
•
•
•
•
•
•
•
•
The holders of the Promissory Notes, first announced on 6 June 2018, and updated on 22 July 2019,
have agreed to extinguish the entire remaining balance, owed under the Promissory Notes, through
a subscription for new Loan Notes and a share conversion. The partial conversion of the Promissory
Notes will result in the issuance of 2,596,363,636 new ordinary shares of the Company, and the
investors have agreed to lock up the Promissory Conversion Shares, 100% of the total for three
months, 70% of the total shares for a subsequent six months, and 40% of the total shares of the
Promissory Conversion Shares for a further six-month period.
The approximate residual balance of £286,756 of the Promissory Notes will be retired, and YA PN II
Ltd and Riverfort Global Capital Ltd will subscribe for new two-year Loan Notes payable on
23 December 2021, bearing 8% interest per annum with no conversion rights.
Of the outstanding Convertible Loan Notes, first announced on 14 January 2019, holders of £281,113
of these notes have agreed to convert these obligations into 1,022,229,140 new ordinary shares of
the Company at a price of £0.000275 per share. The terms of 88,015,874 warrants, originally issued
to the Convertible Loan Note holders, will be varied, and the new terms of these warrants allow
exercise into new ordinary shares of the Company at a price of £0.00055 for a period of 36 months.
YA PN II Ltd and Riverfort Global Capital Ltd, existing holders of £442,516 of Convertible Loan Notes,
have agreed to extinguish the balance of these notes and to subscribe for an equivalent amount of
new Loan Notes, as more fully described above.
A small residual balance of Convertible Loan Notes, representing £30,000 of principal, will remain
payable by the Company in May 2020 on the existing Convertible Loan Note terms, and the warrants
associated with this note will remain in place under the existing terms as announced on 14 January
2019.
The Company has further been informed by YA II PN Ltd and Riverfort Global Capital Ltd that,
following the subscription for the new Loan Notes, both parties have granted an option over their
interests in the new Loan Notes, totalling £729,272, to C4 Energy Ltd ("C4"), a UK incorporated private
company.
The issuance of the transaction shares consisting of 3,021,818,173 placing shares, 530,030,036
subscription shares, 2,596,363,636 promissory conversion shares and 1,022,229,140 convertible
conversion shares, is conditional upon, inter alia, the passing of resolutions to be put to shareholders
of the Company at a General Meeting of the Company, to be held on 23 December 2019, to provide
authority to the Directors to issue and allot the required shares on a non-pre-emptive basis. A circular,
containing a notice of the General Meeting, will be posted to shareholders.
Conditional on the passing of the resolutions at the General Meeting, application will be made for the
transaction shares to be admitted to trading on AIM and it is expected that their admission to AIM will
take place on or around 24 December 2019.
The Transaction Shares as a whole would, if the required resolutions are approved at the General
Meeting, result in the issuance of 7,170,440,985 Ordinary Shares, representing, in aggregate, 82.54%
of the newly enlarged share capital of the Company. The Transaction Shares will, when issued, be
credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of the
Company.
James Parsons has been awarded 304,056,730 three-year vest, five-year expiry options with an
exercise price of £0.000275 per share.
Red Rock Resources Plc, subscriber of the Subscription Shares, has in common with Regency Mines
Plc an Executive Director, Scott Kaintz, and a previous Director within the last twelve months, Andrew
Bell.
Riverfort Global Capital Ltd and YA II PN Ltd, the participants in the Promissory Conversion, jointly
held 19.93% in the past twelve months, and as such are deemed substantial shareholders during the
last twelve months.
CORCEL PLC 73
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 74
Notes to Financial Statements
continued
22. Significant Agreements and Transactions continued
•
•
•
•
•
•
For the purposes of the Transaction, the Subscription by Red Rock Resources Plc and the Promissory
Conversion by Riverfort Global Capital Ltd and YA II PN Ltd, constitute related party transactions as
defined in Rule 13 of the AIM Rules for Companies.
Nigel Burton and Ewen Ainsworth, being the Directors of the Company who are independent of the
Transaction, having consulted with the Company's nominated advisor, Beaumont Cornish Ltd,
consider the terms of the Subscription Shares and the Promissory Conversion to be fair and
reasonable insofar as the Company's shareholders are concerned.
Following the Transaction, the Company will have 8,687,335,144 Ordinary Shares in issue, each with
a nominal value of £0.0001. The Directors consider that it is in the best interests of the Company's
long-term development as a publicly quoted company to have a smaller number of shares in issue
and a higher share price.
As set out in the Notice of General Meeting Circular, shareholders will be asked to consider, and if
thought fit, pass resolutions, which will have the following effect: that every 100 ordinary shares of
£0.0001 on the Record Date are consolidated into one new ordinary share of £0.0001 each.
As the expected issued share capital of the Company is not divisible by 100 without leaving a fraction
of a share following the Reorganisation, it is intended to conditionally issue and allot, subject to
approval of the Reorganisation by shareholders at the General Meeting, 56 new Ordinary Shares on
the Record Date. The issued share capital of the Company as at the Record Date will therefore be
8,687,335,200 Ordinary Shares.
Assuming completion of the Transaction and the Consolidation following the General Meeting, the
Company will have a total of 86,873,352 ordinary shares of £0.0001 in issue.
On 18 December 2019, the Company announced that it had issued 56 new ordinary shares of £0.0001
each for a nominal total consideration of £0.0056. The rounding shares have been issued to adjust the
total number of shares in issue to be 1,516,894,215 ordinary shares of £0.0001 each with voting rights, at
the time of the General Meeting held on 23 December 2019 at 12 noon, and accordingly be a suitable
number to issue 7,170,440,985 new ordinary shares in a consolidated form of 71,704,410 ordinary shares
of £0.0001 each on 24 December 2019.
On 23 December 2019, the Company announced that at its General Meeting, held earlier that day, all
resolutions were passed. As such James Parsons joined the Board as Executive Chairman, and outgoing
Chairman Nigel Burton, moved to senior Independent Non-Executive Director. Accordingly, the 1 for 100
share consolidation was announced as being effected and 86,873,352 ordinary shares will trade in their
new consolidated form with effect from 24 December 2019.
On 31 January 2020, the Company announced the appointment of a new company secretary and the issue
of 481,622 new ordinary shares, 3,040,567 options and 438,596 warrants further to commitments made
prior to the recent restructuring as announced on 5 December 2019, but only now executed due to the
Company being in a close period. Nigel Burton and Ewen Ainsworth joined the Company as a Director on
24 June 2019 under an arrangement, where 42.5% and 48.6% of their respective annual Directors' fee
was to be paid in shares. Accordingly, to clear historic balances the Company has issued 122,312 new
ordinary shares to Mr Burton and 190,929 new ordinary shares to Mr Ainsworth for the period from June
2019 to December 2019 (of the 190,929 shares awarded to Mr Ainsworth, 141,901 new ordinary shares
have been issued to Discovery Energy Limited a company controlled by Mr Ainsworth). This deals with all
outstanding legacy issues and the Non-Executive Directors of the Company are now being remunerated
on normal market terms. Consistent with the Company's strategy of preserving its cash balances, a further
168,421 shares and 438,596 warrants (at yesterday's closing price of £0.0285 have been awarded to
consultants and advisors for services to be provided during 2020. The Company has awarded Scott Kaintz,
Chief Executive Officer, 3,040,567 three-year vest, five-year expiry options under the Company's Enterprise
Management Scheme, to purchase new ordinary shares of the Company at yesterday's closing price of
£0.0285. These options carry performance criteria under which vesting can be accelerated. These options
were unable to be awarded as part of the recent restructuring due to the Company being in a close period.
•
•
•
74 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 75
•
•
•
•
On 7 February 2020, the Company announced the partial waiver of an existing lock-in agreement over
7,789,091 shares to enable a block trade to new investors and a lock-in of all remaining shares currently
held by Red Rock Resources Plc. The balance of the shares held by YA PN II Ltd and Riverfort Global
Capital Ltd and for which the lock-in was not waived, 18,174,545 in total, will remain bound by the existing
lock-in provisions. The entire position of 3,383,633 shares currently held by Red Rock Resources, will be
locked-in until March 2020, at that point 70% will be locked-in to June 2020, and 40% until December 2020.
On 7 April 2020, the Company announced that it had raised £470,000 by way of a placing of 58,750,000
new ordinary shares at a price of £0.008 per share. The Company also granted participating investors
29,375,000 3-year warrants with an exercise price of £0.016 per share. Company Directors also participated
in the placing as follows, 1,562,500 new ordinary shares and 781,250 warrants have been issued to James
Parsons and 937,500 new ordinary shares and 468,750 warrants have been issued to Scott Kaintz.
1,562,500 new ordinary shares and 781,250 warrants have been issued to Discovery Energy Pension
Scheme of Discovery Energy Limited, a company controlled by Ewen Ainsworth, a Director of the Company.
On 21 April 2020, the Company announced that the Board of Directors had approved the issuance of
1,145,452 ordinary shares in the Company under the Company’s Share Incentive Plan for the 2019/20 tax
year as agreed in a Trustees meeting held on 1 April 2020. In respect of the 2019/20 tax year Scott Kaintz
purchased and was awarded a total of 818,180 new ordinary shares under the SIP.
On 19 June 2020 the Company announced that it had raised £210,000 by way of a placing organised by
the Company of 21,000,000 new ordinary shares at a price of £0.01 per share. A total of 21,000,000 three-
year warrants have been issued to investors at an exercise price of £0.016 per share. The Company also
issued 1,000,000 shares to a service provider in association with this transaction. A Company Director,
Ewen Ainsworth also participated in the placing of 500,000 new ordinary shares and 500,000 warrants.
Mambare Nickel-Cobalt Project
•
On 7 April 2020, the Company announced the resolution of the ongoing partner dispute and the execution
of an amendment to its development agreement regarding the Company’s Mambare nickel-cobalt project
in Papua New Guinea. The JV partners agreed with immediate effect to increase Battery Metals Pty Ltd’s
stake in the joint venture to 59%, with a further 6% to be awarded if prior to November 2021, the Mambare
JV receives a recommendation to award a mining lease from the Mineral Resource Authority in Papua
New Guinea. The Company also agreed to pay Battery Metals Pty Ltd. USD 50,000 in cash and
USD 50,000 in shares at a price of £0.0083, resulting in the issuance of 4,909,610 new ordinary shares.
Battery Metals also received 4,909,610 three-year warrants price at £0.01245. Both parties further agreed
that all litigation between them would cease immediately and a revised joint venture structure and
development plan has been created with the centre of gravity in Australia, leveraging Battery Metal’s
logistical advantages and regional proximity.
Resource Mining Corporation Debt Purchase
•
On 7 April 2020, the Company announced the partial purchase of the corporate debt of Resource Mining
Corporation Pty Ltd, the 100% owner of the WoWo Gap nickel-cobalt project in Papua New Guinea. The
Company agreed to purchase AUD 1.7 million of outstanding corporate debt in RMI from Sinom Hong
Kong Limited. The consideration was £178,096 cash plus 13,288,982 new ordinary shares, representing
aggregate consideration of £324,275, being a 62% discount to the face value of the debt. The new shares
were subject to a lock-up of one year. The Company has also, after the accounting period, exercised the
6-month option to purchase the remaining RMI debt of AUD 3.05 million for consideration of 23,711,018
new ordinary shares and AUD 640,000 in cash, which represents a similar discount to the initial acquisition.
All the loan notes are interest free and unsecured.
CORCEL PLC 75
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 76
Notes to Financial Statements
continued
22. Significant Agreements and Transactions continued
Flexible Grid Solutions
•
On 20 September 2019, the Company announced that Allied Energy Services Ltd, an investment held
through the Company’s EsTeq Ltd subsidiary had executed an exclusivity agreement with the leaseholder
of the Southport Energy Centre, as previously announced on 24 July 2019. The agreement gave Allied
Energy Services Ltd a period of exclusivity of three months over Phase 1 of the project, during which time
the leaseholder will refrain from entering into any agreement that would prevent Allied Energy Services
Ltd from executing a commercial lease as contemplated by the letter of intent signed by the parties in
February 2019. The agreement further includes a right of first refusal from the date of this agreement for
a period of six months over Phase 2 of the project, conditional on Allied Energy Services Ltd, making an
investment in Phase 1 during the period. The leaseholder must offer Allied Energy Services Ltd the right
to participate in Phase 2 of the project on the same terms as any third party, which Allied Energy Services
Ltd may then consider at its own discretion.
•
•
•
•
On 19 December 2019, the Company announced that it had agreed to purchase the 20% minority interest
in Allied Energy Services Ltd that it did not currently own. The minority shareholders in Allied Energy
Services would be paid 2,461,538 post consolidation new ordinary shares of Regency Mines Plc and would
be locked in for six months following the date of the agreement. A second share issuance of up to £80,000
would be priced based on a trailing 10 day volume weighted average price calculation, and would come
due on the combination of Regency Mines Plc trading at a market cap of over £10 million for consecutive
days, and when Allied Energy Services had secured £30 million in funding for its first project, the Southport
Energy Centre.
On 23 December 2019, the Company announced the signing of an MOU with ion Ventures, an investor in
and developer of energy storage and flexibility assets. Under the terms of the MOU the parties have agreed
to partner on the Company’s existing pipeline of projects with a view towards identifying and prioritising
the most commercially attractive projects, securing funding and moving them quickly to first cash flow. ion
Ventures will support the Company initially, on a consultancy basis, and will be issued shares in the
Company as consideration.
On 3 January 2020, the Company announced the completion of the buy-out of the 20% minority
shareholders in Flexible Grid One Limited (ex-Allied Energy Services Ltd). As such, the Company issued
2,461,538 new ordinary shares to complete the transaction. These shares were to be locked-in for six
months. The investment in Flexible Grid One Limited was subsequently written off at the year-end.
On 19 June 2020, the Company announced the purchase of a 50% interest in Weirs Drove Development
Limited (“WDD”), a developer of energy storage and solar projects in the United Kingdom, with an initial
site in Burwell, outside of Cambridge. The Company acquire a 50% interest in Weirs Drove Development
Limited, a debt free privately owned battery storage developer for £25,000 of cash injected into the WDD
business. Flexible Grid Solutions Limited further agreed to extend a shareholder loan of £100,000 once
the first site at Burwell has met all shovel ready criteria, which includes a grid connection offer, full planning
permission and an executed site lease. The debt is repayable at financial close, expected later in 2020. It
is expected that both the debt and equity injected by the Company would be utilised to finalise the
development of the Burwell battery storage site and thereafter to advanced additional projects. In addition
to agreeing an industry standard joint venture shareholder agreement, including Board participation and
Company approval of key decisions, the Company has secured a further option to buy the remaining 50%
of WDD at a price of £30,000 per fully operational megawatt of energy storage or production at the time of
option exercise, to be paid 50% in cash and 50% in new ordinary shares of the Company. The option is
exercisable at the sole election of the Company, and becomes exercisable following WDD commissioning
of at least 40MW of installed energy storage or production capacity. A deferred option consideration of
£5,000 per MW on the next 100MW of installed capacity would also become due after reaching that metric,
also payable 50% in cash and 50% in shares if triggered. The entire equity component of the option and
deferred consideration, should the option be exercised at the Company’s discretion, would be priced at
the 30-day VWAP prior to exercise. The Company has also agreed standard drag along and tag along
rights for the Company.
76 CORCEL PLC
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 77
US Metallurgical Coal Interests
•
On 9 July 2019, the Company announced that Mining Equity Trust LLC had agreed to accept an investment
of USD 750,000 by Carraigbarre Capital Ltd in exchange for a 45.02% stake in the business and a Board
seat. Legacy Hill Resources Ltd has agreed to remain as operator of the Omega metallurgical coal assets,
with the new funds deployed to partially recapitalise MET and its Omega coal operations. Previously a
forbearance agreement was signed with the original sellers of the assets, by which obligations of
USD 8.17 million were rescheduled over a period to October 2020, however, at the time of the
announcement the forbearance agreement was in default. Following the investment by Carraigbarre Capital
Ltd, Regency Mines Plc retained a 25.84% stake in the expanded share capital of MET. It was further noted
that additional funding would be required to ensure the long-term stability of the business with plans in
place to install a wash plant and upgrade the saleable metallurgical coal product subject to additional
capital being made available.
23. Commitments
As at 30 June 2019, the Company had entered into the following commitments:
•
•
Exploration commitments: On-going exploration expenditure is required to maintain title to the Group
mineral exploration permits. No provision has been made in the Financial Statements for these amounts
as the expenditure is expected to be fulfilled in the normal course of the operations of the Group.
On 29 May 2020, the Company entered into a new lease agreement for office space with WeWork Aldwych
House. The initial lease runs from 1 July 2020 through 31 January 2021 and is non-cancellable during this
period. Thereafter, the lease can be terminated by giving one full calendar month notice.
24. Related Party Transactions
•
•
•
•
•
•
•
The costs, incurred on behalf of the Company by Red Rock Resources Plc, are invoiced at each month
end and settled on a quarterly basis. By agreement, the Company pays interest at the rate of 0.5% per
month on all balances outstanding at each month end until they are settled. The total charged to Red Rock
Resources Plc for the year was £25,563 (2019: £49,135). Of this, £7,962 was outstanding at 30 June 2020
(2019: £31,372). The Company is closely associated with Red Rock Resources Plc, in which the Company
has no interest as at 30 June 2020 (2019: 0.67%). Red Rock Resources Plc had a 3.77% interest in the
Company as at 30 June 2020 (2019: 2.34%). Two Directors, Andrew Bell and Scott Kaintz, are also
Directors of, and received a salary from, Red Rock Resources Plc during the year.
The costs incurred by the Company on behalf of Red Rock Resources Plc were £21,589 (2019: £58,329).
Of this, £16,549 was outstanding at 30 June 2020 (2019: £18,948).
Related party receivables and payables are disclosed in notes 14 and 15, respectively.
The Company does not hold any shares in Red Rock Resources Plc as at 30 June 2020 (2019: 5,759,760
shares (0.85%)).
The key management personnel are the Directors and their remuneration is disclosed within note 8.
A related party transaction, involving the subscription for shares by Red Rock Resources Plc and the
Promissory Note Conversion by YA PN II Ltd and Riverfort Global Capital Ltd, is fully outlined in Note 22.
Ewen Ainsworth, a Director of the Company, is paid a portion of his Director’s fee through Discovery Energy
Ltd, a company controlled by Mr Ainsworth.
CORCEL PLC 77
260124 Corcel Annual Report pp39-imprint.qxp 03/12/2020 19:12 Page 78
Notes to Financial Statements
continued
25. Events After the Reporting Period
•
•
•
•
•
•
•
•
On 14 July 2020, the Company announced that it had been notified that Ewen Ainsworth, Non-Executive
Director, sold and repurchased within an ISA an aggregate 549,028 Ordinary Shares of £0.0001 each in
the Company. Specifically, on 14 July 2020, Ewen Ainsworth sold a total of 549,028 Ordinary Shares at a
price of £0.0085 per Ordinary Share and on 14 July 2020 repurchased 549,028 Ordinary Shares at a price
of £0.00857 per Ordinary Share. The shares are held in Rock (Nominees) Limited A/C ISA.
On 5 August 2020, the Company announced that it was proposing to change its name to Corcel Plc. The
purpose of the name change was to more closely reflect the Company’s strategy to develop its businesses
across the battery metals exploration and flexible grid solutions space. An application is being made to
Companies House for the name change. A new website will also be launched simultaneous to the name
change.
On 7 August 2020, the Company announced that its name had now been changed by Companies House
and accordingly the Company is now named Corcel Plc. With effect from 08:00 today, trading on AIM would
commence under the Company’s new name and the new TIDM will be CRCL.L. The Company’s ISIN and
SEDOL remain unchanged.
On 10 August 2020, the Company announced the mobilisation of the geological team to deliver the field
programme at the Dempster Vanadium project in the Yukon, Canada, a project where the Company has a
50% interest. The exploration team, provided by Corcel’s local technical consultant Breakaway Exploration
Management Inc, will spend up to ten days on-site to conduct a soil geochemical survey to define drill
targets focused on a 3km segment, where no work had been done previously.
On 25 August 2020, the Company announced the completion of the field programme at the Dempster
Vanadium project in the Yukon, Canada, a project where the Company has a 50% interest. The geological
team have now demobilised from site following completion of the field programme. Rock and soil samples
collected during the programme have been submitted to the lab in Canada, and are now being analysed
along with the core pulps, which have been delivered to McGill university for processing at their laboratories
as part of the joint venture's collaboration with a McGill PhD candidate. The results of the programme and
the lab analysis of the sampling will be announced in due course.
On 22 September 2020, the Company announced the receipt of both planning permission and a grid
connection offer for the Burwell energy project. The Company announces that the Weirs Drove
Development Company ("WDDC"), where it owns 50%, has received a formal Grid Connection offer from
UK Power Networks, which includes undertaking the "non-contestable" works necessary to connect the
Burwell site to its UK energy network. This offer covers a site capacity of 100MW (split 49.9MW of energy
storage and 49.9MW of photovoltaic solar energy production), a 132kV power input and an import / export
capacity of 49.9MW and 99.8MW respectively. The offer is for substantially more power than originally
planned, which enables a larger battery storage site alongside an adjacent solar power site. The Company
also announces that the landlord of the Burwell site has received from the East Cambridgeshire District
Council planning permission for a 50MW energy storage development. The permission covers the existing
factory and the surrounding land at the Burwell site, and specifies the installation of the main battery and
a 132kV transformer on an adjacent hard stand.
On 26 October 2020, the Company announced that it had raised gross proceeds of £750,000 by way of a
placing with private investors of 75,000,000 new ordinary shares at a price of £0.01 per share. A total of
37,500,000 three-year warrants have been issued to investors at an exercise price of £0.016. The
Company also issued 3,000,000 shares to service providers associated with the recent rebranding.
On 28 October 2020, the Company announced that it had exercised its option to buy AUD 3.05 million of
debt in Resource Mining Corporation Limited, as first announced on 7 April 2020 and 26 October 2020.
Execution of the option entails the payment of AUD 640,000 in cash and the issuance of 23,711,018 new
ordinary shares in Corcel to Base Asia Pacific Ltd. On 17 November 2020, the Company announced
completion of the exercise of the option.
26. Control
There is considered to be no controlling party.
78 CORCEL PLC
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