Great Western Mining Corporation PLC
Annual Report 2020

Plain-text annual report

t Western Mining Corporation PLC Grea Annual Report 2020  Great Western Mining Corporation PLC Great Western Mining Corporation PLC Annual Report and Financial Statements for the year ended 31 December 2020 Registered number: 392620 Great Western Mining Corporation PLC Great Western Mining Corporation PLC Annual Report and Financial Statements For the year ended 31 December 2020 Contents Page Directors and Other Information………………………………………………………………………………… …………..………………………..1 Executive Chairman’s Statement…..….………….………………………………………………………….... …………………………..………..3 Operations Report…….………………………….…………………….…….…………………………….…………. ………………………….…………5 Directors’ Report………………..………….………………………………………………………………………….. ……………..……………………..8 Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial Statements…………………….……………………..……………………………………..… …………………………………..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 2020 Directors Registered office Secretary Auditor Bankers Registrar 1 Brian Hall (Executive Chairman) Max Williams (Finance Director) Robert O’Connell (Operations Director) Andrew Hay (Non-Executive Director) Alastair Ford (Non-Executive 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 2020 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 2020 Dear Shareholder, Herewith your Company’s Annual Report and audited Financial Statements for the year ended 31 December 2020. Great Western is an exploration and development company which does not yet generate commercial revenues and is reporting a loss for the year of €852,042 (2019: €815,795), net assets of €7,919,625 (2019: €6,234,087) and net cash of €2,287,172 (2019: €306,675). The Company has no debt apart from current creditors arising in the normal course of business and is not a party to any disputes. Great Western explores for and exploits precious and base metals in Mineral County, Nevada, USA where it operates multiple 100% owned claims and has over 17,000 acres under licence. During the reporting year we strengthened our cash position through four placings of new shares; acquired an option to purchase the Olympic Gold Project in Nevada where we have since carried out two separate geophysical surveys; evaluated spoil heaps at the Mineral Jackpot property and, at the very end of the year, poured a trial quantity of gold and silver as a pilot scheme for processing operations; doubled the mineralisation footprint at Mineral Jackpot; and established the potential for gold and silver at the Rock House (‘RH’) group of claims which have never before been explored or exploited. At the Annual General Meeting in 2020 we were pleased to welcome two experienced Non-Executive Directors to the Board who have now been elected by shareholders. Andrew Hay has spent a long career in banking and finance and is former head of corporate finance at the Edmond de Rothschild in London. He is now a Senior Adviser at Smith Square Partners, a leading UK corporate finance advisory firm. Alastair Ford has spent his entire career in or associated with the mining industry, at different times as an analyst, journalist and asset manager. These two appointees have both previously been directors of listed companies and are making a strong contribution. During 2020 our focus was almost entirely on gold and silver. Our target for gold is a resource of 1.5 million ounces but this is of course subject to the success of our ongoing exploration efforts. We have already established an inferred and indicated copper resource of 4.28 million tonnes of 0.45% copper for 19,000 tonnes of contained copper metal at a 0.2% cut-off grade, which represents considerable progress but still falls far short of an economic resource and requires further capital expenditure. The Company’s current policy is to accelerate its numerous and more accessible gold and silver prospects, while seeking a strong joint venture partner for development of the copper potential. We have had two separate approaches from third parties but neither has met our criteria and we actively continue to seek an appropriate partner. In the meantime, there are no outstanding work commitments beyond manageable annual lease rentals. Our three primary gold and silver prospects are (1) the Mineral Jackpot claims on the Black Mountain group, consisting of five historic mines, which we have managed to link together through mapping and thereby double the area of potential mineralisation; (2) the RH (Rock House) Group which has never previously been explored but where we have identified strong indications of gold and silver, carried out trenching, a geophysical survey and processed small quantities of gold and silver from float material; and (3) the Olympic Gold Project where we acquired a 4 year purchase option in May 2020 and have since carried out two geophysical surveys which have allowed us to plan a drilling programme for 2021. More detailed information on all these prospects is to be found in the operations section of the Annual Report. New gold mines are not developed overnight and, as an interim measure, we are assessing how to exploit the numerous spoil heaps from past mine workings at Mineral Jackpot and elsewhere for secondary recovery of precious metals. At Mineral Jackpot alone there are approximately 38 spoil heaps, estimated to aggregate up to 12,000 tonnes of material. We set ourselves a challenging target of pouring first precious metal from a pilot scheme by the end of 2020. This was a difficult exercise, not helped by the pandemic-related trans-Atlantic travel ban, but at the very end of the year we achieved this objective with only a day or two to spare. We therefore proved the concept by producing a single small doré bar comprising a mix of gold, silver and some other minerals and we still have a lot of material left to be processed, as our small team on site is currently multi- 3 Great Western Mining Corporation PLC Executive Chairman’s Statement (continued) For the year ended 31 December 2020 tasking over all our projects and our team members in the UK and Ireland continue to face travel restrictions at the time of writing. A balancing act and careful planning is constantly needed to prioritise the tasks in hand among only a very few people and to make sure we keep our projects moving ahead. Processing the remaining material together with additional material from our trenching exercise at RH is work-in-progress. During the first quarter of 2021 a metallurgical laboratory in the UK carried out a full analysis of a sample load of spoil heap material from Mineral Jackpot, with an initial calculated grade of 1.26 g/t gold and 434 g/t silver, and the results of this were announced at the beginning of April. This analysis concluded that gravity separation of the material will be a viable production method and that a much more complex and expensive cyanide leaching project, requiring a high level of environmental approvals, would not significantly increase recovery of precious metals. Under test conditions at the laboratory, material ground to a diameter of 0.35mm liberated 50% of available gold and 40% of available silver. This was further improved when the material was ground to 0.25mm diameter, yielding an enriched concentrate that assayed up to 140 grams gold and 20,000 grams silver per tonne processed. It is important to stress that while these results are extremely encouraging, they cannot be directly extrapolated over 38 widely dispersed spoil heaps which may have varying characteristics. However, we now have sufficient data from which to evaluate a potential production project and have contracted an independent metallurgical consultant who is preparing specifications and detailed costings. Looking ahead, with regulatory approvals now in place, we have this month commenced a 10,000-foot drilling programme with a Reverse Circulation rig which we have under contract. In addition, we have contracted a much smaller and more easily transportable coring rig for accessing difficult mountainous areas and with these two units we shall be drilling at all three of our primary gold and silver target areas. Although our main objective is precious metals, we also aim to drill at least one hole on the M4 prospect with the aim of defining a copper lead. Away from field operations, we expect to formulate a workable plan for exploitation of the spoil heaps in the near future. Our basic 2021 programme was already funded but In March we undertook a placing of new shares for cash and raised £1 million before transaction expenses which will enable us to expand our programme if our drilling yields promising results. In addition to our existing assets and the recently acquired Olympic Gold Project option, we are actively seeking further precious metals opportunities for exploration, to spread our risk and maximise the opportunity for a company-maker discovery. Since the year end, we have successfully migrated our share settlement operations from CREST in London to the Euroclear Bank in Belgium, being a post-Brexit requirement for Irish public companies. This was a complicated and lengthy exercise which we have managed to achieve at minimum cost and which also required the active voting participation of shareholders in order to succeed, for whose support we are very grateful. Details of the Annual General Meeting will be advised to shareholders in the near future. We have a very active ongoing programme and a number of excellent prospects to work on. We cannot assure success on all of them but believe we have a wide enough spread of really interesting opportunities to be able to create real value for Great Western’s shareholders. On behalf of our small, dedicated team, I would like to thank our wide base of nearly 4,000 underlying shareholders for their continuing support. We will publish operational updates whenever appropriate throughout the year. Yours sincerely, Brian Hall Executive Chairman Date: 28 April 2021 4 Great Western Mining Corporation PLC Operations Report For the year ended 31 December 2020 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 2020, Great Western carried out exploration across its portfolio of six 100% owned claims groups in Nevada and in May 2020 entered an option agreement over the Olympic Gold group of claims, increasing the Group’s claim position by 48 claims. In September 2020 as part of the annual claim renewal procedure, the Group reduced its land position through the relinquishment of 119 claims in the JS, EM and BM Groups which were considered no longer to have strategic value to the Group. Following renewal, the land position held by Great Western in Mineral County consists of 728 full and fractional unpatented claims, covering a total land area of approximately 58.9 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 249 full and fractional claims covering approximately 20.7 km². During 2020, the Company conducted a magnetometer survey over the northern apart of the prospect, around the former workings of the Mineral Jackpot mine. Results were very encouraging – appearing to show a strong correlation between magnetic signatures and known vein structures. This should allow for expansion of the survey into prospective areas where there are currently no known veins in the search for new structures. During the autumn, a team was organised to collect prospective vein material from numerous spoil heaps that are scattered around the former workings at Mineral Jackpot. Several tonnes of material were collected and bought down to a small purpose-built gravity pilot plant erected nearby. 130 kg of this material was split off and shipped to a professional testing facility in the U.K., to process in conjunction with the bulk of the material. The U.K. testing facility was engaged to run leaching amenability tests, as well as gravity amenability tests, with work ongoing at the year end. Of the remaining material, the majority was successfully run through the pilot gravity circuit, and a small doré bar of precious metal produced with further processing planned for the current year. As well as precious metals, 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. In 2019 two drill locations were permitted with the BLM in order to drill test the target and they remain current and valid. The Olympic Gold Group of Claims In May, the Company acquired an option to purchase the Olympic Gold Project, a group of 48 claims, located approximately 50 miles from Great Western’s original concessions but still within Mineral County. The purchase consideration of $150,000 is spread over four years during which time Great Western has full rights to all data and to conduct exploration and appraisal work. Great Western may elect to bring forward the closing of the purchase by early-paying the schedule in full or it may exit the project at any time without penalty and without completing the payment schedule. Work is in progress on several potential prospects over this 800 acre site. 5 Great Western Mining Corporation PLC Operations Report (continued) For the year ended 31 December 2020 The Olympic Gold Group of Claims (continued) The Olympic Gold Project lies on the northern flanks of the Cedar Mountain Range, on the eastern edge of Mineral County. It lies within the Walker Lane Fault Belt, at the intersection of two major mineral trends – the Rawhide-Paradise Peak trend, and the Aurora-Round Mountain Trend. The mineral deposit type at Olympic is of low sulphidation epithermal banded quartz-gold vein style. Historic production from the former Olympic Gold Mine totalled approximately 35,000 tonnes, at a grade of 25 g/t gold and 30 g/t silver, in the interwar period of 1918 to 1939. Great Western believes that faulted offsets of the high-grade Olympic Vein still remain to be discovered in the area and this forms one of the numerous target zones on the prospect. During 2020 a rock sampling programme verified the historical results provided as part of the option agreement package, indicating mineralisation to be present across the claim block. A magnetometer survey covering the sites of the mineralisation was undertaken, leading to the discovery of a further buried target to the east of the Trafalgar Hill prospect. The magnetics survey also defined an anomaly to the east of the OMCO fault, the target area containing a projected faulted slice of the Olympic vein. 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 2020 a trenching programme was enacted over the Eastern Shear Zone (“ESZ”) and the Southern Alteration Zone (“SAZ”), designed to target the anomalies detected in the earlier soil programme. The trenches were designed to cross-cut the major northwest to southeast structure mapped at the ESZ, and to better expose the alteration assemblage at the SAZ. Best assays of 1.5m @ 0.23 g/t Au and 1.5m @ 0.1 g/t Au from trench 5 in the SAZ, within a sheared and altered carbonate unit, intruded by a felsic intrusive, point to the promise of the area. Although no reportable intercepts were encountered in the trenches excavated in the ESZ, a 10kg float sample was recovered from near the area of trench 2 and assayed, producing a small prill of gold and silver. A magnetometer survey was conducted over both the ESZ and the SAZ. Although the survey did not pick up the main structure at the ESZ, a magnetic high under the alluvium to the east and south of the zone was defined, potentially indicating a buried intrusive body. The survey over the SAZ showed a broad magnetic low to the east of the SAZ, running north east to south west, which is likely related to a buried fault structure underneath the alluvium. This fault may be a range front fault, of which similar structures throughout Nevada are known to host important gold deposits, or it may be related to the Golconda fault system, an earlier thrust fault system that hosts the prolific Candelaria silver deposit to the east. 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 northwest 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 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 6 Great Western Mining Corporation PLC Operations Report (continued) For the year ended 31 December 2020 The JS Group of Claims (continued) 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 2019 the Group received a drill permit application to follow up on the exciting discovery in hole M4_05 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, within a north east trending graben structure. Drilling by Conoco at the southern end of this structure identified thick successions of alteration, and copper enrichment. They did no further work to follow up on these results. The Company regards the northerly continuation of this structure to be a strong target for buried copper mineralisation, which remains untested. 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. Summary of 2020 Work Programme • Portfolio of claims reorganised by acquiring new claims with precious metals potential and relinquishing old claims with no remaining potential. Collection of spoil heap material from the Mineral Jackpot area, and production of a gold and silver bar. Magnetometer survey over the Mineral Jackpot prospect. Rock sampling over the Olympic Gold Project. Magnetometer survey over the Olympic Gold Project. Trenching and sampling at RH Group. Magnetometer survey at RH Group. • • • • • • Forward to 2021 2021 is scheduled to be a busy and exciting year for Great Western, although the ongoing impact of Covid-19 may cause continued challenges, 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 2020 field campaigns where drilling activities will commence on the most promising of these as soon as applications for surface disturbance works have been approved. Approval for drilling at the Olympic project was granted in April 2021, with a drill rig mobilising shortly after. Drilling is also taking place at the M4 copper project, with a light drill rig currently set up on one of the eastern drill pads. At the other prospects, rock and soil sampling will be continued to identify future targets with a view to accelerating their exploitation. A contract for a Reverse Circulation rig has been signed and a 10,000 feet (3,000 metre) programme is due to commence at the beginning of the second quarter, starting at the Olympic property. A lighter, easily deployable rig has also been identified and signed up with a capability of drilling up to 90 feet and the Company is upgrading this to increase its capability to 200 feet. On the processing side, the Company will process more material through gravity separation and work on developing a longer-term processing facility, the specifications of which will be designed with the help of specialist consultants once the laboratory analysis has been definitively completed. William Cooper Vice-President, Exploration Date: 28 April 2021 7 Great Western Mining Corporation PLC Directors’ Report For the year ended 31 December 2020 The Directors present their report and audited financial statements for the year ended 31 December 2020 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 €196,982 (2019: €206,736) 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 2020 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 2020 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 €852,042 (2019: €815,795). All exploration and development costs to date have been deferred and no transfer to distributable reserves or dividends is recommended by the Directors (2019: €Nil). Directors and Secretary and their interests At the Annual General Meeting held on 14 July 2020, Alastair Ford and Andrew Hay were elected to the Board. In accordance with the articles of association, Brian Hall and Max Williams retire from the Board by rotation and being eligible, offer themselves for re-election. The Directors who held office at 31 December 2020 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 Alastair Ford Andrew Hay Robert O’Connell Max Williams (* Or date of appointment.) Number of ordinary shares 28 Apr 2020 31 Dec 2020 31 Dec 2019* 71,000,200 - 10,000,000 21,670,490 46,250,000 71,000,200 - 10,000,000 21,670,490 46,250,000 48,000,200 - - 21,670,490 31,250,000 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 2020 had the following beneficial interests in options over the Company’s Ordinary shares: 8 Great Western Mining Corporation PLC Directors’ Report (continued) For the year ended 31 December 2020 Directors and Secretary and their interests (continued) Name of Director Alastair Ford Brian Hall Andrew Hay Robert O’Connell Max Williams Holding at 1 January 2020 Granted during the year Exercised during the year Holding at 31 December 2020 - 10,666,667 - 17,000,000 - - 9,000,000 - 9,000,000 9,000,000 - - - - - - 19,666,667 - 26,000,000 9,000,000 Weighted average exercise price - £0.0056 - £0.0069 £0.0009 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 2020 was €nil (2019: €nil). 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 2020 had the following beneficial interest in warrants over the Company’s Ordinary shares: Name of Director Brian Hall Max Williams Holding at 1 January 2020 31,250,000 31,250,000 Granted during the year Exercised during the year Holding at 31 December 2020 - - - - 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 19 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 Number of shares Per cent 116,846,960 3.27% 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 €0.0010/£0.0008 to a high of €0.0040/£0.0.0033 (2019: €0.00160/£0.00105 to €0.00700/£0.00585). The share price at the year-end was €0.0025/£0.0022 (2019: €0.00200/£0.00125). 9 Great Western Mining Corporation PLC Directors’ Report (continued) For the year ended 31 December 2020 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. The prices of silver and copper have risen strongly during the 2020. The gold price also rose during the first half of the year and although it has since declined remains higher than the start of the year. 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 with 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 2020 Main trends and factors likely to impact future business performance (continued) Covid-19 - the Directors monitor the impact of Covid-19 and have adapted the work programme and work practices so that the Group is able to execute its strategy in a timely manner. The continuing impact of Covid- 19 could restrict the Company’s ability from time to time to conduct its work programme. • • The Board abides by governmental direction to combat Covid-19. To enable work on the Group’s assets, Great Western contracts local service providers to perform work overseen by the Group’s management. This has enabled much of the work programme to be performed although some elements are delayed until the Group’s own staff can be on site. 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 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 and two Non-Executive Directors, who were elected to the Board at the Annual General Meeting on 14 July 2020 which addressed the Company’s non-compliance with the QCA Code requiring a company to appoint two independent non-executive Directors. 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. Mr Hay has been appointed the Senior Independent Non-Executive Director. 11 Great Western Mining Corporation PLC Directors’ Report (continued) For the year ended 31 December 2020 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. The Board met formally on seven occasions during the year ended 31 December 2020 to discuss scheduled matters for consideration by the Board. The Board met on a further twelve occasions to approve specific matters including the migration of the share settlement system from CREST to Euroclear Bank, and the issue of new shares in accordance with placings and the exercise of share warrants. 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 Directors required to seek re-election at the forthcoming annual general meeting are Brian Hall and Max Williams. 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. Audit committee The Audit Committee comprised Brian Hall (Executive Chairman) and Robert O’Connell (Operations Director) until 14 July 2020 and from then the Non-executive Directors, Andrew Hay (as Chairman of the Committee) and Alastair Ford. The Committee may examine any matters relating to the financial affairs of the Group and the Group’s audit. These includes reviews of the published financial statements and announcements, internal control procedures, accounting procedures, accounting policies, the appointment, independence, objectivity, terms of reference and fees of external auditors and such other related functions as the Board may require. The Audit Committee met twice during the year. The Audit Committee reviews the necessity for an internal audit function. Based on the scale of the Group’s operations and close involvement of the Board and senior management in setting and monitoring controls, the Audit Committee is satisfied that an internal audit function is not currently required. Nomination committee The Nomination Committee, which comprised Robert O’Connell (Operations Director) and Max Williams (Finance Director) until 14 July 2020 and then Brian Hall (Chairman of the Committee) and the Non-Executive Directors, Alastair Ford and Andrew Hay. The Committee 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. Following the changes in executive management in November 2019, the Committee undertook a process to identify suitable non-executive directors and recommended the appointments of Andrew Hay and Alastair Ford at the 2020 Annual General Meeting. Remuneration committee The Remuneration Committee comprised of Robert O’Connell (Executive Director) and Max Williams (Finance Director) until 14 July 2020 and from then the Non-Executive Directors, Alastair Ford (Chairman of the Committee) and Andrew Hay. The Committee 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. 12 Great Western Mining Corporation PLC Directors’ Report (continued) For the year ended 31 December 2020 Remuneration committee (continued) 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. Directors’ remuneration during the year ended 31 December 2020, 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 fees Brian Hall (until 13 November 2019) Alastair Ford (appointed 14 July 2020) Andrew Hay (appointed 14 July 2020) Total non-executive Director’s fees 2020 € 56,199 - - 52,000 56,526 164,725 - 6,185 6,185 12,370 2019 € - 71,819 52,195 39,491 - 163,505 31,593 - - 31,593 Total Directors’ remuneration 177,095 195,098 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. In addition to Non-Executive Directors’ fees, Alastair Ford and Andrew Hay are each contracted with GWM Operations Limited to provide consulting services for marketing and corporate finance respectively for which each received €6,185 in the period. 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 subject to Covid-19 restrictions. 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 2020 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 (2019: €Nil). Going concern The financial statements of the Group and Parent Company are prepared on a going concern basis. In order to assess the appropriateness of the going concern basis in preparing the financial statements for the year ended 2020, the Directors have considered a time period of at least twelve months from the date of approval of these financial statements. The Group incurred an operating loss during the year ended 31 December 2020. As the Group is not generating revenues, an operating loss is expected for the next twelve months. However at the balance sheet date, the Group had cash and cash equivalents amounting to €2.29 million and has raised approximately €1.18 million in 2021 which the Board considers will enable the Group to meet continuing operating expenditure and the planned work programme. The future of the Company is dependent on the successful outcome of its exploration activities and implementation of revenue-generating operations. The Directors believe that the Group’s ability to make additional capital expenditure on its claims interests in Nevada can be assisted if necessary by raising additional capital or from future revenues. The Directors have taken into consideration the Company’s successful completion of placings and the exercise of warrants by warrant holders during 2020 and 2021 to provide additional cash resources. The Directors concluded that the Group will have sufficient resources to continue as a going concern for the period of assessment period of not less than 12 months from the date of approval of the consolidated financial statements without material uncertainties. Accordingly the consolidated 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 2020 Post balance sheet events On 21 January 2021, the Company completed the issue of 15,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0020 (€0.0018) per ordinary share, raising gross proceeds of £30,000 (€55,427). On 12 February 2021, the Company completed the issue of 31,250,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in November 2019. The exercise price was £0.0016 (€0.0018) per ordinary share, raising gross proceeds of £50,000 (€56,978). On 15 February 2021, the Company completed the issue of 6,000,000 new ordinary shares following the exercise of options granted in April 2020. The exercise price was £0.009 (€0.0010) per ordinary share, raising gross proceeds of £5,400 (€6,191). At an Extraordinary General Meeting held on 17 February 2021, the shareholders approved the migration of the Company’s share settlement system from CREST to Euroclear Bank in accordance with the Migration of Participating Securities Act 2019. The estimated cost of the migration is €70,000. On 19 March 2021, the Company signed a Placing Agreement for the issue of 454,545,455 new Ordinary Shares of €0.0001 each at a price of 0.22 pence each, raising £1 million (€1,153,429) before transaction expenses. In addition, the Company is granting 227,272,727 warrants with an exercise price of 0.30 pence per share based on a ratio of one warrant for every two new Ordinary shares being issued, together with a further 22,727,272 warrants with an exercise price of 0.22 pence per share to be granted to Novum Securities Limited acting as broker. The new shares were issued on 13 April 2021. 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 41 Ewell Downs Road, Epsom, 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: 28 April 2021 15 Max Williams Finance Director Great Western Mining Corporation PLC Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial Statements For the year ended 31 December 2020 The directors are responsible for preparing the annual report and the Group and Company financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and Company financial statements for each financial year. As required by the AIM/ESM 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 Company financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group and Company and of the Group’s profit or loss for that year. In preparing each of the Group and 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 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 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, financial position of the Group and 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. On behalf of the Board Brian Hall Executive Chairman Date: 28 April 2021 Max Williams Finance Director 16 Great Western Mining Corporation PLC Independent Auditor’s Report to the Members of Great Western Mining Corporation PLC For the year ended 31 December 2020 Report on the audit of the financial statements Opinion We have audited the financial statements of Great Western Mining Corporation plc (‘the Company’) and its consolidated undertakings (‘the Group’) for the year ended 31 December 2020 set out on pages 22 to 55, 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 Company as at 31 December 2020 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 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 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. Conclusions relating to going concern In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s and Company’s ability to continue to adopt the going concern basis of accounting included considering the inherent risks to the Group’s and Company’s business model and analysing how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the going concern period. 17 Great Western Mining Corporation PLC Independent Auditor’s Report (continued) For the year ended 31 December 2020 We evaluated the going concern assessment by carrying out the following procedures among others: • Obtained and inspected management’s cash flow forecasts; • Evaluated and challenged the key assumptions used by management in performing the cash flow forecasts; • Obtained and inspected management’s going concern paper which outlines the status of the various factors impacting on going concern, the risks attaching to the various potential outcomes and the likely future developments. • Obtained and inspected relevant correspondence between the group and third parties to support the • assumptions made by management in its going concern paper. Inspected the accounting treatment and disclosures in the annual report in accordance with accounting requirements. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group or the Company’s ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue. 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. We have determined the matter described below to be the key audit matter to be communicated in our report. 18 Great Western Mining Corporation PLC Independent Auditor’s Report (continued) For the year ended 31 December 2020 Group Audit Matter In arriving at our Group audit opinion above, the key audit matter was as follows: (unchanged from 2019): Valuation of exploration and evaluation intangible assets (“E&E Assets”) €5,898,940 (2019: €6,106,347) Refer to note 1 (accounting policy) on page 34 and note 11 (financial disclosures) on page 44. The key audit matter E&E assets comprise the Group’s interest in mining claims in Nevada, U.S. The carrying value of interests amounted to €5.9 million as at 31 December 2020 (31 December 2019: €6.1 million) these There is a significant risk in relation to the recoverability of the E&E assets given the judgement in determining whether an indication of impairment exists. 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 paper and considered the existence of impairment; • We obtained and inspected claim correspondence between the Group and Nevada Authorities and agreed payment of annual claim maintenance fees to supporting documentation; • We inspected a copy of the entity’s budget to determine if substantive expenditure is planned on each of the claim areas. We compared the budget received for the purpose of this analysis with the entity’s cash flows provided for other analysis on the file to determine if it is consistent and considered the ongoing activities at each of the claim areas. • We considered if there was any contradictory evidence to management’s assessment that they are not planning to discontinue activities on the respective sites through review of board minutes, press releases and search of media; • We have inspected company announcements relating to operational updates which have been released by the company during 2020 and 2021. We inspected details of management's plans for continued exploration in each of the claim sites • We challenged management through discussions on the possibility of additional indicators including in assessing whether the entity has sufficient cash to fund future planned or budgeted substantive exploration from inspection of their cashflow forecast and the entity’s capacity to raise cash. • We tested the design and implementation of the controls management have to identify indicators of impairment. We found no material misstatements arising from our procedures. 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. 19 Great Western Mining Corporation PLC Independent Auditor’s Report (continued) For the year ended 31 December 2020 Our application of materiality and an overview of the scope of our audit Materiality for the Group financial statements was set at €62,500 (2019: €32,600), determined with reference to a benchmark of total assets of which it represents approximately 0.75% (2019: 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 €3,000 (2019: €1,650) 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 €50,000 (2019: €24,500), determined by reference to a benchmark of the Company’s total assets of which it represents approximately 0.75% (2019: 0.5%). We applied materiality to assist us determine what risks were significant risks and the procedures to be performed. 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 preparation of 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 undertaken during the course of the audit, 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; and in our opinion, the directors’ report has been prepared in accordance with the Companies Act 2014. • 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. 20 Great Western Mining Corporation PLC Independent Auditor’s Report (continued) For the year ended 31 December 2020 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. We have nothing to report in this regard. 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 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 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: http://www.iaasa.ie/Publications/Auditing-standards/International-Standards-on-Auditing-for-use-in- Ire/Description-of-the-auditor-s-responsibilities-for. 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. Eamon Dillon for and on behalf of KPMG Chartered Accountants, Statutory Audit Firm 1 Stokes Place, St. Stephens Green, Dublin DO2 DE03, Ireland Date: 28 April 2021 21 Great Western Mining Corporation PLC Consolidated Income Statement For the year ended 31 December 2020 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 2020 € 2019 € 4 5 7 (852,270) 228 (852,042) (816,990) 1,195 (815,795) - (852,042) - (815,795) (852,042) (815,795) Loss per share from continuing operations Basic and diluted loss per share (cent) 8 (0.001) (0.001) All activities derived from continuing operations. All losses are attributable to the owners of the Company. The accompanying notes on page 32 to 55 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 2020 Loss for the financial year (852,042) (815,795) Notes 2020 € 2019 € 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 (512,730) (512,730) 87,052 87,052 (1,364,772) (728,743) The accompanying notes on page 32 to 55 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 2020 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 2020 € 2019 € 10 11 12 13 15 15 16 66,612 5,898,940 5,965,552 76,556 6,106,347 6,182,903 99,904 2,287,172 2,387,076 94,943 306,675 401,618 8,352,628 6,584,521 307,071 12,543,606 559,420 21,173 (5,511,645) 7,919,625 112,205 9,687,151 435,962 533,903 (4,535,134) 6,234,087 7,919,625 6,234,087 14 433,003 433,003 350,434 350,434 433,003 350,434 8,352,628 6,584,521 The accompanying notes on page 32 to 55 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 April 2021 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 2020 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 2020 € 2019 € 9 12 13 15 15 16 500,001 500,001 500,001 500,001 7,638,603 1,990,851 9,629,454 7,359,367 269,704 7,629,071 10,129,455 8,129,072 307,071 12,543,606 559,420 (295,873) (3,442,381) 9,671,843 112,205 9,687,151 435,962 296,111 (2,833,559) 7,697,870 9,671,843 7,697,870 14 457,612 457,612 431,202 431,202 457,612 431,202 10,129,455 8,129,072 The accompanying notes on page 32 to 55 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 28 April 2021 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 2020 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 (815,975) (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 26 Great Western Mining Corporation PLC Consolidated Statement of Changes in Equity (continued) For the year ended 31 December 2020 Share capital € Share premium € Share based payment reserve € Foreign currency translation reserve € Retained earnings € Total € Balance at 1 January 2020 112,205 9,687,151 435,962 533,903 (4,535,134) 6,234,087 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 warrants exercised Share warrants terminated Share options charge Total transactions with owners, recorded directly in equity - - - - - - - - - - (852,042) (852,042) (512,730) - (512,730) (512,730) (852,042) (1,364,772) 194,866 - - - - 2,680,921 - 175,534 - - - 25,521 (11,815) (41,542) 151,294 - - - - - (140,490) (25,521) - 41,542 - 2,735,297 - 163,719 - 151,294 194,866 2,865,455 123,458 - (124,469) 3,050,310 Balance at 31 December 2020 307,071 12,543,606 559,420 21,173 (5,511,645) 7,919,625 The accompanying notes on page 32 to 55 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 2020 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 28 Great Western Mining Corporation PLC Company Statement of Changes in Equity (continued) For the year ended 31 December 2020 Share capital € Share premium € Share based payment reserve € Foreign currency translation reserve € Retained earnings € Total € Balance at 1 January 2020 112,205 9,687,151 435,962 296,111 (2,833,559) 7,697,870 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 warrants exercised Share warrants terminated Share options charge Total transactions with owners, recorded directly in equity - - - - - - - - - - (484,353) (484,353) (591,984) - (591,984) (591,984) (484,353) (1,076,337) 194,866 - - - - 2,680,921 - 175,534 - - - 25,521 (11,815) (41,542) 151,294 - - - - - (140,490) (25,521) - 41,542 - 2,735,297 - 163,719 - 151,294 194,866 2,856,455 123,458 - (124,469) 3,050,310 Balance at 31 December 2020 307,071 12,543,606 559,420 (295,873) (3,442,381) 9,671,843 The accompanying notes on page 32 to 55 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 2020 Cash flows from operating activities Loss for the year Adjustments for: Depreciation Interest receivable and similar income (Increase)/Decrease in trade and other receivables (Decrease)/Increase in trade and other payables Equity settled share-based payment Net cash flows from operating activities Cash flow from investing activities 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 Commission paid from the issue of new shares Net cash from financing activities Increase/(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 2020 € 2019 € (852,042) (815,795) 3,733 (228) (4,961) (72,067) 151,294 (774,271) 7,216 (1,195) 28,231 32,784 156,223 (592,536) (196,982) 228 (196,754) (206,736) 1,195 (205,541) 3,130,705 - (140,490) 2,990,215 2,019,190 (38,693) 306,675 2,287,172 415,441 (175,289) (11,686) 228,466 (569,611) (8,166) 884,452 306,675 10 4 16 11 4 15 15 15 13 13 30 Great Western Mining Corporation PLC Company Statement of Cash Flows For the year ended 31 December 2020 Cash flows from operating activities Loss for the year Adjustments for: Interest receivable and similar income Increase in trade and other receivables (Decrease)/Increase in trade and other payables Equity settled share-based payment 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 Commission paid from the issue of new shares Net cash from financing activities Increase/(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 2020 € 2019 € (484,352) (475,107) (201) (279,236) (52,939) 151,294 (665,434) (553) (1,062,957) 277,688 156,223 (1,104,706) 201 201 553 553 3,130,705 - (140,490) 2,990,215 2,324,982 (603,835) 269,704 1,990,851 415,441 (175,289) (11,686) 228,466 (875,687) 332,023 813,368 269,704 4 16 4 15 15 15 13 13 31 Great Western Mining Corporation PLC Notes to the Financial Statements For the year ended 31 December 2020 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 2020. 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 2020. There was no material impact to the financial statements in the current year from these standards set out below: • • • • Amendments to References to Conceptual Framework in IFRS Standards - effective 1 January 2020. Amendments to IFRS 3: Definition of a Business - 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. 32 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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. • Amendment to IFRS 16: COVID-19-Related Rent Concessions – effective 1 June 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. Amendments to IAS 1: Classification of liabilities as current or non-current. 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 16 – Share based payments and share warrant valuations. Note 17 – Share warrants – financial liability. 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. Note 14 – Trade and other payables, decommissioning provision. 33 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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 2020. 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) 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 (ii) 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. Decommissioning Provision There is uncertainty around the cost of decommissioning as cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope and amount and currency mix of expenditure required may also change. Therefore, significant estimates and assumptions are made in determining the provision for decommissioning. Provision for environmental clean-up and remediation costs is based on current legal and contractual requirements, technology and management’s estimate of costs with reference to current price levels and the estimated costs calculated by the regulatory authorities. 34 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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 2020 Employee Benefits i) Equity-Settled Share-Based Payments For equity-settled share-based payment transactions (i.e. the issuance of share options in accordance with the Group’s share option scheme or share warrants granted in relation to services provided), the Group measures the services received by reference to the value of the option or other financial instrument at fair value at the measurement date (which is the grant date) using a recognised valuation methodology for the pricing of financial instruments (the binomial option pricing model). If the share options granted do not vest until the completion of a specified period of service, the fair value assessed at the grant date is recognised in the income statement over the vesting period as the services are rendered by employees with a corresponding increase in equity. For options granted with no vesting period, the fair value is recognised in the income statement at the date of the grant. For share warrants granted with no vesting period, the fair value is recognised in retained earnings. The fair value of equity-settled share-based payments on exercise is released to the share premium account. When equity-settled share-based payments which have not been exercised reach the end of the original contractual life, whether share options or share warrants, the value is transferred from the share option reserve to retained earnings. 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. 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 share 36 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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 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 Except for the decommissioning provision and financial liabilities arising on the grant of share warrants, 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. Share Warrant Provision The fair value of an equity classified warrant is measured using the binomial option pricing model. As the warrant price is in a different currency to the functional currency of the company, the share warrant provision creates a financial liability. 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. The fair value on exercise is credited to the share premium account. 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 2020 2. Going concern The financial statements of the Group and Parent Company are prepared on a going concern basis. In order to assess the appropriateness of the going concern basis in preparing the financial statements for the year ended 2020, the Directors have considered a time period of at least twelve months from the date of approval of these financial statements. The Group incurred an operating loss during the year ended 31 December 2020. As the Group is not generating revenues, an operating loss is expected for the next twelve months. However at the balance sheet date, the Group had cash and cash equivalents amounting to €2.29 million and has raised approximately €1.18 million in 2021 which the Board considers will enable the Group to meet continuing operating expenditure and the planned work programme. The future of the Company is dependent on the successful outcome of its exploration activities and implementation of revenue-generating operations. The Directors believe that the Group’s ability to make additional capital expenditure on its claims interests in Nevada can be assisted if necessary by raising additional capital or from future revenues. The Directors have taken into consideration the Company’s successful completion of placings and the exercise of warrants by warrant holders during 2020 and 2021 to provide additional cash resources. The Directors concluded that the Group will have sufficient resources to continue as a going concern for the period of assessment period of not less than 12 months from the date of approval of the consolidated financial statements without material uncertainties. Accordingly the consolidated 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 2020 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 2020 € - - - 2019 € Loss 2020 € 2019 € - - - (12,865) (839,177) (852,042) (9,373) (806,422) (815,795) 2020 € 2019 € 6,315,904 2,036,724 8,352,628 6,260,174 324,347 6,584,521 2020 € 86,571 346,432 433,003 2019 € 52,244 298,190 350,434 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 2020 € 2019 € 5,965,552 - - 5,965,552 6,182,903 - - 6,182,903 39 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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 2020 € 228 228 Group 2020 € 176,768 16,833 327 151,294 36,740 - 12,377 Group 2019 € 1,195 1,195 Company 2020 € Company 2019 € 201 201 553 553 Group 2019 € 193,514 16,951 1,584 156,223 29,870 1,250 4,400 Company 2020 € Company 2019 € 64,370 5,746 - 151,294 36,740 - 12,377 39,491 4,324 - 156,223 29,870 1,250 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 2020 Number Group 2019 Number Company 2020 Number Company 2019 Number 5 2 7 4 3 7 5 - 5 4 - 4 40 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 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 2020 € 311,083 27,860 2,254 151,294 492,491 Group 2019 € 338,767 31,473 3,466 156,223 529,929 Company 2020 € Company 2019 € 67,370 5,746 - 151,294 224,410 39,491 4,324 - 156,223 200,038 7. Income tax - expense Current tax expense Deferred tax expense 2020 € - - - The income tax expense for the year can be reconciled to the accounting loss as follows: 2020 € 2019 € - - - 2019 € Loss from continuing operations (852,042) (815,795) Income tax expense calculated at 12.5% (2019: 12.5%) (106,505) (101,974) Effects of: Unutilised tax losses Income tax expense (106,505) - (101,974) - 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 €4,505,002 (2019: €3,997,275) 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 2020 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: 2020 € 2019 € Loss for the year attribute to equity holders of the parent (852,042) (815,795) 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 1,122,055,459 1,948,659,091 3,070,714,550 677,673,809 444,381,650 1,122,055,459 Weighted average number of ordinary shares for the purposes of basic earnings per share 1,844,253,806 751,737,417 Basic loss per ordinary share (cent) (0.001) (0.001) 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 2020 € 2019 € 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 2020, 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 2020 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 € 94,410 - (7,978) 86,432 17,854 3,733 (1,767) 19,820 Total € 94,410 - (7,978) 86,432 17,854 3,733 (1,767) 19,820 76,556 76,556 66,612 66,612 43 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 11. Intangible assets Cost Opening cost Additions Cost of decommissioning 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 € 6,106,347 196,982 75,287 (479,676) 5,898,940 6,106,347 196,982 75,287 (479,676) 5,898,940 - - - - - - - - 6,106,347 6,106,347 5,898,940 5,898,940 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 specific indicators as set out in 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 also considered other factors in assessing potential impairment including cash available to the Group, commodity prices and markets, taxation and regulatory regime, access to equipment and services and the impact of Covid-19 restrictions. The Directors are satisfied that no impairment is required as at 31 December 2020. 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 2020 12. Trade and other receivables Amounts falling due within one year: Other debtors Prepayments Amounts owed by subsidiary undertakings Group 2020 € 61,399 38,505 - 99,904 Group 2019 € 52,625 42,318 - 94,943 Company 2020 € Company 2019 € - 38,505 - 42,154 7,600,098 7,638,603 7,317,213 7,359,367 All amounts above are current and there have been no impairment losses during the year (2019: €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 Decommissioning provision Amounts payable to subsidiary undertakings Group 2020 € 307,658 1,979,514 2,287,172 Group 2019 € 29,372 277,303 306,675 Company 2020 € 27,416 1,963,435 1,990,851 Company 2019 € 9,937 259,767 269,704 Group 2020 € 8,285 670 80,235 12,872 255,654 75,287 - 433,003 Group 2019 € 77,642 416 90,439 5,632 176,305 - - 350,434 Company 2020 € Company 2019 € 7,567 - 60,324 4,958 255,654 - 129,109 457,612 50,901 - 64,934 839 176,305 - 138,223 431,202 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 2020 15. Share capital Authorised at 1 January 2019: Creation of Ordinary shares of €0.0001 each Authorised at 31 December 2019 Authorised at 1 January 2020 Creation of Ordinary shares of €0.0001 each Authorised at 31 December 2020 No of shares Value of shares € 900,000,000 1,800,000,000 2,700,000,000 2,700,000,000 2,300,000,000 5,000,000,000 90,000 180,000 270,000 270,000 230,000 500,000 The authorised share capital of the company was increased to €500,000, consisting of 5,000,000,000 ordinary shares of €0.0001 each by way of an ordinary resolution at the Company’s Annual General Meeting on 14 July 2020. No of issued shares Ordinary shares of €0.0001 each Share capital € Share premium € Total capital € 677,673,809 67,767 9,491,437 9,559,204 Issued, called up and fully: At 1 January 2019 Ordinary shares issued Share warrants granted 444,381,650 - 44,438 - 371,003 (175,289) 415,441 (175,289) At 31 December 2019 1,122,055,459 112,205 9,687,151 9,799,356 Issued, called up and fully: At 1 January 2020 Ordinary shares issued Ordinary shares issued on exercise of warrants Released on exercise of warrants 1,122,055,459 112,205 9,687,151 9,799,356 1,535,909,091 153,591 1,964,204 2,117,795 412,750,000 41,275 716,717 757,992 - - 175,534 175,534 At 31 December 2020 3,070,714,550 307,071 12,543,606 12,850,677 46 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 15. Share capital (continued) 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). Details of issues of shares during the year ended 31 December 2020 arising from the exercise of these warrants are detailed within this note. 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. On 3 June 2020, the Company completed a placing of 217,500,000 new ordinary shares of €0.0001 at a price of £0.0010 (€0.0011) per ordinary share, raising gross proceeds of £217,500 (€244,204) and increasing share capital by €21,750. The premium arising on the issue amounted to €222,454. In addition, on 3 June 2020, the Company issued 15,000,000 new ordinary shares of €0.0001 at the placing price of £0.0010 for services provided to the Company. The issue increased share capital by €1,500 and share premium by €15,342. On 30 July 2020, the Company completed a placing of 450,000,000 new ordinary shares of €0.0001 at a price of £0.0010 (€0.0011) per ordinary share, raising gross proceeds of £450,000 (€498,516) and increasing share capital by €45,000. The premium arising on the issue amounted to €368,519. The share issue included warrants granted giving the right to acquire 225,000,000 Ordinary shares of €0.0001 at an exercise price of £0.0020 with a fair value of €84,997. Details of issues of shares during the year ended 31 December 2020 arising from the exercise of these warrants are detailed within this note. On 24 September 2020, the Company completed the issue of 50,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in November 2019. The exercise price was £0.0016 (€0.0018) per ordinary share, raising gross proceeds of £80,000 (€87,692) and increasing share capital by €5,000. The premium arising on the issue amounted to €82,692. On 28 September 2020, the Company completed the issue of 200,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in November 2019. The exercise price was £0.0016 (€0.0018) per ordinary share, raising gross proceeds of £320,000 (€353,560) and increasing share capital by €20,000. The premium arising on the issue amounted to €333,560. On 8 October 2020, the Company completed the issue of 27,000,000 new ordinary shares following the exercise of broker warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0010 (€0.0011) per ordinary share, raising gross proceeds of £27,000 (€29,659) and increasing share capital by €2,700. The premium arising on the issue amounted to €26,959. In addition the Company issued 10,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0020 (€0.0011) per ordinary share, raising gross proceeds of £20,000 (€21,969) and increasing share capital by €1,000. The premium arising on the issue amounted to €20,969. 47 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 15. Share capital (continued) On 14 October 2020, the Company completed the issue of 25,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0020 (€0.0022) per ordinary share, raising gross proceeds of £50,000 (€55,313) and increasing share capital by €2,500. The premium arising on the issue amounted to €52,813. On 30 October 2020, the Company completed the issue of 31,250,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in November 2019. The exercise price was £0.0016 (€0.0018) per ordinary share, raising gross proceeds of £50,000 (€55,427) and increasing share capital by €3,125. The premium arising on the issue amounted to €52,302. On 3 November 2020, the Company completed the issue of 69,500,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0020 (€0.0022) per ordinary share, raising gross proceeds of £139,000 (€154,372) and increasing share capital by €6,950. The premium arising on the issue amounted to €147,422. On 24 November 2020, the Company completed a placing of 550,000,000 new ordinary shares of €0.0001 at a price of £0.0020 (€0.0022) per ordinary share, raising gross proceeds of £1,100,000 (€1,235,788) and increasing share capital by €55,000. The premium arising on the issue amounted to €1,010,867. The share issue included warrants granted giving the right to acquire 275,000,000 Ordinary shares of €0.0001 at an exercise price of £0.0030 with a fair value of €169,921. which remain unexercised at period end 31 December 2020. Transaction expenses including commission arising on the issue of new shares amounted to €140,490 during the year (2019: €11,686). A total of €175,534 has been released from the share warrant financial liability following the exercise of warrants during the year (2019 €nil). 48 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 16. Share based payments Share options The Great Western Mining Corporation PLC operates a share options scheme, “Share Option Plan 2014”, which entitles directors and employee to purchase ordinary shares in the Company at the market value of a share on the award date, subject to a maximum aggregate of 10% of the issued share capital of the Company on that date. Measure of fair values of options The fair value of the options granted has been measured using the binomial lattice 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 Number of options granted Vesting conditions Expected volatility Sub-optimal exercise factor Expected life Expected dividend Risk free interest rate 22 Apr 2020 €0.0011 €0.0010 €0.0008 47,000,000 Immediate 137% 4x 7 Years 0% 0.1% During the year, the Group recognised total expenses of €151,294 (2019: €156,223) was recognised in the income statement related to share options granted during the year and the amortisation of the fair value of options granted in earlier periods over the vesting period. The total number of share options outstanding and exercisable are summarised as follows: Outstanding at 1 January 2019 and 2020 Granted Number of options Average exercise price 65,000,000 47,000,000 Stg1.04 p Stg0.09 p Outstanding at 31 December 2020 112,000,000 Stg0.64 p Exercisable at 31 December 2020 88,000,000 Stg0.98 p Exercisable at 31 December 2019 - - On 31 December 2020, there were options over 112,000,000 ordinary shares outstanding (2019: 65,000,000) which are exercisable at prices ranging from Stg0.09 pence to Stg1.6 pence and which expire at various dates up to April 2027. The weighted average remaining contractual life of the options outstanding is 4 years 11 months (2019: 4 years 10 months). 49 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 16. Share based payments (continued) Equity-settled warrants In July 2020, the Group granted warrants to Novum Securities Limited in connection with a share placing. 27,000,000 warrants were granted exercisable at £0.0010 (€0.0011) each with immediate vesting and a contractual life of 2 years. In November 2020, the Group granted warrants to Monecor (London) Limited in connection with a share placing. 20,000,000 warrants were granted exercisable at £0.0020 (€0.0022) each with immediate vesting and a contractual life of 2 years. Measure of fair values of warrants The fair value of the warrants issued has been measured using the binomial lattice 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. 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 Number of warrants granted Sub-optimal exercise factor Expected volatility Expected life Expected dividend Risk free interest rate Jul 2020 Nov 2020 €0.0004 €0.0014 €0.0011 27,000,000 1.5x 120% 2 Years 0% 0.1% €0.0007 €0.0022 €0.0022 20,000,000 1.5x 112% 2 Years 0% 0.1% In October 2020, the warrants over 27,000,000 shares granted in July 2020 were exercised and the amount of €11,816 released from the share-based payment reserve to share premium. In July 2020, warrants granted in July 2017 over 4,687,500 shares lapsed unexercised and an amount of €41,542 released from the share-based payment reserve to retained earnings. At 31 December 2020, the balance on the share-based payment reserve amounted to €559,420 (2019: €435,962). 50 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 17. Share warrants – financial liability In November 2019, the Group granted warrants in connection with a share placing. 375,000,000 warrants were granted exercisable at £0.0016 each with immediate vesting and a contractual life of 3 years. In July 2020, the Group granted warrants in connection with a share placing. 225,000,000 warrants were granted exercisable at £0.0020 each with immediate vesting and a contractual life of 2 years. In November 2020, the Group granted warrants in connection with a share placing. 275,000,000 warrants were granted exercisable at £0.0030 each with immediate vesting and a contractual life of 2 years. 2020 Number of warrants 2020 Weighted Average Exercise price 2019 Number of warrants 2019 Weighted Average Exercise price Exercisable at 31 December 489,250,000 £0.0025 375,000,000 £0.0016 Measure of fair values of warrants The fair value of the warrants issued has been measured using the binomial lattice 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. 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 Number of warrants granted Sub-optimal exercise factor Expected volatility Expected life Expected dividend Risk free interest rate Nov 2020 Jul 2020 Nov 2019 £0.0006 £0.0020 £0.0030 275,000,000 1.5x 112% 2 Years 0% 0.1% £0.0004 £0.0012 £0.0020 225,0000,000 1.5x 120% 2 Years 0% 0.1% €0.0005 €0.0012 €0.0016 375,000,000 1.5x 129% 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. 18. 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 €484,352 (2019: €475,107) for the financial year ended 31 December 2020 has been dealt with in the Company income statement of Great Western Mining Corporation PLC. 51 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 19. 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. The Group also entered into related party transactions with Andrew Hay Advisory Limited for corporate finance advice services and Sofabar Consulting Limited for marketing services which are companies connected with Andrew Hay and Alastair Ford respectively. The companies each received €6,185 in the period. Details of the directors’ interests in the share capital of the Company are set out in the Directors’ Report on pages 8 to 9. 20. 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 2020 and 2019 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 2020 and 31 December 2019, 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 2019 2020 Spot rate at year end 2019 2020 0.8897 1.1422 0.8777 1.1195 0.8990 1.2271 0.8508 1.1234 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 2020 $ 70,344 354,573 (106,232) 318,685 2020 £ - 235,794 (16,118) 219,676 2019 $ 59,119 27,687 (58,692) 28,114 2019 £ 140 239,656 (4,433) 235,363 52 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 20. Financial instruments and financial risk management (continued) 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. 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 2020 € 99,904 2,287,172 (433,003) 1,954,073 Group 2019 € 94,943 306,675 (350,434) 51,184 Company 2020 € 7,638,603 1,990,851 (457,612) 9,171,842 Company 2019 € 7,359,367 269,704 (431,202) 7,197,869 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 2020 or 31 December 2019. The Group and Company’s financial liabilities as at 31 December 2020 and 31 December 2019 were all payable on demand. The expected maturity of the Group and Company’s financial assets (excluding prepayments) as at 31 December 2020 and 31 December 2019 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 2020 and 31 December 2019. 53 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 20. 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 2020 would have decreased/ increased the reported loss and equity by €22,872 (2019: €7,044). 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 2020 and 31 December 2019. 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 2020 and 31 December 2019, 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 2019 € Cashflow € At 31 December 2019 € 884,452 884,452 (577,777) (577,777) 306,675 306,675 At 1 January 2020 € Cashflow € At 31 December 2020 € 306,675 306,675 1,980,497 1,980,497 2,287,172 2,287,172 54 Great Western Mining Corporation PLC Notes to the Financial Statements (continued) For the year ended 31 December 2020 21. Events after the reporting date On 21 January 2021, the Company completed the issue of 15,000,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in July 2020. The exercise price was £0.0020 (€0.0018) per ordinary share, raising gross proceeds of £30,000 (€33,850). On 12 February 2021, the Company completed the issue of 31,250,000 new ordinary shares following the exercise of warrants granted in conjunction with the placing in November 2019. The exercise price was £0.0016 (€0.0018) per ordinary share, raising gross proceeds of £50,000 (€56,978). On 15 February 2021, the Company completed the issue of 6,000,000 new ordinary shares following the exercise of options granted in April 2020. The exercise price was £0.009 (€0.0010) per ordinary share, raising gross proceeds of £5,400 (€6,191). At an Extraordinary General Meeting held on 17 February 2021, the shareholders approved the migration of the Company’s share settlement system from CREST to Euroclear Bank in accordance with the Migration of Participating Securities Act 2019. The estimated cost of the migration is €70,000. On 19 March 2021, the Company signed a Placing Agreement for the issue of 454,545,455 new Ordinary Shares of €0.0001 each at a price of 0.22 pence each, raising £1 million (€1,153,429) before transaction expenses. In addition, the Company is granting 227,272,727 warrants with an exercise price of 0.30 pence per share based on a ratio of one warrant for every two new Ordinary shares being issued, together with a further 22,727,272 warrants with an exercise price of 0.22 pence per share to be granted to Novum Securities Limited acting as broker. The new shares are expected to be issued on 13 April 2021. 22. Approval of financial statements The financial statements were approved by the Board on 28 April 2021. 55 www.greatwesternmining.com  

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