Great Western Mining Corporation PLC
Annual Report 2019
Great Western Mining Corporation PLC
Great Western Mining Corporation PLC
Annual Report and Financial Statements
for the year ended 31 December 2019
Registered number: 392620
Great Western Mining Corporation PLC
Great Western Mining Corporation PLC
Annual Report and Financial Statements
For the year ended 31 December 2019
Contents
Page
Directors and Other Information…………………………………………………………………………………
…………..………………………..1
Executive Chairman’s Statement…..….………….…………………………………………………………....
…………………………..………..3
Operations Report…….………………………….…………………….…….…………………………….………….
………………………….…………5
Directors’ Report………………..………….…………………………………………………………………………..
……………..……………………..8
Statement of Directors’ Responsibilities…………………….……………………..……………………..…
…………………………………..16
Independent Auditor’s Report….……………………………………..……………………………………….…
……………………………….….17
Consolidated Income Statement…………………………………………..………………………………….…
………………………….…….…22
Consolidated Statement of Other Comprehensive Income……..….…………………..……….….
…………………………………..23
Consolidated Statement of Financial Position………………..………….…………………………….….
……………………………….….24
Company Statement of Financial Position………………………………….…………………………….….
……………………………….….25
Consolidated Statement of Changes in Equity………………..………….…………………………….….
……………………………….….26
Company Statement of Changes in Equity……………………..………….…………………………….….
……………………………….….28
Consolidated Statement of Cash Flows………………………….………….…………………………….….
……………………………….….30
Company Statement of Cash Flows………………………………..………….…………………………….….
……………………………….….31
Notes to the Financial Statements…………………………………………….…………………………….….
……………………………….….32
Great Western Mining Corporation PLC
Directors and Other Information
For the year ended 31 December 2019
Directors
Registered office
Secretary
Auditor
Bankers
Registrar
1
Brian Hall (Executive Chairman)
Max Williams (Finance Director)
Robert O’Connell (Operations Director)
1 Stokes Place
St. Stephen’s Green
Dublin DO2 DE03
Ireland
Max Williams
KPMG
Chartered Accountants
1 Stokes Place
St. Stephen’s Green
Dublin DO2 DE03
Ireland
HSBC Bank PLC
60 Queen Victoria Street
London EC4N 4TR
United Kingdom
Bank of Ireland
Ross Road
Taghmon
Co. Wexford Y35 XP96
Ireland
Wells Fargo Bank
2070 Idaho Street
Elko
Nevada 89801
U.S.A
Computershare Investor Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin D24 AK82
Ireland
Great Western Mining Corporation PLC
Directors and Other Information (continued)
For the year ended 31 December 2019
Solicitors
AIM Nominated Advisor, Euronext Growth Advisor
and Broker
AIM Joint Broker
John O’Connor Solicitors
168 Pembroke Road
Ballsbridge
Dublin 4
Ireland
ByrneWallace
88 Harcourt Street
Dublin 2
DO2 DK18
Ireland
Davy Corporate Finance
Davy House
49 Dawson Street
Dublin 2
Ireland
Novum Securities Limited
8-10 Grosvenor Gardens
London SW1W 0DH
United Kingdom
ETX Capital
One Broadgate Circle
London EC2M 2QS
United Kingdom
Registered number
392620
Date of incorporation
20 October 2004
Website
www.greatwesternmining.com
2
Great Western Mining Corporation PLC
Executive Chairman’s Statement
For the year ended 31 December 2019
Dear Shareholder,
Here are Great Western Mining Corporation PLC’s Annual Report and audited financial statements for the year
ended 31 December 2019. The Group does not yet generate revenues and incurred a loss of €815,795 (2018:
€992,774).
A number of important changes and a refocusing of the Company’s activities have occurred since we last
reported to shareholders in September with the 2019 half-year results. In November David Fraser resigned as
Chief Executive to pursue opportunities in another sector after six years at the helm, during which the Company
greatly enhanced the potential for commercial copper on its properties in Mineral County, Nevada. As foreseen
in the 2019 Interim Report, Melvyn Quiller, one of the Company’s founders, has now retired as Finance Director.
Max Williams, a Chartered Accountant with a strong track record in the financial management of publicly traded
natural resource companies, was co-opted to the Board in November as Finance Director and will offer himself
for election at the AGM. I have now taken over the day to day management of the Company as Executive
Chairman and, to strengthen our team and fulfil the aim of good corporate governance, we plan to appoint new
independent directors to the Board in the near future.
In both the 2018 Annual Report and the 2019 Interim Statement, we indicated the Company’s belief in the
precious metals potential of its acreage in Nevada, the aptly-named ‘Silver State’. We have now taken this a
stage further and are concentrating on precious metals. In November 2019 we raised new capital to progress
the potential for gold and silver extraction on the Company's mining leases in Nevada; and post period end in
February 2020, we raised additional new capital at a higher placing price, to take the appraisal of gold and silver
prospects to the next stage. In November and December 2019, before the harsh Nevada winter closed in, a
three-man Great Western team collected multiple soil samples at two selected properties, the Mineral Jackpot
group of old mine workings and the Rock House (‘RH’) exploration play, Mineral Jackpot being the collective
name for several old, long-abandoned gold mines. Laboratory analysis of the soil sampling has now virtually
doubled the footprint for gold extraction at these locations. RH was never mined in the past but its potential
for precious metals has been identified through satellite imagery, which the soil sampling exercise at the end of
last year has now strongly confirmed. As well as Mineral Jackpot and RH, there are several other areas in our
acreage with the potential for precious metal recovery and these are currently being evaluated and prioritised
by our technical team. While we work on the potential for new gold mining operations, we shall also be looking
at spoil heaps from historic mining operations with a view to leaching them for gold and silver. If effective, this
will produce early revenues for Great Western and we shall be following a well-trodden path which has often
been successful at historic gold mines in Western Australia.
Focusing on precious metals at this stage does not detract from the major potential for copper which we have
worked so hard to enhance for several years now, nor does it mean that we are abandoning our efforts in that
area. However, your current Board believes that prioritising gold and silver will provide earlier benefits for
shareholders during a period when the market for gold is very strong. We are actively seeking partners to finance
and develop the copper potential in parallel with our efforts to develop the precious metals potential.
At the time of writing, the effects of the Covid-19 virus all over the world are affecting our plans and restricting
our ability to progress our field work. In common with all other businesses we are having to review our
operations on an almost daily basis. While we will do our best to maintain the objectives of our 2020 work
programme, there can be no certainty that we will achieve them. All this said, our plan is to exploit the gold
potential of our properties as soon as we can, find a partner with whom we can work on early development of
copper and expand into carefully selected areas for precious metals outside our existing interests, with a view
to growing the Company’s base and spreading risk.
3
Great Western Mining Corporation PLC
Executive Chairman’s Statement (continued)
For the year ended 31 December 2019
Due to the disruption to normal business caused by the COVID-19 virus we are not yet proposing a date for the
Company’s Annual General Meeting in the hope that, by delaying it, there will a stronger chance of shareholders
being able to attend. At the appropriate time we will mail a Notice of Meeting. In the meantime the 2019
Annual Report and Accounts may be downloaded from our website www.greatwesternmining.com under the
Investors section. Any shareholder who would like to receive a hard copy should contact The Secretary, Great
Western Mining Corporation PLC, 1 Stokes Place, Dublin 2, Ireland.
It remains for me to thank you, our shareholders, for your patience and continuing support.
Yours sincerely,
Brian Hall
Executive Chairman
Date: 8 April 2020
4
Great Western Mining Corporation PLC
Operations Report
For the year ended 31 December 2019
Principal activities, strategy and business model
The principal activity of the Group is to explore for and develop gold, silver, copper and other minerals. The
Board aims to increase shareholder value by the systematic evaluation and exploitation of its existing assets in
Mineral County, Nevada, USA and elsewhere as may become applicable.
Great Western’s near-term objective is to develop small scale, short lead-time gold and silver projects which can
potentially be brought into production under the control of the Group.
The Group’s secondary objective is to progress the copper projects which it has already identified and enhanced
through extensive drilling. Such projects have potential for the discovery of large mineralised systems which
can be monetised over the longer term, possibly through joint ventures with third parties.
Business development and performance
During the twelve months ended 31 December 2019, Great Western carried out exploration across its portfolio
of six 100% owned claims groups in Nevada.
In September 2019 the Group reduced its land position through the relinquishment of 204 claims in the TUN,
HUN and JS Groups which were considered no longer to have strategic value to the Group. The revised land
position held by Great Western in Mineral County now consists of 800 full and fractional unpatented claims,
covering a total land area of approximately 66.4 km².
Review by Project
The Black Mountain Group of Claims
The Black Mountain Group (“BM”) lies on a south-west trending spur ridge of the Excelsior Range of mountains
and comprises 247 full and fractional claims covering approximately 21 km².
During 2019, the Company conducted detailed geological mapping and appraisal at its recently acquired Silver
Moon and Silver Bell prospects. These historic mining areas have previously been exploited for gold and silver
ore and are considered by GWM to lie on the same structure as the Mineral Jackpot deposit to the north-west.
At the very end of the year, before the onset of winter, the Company carried out comprehensive soil sampling
to cover the Mineral Jackpot – Silver Bell trend and this yielded encouraging results, beyond expectations. Best
results of 309 ppb gold from the soil programme demonstrate the potential of the area and the soil sampling
confirms the Company theory of mineralisation continuity between the two areas. Surface trenching in 2020 will
seek strike extents of known veins and new areas of mineralisation identified by the soil sampling.
The copper potential at M2 is significant and the M2 Deep Target is buried far beneath the existing M2 copper
oxide resource which was defined by an earlier geophysical survey. This target could potentially extend the
current copper resource for a further 500m along strike. During 2019 two drill locations were permitted with
the BLM in order to drill test the target and they remain current and valid.
The RH Group of Claims
The M7 gold-silver prospect lies within the Rock House (“RH”) group of claims. This area is accessible and lends
itself to mining operations but was never mined in the past, its potential having only recently been identified
through satellite imagery. It is a circular structure associated with a magnetic low, adjacent to the prolific
Golconda thrust fault. The area is characterised by intense argillic and sericitic alteration, along with silicification
and oxidation, within basement siltstones and slates.
During 2019 a soil and rock sampling programme identified three previously unexplored prospective areas: (1)
The Eastern Shear Zone area covers 35,000 m² and contains Au-Cu-Pb-Sb anomalies within a 200m-long sheared
and altered structure. Rock sampling within the structure returned 240 ppb gold and 0.13% copper. (2) The
Northern Slate Zone covers 700,000 m² of variably altered slates containing numerous Au-Cu-Ni anomalies,
5
Great Western Mining Corporation PLC
Operations Report (continued)
For the year ended 31 December 2019
The RH Group of Claims (continued)
along the suspected northern contact with the Golconda fault. (3) The Southern Alteration Zone is an area of
intense phyllic and silicic alteration within host siltstones, containing very strong Au-Ag-Sb-As-W signatures.
Upcoming plans for the area include a closer-spaced soil programme over the Northern Slate Zone, followed up
rock sampling in previously unsampled area of the Eastern Shear Zone and the Southern Alteration Zone and an
application for surface disturbance works to conduct trenching and drilling in the most prospective areas as soon
as possible.
The Huntoon Group of Claims
107 full and 12 fractional claims surround the workings of the historic underground Huntoon gold mine and are
prospective for gold, silver and copper mineralisation. The claims are located on the north-west side of the
Huntoon Valley, covering approximately 10 km2. The Company is actively planning further exploration and in
parallel identifying opportunities for achieving near-term production.
The JS Group of Claims
The M5 gold prospect lies within the JS Group in altered siliceous host rock, exposed beneath Tertiary
volcaniclastics for 1km. Gold, Arsenic and Antimony were all anomalous in samples taken along a north-easterly
crest of the central ridge at M5 and the coincidence of anomalous pathfinder geochemistry and altered
sediments strongly suggests the presence of sediment hosted disseminated gold mineralisation. The Group
conducted a geological mapping and sampling exercise in 2019 to follow up the anomalous results from an
earlier campaign.
The M4 Copper-Gold project also lies within the JS Group. The M4 copper target was identified through
geophysical surveys, soil sampling and mapping of mineralised structures on surface. Great Western believes
that the breccia vein intercepted in hole M4_05, along with other veins mapped at surface, could be offshoot
structures in the roof of a buried sulphide orebody. In December 2018 the Group submitted a drill permit
application to follow up on the exciting discovery in hole M4_05. The application was approved in 2019 and
remains current.
The EM Group of Claims
The M8 copper prospect lies within the EM Group which contains the historic Eastside Mine where high grade
copper-oxide ore was mined from shallow underground workings during the First World War. Conoco
investigated Eastside as a copper porphyry prospect in the early 1970’s, identifying mineralisation consisting of
substantial copper and molybdenum values.
In 2019 Great Western undertook an in-depth geological mapping exercise over the EM Group in conjunction
with a broad soil sampling campaign covering the entire exposure of altered basement sediments. Anomalous
copper and zinc values were identified, validating Conoco’s reported results, along with an apparent zonation of
metal enrichment which points to a buried source in the north-east quadrant of the claim group.
6
Great Western Mining Corporation PLC
Operations Report (continued)
For the year ended 31 December 2019
The Tun Group of Claims
The M6 gold-silver prospect lies within the TUN Group. The M6 prospect is a parallel system of multiple, oxide
and sulphide, gold-silver veins and veinlet stockworks. Supergene, high-grade ores have been mined in the past
at M6 and the potential remains for deposits of shallow, oxidised stockworks in the immediate vicinity of the
historic workings.
In 2019 Great Western carried out a detailed mapping and sampling programme at the TUN Group, identifying
multiple quartz veins and encountering further previously unreported historic workings along a 2km strike
corridor.
Summary of 2019 Work Programme
•
Portfolio of claims reorganised by acquiring new claims with precious metals potential and relinquishing
old claims with no remaining potential
Geological mapping at the Silver Moon and Silver Bell gold and silver prospects
Soil sampling programme at Mineral Jackpot group of claims, including Silver Bell and Silver Moon
Two drill locations permitted for M2
Soil and rock sampling at RH Group
M4 drill permit sought and approved
Geological mapping undertaken and concluded over the Eastside Mine area
•
•
•
•
•
•
Forward to 2020
2020 is scheduled to be a busy and exciting year for Great Western, although the impact of Covid-19 is likely to
cause delays, given the overriding need to safeguard the Company’s employees and contractors and to comply
fully with all government directives. Numerous precious metal targets have been identified from the 2019 field
campaigns where trenching and drilling activities will commence on the most tantalising of these targets as soon
as applications for surface disturbance works have been approved, always subject to the situation with the virus.
Historic spoil heap will be leached offsite for early recovery of precious metals and to verify prospectivity. At the
other prospects, further rock and soil sampling will be undertaken to identify future targets with a view to
accelerating their exploitation.
William Cooper
Vice-President, Exploration
Date: 8 April 2020
7
Great Western Mining Corporation PLC
Directors’ Report
For the year ended 31 December 2019
The Directors present their report and audited financial statements for the year ended 31 December 2019 of
Great Western Mining Corporation PLC (“the Company”) and its subsidiaries (“the Group”).
Principal activity, business review and future developments
The Company is listed on the Euronext Growth market of Euronext Dublin and the Alternative Investment Market
(“AIM”) of the London Stock Exchange.
The Group’s principal activity is the exploration for and mining of copper, silver, gold and other minerals in
Nevada, U.S.A. During the year, expenditure of €206,736 (2018: €2,266,542) was incurred on the Group’s
exploration assets including costs associated with the retention of the claims held by the Group.
The Directors have reviewed the financial position of the Group as at 31 December 2019 and expect that it will
be in a position to continue its planned activities for the foreseeable future.
Results and dividends
The consolidated income statement for the year ended 31 December 2019 and the consolidated statement of
financial position as at that date are set out on page 22 and 24 respectively. The loss for the year amounted to
€815,795 (2018: €992,774).
All exploration and development costs to date have been deferred and no transfer to distributable reserves or
dividends is recommended by the Directors (2018: €Nil).
Directors and Secretary and their interests
On 13 November 2019, David Fraser resigned, and Melvyn Quiller retired from the Board. In accordance with
the articles of association, Robert O’Connell retires from the Board by rotation and being eligible, offers himself
for re-election. Max Williams, having been appointed to the Board since the last annual general meeting, will
seek election at the forthcoming annual general meeting.
The Directors who held office at 31 December 2019 had no beneficial interests in any of the shares of the
Company and Group companies other than Ordinary Shares in Great Western Mining Corporation PLC as follows:
Director
Brian Hall
Robert O’Connell
Max Williams
Number of ordinary shares
8 Apr 2020
31 Dec 2019
31 Dec 2018
48,000,200
21,670,490
31,250,000
48,000,200
21,670,490
31,250,000
4,916,666
11,670,490
-
8
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Directors and Secretary and their interests (continued)
The Group operates a directors’ share option scheme and in addition to the interests disclosed above certain
directors have options to acquire ordinary shares of €0.0001 each in Great Western Mining Corporation PLC.
The Directors who held office at 31 December 2019 had the following beneficial interests in options over the
Company’s Ordinary shares:
Name of Director
Brian Hall
Robert O’Connell
Holding at 1
January 2019
10,666,667
17,000,000
Granted
during the
year
Exercised
during the
year
Holding at 31
December
2019
Weighted
average
exercise
price
-
-
-
-
10,666,667
17,000,000
£0.0103
£0.0103
For the purposes of Section 305 of the Companies Act 2014 (Ireland), the aggregate gains by Directors on the
exercise of share options during the year ended 31 December 2019 was €Nil (2018: €68,000).
Under the terms of a placing on 13 November 2019, the Company granted warrants to placees in the ratio of
one warrant for one Ordinary share subscribed for in the placing. Certain Directors participated in the placing
and those Directors that held office at 31 December 2019 had the following beneficial interest in warrants over
the Company’s Ordinary shares:
Name of Director
Brian Hall
Max Williams
Holding at 1
January 2019
Granted
during the
year
Exercised
during the
year
Holding at 31
December
2019
-
-
31,250,000
31,250,000
-
-
31,250,000
31,250,000
The warrants have an exercise price of Stg 0.16 pence per ordinary share and may be exercised at any time up
until the third anniversary of the date of the placing, being 13 November 2022.
Transactions involving Directors
There have been no contracts or arrangements of significance during the year in which Directors of the Company
had an interest other than as disclosed in note 18 to the financial statements.
Significant shareholders
As of the date of this report, the following shareholders held 3% or more of the issued ordinary share capital of
the Company:
Andrew Webley
Brian Hall
Number of
shares
75,263,451
48,000,200
Per cent
5.28%
3.37%
The Directors are not aware of any other legal or beneficial shareholder with a holding of 3% or more of the
share capital of the Company.
Share price
The share price movement in the year ranged from a low of €0.00160/£0.00105 to a high of €0.00700/£0.00585
(2018: €0.00200/£0.00221 to €0.02500/£0.01740). The share price at the year-end was €0.00200/£0.00125
(2018: €0.00500/£0.00250).
9
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Principal risks and uncertainties
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and
regular reporting that these risks are minimised as far as possible.
Main trends and factors likely to impact future business performance
The Group considers the general commodity cycle to be the key trend and factor that is likely to impact future
business performance. Commodity prices remained generally stable during 2019 but prices of copper and silver
have fallen since the year-end with the outbreak of Covid-19: the gold price however has strengthened although
it is volatile. The Board maintains a longer-term positive outlook for copper and precious metal fundamentals
because:
•
•
•
Global mine supply remains constrained – declining grade and continued project deferrals forecast going
forward.
Further demand growth upside forecast through electric vehicles, renewable energy and infrastructure
investment.
Future base demand will not be met without significant investment and these investments take time to
come to market.
The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable
future are detailed below together with risk mitigation strategies employed by the Board:
Mineral exploration - Mineral exploration is a high-risk activity and there can be no guarantee that the Group
will identify a mineral resource that can be extracted economically.
•
•
•
The Board regularly reviews the exploration and development programmes.
Activities are focused in Nevada, a jurisdiction that represents relatively low political and operational risk.
Exploration work is conducted on a systematic basis, using modern geochemical and geophysical
techniques and various drilling methods.
Resource risk - All mineral projects have risk associated with defined grade and continuity. Mineral reserves are
always subject to uncertainties in the underlying assumptions which include geological projection and price
assumptions.
•
•
At the appropriate time resources and reserves are estimated by independent specialists on behalf of the
Group in accordance with accepted industry standards and codes. The Group currently reports resources
in accordance to the JORC (2012) code.
The directors are realistic in the use of metal and mineral price forecasts and impose rigorous practices
in the QA/QC programmes that support its independent estimates.
Commodity price risk - The principal commodities that are the focus the Group’s exploration and development
efforts are subject to highly cyclical patterns in global demand and supply and consequently the price of those
commodities is highly volatile.
•
The Board consistently reviews commodity prices and trends for its key projects throughout the
development cycle.
Recruitment and Retention of Staff - the Group’s ability to execute its strategy is dependent on the skills and
abilities of its people.
•
The Board undertakes initiatives to foster good staff engagement and ensure that remuneration packages
are competitive in the market.
10
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Main trends and factors likely to impact future business performance (continued)
Covid-19 - the Directors are monitoring the impact of the progress of Covid-19 which may impact on the Group’s
ability to execute its strategy in a timely manner and to raise equity due to periods of market volatility.
•
The Board is undertaking action to abide by governmental direction to combat Covid-19 and to
implement cost control measures where possible.
Occupational health and safety - the Group’s exploration activities are conducted in an extremely remote area
of Nevada.
•
•
•
The Operations Director has been given specific responsibility for health and safety in the field.
Every employee of the Group is committed to promoting and maintaining a safe working environment.
The Board regularly reviews occupational health and safety policies and compliance with those policies.
Foreign exchange- Although the reporting currency is the Euro, which is the functional currency of the Company,
the Group incurs expenditure in foreign currencies in the countries in which it operates. The Company may also
undertake fundraising activities in local currencies, thus creating foreign currency exposure.
Corporate governance
The Directors of Great Western Mining Corporation PLC recognise the importance of good corporate governance
and have decided to apply the Quoted Companies Alliance Corporate Governance Code (“QCA Code”). The QCA
Code was developed by the QCA in consultation with several significant institutional small company investors.
The underlying principle of the QCA Code is that “the purpose of good corporate governance is to ensure that
the company is managed in an efficient, effective and entrepreneurial manner for the benefit of all shareholders
over the longer term”. Further details of how the Company complies with the QCA code are available on the
Company’s website. The Directors anticipate that, whilst the Company will continue to comply with the QCA
Code, given the Group’s size, and plans for the future, it will also endeavour to have regard to the provisions of
the UK Corporate Governance Code as best practice guidance to the extent appropriate for a company of its size
and nature.
The Board
The Board is responsible for the supervision and control of the Group and is accountable to the shareholders.
The Board has reserved decision-making rights on a variety of matters including determining and monitoring
business strategy for the Group; evaluating exploration opportunities and risks; approving all capital expenditure
on exploration assets; approving budgets and monitoring performance against budgets; monitoring risks and
controls; reviewing and monitoring executive management performance and considering and appointing new
Directors and Company Secretary.
The Board currently has three executive Directors. Following the Board changes on 13 November 2019, the
Company does not have a non-executive Director. The Board acknowledges that this does not comply with the
QCA Code which requires a company to appoint two independent non-executive Directors. The Board is
currently seeking suitable candidates in order to comply with the QCA Code. The Company currently does not
comply with the QCA Code as the roles of chief executive officer and non-executive chairman are not separate
with the Company having appointed Mr Hall as Executive Chairman. The Board considers this appropriate for
the short-term but has the matter under review. The Board has not appointed a senior independent non-
executive Director and intends to comply with the QCA Code once non-executive appointments have been made
to the Board.
There is an agreed procedure for Directors to take independent legal advice. The Company Secretary is
responsible for ensuring that the Board procedures are followed and all Directors have direct access to the
Company Secretary.
11
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
The Board met formally on eight occasions during the year ended 31 December 2019. An agenda and supporting
documentation are circulated in advance of each meeting. All the Directors bring independent judgement to
bear on issues affecting the Group and all have full and timely access to information necessary to enable them
to discharge their duties. The Directors have a wide and varying array of experiences in the extractive industries.
Each year, under the terms of the Articles of Association of the Company, at least one third of the Directors
retire from the Board by rotation and every Director is subject to this rule. All new Directors appointed since the
previous annual general meeting are required to seek election at the next annual general meeting. The Director
required to seek re-election at the forthcoming annual general meeting is Robert O’Connell. Max Williams,
having been appointed to the Board since the last annual general meeting, will seek election at the forth coming
annual general meeting.
Board committees
The Board has implemented a committee structure to assist in the discharge of its responsibilities. All
committees have written terms of reference setting out their authority and duties.
Nomination committee
The Nomination Committee, which comprised Brian Hall (Chairman) and David Fraser (Chief Executive Officer)
until 13 November 2019 and from then of Robert O’Connell (Executive Director) and Max Williams (Finance
Director), meets at least once every year to lead the formal process of rigorous and transparent procedures for
Board and Senior Management appointments and to make recommendations to the Board in accordance with
best practice and other applicable rules and regulations, insofar as they are appropriate to the Group at this
stage in its development. With the expected retirement of Melvyn Quiller from the Board, the Committee
undertook a process to identify a suitable replacement and recommended the appointment of Max Williams as
Finance Director.
Remuneration committee
The Remuneration Committee comprised of Brian Hall (Executive Chairman) and Melvyn Quiller (Finance
Director) until his retirement on 13 November 2019 when Robert O’Connell (Executive Director) and Max
Williams (Finance Director) joined the Committee. It determines the terms and conditions of employment and
annual remuneration of the executive Directors. It takes into consideration external data and comparative third-
party remuneration and has access to professional advice outside the Group.
The key policy objectives of the Remuneration Committee in respect of the Company’s executive Directors are:
•
•
To ensure that individuals are fairly rewarded for their personal contributions to the Group’s overall
performance; and
To act as the committee ensuring that due regard is given to the interest of the Company’s shareholders
and to the financial and commercial health of the Group.
12
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Remuneration committee (continued)
Directors’ remuneration during the year ended 31 December 2019, excluding share-based payments was as
follows:
Executive Directors’ remuneration
Brian Hall (from 14 November 2019)
David Fraser (resigned 13 November 2019)
Melvyn Quiller (retired 13 November 2019)
Robert O’Connell
Max Williams (appointed 13 November 2019)
Total executive Directors’ remuneration
Non-executive Director remuneration
Brian Hall (until 13 November 2019)
Total non-executive Director’s remuneration
Total Directors’ remuneration
2019
€
-
71,819
52,195
39,491
-
163,505
2018
€
-
122,416
89,858
82,000
-
294,274
31,593
31,593
56,281
56,281
195,098
350,555
In conjunction with the Placing on 13 November 2019, Brian Hall, Robert O’Connell and Max Williams waived
their remuneration from the date of the Placing to 31 December 2019.
Shareholders
There is regular dialogue with shareholders and presentations are posted to the Company’s website from time
to time.
The Board encourages communication with shareholders throughout the year and welcomes their participation
at general meetings. Where possible, all Board members attend the annual general meeting and are available
to answer questions. Separate resolutions are proposed on substantially different issues and the agenda of
business to be conducted at the annual general meeting includes a resolution to receive and consider the annual
report and financial statements. The Chairman of each of the Board’s committees is available at the annual
general meeting.
The Board regards the annual general meeting as an important opportunity for shareholders, Directors and
management to meet and exchange views. Notice of the annual general meeting together with the annual report
and financial statements is sent to shareholders in accordance with the articles of association of the Company
and details of the proxy votes for and against each resolution are announced after the result of the votes.
13
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Internal control
The Directors have overall responsibility for the Group’s system of internal controls and the setting of
appropriate policies on these controls. The Board regularly assures itself that the system is functioning and is
effective in managing business risk. This system includes financial controls which enable the Board to meet its
responsibilities for the integrity and accuracy of the Group’s accounting records.
The key features of the system of internal controls are the following:
•
•
•
•
•
•
•
•
Budgets are prepared for approval by executive management and inclusion in a Group budget approved
by the Board;
Expenditure and income are regularly compared to previously approved budgets;
The Board establishes exploration and commodity risk policies as appropriate, for implementation by
executive management;
All commitments for expenditure and payments are compared to previously approved budgets and are
subject to approval by personnel designated by the Board or by the Board of subsidiary companies;
Regular management meetings take place to review financial and operational activities;
Cash flow forecasting is performed on an ongoing basis to ensure efficient use of cash resources;
Regular financial results are submitted to and reviewed by the Board; and
The Directors, through the audit committee, consider the effectiveness of the Group’s system of internal
financial control on an ongoing basis.
Political and charitable donations
The Company did not make any political or charitable donations during the year (2018: €Nil).
Going concern
The financial statements of the Group and Parent Company are prepared on a going concern basis.
The Directors have given careful consideration to the Group’s ability to continue as a going concern through
review of cash flow forecasts prepared by management for the period to 31 December 2021, review of the key
assumptions on which these are based and sensitivity analysis.
The future of the Company is dependent on the successful outcome of its exploration activities. The Directors
believe that the Group’s ability to make planned capital expenditure on its claims interests in Nevada and to
fund its ongoing operational expenditure can be assisted if necessary by the deferral of planned expenditure or
by raising additional capital.
The Directors have also considered the potential impact of Covid-19 on the Company’s ability to complete its
capital work programme and to meet ongoing operational expenditure, with particular reference to the volatility
of the capital markets, the ability to raise new equity funds if required, travel restrictions and the health of staff.
The Directors have concluded that the full impact of Covid-19 on the Group’s operations and financial
performance cannot yet be determined and will need to be kept under review over the coming months.
The Directors concluded that the Group will have sufficient resources to continue as a going concern for the
future, that is for a period of not less than 12 months from the date of approval of the condensed consolidated
financial statements. However, there exists a material uncertainty that may cast significant doubt over the
ability of the Group to continue as a going concern while the impact of Covid-19 cannot be fully assessed. The
impact of Covid-19 may result in the Group being unable to realise its assets and discharge its liabilities in the
normal course of business or being able to raise funds to explore further its exploration assets. The consolidated
and Parent Company financial statements have been prepared on a going concern basis and do not include any
adjustments that would be necessary if this basis were inappropriate.
14
Great Western Mining Corporation PLC
Directors’ Report (continued)
For the year ended 31 December 2019
Post balance sheet events
On 5 February 2020, the Company completed a placing of 12,500,000 new ordinary shares of €0.0001 at a price
of £0.0011 (€0.0013) per ordinary share, raising gross proceeds of £13,750 (€16,283) and increasing share capital
by €1,250. The premium arising on the issue amounted to €15,033.
On 12 March 2020, the Company completed a placing of 290,909,091 new ordinary shares of €0.0001 at a price
of £0.0011 (€0.0012) per ordinary share, raising gross proceeds of £320,000 (€361,080) and increasing share
capital by €29,091. The premium arising on the issue amounted to €331,989.
The outbreak of Covid-19 in 2020 gives rise to a non-adjusting event. During March 2020, government
restrictions on travel have delayed the expected start date of the Company’s work programme. Employee safety
remains paramount and the Company will monitor advice accordingly. The impact on the Company is considered
in the going concern statement in Note 2 to the Financial Statements. The Directors do not believe Covid-19
gives rise to an impairment of the exploration and evaluation assets or other assets at the balance sheet date.
Accounting records
The Directors believe that they have complied with the requirements of Sections 281 to 285 of the Companies
Act 2014 with regard to the maintenance of adequate accounting records by employing personnel with
appropriate expertise and by providing adequate resources to the financial function. The accounting records of
the Company are maintained at Audley House, 13 Palace Street, London, SW1E 5HE, United Kingdom.
Directors’ Compliance Statement
The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are
responsible for securing the Company’s compliance with certain obligations specified in that section arising from
the Companies Act 2014, and tax laws (‘relevant obligations’). The Directors confirm that:
•
•
•
A compliance policy statement has been drawn up setting out the Company’s policies that in their opinion
are appropriate with regard to such compliance;
Appropriate arrangements and structures have been put in place that, in their opinion, are designed to
provide reasonable assurance of compliance in all material respects with those relevant obligations; and
A review has been conducted, during the financial year, of those arrangements and structures.
Relevant audit information
The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit
information and have established that the Group’s statutory auditors are aware of that information. In so far as
they are aware, there is no relevant audit information of which the Group’s statutory auditors are unaware.
Auditors
Pursuant to Section 383(2) of the Companies Act 2014, the auditor, KPMG, Chartered Accountants, will continue
in office.
For and on behalf of the Board
Brian Hall
Executive Chairman
Date: 8 April 2020
Max Williams
Finance Director
15
Great Western Mining Corporation PLC
Statement of Directors’ Responsibilities
For the year ended 31 December 2019
The directors are responsible for preparing the annual report and the Group and Parent Company financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and Parent Company financial statements for each
financial year. As required by the AIM/Euronext Growth rules, they are required to prepare the Group financial
statements in accordance with IFRS as adopted by the EU. The directors have elected to prepare the Company
financial statements in accordance with IFRS as adopted by the EU and as applied in accordance with the
Companies Act 2014.
Under company law the directors must not approve the Group and Parent Company financial statements unless
they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group
and Parent Company and of the Group’s profit or loss for that year.
In preparing each of the Group and Parent Company financial statements, the directors are required to:
•
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements;
assess the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern; and
use the going concern basis of accounting unless they either intend to liquidate the Group or Parent
Company or to cease operations or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records which disclose with reasonable accuracy
at any time the assets, liabilities and financial position of the Group and Parent Company and the profit and loss
of the Group and which enable them to ensure that the financial statements comply with the provision of the
Companies Act 2014. The directors are also responsible for taking all reasonable steps to ensure such records
are kept by its subsidiaries which enable them to ensure that the financial statements of the Group comply with
the provisions of the Companies Act 2014. They are responsible for such internal controls as they determine are
necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error, and have a general responsibility for safeguarding the assets of the Company and the
Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are also responsible for preparing a directors’ report that complies with the requirements of the
Companies Act 2014.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company's website. Legislation in the Republic of Ireland governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
For and on behalf of the Board
Brian Hall
Executive Chairman
Date: 8 April 2020
Max Williams
Finance Director
16
Great Western Mining Corporation PLC
Independent Auditor’s Report
For the year ended 31 December 2019
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Great Western Mining Corporation PLC (‘the Company’) for the
year ended 31 December 2019 which comprise the Consolidated Income Statement, the Consolidated
Statement of Other Comprehensive Income, the Consolidated and Company Statements of Financial Position,
the Consolidated and Company Statements of Changes of Equity, the Consolidated and Company Statements
of Cashflows and related notes, including the summary of significant accounting policies set out in note 1. The
financial reporting framework that has been applied in their preparation is Irish law and International Financial
Reporting Standards (IFRS) as adopted by the European Union.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the assets, liabilities and financial position of the
Group and Parent Company as at 31 December 2019 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with IFRS as adopted by the
European Union;
the Parent Company financial statements have been properly prepared in accordance with IFRS as
adopted by the European Union, as applied in accordance with the provisions of the Companies Act
2014; and
the Group and Parent Company financial statements have been properly prepared in accordance with
the requirements of the Companies Act 2014.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and
applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities
for the audit of the financial statements section of our report. We have fulfilled our ethical responsibilities under,
and we remained independent of the Group in accordance with ethical requirements that are relevant to our
audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting
Supervisory Authority (IAASA), as applied to listed entities.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 2 to the consolidated financial statements which indicates that the Group and Parent
Company’s ability to continue as a going concern is dependent on 1) the impact of the COVID-19 outbreak on
the ability of the Group to complete its capital work programme and meet its ongoing operational expenditure
and 2) the ability to raise equity funding when required from the capital markets which is now uncertain as a
result of COVID- 19. These events and conditions, along with the other matters explained in note 2, constitute a
material uncertainty that may cast significant doubt on the Group’s and the Parent Company’s ability to continue
as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit
of the financial statements and include the most significant assessed risks of material misstatement (whether or
not due to fraud) identified by us, 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.
17
Great Western Mining Corporation PLC
Independent Auditor’s Report (continued)
For the year ended 31 December 2019
Group Audit Matter
In arriving at the Group audit opinion, the key audit matter was as follows:
Valuation of exploration and evaluation intangible assets (“E&E Assets”)
€6,106,347 (2018: €5,805,973)
Refer to note 1 (accounting policy) on page 34 and note 11 (financial disclosures) on page 44 and note 20 (events
after the reporting date) on page 54.
The key audit matter
E&E assets comprise the Group’s interest in
mining claims in Nevada, U.S. The carrying value
of these interests amounted to €6.1 million as at
31 December 2019 (31 December 2018: €5.8
million)
There is a significant risk in relation to the
recoverability of the E&E assets given the
judgmental and subjective considerations
in
performing the impairment analysis.
How the matter was addressed in our audit
Our procedures over the valuation of the Group’s
E&E assets included, but were not limited to:
• We obtained and inspected management’s
impairment assessment paper which
summarises the ongoing activities at the
claim areas and considered the existence of
impairment indicators to determine the
need for an impairment provision at 31
December 2019;
• We challenged
the content of
the
key
the
impairment paper with management and
assumptions made. We
the
corroborated
therein
information
through other information obtained during
the course of our audit such as inspecting
cashflow
by
management to establish if expenditures
further E&E activities are either
on
budgeted or planned,
the Group’s
announcements during and subsequent to
the year end and the Group’s assessment
of the impact of COVID-19;
forecasts
provided
• We considered the ongoing activities at
each of the claim areas and inspected the
impairment indicators set out in IFRS 6
“Exploration for and evaluation of Mineral
Resources” to determine if there were any
indicators of impairment;
• We obtained evidence of payments made
for annual claim maintenance extensions
which retain the Group’s mining claims in
Nevada, U.S.; and
• We reviewed the disclosures in the note 20
relating to subsequent events.
We found no material misstatements arising from
our procedures.
18
Great Western Mining Corporation PLC
Independent Auditor’s Report (continued)
For the year ended 31 December 2019
Company Audit Matter
Due to the nature of the Parent Company’s activities, we consider that there are no key audit matters that we
are required to communicate in accordance with the ISAs (Ireland). We continue to perform procedures over
cash balances. However, given cash balances represents only 3% of total assets, we have not assessed this as
one of the most significant risks in our current year audit and therefore it is not separately identified in our
report this year.
Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements was set at €32,600 (2018: €34,500), determined with reference
to a benchmark of total assets of which it represents approximately 0.5% (2018: 0.5%). We consider total assets
to be the most appropriate benchmark as it reflects the nature of the business as a mining entity at the
exploration and evaluation stage of its lifecycle.
We report to the audit committee all corrected and uncorrected audit misstatements identified in our audit with
a value in excess of €1,650 (2018: €1,700) in addition to any identified misstatements below that level that we
believe warrant reporting on qualitative grounds.
Materiality for the Company financial statements as a whole was set at €24,500 (2018: €27,600), determined by
reference to a benchmark of the Company’s total assets of which it represents approximately 0.5% (2018: 0.5%).
The accounting records of each of the Group’s subsidiaries are maintained in London. All audit work was
conducted by the Group audit team and covered 100% of the Group’s loss for the financial year and 100% of
Group total assets.
Other information
The directors are responsible for the other information presented in the Annual Report together with the
financial statements. The other information comprises the information included in the Executive Chairman’s
Statement, the Operations report and the Directors’ report. The financial statements and our auditor’s report
thereon do not comprise part of the other information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial
statements audit work, the information therein is materially misstated or inconsistent with the financial
statements or our audit knowledge. Based solely on that work we have not identified material misstatements in
the other information.
Based solely on our work on the other information, we report that:
• we have not identified material misstatements in the directors’ report;
•
•
in our opinion, the information given in the directors’ report is consistent with the financial statements;
in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014.
19
Great Western Mining Corporation PLC
Independent Auditor’s Report (continued)
For the year ended 31 December 2019
Our opinions on other matters prescribed the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of our
audit.
In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be
readily and properly audited and the Company’s financial statements are in agreement with the accounting
records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration
and transactions required by Sections 305 to 312 of the Act are not made.
Respective responsibilities and restrictions on use
Directors’ responsibilities
As explained more fully in their statement set out on page 16, the directors are responsible for: the preparation
of the financial statements including being satisfied that they give a true and fair view; such internal control as
they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis
of accounting unless they 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 (Ireland) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at:
https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/
Description_of_auditors_responsibilities_for_audit.pdf.
20
Great Western Mining Corporation PLC
Independent Auditor’s Report (continued)
For the year ended 31 December 2019
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the
Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Eamonn Russell
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place,
St. Stephens Green,
Dublin DO2 DE03,
Ireland
Date: 8 April 2020
21
Great Western Mining Corporation PLC
Consolidated Income Statement
For the year ended 31 December 2019
Continuing operations
Administrative expenses
Finance income
Loss for the year before tax
Income tax expense
Loss for the financial year
Loss attributable to:
Equity holders of the Company
Notes
2019
€
2018
€
4
5
7
(816,990)
1,195
(815,795)
(995,260)
2,486
(992,774)
-
(815,795)
-
(992,774)
(815,795)
(992,774)
Loss per share from continuing operations
Basic and diluted loss per share (cent)
8
(0.001)
(0.002)
All activities derived from continuing operations. All losses are attributable to the owners of the Company.
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
22
Great Western Mining Corporation PLC
Consolidated Statement of Other Comprehensive Income
For the year ended 31 December 2019
Loss for the financial year
(815,795)
(992,774)
Notes
2019
€
2018
€
Other comprehensive income
Items that are or may be reclassified to profit or loss:
Currency translation differences
Total comprehensive expense for the financial year
attributable to equity holders of the Company
87,052
87,052
140,736
140,736
(728,743)
(852,038)
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
23
Great Western Mining Corporation PLC
Consolidated Statement of Financial Position
For the year ended 31 December 2019
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Capital and reserves
Share capital
Share premium
Share based payment reserve
Foreign currency translation reserve
Retained earnings
Attributable to owners of the Company
Total equity
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2019
€
2018
€
10
11
12
13
15
15
16
76,556
6,106,347
6,182,903
82,192
5,805,973
5,888,165
94,943
306,675
401,618
123,174
884,452
1,007,626
6,584,521
6,895,791
112,205
9,687,151
435,962
533,903
(4,535,134)
6,234,087
67,767
9,491,437
279,739
446,851
(3,707,653)
6,578,141
6,234,087
6,578,141
14
350,434
350,434
317,650
317,650
350,434
317,650
6,584,521
6,895,791
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 8 April 2020 and signed on its behalf by:
Brian Hall
Executive Chairman
Max Williams
Finance Director
24
Great Western Mining Corporation PLC
Company Statement of Financial Position
For the year ended 31 December 2019
Assets
Non-current assets
Investments in subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity
Capital and reserves
Share capital
Share premium
Share based payment reserve
Foreign currency translation reserve
Retained earnings
Attributable to owners of the Company
Total equity
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Notes
2019
€
2018
€
9
12
13
15
15
16
500,001
500,001
500,001
500,001
7,359,367
269,704
7,629,071
6,296,410
813,368
7,109,778
8,129,072
7,609,779
112,205
9,687,151
435,962
296,111
(2,833,559)
7,697,870
67,767
9,491,437
279,739
(35,912)
(2,346,766)
7,456,265
7,697,870
7,456,265
14
431,202
431,202
153,514
153,514
431,202
153,514
8,129,072
7,609,779
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 8 April 2020 and signed on its behalf by:
Brian Hall
Executive Chairman
Max Williams
Finance Director
25
Great Western Mining Corporation PLC
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Share
capital
€
Share
premium
€
Share
based
payment
reserve
€
Foreign
currency
translation
reserve
€
Retained
earnings
€
Total
€
Balance at 1 January 2018
2,681,023
8,328,238
218,200
306,115
(5,342,764)
6,190,812
Comprehensive income for the
year
Loss for the year
Currency translation
differences
Total comprehensive income
for the year
Transactions with owners,
recorded directly in equity
Shares issued
Share warrants charge
Share warrants exercised
Share options charge
Share options cancelled
Cancellation of deferred share
capital
Total transactions with
owners, recorded directly in
equity
-
-
-
-
-
-
-
-
-
-
(992,774)
(992,774)
140,736
-
140,736
140,736
(992,774)
(852,038)
8,500
-
-
-
-
1,163,199
-
-
-
-
-
23,554
(108,542)
152,421
(5,894)
(2,621,756)
-
-
-
-
-
-
-
-
(78,859)
(23,554)
108,542
-
-
1,092,840
-
-
152,421
(5,894)
2,621,756
-
(2,613,256)
1,163,199
61,539
-
2,627,885
1,239,367
Balance at 31 December 2018
67,767
9,491,437
279,739
446,851
(3,707,653)
6,578,141
26
Great Western Mining Corporation PLC
Consolidated Statement of Changes in Equity (continued)
For the year ended 31 December 2019
Share
capital
€
Share
premium
€
Share
based
payment
reserve
€
Foreign
currency
translation
reserve
€
Retained
earnings
€
Total
€
Balance at 1 January 2019
67,767
9,491,437
279,739
446,851
(3,707,653)
6,578,141
Comprehensive income for the
year
Loss for the year
Currency translation
differences
Total comprehensive income
for the year
Transactions with owners,
recorded directly in equity
Shares issued
Share warrants granted
Share options charge
Total transactions with
owners, recorded directly in
equity
-
-
-
-
-
-
-
-
-
-
(815,795)
(815,795)
87,052
-
87,052
87,052
(815,795)
(728,743)
44,438
-
-
371,003
(175,289)
-
-
-
156,223
44,438
195,714
156,223
-
-
-
-
(11,686)
-
-
403,755
(175,289)
156,223
(11,686)
384,689
Balance at 31 December 2019
112,205
9,687,151
435,962
533,903
(4,535,134)
6,234,087
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
27
Great Western Mining Corporation PLC
Company Statement of Changes in Equity
For the year ended 31 December 2019
Share
capital
€
Share
premium
€
Share
based
payment
reserve
€
Foreign
currency
translation
reserve
€
Retained
earnings
€
Total
€
Balance at 1 January 2018
2,681,023
8,328,238
218,200
(21,810)
(4,390,969)
6,814,682
Comprehensive income for the
year
Loss for the year
Currency translation
differences
Total comprehensive income
for the year
Transactions with owners,
recorded directly in equity
Shares issued
Share warrants charge
Share warrants exercised
Share options charge
Share options cancelled
Cancellation of deferred share
capital
Total transactions with
owners, recorded directly in
equity
-
-
-
-
-
-
-
-
-
-
(583,682)
(583,682)
(14,102)
-
(14,102)
(14,102)
(583,682)
(597,784)
8,500
-
-
-
-
1,163,199
-
-
-
-
-
23,554
(108,542)
152,421
(5,894)
(2,621,756)
-
-
-
-
-
-
-
-
(78,859)
(23,554)
108,542
-
-
1,092,840
-
-
152,421
(5,894)
2,621,756
-
(2,613,256)
1,163,199
61,539
-
2,627,885
1,239,367
Balance at 31 December 2018
67,767
9,491,437
279,739
(35,912)
(2,346,766)
7,456,265
28
Great Western Mining Corporation PLC
Company Statement of Changes in Equity (continued)
For the year ended 31 December 2019
Share
capital
€
Share
premium
€
Share
based
payment
reserve
€
Foreign
currency
translation
reserve
€
Retained
earnings
€
Total
€
Balance at 1 January 2019
67,767
9,491,437
279,739
(35,912)
(2,346,766)
7,456,265
Comprehensive income for the
year
Loss for the year
Currency translation
differences
Total comprehensive income
for the year
Transactions with owners,
recorded directly in equity
Shares issued
Share warrants granted
Share options charge
Total transactions with
owners, recorded directly in
equity
-
-
-
-
-
-
-
-
-
-
(475,107)
(475,107)
332,023
-
332,023
332,023
(475,107)
(143,084)
44,438
-
-
371,003
(175,289)
-
-
-
156,223
44,438
195,714
156,223
-
-
-
-
(11,686)
-
-
403,755
(175,289)
156,223
(11,686)
384,689
Balance at 31 December 2019
112,205
9,687,151
435,962
296,111
(2,833,559)
7,697,870
The accompanying notes on page 32 to 54 form an integral part of these financial statements.
29
Great Western Mining Corporation PLC
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
Cash flows from operating activities
Loss for the year
Adjustments for:
Depreciation
Interest receivable and similar income
Decrease in trade and other receivables
Increase in trade and other payables
Equity settled share-based payment
Share options cancelled
Net cash flows from operating activities
Cash flow from investing activities
Acquisition of property, plant and equipment
Expenditure on intangible assets
Interest received
Net cash from investing activities
Cash flow from financing activities
Proceeds from the issue of new shares
Share warrants granted
Proceeds from the exercise of share options
Commission paid from the issue of new shares
Net cash from financing activities
Decrease in cash and cash equivalents
Exchange rate adjustment on cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Notes
2019
€
2018
€
(815,795)
(992,774)
7,216
(1,195)
28,231
32,784
156,223
-
(592,536)
7,080
(2,486)
31,728
250,780
152,421
(5,894)
(559,145)
-
(206,736)
1,195
(205,541)
(62,654)
(2,266,542)
2,486
(2,326,710)
415,441
(175,289)
-
(11,686)
228,466
(569,611)
(8,166)
884,452
306,675
1,126,555
-
45,144
(78,859)
1,092,840
(1,793,015)
(809)
2,678,276
884,452
10
4
16
16
10
11
4
15
15
15
15
13
13
30
Great Western Mining Corporation PLC
Company Statement of Cash Flows
For the year ended 31 December 2019
Cash flows from operating activities
Loss for the year
Adjustments for:
Interest receivable and similar income
Increase in trade and other receivables
Increase in trade and other payables
Equity settled share-based payment
Share options cancelled
Net cash flows from operating activities
Cash flow from investing activities
Interest received
Net cash from investing activities
Cash flow from financing activities
Proceeds from the issue of new shares
Share warrants granted
Proceeds from the exercise of share options
Commission paid from the issue of new shares
Net cash from financing activities
Decrease in cash and cash equivalents
Exchange rate adjustment on cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
Notes
2019
€
2018
€
(475,107)
(583,682)
4
16
16
4
15
15
15
15
13
13
(553)
(1,062,957)
277,688
156,223
-
(1,104,706)
(2,464)
(2,478,732)
46,787
152,421
(5,894)
(2,871,564)
553
553
2,464
2,464
415,441
(175,289)
-
(11,686)
228,466
(875,687)
332,023
813,368
269,704
1,126,555
-
45,144
(78,859)
1,092,840
(1,776,260)
(14,102)
2,603,730
813,368
31
Great Western Mining Corporation PLC
Notes to the Financial Statements
For the year ended 31 December 2019
1.
Accounting policies
Great Western Mining Corporation PLC (“the Company”) is a Company domiciled and incorporated in
Ireland. The Group financial statements consolidate the individual financial statements of the Company
and its subsidiaries (“the Group”).
Basis of preparation
The Group and the Company financial statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”).
Statement of compliance
The Group financial statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards and their interpretations as adopted by the European Union
(“EU IFRSs”). The individual financial statements of the Company have been prepared and approved by
the Directors in accordance with EU IFRSs and as applied in accordance with the provisions of the
Companies Act 2014 which permits a Company that publishes its Company and Group financial
statements together, to take advantage of the exemption in Section 304 of the Companies Act 2014 from
presenting to its members its Company income statement and related notes that form part of the
approved Company financial statements.
The EU IFRSs applied by the Company and the Group in the preparation of these financial statements are
those that were effective for accounting periods ending on or before 31 December 2019.
New accounting standards and interpretations adopted
Below is a list of standards and interpretations that were required to be applied in the year ended 31
December 2019. There was no material impact to the financial statements in the current year from these
standards set out below:
•
•
•
•
•
•
IFRS 16: Leases - effective 1 January 2019.
IFRIC Interpretation 23: Uncertainty over Income Tax Treatment - effective 1 January 2019.
Amendments to IFRS 9: Prepayment Features with Negative Compensation - effective 1 January
2019.
Amendments to IAS 28: Long-term Interest in Associates and Joint Ventures - effective 1 January
2019.
Amendments to IAS 19: Plan Amendment, Curtailment or Settlement - effective 1 January 2019.
Annual Improvements to IFRS Standards 2015 2017 Cycle - effective 1 January 2019.
32
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
New accounting standards and interpretations not adopted
Standards endorsed by the EU that are not yet required to be applied but can be early adopted are set
out below. None of these standards have been applied in the current period. The Group is currently
assessing whether these standards will have a material impact in the financial statements.
•
•
•
Amendments to References to Conceptual Framework in IFRS Standards - effective 1 January
2020.
Amendments to IAS 1 and IAS 8: Definition of Material - effective 1 January 2020
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform - effective 1 January
2020.
The following standards have been issued by the IASB but have not been endorsed by the EU, accordingly
none of these standards have been applied in the current period and the Group is currently assessing
whether these standards will have a material impact in the financial statements.
•
•
•
•
IFRS 17: Insurance Contracts.
IFRS 14: Regulatory Deferral Accounts.
Amendments to IFRS 3: Definition of a Business.
Amendments to IFRS 10 and IAS 28: Sale and Contribution of Assets between an Investor and its
Associate or Joint Venture.
Functional and Presentation Currency
The functional currency for each entity within the Group is deemed to be the currency for the jurisdiction
of each company’s registration. This has been determined using the primary criteria as defined by IAS 21.
Great Western Mining Corporation PLC
Great Western Mining Corporation, Inc.
GWM Operations Limited
Euro
US Dollar
Sterling
The financial statements are presented in Euro (“€”), which is the parent Company’s functional currency.
Use of Estimates and Judgements
The preparation of financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions
are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources.
In particular, significant areas of estimation uncertainty in applying accounting policies that have the most
significant effect on the amount recognised in the financial statements are in the following area:
•
Note 15 – Share based payments and share warrant valuations
In particular, significant areas of critical judgements in applying accounting policies that have the most
significant effect on the amount recognised in the financial statements are in the following areas:
•
•
•
Note 10 – Property, plant and equipment, consideration of impairment.
Note 11 – Intangible asset, consideration of impairment.
Note 12 – Amounts owed by subsidiary, expected credit loss.
33
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Great Western Mining
Corporation PLC and its subsidiary undertakings for the year ended 31 December 2019.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be
consolidated from the date on which control is transferred out of the Group. Control exists when the
Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. Financial statements of subsidiaries are
prepared for the same reporting year as the parent Company.
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, and no
controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit
arising on the loss of control is recognised in the income statement. If the Group retains any interest in
the previous subsidiary, then such interest in measured at fair value at the date control is lost.
Subsequently, it is accounted for an equity-accounted investee or as an available for sale financial asset,
depending on the level of influence retained.
Intragroup balances and transactions, including any unrealised gains arising from intragroup transactions,
are eliminated in preparing the Group financial statements. Unrealised losses are eliminated in the same
manner as unrealised gains except to the extent that there is evidence of impairment.
Investments in Subsidiaries
In the Company’s own statement of financial position, investments in subsidiaries are stated at cost less
provisions for any permanent diminution in value.
Exploration and Evaluation Assets
Exploration expenditure in respect of properties and licences not in production is capitalised and is
carried forward in the statement of financial position under intangible assets in respect of each area of
interest where: -
(i)
(ii)
the operations are ongoing in the area of interest and exploration or evaluation activities have not
reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves; and
such costs are expected to be recouped through successful development and exploration of the
area of interest or alternatively by its realisation.
Exploration costs include licence costs, survey, geophysical and geological analysis and evaluation costs,
costs of drilling and project-related overheads.
When the Directors decide that no further expenditure on an area of interest is worthwhile, the related
expenditure is written off or down to an amount which it is considered represents the residual value of
the Group’s interest therein.
34
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
Impairment
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed
at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the amount recoverable from the assets is estimated. For intangible assets that have
indefinite lives or that are not yet available for use, the recoverable amount is estimated at each reporting
date.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. A cash-generating unit is the smallest identifiable asset Group that is expected
to generate cash flows that is largely independent from other assets and Groups of assets. Impairment
losses are recognised in the Statement of Comprehensive Income. Impairment losses recognised in
respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit (Group of
units) on a pro rata basis.
The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risk specific to the asset.
Taxation
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit and
loss except to the extent that it relates to items recognised in other comprehensive income or directly in
equity, in which case the tax is also recognised in other comprehensive income or equity respectively.
Current corporation tax is the expected tax payable on the taxable income for the year, using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised using the liability method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial
recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit, and differences relating to
investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which temporary difference can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividends is recognised.
35
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
Foreign Currencies
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the
transaction. Monetary assets and liabilities denominated in a foreign currency are translated into the
functional currency at the exchange rate ruling at the reporting date, unless specifically covered by
foreign exchange contracts whereupon the contract rate is used. All translation differences are taken to
the income statement with the exception of foreign currency differences arising on net investment in a
foreign operation. These are recognised in other comprehensive income.
Results and cash flows of non-Euro subsidiary undertakings are translated into Euro at average exchange
rates for the year and the related assets and liabilities are translated at the rates of exchange ruling at
the reporting date. Adjustments arising on translation of the results of non-Euro subsidiary undertakings
at average rates, and on the restatement of the opening net assets at closing rates, are dealt with in a
separate translation reserve within equity. Proceeds from the issue of share capital are recognised at the
prevailing exchange rate on the date that the Board of Directors ratifies such issuance; and foreign
exchange movement arising between the date of issue and the date of receipt of funds is credited or
charged to the income statement.
On loss of control of a foreign operation, accumulated currency translation differences are recognised in
the income statement as part of the overall gain or loss on disposal.
Share Capital
Incremental costs directly attributable to the issue of ordinary shares and share options are recognised
as a reduction in equity.
Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined
by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive potential ordinary shares.
Property, plant and equipment
Property, plant and equipment under the cost model are stated at historical cost less accumulated
depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating
in the manner intended by management.
Depreciation is provided on the following basis:
Land and property
Plant & machinery
Motor vehicles
-
-
-
0%
33.33% straight line
33.33% straight line
36
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
Employee Benefits
i)
Share Based Payments
The grant-date fair value of equity-settled share-based payment arrangements granted to
employees and or non-employees is generally recognised as an expense, with a corresponding
increase in equity, over the vesting period of the awards. The amount recognised as an expense is
adjusted to reflect the number of awards for which the related service and non-market
performance conditions are expected to be met, such that the amount ultimately recognised is
based on the number of awards that meet the related service and nonmarket performance
conditions at the vesting date. For share-based payment awards with non-vesting conditions, the
grant-date fair value of the share-based payment is measured to reflect such conditions and there
is no true-up for differences between expected and actual outcomes.
The fair value of an equity classified warrant is measured using the binomial option pricing model
and recorded in creditors as a financial liability as the warrant price is in a different currency to
the functional currency of the company. The fair value is remeasured at each period end and any
movement charged or credited to the income statement. The fair value on grant is charged against
the share premium account.
ii)
Defined Contribution Plans
Obligations for contributions to defined contribution plans are expensed as the related service is
provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a
reduction in future payments is available.
Financial Instruments
Cash and Cash Equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand and
short-term deposits with an original maturity of three months or less. Bank overdrafts that are repayable
on demand and form part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of Statement of Cash Flows.
Trade and Other Receivables / Payables
Trade and other receivables and payables are stated at cost less impairment, which approximates fair
value given the short-dated nature of these assets and liabilities. There are no expected credit losses on
amounts due from subsidiaries and therefore no expected credit loss provision has been recognised.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of this obligation. Where the
Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the Consolidated Statement of Comprehensive
Income net of any reimbursement. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
Contingencies
A contingent liability is disclosed where the existence of an obligation will only be confirmed by future
events or where the amount of the obligation cannot be measured with reasonable reliability. Contingent
assets are not recognised but are disclosed where an inflow of economic benefit is probable.
37
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
2.
Going concern
The financial statements of the Group and Parent Company are prepared on a going concern basis.
The Directors have given careful consideration to the Group’s ability to continue as a going concern
through review of cash flow forecasts prepared by management for the period to 31 December 2021,
review of the key assumptions on which these are based and sensitivity analysis.
The future of the Company is dependent on the successful outcome of its exploration activities. The
Directors believe that the Group’s ability to make planned capital expenditure on its claims interests in
Nevada and to fund its ongoing operational expenditure can be assisted if necessary by the deferral of
planned expenditure or by raising additional capital.
The Directors have also considered the potential impact of Covid-19 on the Company’s ability to complete
its capital work programme and to meet ongoing operational expenditure, with particular reference to
the volatility of the capital markets, the ability to raise new equity funds if required, travel restrictions
and the health of staff. The Directors have concluded that the full impact of Covid-19 on the Group’s
operations and financial performance cannot yet be determined and will need to be kept under review
over the coming months.
The Directors concluded that the Group will have sufficient resources to continue as a going concern for
the future, that is for a period of not less than 12 months from the date of approval of the condensed
consolidated financial statements. However, there exists a material uncertainty that may cast significant
doubt over the ability of the Group to continue as a going concern while the impact of Covid-19 cannot
be fully assessed. The impact of Covid-19 may result in the Group being unable to realise its assets and
discharge its liabilities in the normal course of business or being able to raise funds to explore further its
exploration assets. The consolidated and Parent Company financial statements have been prepared on a
going concern basis and do not include any adjustments that would be necessary if this basis were
inappropriate.
3.
Segment information
The Group has one principal reportable segment - Nevada, USA, which represents the exploration for and
development of copper, silver, gold and other minerals in Nevada, USA.
Other operations “Corporate Activities” includes cash resources held by the Group and other operational
expenditure incurred by the Group. These assets and activities are not within the definition of an
operating segment.
In the opinion of the Directors the operations of the Group comprise one class of business, being the
exploration and development of copper, silver, gold and other minerals. The Group’s main operations are
located within Nevada, USA. The information reported to the Group’s chief executive officer (the
Executive Chairman) who is the chief operating decision maker, for the purposes of resource allocation
and assessment of segmental performance is particularly focussed on the exploration activity in Nevada.
It is the opinion of the Directors, therefore, that the Group has only one reportable segment under IFRS
8 ‘Operating Segments’, which is exploration carried out in Nevada. Other operations “Corporate
Activities” includes cash resources held by the Group and other operational expenditure incurred by the
Group. These assets and activities are not within the definition of an operating segment.
Information regarding the Group’s results, assets and liabilities is presented below.
38
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
3.
Segment information (continued)
Segment results
Exploration activities - Nevada
Corporate activities
Consolidated loss before tax
Segment assets
Exploration activities - Nevada
Corporate activities
Consolidated total assets
Segment liabilities
Exploration activities - Nevada
Corporate activities
Consolidated total liabilities
Revenue
2019
€
-
-
-
2018
€
Loss
2019
€
2018
€
-
-
-
(9,373)
(806,422)
(815,795)
(7,964)
(984,810)
(992,774)
2019
€
2018
€
6,260,174
324,347
6,584,521
6,054,916
840,875
6,895,791
2019
€
52,244
298,190
350,434
2018
€
225,940
91,710
317,650
Geographical information
The Group operates in three principal geographical areas –Ireland (country of residence of Great Western
Mining Corporation PLC), Nevada, USA (country of residence of Great Western Mining Corporation, Inc.,
a wholly owned subsidiary of Great Western Mining Corporation PLC) and the United Kingdom (country
of residence of GWM Operations Limited, a wholly owned subsidiary of Great Western Mining
Corporation PLC).
The Group has no revenue. Information about the Group’s non-current assets by geographical location
are detailed below:
Nevada, USA – exploration activities
Ireland
United Kingdom
2019
€
2018
€
6,182,903
-
-
6,182,903
5,888,165
-
-
5,888,165
39
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
4.
Finance income
Bank interest receivable
5.
Loss on ordinary activities before taxation
Directors’ remuneration
-
-
- Defined contribution pension
Salaries
Social security
scheme
Share based payments
-
Auditor’s remuneration
-
- Other assurance services
- Other non-audit services
Audit of the financial statements
Group
2019
€
1,195
1,195
Group
2019
€
193,514
16,951
1,584
156,223
29,870
1,250
4,400
Group
2018
€
2,486
2,486
Company
2019
€
Company
2018
€
553
553
2,464
2,464
Group
2018
€
348,967
40,184
1,588
152,421
29,000
5,250
4,400
Company
2019
€
Company
2018
€
39,491
4,324
-
156,223
29,870
1,250
4,400
82,000
8,897
-
152,421
29,000
5,250
4,400
As permitted by Section 304 of the Companies Act 2014, the Company income statement and statement
of other comprehensive income have not been separately presented.
6.
Employees
Number of employees
The average number of employees, including executive Directors during the year was:
Executive and non-Executive Directors
Administration
Group
2019
Number
Group
2018
Number
Company
2019
Number
Company
2018
Number
4
3
7
4
3
7
4
-
4
4
-
4
40
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
6.
Employees (continued)
Employees costs
The employment costs, including executive Directors during the year was:
Wages and salaries
Social security
Defined contribution pension scheme
Share based payments
Group
2019
€
338,767
31,473
3,466
156,223
529,929
Group
2018
€
436,738
47,184
2,363
152,421
638,706
Company
2019
€
Company
2018
€
39,491
4,324
-
156,223
200,038
82,000
8,897
-
152,421
243,318
7.
Income tax - expense
Current tax expense
Deferred tax expense
2019
€
2018
€
-
-
-
-
-
-
The income tax expense for the year can be reconciled to the accounting loss as follows:
2019
€
2018
€
Loss from continuing operations
(815,795)
(992,774)
Income tax expense calculated at 12.5% (2018: 12.5%)
(101,974)
(124,097)
Effects of:
Unutilised tax losses
Income tax expense
(101,974)
-
(124,097)
-
The tax rate used for the year end reconciliations above is the corporation rate of 12.5% payable by
corporate entities in Ireland on taxable profits under tax law in the jurisdiction of Ireland.
At the statement of financial position date, the Group had unused tax losses of €3,997,275 (2018:
€3,895,301) available for offset against future profits. No deferred tax asset has been recognised due to
the unpredictability of future profit streams. Unused tax losses may be carried forward indefinitely.
41
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
8.
Loss per share
Basic earnings per share
The basic and weighted average number of ordinary shares used in the calculation of basic earnings per
share are as follows:
2019
€
2018
€
Loss for the year attribute to equity holders of the parent
(815,795)
(992,774)
Number of ordinary shares at start of year
Number of ordinary shares issued during the year
Number of ordinary shares in issue at end of year
677,673,809
444,381,650
1,122,055,459
592,673,809
85,000,000
677,673,809
Weighted average number of ordinary shares for the purposes of basic
earnings per share
751,737,417
635,173,809
Basic loss per ordinary share (cent)
(0.001)
(0.002)
Diluted earnings per share
There were no potentially dilutive ordinary shares that would increase the basic loss per share.
9.
Investments in subsidiaries
Subsidiary undertakings - unlisted
Investment cost
2019
€
2018
€
500,001
500,001
500,001
500,001
In the opinion of the Directors, the investments in subsidiary undertakings are not worth less than their
carrying value.
At 31 December 2019, the Company had the following subsidiary undertakings:
Name
Incorporated in
Main activity
Holdings
Great Western Mining Corporation, Inc.
GWM Operations Limited
Nevada, U.S.A.
London, UK
Mineral exploration
Service Company
100%
100%
GWM Operations Limited, a UK limited company is registered in England and Wales under number
08644971, is exempt from the requirements of the UK Companies Act 2006 relating to the audit of its
accounts under section 479A of the Companies Act 2006.
42
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
10.
Property, plant and equipment
Cost
Opening cost
Additions
Exchange rate adjustment
Closing cost
Depreciation
Opening depreciation
Depreciation charge for the year
Exchange rate adjustment
Closing depreciation
Net book value
Opening net book value
Closing net book value
Property,
plant &
equipment
€
92,629
-
1,781
94,410
10,437
7,216
201
17,854
Total
€
92,629
-
1,781
94,410
10,437
7,216
201
17,854
82,192
82,192
76,556
76,556
43
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
11.
Intangible assets
Cost
Opening cost
Additions
Exchange rate adjustment
Closing cost
Amortisation
Opening amortisation
Additions
Exchange rate adjustment
Closing amortisation
Net book value
Opening net book value
Closing net book value
Exploration
and
evaluation
assets
€
Total
€
5,805,973
206,736
93,638
6,106,347
5,805,973
206,736
93,638
6,106,347
-
-
-
-
-
-
-
-
5,805,973
5,805,973
6,106,347
6,106,347
The Directors have reviewed the carrying value of the exploration and evaluation assets. These assets are
carried at historical cost and have been assessed for impairment in particular with regards to the
requirements of IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ relating to remaining licence
or claim terms, likelihood of renewal, likelihood of further expenditures, possible discontinuation of
activities over specific claims and available data which may suggest that the recoverable value of an
exploration and evaluation asset is less than carrying amount. The Directors are satisfied that no
impairment is required as at 31 December 2019. The realisation of the intangible assets is dependent on
the successful identification and exploitation of copper, silver, gold and other mineral in the Group’s
licence area. This is dependent on several variables including the existence of commercial mineral
deposits, availability of finance and mineral prices.
44
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
12.
Trade and other receivables
Amounts falling due within one year:
Other debtors
Prepayments
Amounts owed by subsidiary
undertakings
Group
2019
€
52,625
42,318
-
94,943
Group
2018
€
69,251
53,923
Company
2019
€
Company
2018
€
-
42,154
-
26,692
-
123,174
7,317,213
7,359,367
6,269,718
6,296,410
All amounts above are current and there have been no impairment losses during the year (2018: €Nil).
Amounts owed by subsidiary undertakings are interest free and repayable on demand.
There are no expected credit losses on amounts due from subsidiaries and therefore no expected credit
loss provision has been recognised.
13.
Cash and cash equivalents
For the purposes the consolidated statement of cash flows, cash and cash equivalents include cash in
hand, in bank and bank deposits with maturity of less than three months.
Cash in bank and in hand
Short term bank deposit
14.
Trade and other payables
Amounts falling due within one year:
Trade payables
Other payables
Accruals
Other taxation and social security
Share warrant provision
Amounts payable to subsidiary
undertakings
Group
2019
€
29,372
277,303
306,675
Group
2019
€
77,642
416
90,439
5,632
176,305
-
350,434
Group
2018
€
39,850
844,602
884,452
Company
2019
€
9,937
259,767
269,704
Company
2018
€
14,599
798,769
813,368
Group
2018
€
Company
2019
€
Company
2018
€
259,044
54
43,427
15,125
-
-
317,650
50,901
-
64,934
839
176,305
138,223
431,202
33,103
-
42,583
4,871
-
72,957
153,514
The Group has financial risk management policies in place to ensure that payables are paid within the
pre-agreed credit terms.
45
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
15.
Share capital
Authorised at 1 January 2018:
Cancellation of authorised deferred share capital
Authorised at 31 December 2018
Authorised at 1 January 2019
Creation of Ordinary shares of €0.0001 each
Authorised at 31 December 2019
No of shares
Value of shares
€
1,164,823,809
(264,823,809)
900,000,000
900,000,000
1,800,000,000
2,700,000,000
2,711,756
(2,621,756)
90,000
90,000
180,000
270,000
The authorised share capital of the company was increased to €270,000, consisting of 2,700,000,000
ordinary shares of €0.0001 each by way of an ordinary resolution at the Company’s Annual General
Meeting on 16 May 2019.
Ordinary
shares of
€0.0001 each
No of issued shares
Deferred
shares of
€0.0099 each
Share
capital
€
Share
premium
€
Total
capital
€
592,673,809
264,823,809
2,681,023
8,328,238
11,009,261
-
77,000,000
8,000,000
(264,823,809)
-
-
(2,621,756)
7,700
800
-
1,118,855
44,344
(2,621,756)
1,126,555
45,144
Issued, called up and
fully:
At 1 January 2018
Cancellation of deferred
share capital
Ordinary shares issued
Exercise of options
At 31 December 2018
677,673,809
Issued, called up and
fully:
At 1 January 2019
677,673,809
Ordinary shares issued
Share warrants granted
444,381,650
375,000,000
At 31 December 2019
1,497,055,459
-
-
-
-
-
67,767
9,491,437
9,559,204
67,767
9,491,437
9,559,204
44,438
-
371,003
(175,289)
415,441
(175,289)
112,205
9,687,151
9,799,356
46
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
15.
Share capital (continued)
On 9 April 2018 the Company obtained an order from the High Court of Ireland, confirming the
cancellation and extinguishment of the entire class of Deferred Shares of Great Western Mining
Corporation PLC in issue being 264,823,809 shares. The Deferred Shares were issued as part of a share
capital reorganisation approved by a special resolution at the Company’s Annual General Meeting
(“AGM”) on 19 May 2016 and amended by a special resolution at the AGM on 18 May 2017. The shares
had an aggregate nominal value of €2,621,756. €Nil was paid to the holders of the Deferred Shares and
as such the full balance of €2,621,756 was transferred to retained earnings.
On 25 July 2018, the Company completed a placing of 77,000,000 new ordinary shares of €0.0001 at a
price of £0.0130 (€0.0146) per ordinary share, raising gross proceeds of £1,001,000 (€1,126,555) and
increasing share capital by €7,700. The premium arising on the issue amounted to €1,118,855 before
share issue costs of €78,859. The share issue included warrants granted to Novum Securities Limited
giving the right to acquire 1,925,000 Ordinary shares of €0.0001 at an exercise price of £0.0175 (€0.0197),
which remain unexercised at period end 31 December 2019.
On 30 July 2018, share options were exercised, resulting in a placing of 8,000,000 new ordinary shares of
€0.0001 at a price of £0.0050 (€0.0056) per ordinary share, raising gross proceeds of £40,000 (€45,144)
and increasing share capital by €800. The premium arising on the issue amounted to €44,344.
On 19 November 2019, the Company completed a placing of 444,381,650 new ordinary shares of €0.0001
at a price of £0.0008 (€0.0009) per ordinary share, raising gross proceeds of £355,505 (€415,441) and
increasing share capital by €44,438. The premium arising on the issue amounted to €371,003 before
share issue costs of €11,686. The share issue included warrants granted giving the right to acquire
375,000,000 Ordinary shares of €0.0001 at an exercise price of £0.0016 (€0.0019), which remain
unexercised at period end 31 December 2019.
47
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
16.
Share based payments
Share options
The “Share Option Plan 2014”, was established on 17 July 2014 that entitled directors and employee to
purchase shares in the Company.
On 26 January 2017 the Company granted share options to the directors under the “Share Option Plan
2014”. Under the terms of the grant, the holders of the vested options are entitled to purchase shares at
£0.0050 (€0.0059).
On 12 July 2017 the Company granted further share options to the directors and an employee under the
“Share Option Plan 2014”. Under the terms of the grant, the holders of the vested options are entitled to
purchase shares at £0.0160 (€0.0180).
On the 2 October 2018 the Company cancelled 1,000,000 share options granted to a former employee
on 12 July 2017.
On 2 October 2018 the Company granted further share options to the directors under the “Share Option
Plan 2014”. Under the terms of the grant, the holders of the vested options are entitled to purchase
shares at £0.0080 (€0.0090).
On 6 July 2018 the Directors of the Company gave notice to exercise 8,000,000 share options at £0.005
from the share options granted on the 26 January 2017. The admission date of the share options was 30
July 2018.
Grant date
Number of options
Vesting conditions
Contractual life of
options
26 January 2017
24,000,000
12 July 2017
26,000,000
2 October 2018
24,000,000
33% options vest in
each of the three
annual dates post
grant date
33% options vest in
each of the three
annual dates post
grant date
33% options vest in
each of the three
annual dates post
grant date
7 years
7 years
7 years
48
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
16.
Share based payments (continued)
Measure of fair values of options
The fair value of the options granted has been measured using the Binomial option pricing model.
The input used in the measurement of the fair value at grant date of the options were as follows;
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividend
Risk free interest rate
Oct 2018
Jul 2017
Jan 2017
€0.0064
€0.0079
€0.0090
100%
7 Years
0%
1.25%
€0.0125
€0.0155
€0.0180
100%
7 Years
0%
1.25%
€0.0045
€0.0055
€0.0059
100%
7 Years
0%
1.25%
During the year an expense of €156,223 (2018: €152,421) was recognised in the statement of profit and
loss related to share options granted during the year.
Warrants granted during the year
In July 2017, the Group granted warrants to Beaufort Securities Limited in connection with a share
placing. 4,687,500 warrants were granted exercisable at £0.0210 (€0.0239) each with immediate vesting
and a contractual life of 3 years.
In July 2018, the Group granted warrants to Novum Securities Limited in connection with a share placing.
1,925,000 warrants were granted exercisable at £0.0175 (€0.0197) each with immediate vesting and a
contractual life of 3 years.
In November 2019, the Group granted warrants in connection with a share placing. 375,000,000 warrants
were granted exercisable at £0.0016 (€0.0019) each with immediate vesting and a contractual life of 3
years.
2019
Number of
warrants
2019
Weighted
Average
Exercise
price
2018
Number of
warrants
2018
Weighted
Average
Exercise
price
Exercisable at 31 December
381,612,500
€0.0022
6,612,500
€0.0226
Measure of fair values of warrants
The fair value of the warrants issued has been measured using the binomial option pricing model. There
are no service or non-market performance conditions attached to the arrangement and the warrants are
considered to have vested immediately.
49
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
16.
Share based payments (continued)
The inputs used in the measurement of the fair values at grant date of the warrants were as follows
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividend
Risk free interest rate
Nov 2019
Jul 2018
Jul 2017
€0.0005
€0.0013
€0.0019
129%
3 Years
0%
1.25%
€0.0072
€0.0132
€0.0197
100%
3 Years
0%
1.25%
€0.0089
€0.0163
€0.0239
100%
3 Years
0%
1.25%
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share
price. The expected life is based on the contractual life of the warrants.
During the year an expense of €Nil (2018: €23,554) was recognised directly through retained earnings in
the statement of changes in equity related to warrants granted during the year.
17.
Retained losses
In accordance with Section 304 of the Companies Act 2014, the Company has not presented a separate
income statement. Of the consolidated loss after taxation, a loss of €475,107 (2018: €583,682) for the
financial year ended 31 December 2019 has been dealt with in the Company income statement of Great
Western Mining Corporation PLC.
18.
Related party transactions
In accordance with International Accounting Standards 24 – Related Party Disclosures, transactions
between Group entities that have been eliminated on consolidation are not disclosed.
Details of the directors’ remuneration for the year is set out in Note 5. Information about the
remuneration of each director is shown in the Remuneration Report on pages 12 to 13. The directors are
considered to be the Group’s key management personnel.
Details of the directors’ interests in the share capital of the Company are set out in the Directors’ Report
on pages 8 to 9.
50
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
19.
Financial instruments and financial risk management
The Group’s and Company’s main risks arising from financial instruments are foreign currency risk, credit
risk, liquidity risk and interest rate risk. The Board of Directors has overall responsibility for the
establishment and oversight of the risk management frameworks for each of these risks which are
summarised below.
The Group and Company’s principal financial instruments comprise cash and cash equivalents and other
receivables and payables. The main purpose of these financial instruments is to provide finance for the
Group and Company’s operations. The Group has various other financial assets and liabilities such as
receivables and trade payables, which arise directly from its operations.
It is and has been throughout 2019 and 2018 the Group and Company’s policy that no trading in financial
instruments be undertaken.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies and is exposed to exchange
rate fluctuations as a consequence. It is the policy of the Group and Company to ensure that foreign
currency risk is managed wherever possible by matching foreign currency income and expenditure. During
the years ended 31 December 2019 and 31 December 2018, the Group did not utilise either forward
exchange contracts or derivatives to manage foreign currency risk on future net cash flows.
1 GBP
1 USD
Average rate
2018
2019
Spot rate at year end
2018
2019
0.8777
1.1195
0.8847
1.1810
0.8508
1.1234
0.8945
1.1450
The foreign currency exposure risk in respect of the principal foreign currencies in which the Group
operates was as follows:
Trade and other debtors
Cash and cash equivalents
Trade and other payables
2019
$
59,119
27,687
(58,692)
28,114
2019
£
140
239,656
(4,433)
235,363
2018
$
110,355
80,575
(258,701)
(67,771)
2018
£
-
715,964
(9,221)
706,743
Credit risk
Credit risk of financial loss to the Group and Company arises from the risk that if cash deposits are not
recovered. Group and Company cash and short-term deposits are placed only with banks with a minimum
credit rating of A-/A3.
51
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
19.
Financial instruments and financial risk management (continued)
Credit risk (continued)
The carrying amount of financial assets represents the maximum credit exposure. The maximum credit
exposure to credit risk is:
Trade and other debtors
Cash and cash equivalents
Trade and other payables
Group
2019
€
94,943
306,675
(350,434)
51,184
Group
2018
€
123,174
884,452
(317,650)
689,976
Company
2019
€
7,359,367
269,704
(431,202)
7,197,869
Company
2018
€
6,296,410
813,368
(153,514)
6,956,264
The carrying value of financial assets represents the Company’s maximum exposure at the balance sheet
date. At the balance sheet date, the Directors have reviewed the carrying value of the amounts due from
subsidiary companies for indicators of impairment using the expected credit loss model as required under
IFRS 9 and concluded that these amounts were not impaired. If the value of any of the Group’s exploration
or production assets became impaired, then provision would be made by the Company against relevant
amounts due from subsidiary companies.
Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall due. The Group
manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are
regularly produced to identify the liquidity requirements of the Group. To date, the Group has relied on
shareholder funding to finance its operations. The Group did not have any bank loan facilities at 31
December 2019 or 31 December 2018.
The Group and Company’s financial liabilities as at 31 December 2019 and 31 December 2018 were all
payable on demand.
The expected maturity of the Group and Company’s financial assets (excluding prepayments) as at 31
December 2019 and 31 December 2018 was less than one month.
The Group expects to meet its other obligations from operating cash flows with an appropriate mix of
funds and equity instruments. The Group further mitigates liquidity risk by maintaining an insurance
programme to minimise exposure to insurable losses.
The Group had no derivative financial instruments as at 31 December 2019 and 31 December 2018.
52
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
19.
Financial instruments and financial risk management (continued)
Interest rate risk
The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the
Group and Company’s holdings of cash and short-term deposits. It is the Group and Company’s policy as
part of its management of the budgetary process to place surplus funds on short term deposit from time
to time where interest is earned.
Cash flow sensitivity analysis for variable rate instruments
An increase/decrease of 100 basis points in interest rates at 31 December 2019 would have decreased/
increased the reported loss and equity by €7,044 (2018: €8,445).
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the debt and equity
balance. The Group manages its capital structure and makes adjustments to it, in light of changes in
economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares
or raise debt. No changes were made in the objectives, policies or processes during the years ended 31
December 2019 and 31 December 2018. The capital structure of the Group consists of equity attributable
to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in the
consolidated statement of changes in equity.
Fair values
Due to the short-term nature of all of the Group’s and Company’s financial assets and liabilities at 31
December 2019 and 31 December 2018, the fair value is considered by the Directors to equate the
carrying amount in each case.
Analysis of net funds
Group
Cash at bank
Total
Group
Cash at bank
Total
At 1 January
2018
€
Cashflow
€
At 31
December
2018
€
2,678,276
2,678,276
(1,793,824)
(1,793,824)
884,452
884,452
At 1 January
2019
€
Cashflow
€
At 31
December
2019
€
884,452
884,452
(577,777)
(577,777)
306,675
306,675
53
Great Western Mining Corporation PLC
Notes to the Financial Statements (continued)
For the year ended 31 December 2019
20.
Events after the reporting date
On 5 February 2020, the Company completed a placing of 12,500,000 new ordinary shares of €0.0001 at
a price of £0.0011 (€0.0013) per ordinary share, raising gross proceeds of £13,750 (€16,283) and
increasing share capital by €1,250. The premium arising on the issue amounted to €15,033.
On 12 March 2020, the Company completed a placing of 290,909,091 new ordinary shares of €0.0001 at
a price of £0.0011 (€0.0012) per ordinary share, raising gross proceeds of £320,000 (€361,080) and
increasing share capital by €29,091. The premium arising on the issue amounted to €331,989.
The outbreak of Covid-19 in 2020 gives rise to a non-adjusting event During March 2020, government
restrictions on travel have delayed the expected start date of the Company’s work programme. Employee
safety remains paramount and the Company will monitor advice accordingly. The impact on the Company
is considered in the going concern statement in Note 2 to the Financial Statements. The Directors do not
believe Covid-19 gives rise to an impairment of the exploration and evaluation assets or other assets at
the balance sheet date.
21.
Approval of financial statements
The financial statements were approved by the Board on 8 April 2020.
54
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