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2023 ReportRegistered number: 05389216 BLUEJAY MINING PLC ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2023 BLUEJAY MINING PLC CONTENTS Company Information Chairman’s Report Strategic Report Directors’ Report Statement of Directors’ Responsibilities Corporate Governance Report Independent Auditor’s Report Statements of Financial Position Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Changes in Equity Company Statement of Changes in Equity Statements of Cash Flows Notes to the Financial Statements Page 2 3 5 9 12 13 18 23 24 25 26 27 28 30 BLUEJAY MINING PLC COMPANY INFORMATION Directors Michael Hutchinson (Non-Executive Chairman) Eric Sondergaard (Managing Director) Roderick McIllree (Non-Executive Director) Troy Whittaker (Non-Executive Director) Harry Ansell (Non-Executive Director) Company Secretary Westend Corporate LLP Registered Office 6 Heddon Street London W1B 4BT Company Number 05389216 Bankers Nominated Adviser Joint Brokers Independent Auditor Solicitors HSBC Bank plc 129 New Bond Street London W1J 2JA S.P. Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox Street London W1S 2PP S.P. Angel Corporate Finance LLP Prince Frederick House 35-39 Maddox Street London W1S 2PP W.H.Ireland 24 Martin Lane London EC4R 0DR PKF Littlejohn LLP Statutory Auditor 15 Westferry Circus Canary Wharf London E14 4HD Hill Dickinson LLP The Broadgate Tower 20 Primrose Street London EC2A 2EW 2 BLUEJAY MINING PLC CHAIRMAN’S REPORT Dear Shareholders, As we look back on 2023, I am proud to address you at a pivotal moment in Bluejay Mining PLC’s journey. After a year that presented the company with significant challenges, we concluded with decisive corporate renewal and a revitalised focus on our strategic objectives. Last year, the winds of change swept through our boardroom. In December, a transformative board and management overhaul took place, which saw the appointment of new, dedicated leaders including non-executive directors and a fresh executive team. This bold move was essential to steer our company back towards its core mission: unlocking the value within our significant portfolio of new and existing mineral assets. With a streamlined leadership, we sharpened our strategic focus, dedicating ourselves to our flagship Disko-Nikkeli project, where we anticipate making a transformative mineral discovery. Through our joint venture with KoBold Metals, we are advancing a project that promises not just to enhance shareholder value but also to contribute meaningfully to the global green transition. Operationally, we have taken significant steps to increase efficiency and reduce costs. We have rigorously reviewed our expenses, cutting overheads and honing our team to only necessary personnel without compromising on our operational capabilities. This lean approach has positioned us to navigate the complex and challenging environment of mineral exploration with agility and precision. During the year, we also recognised the importance of preserving shareholder trust and funds. Thus, we recalibrated our strategy, concentrating on desktop activities such as project divestments, ensuring that we direct our resources toward the most promising opportunities. One important development was the reclassification of the Dundas resource. The Dundas Ilmenite Project was impacted by bad management decisions, poor planning, as well as the use of an unsuitable drilling rig during a subsequent follow up drilling program in 2022, with the results made public in 2023. The impacts of this program are now well understood by the new management of the Company and we are taking steps to correct the resource and establish a path forward for the project. Looking ahead, we continue to assess strategic acquisitions and project advancements. We are ready to embrace opportunities that align with our rigorous scientific and commercial criteria and will continue to make informed decisions on project prioritisation to maximise returns. In 2024, we anticipate a renewed momentum and the fruition of our strategic initiatives. On behalf of the board, I extend our deepest gratitude for your continued support and trust. Together, we are embarking on a journey of discovery and development that holds promising prospects for our shared future. Financial As we progress into 2024, Bluejay is moving forward from a position of renewed strength and focus. The equity subscription of £1.2 million announced in January has been judiciously applied to a comprehensive company-wide restructure. This strategic overhaul has streamlined our workforce from twelve to three core members, a change that was executed without compromising our operational efficiency or our commitment to our projects. The restructuring of Bluejay is now substantially complete, positioning us with a lean and dynamic team, optimised for both agility and performance. This recalibration is indicative of our responsive and prudent management, ensuring that every resource is aligned with our core objectives. Our financial strategy is designed to maintain a robust cash position, allowing us the flexibility to meet our obligations and seize potential acquisition opportunities. We are currently evaluating our resources with a focus on long-term sustainability and growth. The Company remains vigilant in its cash management practices, ensuring that we remain well-capitalised to act decisively when opportunities present themselves. On 31 July 2023, the Company sold its shareholding in Finnaust Mining Northern Oy to AIM listed Metals One Plc. The consideration for this transaction included £150,000 in cash and the allotment of 62,500,000 new ordinary shares in Metals One Plc. The Company continues to hold a significant position in AIM listed Metals One Plc, as well as its 100% ownership of Finnaust Mining Finland Oy, the Finnish subsidiary that holds Outokumpu, Enonkoski and Hammaslahti licences. The Company continues dialogue with a number of interested parties in relation to these assets. As we move forward, our focus remains steadfast on our key projects, where we see significant potential for value creation. We are well-placed to continue our journey of exploration and development, backed by a strong financial foundation and a commitment to driving shareholder value. 3 BLUEJAY MINING PLC CHAIRMAN’S REPORT Outlook As we navigate through economic uncertainties, the strategic importance of critical minerals to the global energy transition becomes more pronounced, placing Bluejay in a vital role for a sustainable future. As per the announcement dated 2 March 2022 ERMA's officially announced support for the Greenland-based Dundas Ilmenite Project ('Dundas' or the 'Project') is designed to facilitate a secure supply of Dundas ilmenite for end users domiciled within the European Union. This potential aid package will create a secure supply chain of titanium ore and concentrate for the European Union as well as provide government supported infrastructure assistance and employment for this remote part of the world. The endorsement from the European Raw Materials Alliance (ERMA) for our Dundas project reaffirms the quality of the Dundas ore and its standing as one of the highest grade mineral sands projects globally. The Company is now working on the preparation of the 2024 and 2025 work programmes designed to progress both government engagement and project development and looks forward to advising stakeholders of these activities in due course. This will include additional metallurgical work, onsite evaluations and sampling as well as government funding and assistance with infrastructure studies. Our operational bases are in politically stable, mining-friendly jurisdictions, rich in mineral resources, ensuring the integrity of our ownership rights and underpinning our confidence in achieving our objectives. Our strategic alliances with significant global partners underscore our commitment to securing a sustainable supply of critical minerals. The support from the Greenlandic and Danish governments, collaborations with entities like KoBold Metals, and agreements with an Asian Master Distribution partner for Dundas, have enhanced our project portfolio. The Company also announced post year end that it intends to expand the scope of its corporate strategy to include the exploration and development of helium, industrial gases, and hydrocarbons. The Company has proposed the acquisition of White Flame Energy, an industrial gas and liquid hydrocarbon project in the Jameson Land Basin. The Company believes this acquisition represents fantastic value and is value accretive to all shareholders. We will soon begin work to advance an option study to determine the optimal path for drilling and development. This expansion underscores the Company's commitment to innovation and growth in the natural resources sector and maximising value for shareholders. Recognising the increasing global demand for helium and industrial gases across critical sectors such as healthcare, aerospace, and energy, Bluejay is strategically positioned to capitalise on potential opportunities. Our diverse project portfolio empowers us to adjust strategies effectively when unexpected challenges arise, demonstrating the robustness of Bluejay's assets. I extend my gratitude to our supporters in Greenland and Finland and to our shareholders for their belief in Bluejay's long- term vision. The collective support from our communities, partners, and the dedicated Bluejay team has paved the way for promising developments, particularly at Hammaslahti, as we advance our projects and continue to derive value from our strategic initiatives. We look forward to the upcoming year with optimism, ready to elevate our projects further up the value curve and continue to drive our strategic goals to fruition. Michael Hutchinson Non-Executive Chairman 28 June 2024 4 BLUEJAY MINING PLC STRATEGIC REPORT The Directors of the Company present their Strategic Report on the Group for the year ended 31 December 2023. Principal Activities The principal activity of Bluejay Mining plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is the exploration and development of precious and base metals. The Company’s shares are listed on the AIM market of the London Stock Exchange and the open market of the Frankfurt Stock Exchange as well as the OTC PINK in the US. The Company is incorporated and domiciled in England. Strategic approach The Group’s aim is to create value for shareholders through the discovery and development of economic mineral deposits. The Group’s strategy is to continue to progress the development of its existing projects in Greenland and Finland and to evaluate its existing and new mineral resource opportunities with a view to potential joint venture arrangements and/or other corporate activities. Organisation overview The Group’s business is directed by the Board and is managed on a day-to-day basis by the Managing Director. The Board monitors compliance with objectives and policies of the Group through monthly performance reporting, budget updates and periodic operational reviews. The Board comprises of one Executive Directors and four Non-Executive Directors. The Corporate Head Office of the Group is located in London, UK, and provides corporate support services to the overseas operations. Overseas operations are managed out of the Group’s office in Outokumpu, Finland and Nuuk, Greenland. Review of business In January of 2023, Rio Tinto exploration began the second stage work on the Enonkoski Nickel Project. Later in the year, in July 2023, the Joint Venture and Earn-in Agreement with Rio Tinto Exploration Finland Oy ('Rio Tinto') came to an end. This meant Bluejay retained 100% ownership of the Project (through the Company's subsidiary FinnAust Mining Finland Oy) along with all data, samples and drill cores collected during the JV Agreement with Rio Tinto. The Company, in February 2023 entered a funding arrangement for US$6m with a US based funder called Towards Net Zero. Subsequent to this, the Company raised an additional £1.2m in two tranches of £600,000. The Company continued to progress its various projects with a specific focus on Disko and Hammaslahti Cu-Zn-Ag-Au Project in Finland. Post year end, following their assessment, the Directors concluded that an impairment charge of £3,535,254 was prudent in relation to the Disko exploration assets, Thunderstone and Kangerluarsuk. Disko will continue to focus on the Joint Venture with Kobold Metals which sees Kobold earning 51% of the project through an earn in process. The Company expects to undertake a significant field programme over Disko during 2025. On 31 July 2023, the Company sold its shareholding in Finnaust Mining Northern Oy to AIM listed Metals One Plc. The consideration for this transaction included £150,000 in cash and the allotment of 62,500,000 new ordinary shares in Metals One. The Company continues to hold a significant position in AIM listed Metals One Plc, as well as its 100% ownership of Finnaust Mining Finland Oy, the Finnish subsidiary that holds Outokumpu, Enonkoski and Hammaslahti. The Company continues dialogue with a number of interested parties. Near mine exploratory drilling was undertaken in the second half of the year at the Hammaslahti historical copper mine. Highly encouraging copper results were returned in and around the old mine workings as well as strike and depth extensions at the E Lode project several kilometers to the East of the main mine area. Further work will be planned at Hammaslahti for late 2024. Subject to shareholder approval for the White Flame transaction Bluejay will hold three major commodity projects in Greenland The most important of which is the Disko-Nuussuaq Ni-Cu-Co-PGM Joint Venture with Kobold. Second to this is the fully permitted Dundas Ilmenite Project where further work is anticipated during 2024 and 2025 and finally the world class gas and liquid hydrocarbon project White flame where a search for a partner will start in earnest once the transaction is approved by shareholders and regulators. The Company and its executives look forward to what will be a highly productive forward looking 12 months and would like to thank shareholders for their support to date and patience through these transformative times. 5 BLUEJAY MINING PLC STRATEGIC REPORT Financial performance review The loss of the Group for the year ended 31 December 2023 before taxation amounts to £1,870,717 (31 December 2022: profit £1,664,541). The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the Board to assess performance over the period to 31 December 2023. The two main KPIs for the Group are as follows. These allow the Group to monitor costs and plan future exploration and development activities: KPI Cash and cash equivalents Administrative expenses as a percentage of total assets Exploration costs capitalised during the period 2023 2022 £200,700 £1,996,957 4.02% 4.60% £3,582,954 £4,744,690 Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statements of Cash Flows on page 28). Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to ensure they can perform their operational commitments. Exploration costs capitalised during the period consist of exploration expenditure on the Group’s exploration licences net of foreign exchange rate movements. Principal risks and uncertainties The management of the business and the execution of the Group’s strategy are subject to a number of risks. The key business risks affecting the Group are set out below. Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Group. Exploration risks The exploration and mining business is controlled by a number of global factors, principally supply and demand which in turn is a key driver of global mineral prices; these factors are beyond the control of the Group. Exploration is a high-risk business and there can be no guarantee that any mineralisation discovered will result in proven and probable reserves or go on to be an operating mine. At every stage of the exploration process the projects are rigorously reviewed to determine if the results justify the next stage of exploration expenditure ensuring that funds are only applied to high priority targets. The principal assets of the Group comprising the mineral exploration licences are subject to certain financial and legal commitments. If these commitments are not fulfilled the licences could be revoked. They are also subject to legislation defined by the Government; if this legislation is changed it could adversely affect the value of the Group’s assets. Dependence on key personnel The Group and Company is dependent upon its executive management team and various technical consultants. Whilst it has entered into contractual agreements with the aim of securing the services of these personnel, the retention of their services cannot be guaranteed. The development and success of the Group depends on its ability to recruit and retain high quality and experienced staff. The loss of the service of key personnel or the inability to attract additional qualified personnel as the Group grows could have an adverse effect on future business and financial conditions. Uninsured risk The Group, as a participant in exploration and development programmes, may become subject to liability for hazards that cannot be insured against or third party claims that exceed the insurance cover. The Group may also be disrupted by a variety of risks and hazards that are beyond control, including geological, geotechnical and seismic factors, environmental hazards, industrial accidents, occupational and health hazards and weather conditions or other acts of God. 6 BLUEJAY MINING PLC STRATEGIC REPORT Funding risk The only sources of funding currently available to the Group are through the issue of additional equity capital in the parent company, convertible loan notes or through bringing in partners to fund exploration and development costs. The Company’s ability to raise further funds will depend on the success of the Group’s exploration activities and its investment strategy. The Company may not be successful in procuring funds on terms which are attractive and, if such funding is unavailable, the Group may be required to reduce the scope of its exploration activities or relinquish some of the exploration licences held for which it may incur fines or penalties. Financial risks The Group’s operations expose it to a variety of financial risks that can include market risk (including foreign currency, price and interest rate risk), credit risk, and liquidity risk. The Group has a risk management programme in place that seeks to limit the adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance costs. The Group does not use derivative financial instruments to manage interest rate costs and, as such, no hedge accounting is applied. Environmental risk The Group undertakes its exploration activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature. Bluejay is a mineral explorer, not a mining company. Hence, the environmental impact associated with its activities is minimal. To ensure proper environmental stewardship on its projects, Bluejay conducts certified baseline studies prior to all drill programmes and ensures that areas explored are properly maintained and conserved. As an exploration stage business, the Group’s operations are at a relatively small scale. As such, the Group’s environmental impact is relatively small when compared with larger businesses in the sector. Nevertheless, the Board recognises its responsibility to protect the environment (particularly as the business scales up) and is fully committed to conserving natural resources and striving for environmental sustainability, by ensuring that its facilities are operated to optimise energy usage; minimise waste production; and protect nature and people. The Group will seek to collect, structure, and effectively disclose related performance data for the material, climate-related risks and opportunities identified where relevant. Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006. The requirements of s172 are for the Directors to: • Consider the likely consequences of any decision in the long term, • Act fairly between the members of the Company, • Maintain a reputation for high standards of business conduct, • Consider the interests of the Company’s employees, • • Consider the impact of the Company’s operations on the community and the environment. Foster the Company’s relationships with suppliers, customers and others, and The Group operates as an exploration and development of precious and base metals Company, which is inherently speculative in nature and, without regular income, is dependent upon fund-raising for its continued operation. The nature of the business is important to the understanding of the Group by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding requirements as is allowed under FCA regulations. The application of the s172 requirements are demonstrated throughout this report and the financial statements as a whole, with the following examples representing some of the key decisions made in 2023 and up to the date of the approval of these financial statements: • Fundraise to fund exploration: During the year, the Board raised gross proceeds from issue of share capital of £1.9 million to finance operations and assist in the developing a JORC compliant Mineral Resource Estimate ('MRE') in Hammaslahti. Bluejay Directors and officers subscribed for £30,000 worth of Placing Shares, aligning the interests of the Directors with those of the shareholders. • Ethical responsibility to the community and the environment: the Board takes seriously its ethical responsibilities to the communities and environment in which it works. We abide by the local and relevant UK laws on anti-corruption and bribery. Wherever possible, local communities are engaged in the geological operations and support functions 7 BLUEJAY MINING PLC STRATEGIC REPORT required for field operations, providing much needed employment and wider economic benefits to the local communities. In addition, we follow international best practise on environmental aspects of our work. Our goal is to meet or exceed standards, in order to ensure we obtain and maintain our social licence to operate from the communities with which we interact. • Appointment of new directors, both executive and non-executive: Expanding organisational capability through appointing experienced Board members to govern and lead the Company. The likely consequences of any decision in the long term The application of the Section 172 (1) requirements can be demonstrated in relation to some of the key decisions made during the reporting period, including: • Continuing exploration work on numerous projects over Finland and Greenland • Continuing to focus on strategic partnerships with JV partner • Continued assessment of corporate and operational overheads and expenditure The need to act fairly between members of the Company After weighing up all relevant factors, the Directors consider which course of action best enables delivery of our strategy over the long-term, taking into consideration the impact on stakeholders. The Directors believe they have acted in the way they consider most likely to promote the success of the Company for the benefit of its members as a whole. The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with key private shareholder, analysts and brokers, providing the opportunity to discuss issues and provide feedback at meetings with the Company. All shareholders are encouraged to attend the Company's Annual General Meeting and any general meetings held by the Company. The desirability of the Company maintaining a reputation for high standards of business conduct The Board periodically reviews and approves clear frameworks, such as the Company’s Code of Business Ethics, to ensure that its high standards are maintained both within the Group and the business relationships we maintain. This, complemented by the various ways the Board is informed and monitors compliance with relevant governance standards, help ensure its decisions are taken and that the Group acts in ways that promote high standards of business conduct. The interests of the company’s employees The Board recognises that the Company’s employees are fundamental and core to our business and delivery of our strategic ambitions. The success of our business depends on attracting, retaining and motivating employees. From ensuring that we remain a responsible employer, from pay and benefits to our health, safety and workplace environment, the Directors factor the implications of decisions on employees and the wider workforce, where relevant and feasible. Developing relationships with the joint venture partners, suppliers and others Delivering on our strategy requires strong mutually beneficial relationships with suppliers. The Group values all of its suppliers and aims to build strong positive relationships through open communication and adherence option agreement terms. The Group is committed to being a responsible entity and doing the right thing for its suppliers and business partners. The impact of the Company’s operations on the community and the environment The Group is committed to the highest environmental, social and governance standards both internally within the Group and externally with its partners. The Group is committed to being a responsible entity in terms of the community and the wider environment. As a mining exploration Company operating in Greenland and Finland, the Board takes seriously its ethical responsibilities to the communities and environment in which it works. We abide by the local and relevant UK laws on anti- corruption & bribery. Wherever possible, local communities are engaged in the geological operations and support functions required for field operations, providing much needed employment and wider economic benefits to the local communities. In addition, we follow international best practise on environmental aspects of our work. Conclusion The Directors believe that to the best of their wisdom and abilities, they have acted in the way they consider prudent to promote the success of the Company for the benefit of its members as a whole, in the true spirit of the provisions of Section 172 (1) of the Companies Act 2006. The Group Strategic Report was approved by the Board on 28 June 2024. Michael Hutchinson Non-Executive Chairman 8 BLUEJAY MINING PLC DIRECTORS’ REPORT The Directors present the Annual Report on the affairs of Bluejay Mining plc together with the Financial Statements for the year ended 31 December 2023. Dividends The Directors do not recommend the payment of a dividend for the year (31 December 2022: £nil). Directors & Directors’ interests The Directors who served during the year ended 31 December 2023 are shown below and had, at that time the following beneficial interests in the shares of the Company: Eric Sondergaard (1) Roderick McIllree (2) Michael Hutchinson Harry Ansell (3) Troy Whittaker (3) Robert Edwards (4) 31 December 2023 31 December 2022 Ordinary Shares Options Ordinary Shares Options - 12,900,000 - 16,100,000 78,999,268 1,285,714 - - 285,714 - - - - - 75,820,635 142,857 - - - - - - - 17,000,000 Bo Møller Stensgaard (5) 206,428 12,000,000 206,428 16,100,000 Peter Waugh (5) Johannus Hansen (6) 497,366 - - - 211,652 220,000 - - (1) Eric Sondergaard resigned 2 November 2022 and was reappointed 19 December 2023 (2) Roderick McIllree resigned on 22 June 2022 and was reappointed 19 December 2023 (3) Harry Ansell and Troy Whittaker appointed on 19 December 2023 (4) Robert Edwards was appointed on 24 October 2022 and resigned 19 December 2023 (5) Bo Stensgaard and Peter Waugh resigned 19 December 2023 (6) Johannus Hansen resigned on 26 October 2022 Further details on options can be found in Note 18 to the Financial Statements. Substantial shareholders The substantial shareholders with more than a 5% shareholding at 28 June 2024 are shown below: Roderick McIllree Corporate responsibility 28 June 2024 Holding Percentage 91,499,268 6.08 % Environmental The Company undertakes its exploration activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature. Bluejay is a mineral explorer, not a mining company. Hence, the environmental impact associated with its activities is minimal. To ensure proper environmental stewardship on its projects, Bluejay conducts certified baseline studies prior to all drill programmes and ensures that areas explored are properly maintained and conserved. Bluejay is also a member of the European Raw Materials Alliance (“ERMA”) which has a strategic focus on ensuring access to sustainable raw materials and the creation of environmentally sustainable and socially equitable innovations and infrastructure. Health and safety Bluejay operates a comprehensive health and safety programme to ensure the wellness and security of its employees. The control and eventual elimination of all work related hazards requires a dedicated team effort involving the active participation of all employees. A comprehensive health and safety programme is the primary means for delivering best practices in health and safety management. This programme is regularly updated to incorporate employee suggestions, lessons learned from past incidents and new guidelines related to new projects with the aim of identifying areas for further improvement of health and safety management. This results in continuous improvement of the health and safety programme. Employee involvement 9 BLUEJAY MINING PLC DIRECTORS’ REPORT is regarded as fundamental in recognising and reporting unsafe conditions and avoiding events that may result in injuries and accidents. Energy and carbon report The Group is not required to report energy and emissions information under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, given its size. The Group will review providing voluntary disclosures in future reporting periods, where it continues to be below the reporting thresholds. Internal controls The Board recognises the importance of both financial and non-financial controls and has reviewed the Group’s control environment and any related shortfalls during the period. Since the Group was established, the Directors are satisfied that, given the current size and activities of the Group, adequate internal controls have been implemented. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and proposed future development of the Group, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective. Further details of corporate governance can be found in the Corporate Governance Report on page 13. Supplier payment policy The Group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU). The Group's current policy concerning the payment of trade creditors is to: • • • settle the terms of payment with suppliers when agreeing the terms of each transaction; ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and pay in accordance with the Group's contractual and other legal obligations. Going concern These financial statements have been prepared on the going concern basis, as set out in Note 2.4. The Directors have prepared cash flow forecasts for the period ending 30 June 2025, which take into account the cost and operational structure of the Group and Parent Company, planned exploration and evaluation expenditure, licence commitments and working capital requirements. These forecasts indicate that the Group and parent Company’s cash resources are not sufficient to cover the projected expenditure for the period of 12 months from the date of approval of these financial statements. These forecasts indicate that the Group and Parent Company, in order to meet their operational objectives, and expected liabilities as they fall due, will be required to raise additional funds within the next 12 months. Whilst the Directors are confident that they will be able to secure the necessary funding, the current conditions do indicate the existence of a material uncertainty that may cast doubt regarding the applicability of the going concern assumption and the auditors have made reference to this in their audit report. The Directors are confident in the Company’s ability to raise additional funds as required, from existing and/or new investors, within the next 12 months. Thus, they continue to adopt the going concern basis of accounting preparing these financial statements. Directors’ and Officers’ indemnity insurance The Group has made qualifying third-party indemnity provisions for the benefit of its Directors and Officers. These were made during the period and remain in force at the date of this report. Financial Risk Management Objectives The Group has disclosed the financial risk management objectives within Note 3 to these Financial Statements. Events after the reporting period Events after the reporting period are set out in Note 30 to the Financial Statements. Future developments Details of future developments for the Group are disclosed in the Chairman’s Report on page 3. Provision of information to Auditor So far as each of the Directors is aware at the time this report is approved: 10 BLUEJAY MINING PLC DIRECTORS’ REPORT • • there is no relevant audit information of which the Company's auditor is unaware; and the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Auditor PKF Littlejohn LLP has signified its willingness to continue in office as auditor. This report was approved by the Board on 28 June 2024 and signed on its behalf. Michael Hutchinson Non-Executive Chairman 11 BLUEJAY MINING PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable laws and regulations, including the AIM Rules for Companies. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company Financial Statements in accordance with UK-adopted International Accounting Standards (UK-adopted IAS) in conformity with the requirements of the Companies Act 2006. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company, and of the profit or loss of the Group for that period. In preparing these Financial Statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgments and accounting estimates that are reasonable and prudent; • state whether applicable UK-adopted IAS in conformity with the requirements of the Companies Act 2006 have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website, www.bluejaymining.com. Legislation in the United Kingdom governing the preparation and dissemination of the Financial Statements may differ from legislation in other jurisdictions. The Company is compliant with AIM Rule 26 regarding the Company’s website. The Directors confirm that they have complied with the above requirements in preparing the Financial Statements. 12 BLUEJAY MINING PLC CORPORATE GOVERNANCE REPORT The Board of Bluejay Mining plc have adopted the QCA Corporate Governance Code (‘the Code’) as its code of corporate governance. The Code is published by the Quoted Companies Alliance (‘QCA’) and is available at www.theqca.com. The key governance related matter that occurred during the financial year ended 31 December 2023 was the completion and submission of the Environmental Impact Assessment and Social Impact Assessment reports at the Dundas project, both of which have been confirmed compliant for the Public Consultation phase. Corporate Governance Report The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles: Principle One Business Model and Strategy The Board has concluded that the highest medium and long term value can be delivered to its shareholders by the adoption of a single strategy for the Company. The principal activity of the Group is the exploration and development of precious and base metals and the aim is to create value for shareholders through the discovery and development of economic resource deposits. The Board implements this strategy by focusing investment into the exploration of world-class mineralised domains, establishing a strict criteria for project selection, utilising industry recognised methods of exploration, developing a results- driven exploration approach, actively monitoring operational and financial performance, measured against deliverable targets and budgets and considering alternative commercial options for projects which no longer meet the established criteria of the Group. This can be summarised as follows: • Continued assessment of the Dundas ilmenite project in Greenland toward commercialisation. • Continued exploration at the Disko-Nuussuaq Project with its joint venture partner • Post-period acquisition of the Thule Copper Project • Post-period change of corporate strategy to include evaluation of industrial gas and hydrocarbon projects Principle Two Understanding Shareholder Needs and Expectations The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. Investors also have access to current information on the Company though its website, www.bluejaymining.com, and via the Company’s PR advisors, BlytheRay who are available to answer investor relations enquiries. Principle Three Considering Wider Stakeholder and Social Responsibilities The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators and other stakeholders. The Board has put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships. The Company has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Company. Principle Four Risk Management In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company. The risk assessment matrix below sets out those risks, and identifies their ownership and the controls that are in place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. 13 BLUEJAY MINING PLC CORPORATE GOVERNANCE REPORT The Audit Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis. The following principal risks and controls to mitigate them, have been identified: Activity Operation Risk Injury to staff Regulatory adherence Breach of rules Strategic Market downturn Impact Control(s) Injury to staff whilst operating heavy machinery in remote location Creating a safe working environment through strict procedures and regular training Censure or withdrawal of authorisation Strong compliance regime instilled at all levels of the Company Change in Macro economic conditions Ongoing monitoring of economic events and markets. Failure to deliver commerciality Inability to secure offtake agreements Active marketing and experienced management Financial Misappropriation of Funds Fraudulent activity and loss of funds Robust financial controls and split of duties IT Security Loss of critical financial data Regular back up of data online and locally The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control. An internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the executive Directors. However, the Board will continue to monitor the need for an internal audit function. The Board works closely with and has regular ongoing dialogue with the outsourced finance function and has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems. Principle Five A Well Functioning Board of Directors During the year the Board comprised, the CEO Bo Møller Stensgaard, the Executive Chairman Robert Edwards, and two Non-Executive Directors, Peter Waugh and Michael Hutchinson. On 19 December 2023, Bo Møller Stensgaard, Robert Edwards and Peter Waugh resigned and a new Board was appointed: Managing Director Eric Sondergaard and Non- Executive Directors, Roderick McIllree, Harry Ansell and Troy Whittaker. On this date, Michael Hutchinson was appointed Non-Executive Chairman. Biographical details of the current Directors are set out within Principle Six below. Executive and Non-Executive Directors are subject to re-election at intervals of no more than three years. The letters of appointment of all Directors are available for inspection at the Company’s registered office during normal business hours. The Board meets at least three times per annum. It has established an Audit Committee, Remuneration Committee and AIM Compliance Committee, particulars of which appear hereafter. The Board has agreed that appointments to the Board are made by the Board as a whole and so has not created a Nominations Committee. The Non-Executive Directors are considered to be part time but are expected to provide as much time to the Company as is required. The Board considers that this is appropriate given the Company’s current stage of operations. It shall continue to monitor the need to match resources to its operational performance and costs and the matter will be kept under review going forward. Of the current directors, Harry Ansell and Michael Hutchinson are considered to be Independent Directors. Before his resignation, Peter Waugh was also considered to be Independent Director. The Company shall report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. In order to be efficient, the Directors meet formally and informally both in person and by telephone. To date there have been at least quarterly formal and informal meetings of the Board, and the volume and frequency of such meetings is expected to continue at this rate. 14 BLUEJAY MINING PLC CORPORATE GOVERNANCE REPORT Details of the Directors’ attendance at the Board meetings are set out below: Meetings Attended Robert Edwards 1 Bo Stensgaard 1 Michael Hutchinson Peter Waugh 1 Eric Sondergaard 2 Roderick McIllree 2 Harry Ansell 2 Troy Whittaker 2 (1) Resigned on 19 December 2023 (2) Appointed on 19 December 2023 Principle Six Appropriate Skills and Experience of the Directors 8 8 8 8 0 0 0 0 Meetings eligible to attend 8 8 8 8 0 0 0 0 The Board currently consists of five Directors and, in addition, the Company has employed the services of Westend Corporate LLP to act as the Company Secretary. The Company is satisfied that given its size and stage of development, between the Directors, it has an effective and appropriate balance of skills and experience across technical, commercial and financial disciplines. The Director’s experience and skills are listed on the Company’s website, www.bluejaymining.com, The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal. Michael Hutchinson Non-Executive Chairman Chairman of the AIM Compliance Committee and Member of the Audit Committee and Remuneration Committee. Eric Sondergaard Managing Director Roderick McIllree Non-Executive Director Chairman of the Remuneration Committee. Harry Ansell Independent Non-Executive Director Member of the AIM Compliance Committee. Troy Whittaker Non-Executive Director Chairman of the Audit Committee. Where necessary the Board has engaged external professional consultants on an ongoing basis to ensure the Company is meeting its strategies. The key advisers to the Company are SP Angel Corporate Finance LLP, W.H.Ireland, BlytheRay and Hill Dickinson. The Board have ensured that all external advisers are knowledgeable and provide the required skillset. Principle Seven Evaluation of Board Performance Internal evaluation of the Board, the Committees and individual Directors is to be undertaken on an annual basis and on a three-yearly cycle. The Board has not yet had any internal reviews. The internal reviews will be in the form of peer appraisal and discussions to determine the effectiveness and performance of the various governance components, as well as the Directors’ continued independence. 15 BLUEJAY MINING PLC CORPORATE GOVERNANCE REPORT The results and recommendations that come out of the appraisals for the Directors shall identify the key corporate and financial targets that are relevant to each Director and their personal targets in terms of career development and training. Progress against previous targets shall also be assessed where relevant. Principle Eight Corporate Culture The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The corporate governance arrangements that the Board has adopted are designed to ensure that the Company delivers long term value to its shareholders and that shareholders have the opportunity to express their views and expectations for the Company in a manner that encourages open dialogue with the Board. A large part of the Company’s activities are centred upon what needs to be an open and respectful dialogue with employees, clients and other stakeholders. Therefore, the importance of sound ethical values and behaviours is crucial to the ability of the Company to successfully achieve its corporate objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this flows through all that the Company does. The Directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge. The Company has adopted, with effect from the date on which its shares were admitted to AIM, a code for Directors’ and employees’ dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016. Principle Nine Maintenance of Governance Structures and Processes Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the Chairman and Managing Director arising as a consequence of delegation by the Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has been delegated by the Board to the Managing Director. Audit Committee Prior to Board changes on 19 December 2023, the Audit Committee comprised Peter Waugh and Michael Hutchinson, and Peter Waugh chaired this committee. Following the resignation of Peter Waugh on 19 December 2023, the Audit Committee now comprises Troy Whittaker and Michael Hutchinson, and Troy Whittaker chairs this committee. This committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported. It receives reports from the executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and Committee shall meet not less than twice in each financial year and it has unrestricted access to the Company’s auditors. Remuneration Committee Prior to Board changes on 19 December 2023, the Remuneration Committee comprised Peter Waugh and Michael Hutchinson, and Michael Hutchinson chaired this committee. Following the resignation of Peter Waugh on 19 December 2023, the Remuneration Committee now comprises Roderick McIllree and Michael Hutchinson, and Roderick McIllree chairs this committee. The Remuneration Committee reviews the performance of the executive Directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also considers and approves bonuses, the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Company’s Remuneration Policy. AIM Compliance Committee Prior to Board changes on 19 December 2023, the AIM Compliance Committee comprised Michael Hutchinson and Peter Waugh. Peter Waugh chaired this committee. Following the resignation of Peter Waugh on 19 December 2023, the AIM Compliance Committee comprises Michael Hutchinson and Harry Ansell. Michael Hutchinson chairs this committee. The AIM Compliance Committee is responsible for the coordinating and monitoring the Company’s regulatory responsibilities including liaising with the Nomad and the London Stock Exchange as necessary. The purpose of the AIM compliance committee is to designate responsibility of ensuring best practice and application of the defined corporate governance procedures. Nominations Committee The Board has agreed that appointments to the Board will be made by the Board as a whole and so has not created a Nominations Committee. Non-Executive Directors The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and which have been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Chairman and non-executive Directors insofar as both the Chairman and non-executive Directors will be appointed for an initial term of 16 BLUEJAY MINING PLC CORPORATE GOVERNANCE REPORT three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for subsequent terms. The Chairman may serve as a Non-Executive Director before commencing a first term as Chairman. In accordance with the Companies Act 2006, the Board complies with: a duty to act within their powers; a duty to promote the success of the Company; a duty to exercise independent judgement; a duty to exercise reasonable care, skill and diligence; a duty to avoid conflicts of interest; a duty not to accept benefits from third parties and a duty to declare any interest in a proposed transaction or arrangement. Principle Ten Shareholder Communication The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. Investors also have access to current information on the Company though its website, www.bluejaymining.com. The Company shall include, when relevant, in its annual report, any matters of note arising from the Audit or Remuneration committees. Michael Hutchinson Non-Executive Chairman 28 June 2024 17 BLUEJAY MINING PLC INDEPENDENT AUDITOR’S REPORT As at 31 December 2023 Opinion Company number: 05389216 We have audited the financial statements of Bluejay Mining Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the Consolidated and Parent Company Statement of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. In our opinion: • • • • the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 31 December 2023 and of the group’s loss for the year then ended; the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards; the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the Companies Act 2006; and have been prepared in accordance with the requirements of the Companies Act 2006. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to note 2.4 in the financial statements, which indicates that the group and parent company's ability to continue as a going concern is highly dependent on its ability to raise additional funds within the next twelve months from the approval of these financial statements. The outcome of this fundraise is contingent upon the appetite of investors and prevailing market conditions. As stated in note 2.4, these events or conditions, indicate that a material uncertainty exists that may cast significant doubt on the group and parent company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter. In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included: a) Reviewing management's assessment of going concern, including their evaluation of future funding requirements b) Determining if all relevant information, including forecast expenditure, has been appropriately included in the assessment of going concern. c) Analysing cash flow forecasts and budgets, assessing the historical accuracy and consistency of the forecasts. d) Checking the mathematical accuracy of the cash flow forecasts and budgets. e) Considering the cash position at and after the year-end. f) Reviewing the reasonable worst-case forecast scenario prepared by management and evaluating the financial resources available to address this scenario. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our application of materiality The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. The materiality for the financial statements as a whole applied to the group financial statements was £440,000 (2022: £360,000) based on 1% of total assets. The materiality has been based on total assets as the Group is in 18 BLUEJAY MINING PLC INDEPENDENT AUDITOR’S REPORT As at 31 December 2023 Company number: 05389216 the exploration and development phase of its operations and is not revenue generating or profit making. We consider total assets to be one of the principal considerations for users of the financial statements. The performance materiality for the group was £264,000 (2022: £216,000). The materiality for the financial statements as a whole applied to the parent company financial statements was £30,000 (2022: £27,000) based on 2% of total expenses. The performance materiality for the parent company was £18,000 (2022: £16,200). For each component in the scope of our group audit, we allocated a materiality that was less than our overall group materiality. We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. We agreed with those charged with governance that we would report all differences identified during the course of our audit in excess of £22,000 (2022: £18,000) for the group and £1,500 (2022: 1,350) for the parent company. Our approach to the audit In designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular we looked at areas involving significant accounting estimates and judgements by the directors and considered future events that are inherently uncertain, including review of group’s future exploration plans to support impairment assessment of intangible assets. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. Of the 7 components of the group, a full scope audit was performed on the complete financial information of 4 components and the remaining components were subject to analytical review as they were not significant or material to the group. Of the 7 reporting components of the group, one component is located in Finland and one component located in Greenland are audited by a component auditor operating under our instruction. The audit of the remaining components was conducted in London by PKF Littlejohn LLP, utilising a team with specific experience in auditing mining exploration entities and publicly listed entities. The Senior Statutory Auditor interacted regularly with the component audit teams during all stages of the audit and was responsible for the scope and direction of the audit process. This, in conjunction with additional procedures performed, gave us appropriate evidence for our opinion on the group and parent company financial statements. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key Audit Matter How our scope addressed this matter Valuation and impairment of exploration and evaluation assets (refer note 7) The Group’s exploration and evaluation assets per Note 7 of the financial statements represent a significant asset on the consolidated statement of financial position. See Note 2.7 and Note 4 for details of the accounting policy and critical accounting estimate and judgements relating to this key audit matter. The Group has significant intangible assets related to the Dundas Titanium Project in Greenland, the Disko projects in Greenland, and a portfolio of copper, zinc, in Finland, which represent and nickel projects approximately 96% of the Group's total assets as of December 31, 2023 which is £31,237,336 as on 31 December 2023 (2022 : £31,850,128). The risk associated with the Group's exploration and evaluation assets is that they are subject to significant estimation and judgment by management, given the Our work included: • Obtaining management's assessment of IFRS 6 - Exploration for and Evaluation of Mineral Resources, to identify any impairment indicators. Discussing, challenging and documenting the key assumptions included therein and assessing their reasonableness. • Reviewing publicly available information and other relevant audit evidence to assess potential indicators of impairment that may not have been identified by management. • Enquiring about the future plans for each license, including obtaining cashflow projections where necessary and corroborating with minimum spend requirements attached to licenses. • Obtaining internal and external technical reports, such as feasibility reports and application documents for 19 BLUEJAY MINING PLC INDEPENDENT AUDITOR’S REPORT As at 31 December 2023 inherent uncertainty involved in assessing the carrying value of exploration projects. The ongoing review for indicators of impairment adds complexity to the estimation and judgment required by management, and given the financial significance of these assets to the Group's financial statements, we have identified this risk as a key audit matter. Impairment of Investments in subsidiaries, including in intercompany receivables (refer note 8) The parent company’s net investment in subsidiaries is £42,558,878 as on 31 December 2023 : £43,016,524). The recoverability of the investments in subsidiaries (including intercompany receivables) is ultimately dependent on the value of the underlying assets, mainly comprising of exploration and evaluation assets. (2022 The valuation of the exploration projects and other assets held by the subsidiaries is based on judgments and estimates made by the Directors. The exploration projects are at an early stage of exploration and therefore there are continued risks pertaining to the successful development as well as the assessment of the commercial viability of the exploration assets. There is a risk that the judgments and estimates made by the Directors may not be reliable, which could result in a material misstatement in the carrying value of the investments in subsidiaries and related intercompany receivables. the financial Given the estimation/judgment required by management, we have identified the risk of recoverability of receivables and investments in subsidiaries as a key audit matter. significance and Company number: 05389216 exploitation license renewals, and any correspondence with regulatory agencies to support the assessment. • Where indicators of impairment are identified, performing a full impairment test in accordance with IFRS 6 and ensuring impairment loss is appropriately recorded. • Evaluating the Group's accounting policy for recognising exploration and evaluation expenditure. • Obtaining reporting deliverables and reviewing the audit work of component auditors to understand the progress of exploration activities and to confirm compliances with legal requirements on exploration license commitments and license renewals. • Reviewing the financial statement disclosures and ensuring exploration and evaluation assets including impairment assumptions are appropriately disclosed. Our work included: • Obtaining and reviewing the impairment review for all investments held from management, including the net investment in subsidiaries and related intercompany receivables for each subsidiary. • Reviewing the value of the net investment in subsidiaries against the underlying assets, including exploration evaluation and other assets held by the subsidiaries, and verifying and corroborating the judgments and estimates used by management to assess the recoverability of investments and intercompany receivables. • Assessing the carrying value of exploration and evaluation assets in accordance with the criteria defined in IFRS 6; as the recoverability of investments and receivables is dependent on the development of the exploration projects in the subsidiaries. • Obtaining reporting deliverables and reviewing the audit work of component auditors to understand the progress of exploration activities, including any indications of impairment or changes in the recoverability of the investments and receivable balances held in each subsidiary. • Assessing the adequacy and appropriateness of the disclosures related to the investments in subsidiaries and related intercompany receivables in the financial statements. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to 20 BLUEJAY MINING PLC INDEPENDENT AUDITOR’S REPORT As at 31 December 2023 Company number: 05389216 read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: • • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or • • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: • We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management and the application of our cumulative audit knowledge and experience of the sector. • We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from AIM rules and the Companies Act 2006 and local mining and exploration regulations applicable to the subsidiaries. 21 BLUEJAY MINING PLC INDEPENDENT AUDITOR’S REPORT As at 31 December 2023 Company number: 05389216 • We designed our audit procedures to ensure the audit team considered whether there were any indications of non- compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to enquiries of management, review of minutes and regulatory news service announcements and review of legal and regulatory correspondence. • We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, that the potential for management bias was identified in relation to the impairment assessment of intangible assets. We addressed this by challenging the assumptions and judgements made by management when evaluating any indicators of impairment. • As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. • As part of the group audit, we have communicated with component auditors the fraud risks associated with the group and the need for the component auditors to address the risk of fraud in their testing. To ensure that this has been completed, we have reviewed component auditor working papers in this area and obtained responses to our group instructions from the component auditors. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Daniel Hutson (Senior Statutory Auditor) For and on behalf of PKF Littlejohn LLP Statutory Auditor 28 June 2024 15 Westferry Circus Canary Wharf London E14 4HD 22 BLUEJAY MINING PLC STATEMENT OF FINANCIAL POSITION As at 31 December 2023 Non-Current Assets Property, plant and equipment Intangible assets Fair value through profit and loss Equity Investments Investment in subsidiaries Investment in Joint Venture Current Assets Trade and other receivables Cash and cash equivalents Total Assets Non-Current Liabilities Deferred tax liabilities Current Liabilities Group Company 31 December 2023 31 December 2022 31 December 2023 31 December 2022 Note £ £ £ £ 6 7 8 9 1,425,326 1,718,337 22,101 26,230 31,237,336 31,850,128 - 1,656,250 - - - 1,656,250 42,558,878 43,016,524 - - 10 4,740,705 4,470,787 - - 39,059,617 38,039,252 44,237,229 43,042,754 11 12 1,260,237 995,129 1,532,369 255,063 200,700 1,996,957 17,550 1,366,568 1,460,937 2,992,086 1,549,919 1,621,631 40,520,554 41,031,338 45,787,148 44,664,385 13 496,045 496,045 496,045 496,045 - - - - Trade and other payables 14 647,882 524,286 521,285 281,589 647,882 524,286 521,285 281,589 Total Liabilities 1,143,927 1,020,331 521,285 281,589 Net Assets 39,376,627 40,011,007 45,265,863 44,382,796 Equity attributable to owners of the Parent Share capital Share premium Other reserves Retained losses Total Equity 15 15 16 7,506,658 7,492,041 7,506,658 7,492,041 62,915,685 60,903,995 62,915,685 60,903,995 (6,528,838) (5,635,169) 1,215,519 1,377,303 (24,516,878) (22,749,860) (26,371,999) (25,390,543) 39,376,627 40,011,007 45,265,863 44,382,796 The Company has elected to take the exemption under Section 408 of the Companies Act 2006 from presenting the Parent Company Income Statement and Statement of Comprehensive Income. The loss for the Company for the year ended 31 December 2023 was £1,023,812 (profit for year ended 31 December 2022: £1,784,303). The Financial Statements were approved and authorised for issue by the Board of Directors on 28 June 2024 and were signed on its behalf by: Michael Hutchinson Non-Executive Chairman The Notes on pages 30 to 58 form part of these Financial Statements. 23 BLUEJAY MINING PLC CONSOLIDATED INCOME STATEMENT For the year ended 31 December 2023 Continued operations Revenue Cost of sales Gross profit Administrative expenses Impairment Share of (losses) from joint venture Increase in share of net assets on joint venture Other gains / (losses) Foreign exchange gain Operating loss Finance income Other income (Loss)/profit before income tax Tax credit Note Year ended 31 December Year ended 31 December 2023 £ - 2022 £ - 19 (213,523) (629,930) (213,523) (629,930) (1,629,273) (1,886,271) (3,535,254) - (13,779) 283,697 (71,956) 2,457,596 19 7 10 10 8, 22 2,962,769 (112,533) (53,318) 103,543 (2,198,681) (139,551) 7,039 2,653 320,925 1,801,439 (1,870,717) 1,664,541 61,343 - 23 24 25 (Loss)/profit for the year attributable to owners of the Parent (1,809,374) 1,664,541 Basic and Diluted Earnings Per Share attributable to owners of the Parent during the period (expressed in pence per share) 26 (0.16)p 0.16p The Notes on pages 30 to 58 form part of these Financial Statements. 24 BLUEJAY MINING PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2023 (Loss)/profit for the year Other Comprehensive Income: Items that may be subsequently reclassified to profit or loss Year ended 31 December 2023 £ Year ended 31 December 2022 £ (1,809,374) 1,664,541 Currency translation differences (731,885) 1,493,125 Other comprehensive (losses)/income for the year, net of tax (2,541,259) 3,157,666 Total comprehensive (losses)/income attributable to owners of the Parent (2,541,259) 3,157,666 The Notes on pages 30 to 58 form part of these Financial Statements. 25 BLUEJAY MINING PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2023 Note Share capital £ Share premium £ Other reserves £ Retained losses £ Total £ Balance as at 1 January 2022 7,484,355 55,705,882 (7,213,274) (24,448,172) 31,528,791 Profit for the year Other comprehensive income for the year Items that may be subsequently reclassified to profit or loss Currency translation differences Total comprehensive income for the year Issue of share capital Share based payments Expired options Total transactions with owners, recognised directly in equity - - - - - - - 1,664,541 1,664,541 1,493,125 - 1,493,125 1,493,125 1,664,541 3,157,666 15 16 16 7,686 5,198,113 - - - - - 118,751 (33,771) - - 5,205,799 118,751 33,771 - 7,686 5,198,113 84,980 33,771 5,324,550 Balance as at 31 December 2022 7,492,041 60,903,995 (5,635,169) (22,749,860) 40,011,007 Balance as at 1 January 2023 7,492,041 60,903,995 (5,635,169) (22,749,860) 40,011,007 Loss for the year Other comprehensive income for the year Items that may be subsequently reclassified to profit or loss Currency translation differences Total comprehensive income/(losses) for the year Issue of share capital Share based payments Expired options Total transactions with owners, recognised directly in equity 15 16 16 - - - - - - 14,180 1,822,127 189,563 437 - - (1,809,374) (1,809,374) (731,885) - (731,885) (731,885) (1,809,374) (2,541,259) - - - - 1,836,307 190,000 - (161,784) 42,356 (119,428) 14,617 2,011,690 (161,784) 42,356 1,906,879 Balance as at 31 December 2023 7,506,658 62,915,685 (6,528,838) (24,516,878) 39,376,627 The Notes on pages 30 to 58 form part of these Financial Statements. 26 BLUEJAY MINING PLC COMPANY STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2023 Note Share capital £ Share premium £ Other reserves £ Retained losses £ Total equity £ Balance as at 1 January 2022 7,484,355 55,705,882 1,292,323 (27,208,617) 37,273,943 Profit for the year Total comprehensive income for the year Issue of share capital Share based payments Expired options Total transactions with owners, recognised directly in equity 15 16 16 - - - - 7,686 5,198,113 - - - - - - - 118,751 (33,771) 1,784,303 1,784,303 1,784,303 1,784,303 - - 5,205,799 118,751 33,771 - 7,686 5,198,113 84,980 33,771 5,324,550 Balance as at 31 December 2022 7,492,041 60,903,995 1,377,303 (25,390,543) 44,382,796 Balance as at 1 January 2023 7,492,041 60,903,995 1,377,303 (25,390,543) 44,382,796 Loss for the year Total comprehensive income for the year Issue of share capital Share based payments Expired options Total transactions with owners, recognised directly in equity 15 16 16 - - - - 14,180 1,822,127 189,563 437 - - - - - (1,023,812) (1,023,812) (1,023,812) (1,023,812) - - 1,836,307 190,000 - (161,784) 42,356 (119,428) 14,617 2,011,690 (161,784) 42,356 1,906,879 Balance as at 31 December 2023 7,506,658 62,915,685 1,215,519 (26,371,999) 45,265,863 The Notes on pages 30 to 58 form part of these Financial Statements. 27 BLUEJAY MINING PLC STATEMENTS OF CASH FLOWS For the year ended 31 December 2023 Group Company Note Year ended Year ended 31 December 2023 31 December 2022 £ £ Year ended 31 December 2023 Year ended 31 December 2022 £ £ Cash flows from operating activities (Loss)/profit after income tax (1,809,374) 1,664,541 (1,023,812) 1,784,303 Adjustments for: Depreciation (Gain)/Loss on sale of property plant and equipment Gain on sale of investment Impairment of Asset Share options expense Share options forfeited Share based payments Intercompany management fees Share of losses from joint venture Increase in share of net asset Net finance (income) Foreign exchange loss/(gain) Fair value through profit and loss Equity Investments R&D provision for prior year Proceeds from R&D tax credits Changes in working capital: Decrease/(Increase) in trade and other receivables 7 18 18 16 10 10 23 8 25 25 349,792 369,714 15,401 19,312 (20,291) 1,362 2,153 (4,298,312) 3,535,254 - - - 118,751 (119,428) 190,000 - - - - 13,779 71,956 (283,697) (2,457,596) - - - (119,428) 190,000 - - - 118,751 - - (504,353) (542,446) - - - - (7,039) (40,642) 1,468,750 (61,343) 61,343 (2,653) 134,358 (2,207,337) (807,919) 900,461 (2,049,375) - - - 1,468,750 (61,343) 61,343 - - - 829,891 (760,747) 311,345 833,398 Increase/(Decrease) in trade and other payables 123,606 (108,718) 250,395 (65,420) Net cash used in operating activities (67,711) (969,032) (716,425) (709,396) Cash flows from investing activities Purchase of property plant and equipment (101,240) (253,799) (13,425) (14,891) Sale of investment Sale of property, plant and equipment Cash disposed of in Sale of subsidiary 50,000 30,808 (7,095) - 47,149 - Purchase of intangible assets 7 (3,582,956) (4,744,690) - - - - - - - - Interest received Net loans granted to subsidiary undertakings 9,367 - 4,888 - 5,877 4,859 (2,500,851) (5,654,746) Net cash used in investing activities (3,601,116) (4,946,452) (2,508,399) (5,664,778) Cash flows from financing activities Proceeds from issue of share capital 1,930,580 5,379,999 1,930,580 5,379,999 Transaction costs of share issue (94,272) (174,200) (94,272) (174,200) Proceeds from convertible loan notes Repayment of convertible loan notes Interest paid 1,641,836 (1,601,973) - - 1,641,836 (1,601,973) (450) (2,322) (366) - - (20) Net cash generated from financing activities 1,875,721 5,203,477 1,875,805 5,205,779 Net (decrease) in cash and cash equivalents (1,793,106) (712,007) (1,349,019) (1,168,395) The Notes on pages 30 to 58 form part of these Financial Statements. 28 BLUEJAY MINING PLC STATEMENTS OF CASH FLOWS For the year ended 31 December 2023 Cash and cash equivalents at beginning of year 1,996,957 2,701,792 1,366,569 2,534,693 Exchange gain on cash and cash equivalents (3,151) 7,172 - 270 Cash and cash equivalents at end of year 200,700 1,996,957 17,550 1,366,568 The Notes on pages 30 to 58 form part of these Financial Statements. 29 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 1. General information The principal activity of Bluejay Mining plc (the ‘Company’) and its subsidiaries (together the ‘Group’) is the exploration and development of precious and base metals. The Company’s shares are listed on the AIM market of the London Stock Exchange and the open market of the Frankfurt Stock Exchange, as well as the OTC PINK in the US. The Company is incorporated and domiciled in England. The address of its registered office is 6 Heddon Street, London W1B 4BT. 2. Summary of significant Accounting Policies The principal Accounting Policies applied in the preparation of these Consolidated Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated. 2.1. Basis of preparation of Financial Statements The Group and Company Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards (UK adopted IAS) in accordance with the requirements of the Companies Act 2006. The Consolidated Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on business combination. The Financial Statements are presented in Pound Sterling rounded to the nearest pound. The preparation of financial statements in conformity with UK-adopted IAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 4. 2.2. New and amended standards i) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2023 The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions applicable for the period ended 31 December 2023 did not result in any material changes to the financial statements of the Group or Company. ii) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows: Standard IAS 1 IFRS 16 (Amendments) IFRS 7 IAS 7 IAS 21 Impact on initial application Classification of liabilities with covenants Lease Liability in a Sale and Leaseback Supplier finance arrangements Statement of cash flows The effects of changes in foreign exchange rates Effective date 1 January 2024 1 January 2024 1 January 2024 1 January 2024 1 January 2025 The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group’s results or shareholders’ funds 2.3. Basis of Consolidation The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries made up to 31 December. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: The contractual arrangement with the other vote holders of the investee; • • Rights arising from other contractual arrangements; and The Group’s voting rights and potential voting rights • 30 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. a) Subsidiaries Subsidiaries are entities over which the Group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation. b) Joint Venture A joint venture (JV) is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement. Joint arrangements are accounted for using the equity method of accounting and are initially recognised at cost. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The aggregate of the Group’s share of profit or loss of the JV is shown on the face of the statement of profit or loss and other comprehensive income as part of operating profit and represents profit or loss after tax. The financial statements of the JV are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in the JV. At each reporting date, the Group determines whether there is objective evidence that the investment in the JV is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the JV and it’s carrying value, then recognises the loss as ‘Share of profit of a joint venture’ in the statement of profit or loss and other comprehensive income. c) Reimbursement of the costs of the operator of the joint arrangement When the Group, acting as lead operator or manager of a joint arrangement, receives reimbursement of direct costs recharged to the joint arrangement, such recharges represent reimbursements of costs that the operator incurred as an agent for the joint arrangement and therefore have no effect on profit or loss. When the Group charges a management fee (based on a fixed percentage of total costs incurred for the year) to cover other general costs incurred in carrying out the activities on behalf of the joint arrangement, it is not acting as an agent. Therefore, the general overhead expenses and the management fees are recognised in the statement of profit or loss and other comprehensive income as an expense and income respectively. The amount of income does not represent revenue from contracts with customers. Instead, it represents income from collaborative partners and hence is outside the scope of IFRS 15. 2.4. Going concern The Consolidated Financial Statements have been prepared on a going concern basis. The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman’s Statement and the Strategic Report. As at 31 December 2023, the Group had cash and cash equivalents of £200,700 and in January 2024, the Group raised £1.2 million. The Directors have prepared cash flow forecasts to 30 June 2025 which take account of the cost and operational structure of the Group and Parent Company, planned exploration and evaluation expenditure, licence commitments and working capital requirements. These forecasts indicate that the Group and Parent Company’s cash resources are not sufficient to cover the projected expenditure for the period for a period of 12 months from the date of approval of these financial statements. These forecasts indicate that the Group and Parent Company, in order to meet their operational objectives, and meets their expected liabilities as they fall due, will be required to raise additional funds within the next 12 months. In common with many exploration and evaluation entities, the Company will need to raise further funds within the next 12 months in order to meet its expected liabilities as they fall due, and progress the Group into definitive feasibility and then into construction and eventual production of revenues. The Directors are confident in the Company’s ability to raise additional funds as required, from existing and/or new investors, within the next 12 months. The Company has demonstrated its access to financial resources, as evidenced by the successful completion of a Placing in January 2024 with an equity raising of £1.2 million. 31 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 Given the Group and Parent Company’s current cash position and its demonstrated ability to raise capital, the Directors have a reasonable expectation that the Group and Parent Company has adequate resources to continue in operational existence for the foreseeable future. Notwithstanding the above, these circumstances indicate that a material uncertainty exists that may cast significant doubt on the Group and Parent Company’s ability to continue as a going concern and, therefore, that the Group and Parent Company may be unable to realise their assets or settle their liabilities in the ordinary course of business. As a result of their review, and despite the aforementioned material uncertainty, the Directors have confidence in the Group and Parent Company’s forecasts and have a reasonable expectation that the Group and Parent Company will continue in operational existence for the going concern assessment period and have therefore used the going concern basis in preparing these consolidated and Parent Company financial statements. 2.5. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision- maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 2.6. Foreign currencies (a) Functional and presentation currency Items included in the Financial Statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The functional currency of the UK parent entity and UK subsidiary is Pound Sterling, the functional currency of the Finnish subsidiaries is Euros and the functional currency of the Greenlandic subsidiaries is Danish Krone. The Financial Statements are presented in Pounds Sterling which is the Company’s functional and Group’s presentation currency. (b) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. (c) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • assets and liabilities for each period end date presented are translated at the period-end closing rate; • income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and • all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale. 2.7. Intangible assets Exploration and evaluation assets The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production. Exploration and evaluation assets are recorded and held at cost Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units (‘CGU’s’), which are based on specific projects or geographical areas. The CGU’s are then assessed for impairment using a variety of methods including those specified in IFRS 6. 32 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 Under IFRS 6, there are four indicators of impairment: • The period for which the Company has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed; • Substantive expenditures on further exploration for and evaluation of mineral resources in the specific area is neither budgeted or planned; • Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to discontinue such activities in the specific area; and • Sufficient data exists to indicate, that although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. Whenever the exploration for and evaluation of mineral resources in cash generating units does not fulfil the requirements of IFRS 6 or lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement. Exploration and evaluation assets recorded at fair-value on business combination Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset. 2.8. Investments in subsidiaries and joint venture Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision. Additional contributions by the JV Partner which increase the net assets in the joint venture, are shown as “increase in share of net assets” in the Income Statement. This is a non-cash adjustment and is to retain the Group’s ownership in the Joint Venture at 49%. 2.9. Property, plant and equipment Property, Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates: Office Equipment – 5 years Machinery and Equipment – 5 to 15 years Software – 2 years Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. If an impairment review is conducted following an indicator of impairment, assets which are not able to be assessed for impairment individually are assessed in combination with other assets within a cash generating unit. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within ‘Other (losses)/gains’ in the Income Statement. 2.10. Impairment of non-financial assets Assets that have an indefinite useful life, for example, intangible assets not ready to use, and goodwill, are not subject to amortisation and are tested annually for impairment. Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are 33 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. 2.11. Financial assets (a) Classification The Group classifies its financial assets at amortised cost and at fair value through the profit or loss or OCI. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. (b) Recognition and measurement Amortised cost Regular purchases and sales of financial assets are recognised on the trade date at cost – the date on which the Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. Fair value through the profit or loss Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL. Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’): - Level 1: Quoted prices in active markets for identical items (unadjusted) - Level 2: Observable direct or indirect inputs other than Level 1 inputs - Level 3: Unobservable inputs (i.e. not derived from market data). The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur. (c) Impairment of financial assets The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). For trade receivables (not subject to provisional pricing) and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime ECL at each reporting date. The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity. At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. (d) Derecognition The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. 34 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial asset measured at fair value through profit or loss (FVTPL). 2.12. Financial liabilities Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables and loans. Subsequent measurement The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income. Trade and other payables After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income. Derecognition A financial liability is derecognised when the associated obligation is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised cost. 2.13. Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand. 2.14. Equity Equity comprises the following: • • • “Share capital” represents the nominal value of the Ordinary shares; “Share Premium” represents consideration less nominal value of issued shares and costs directly attributable to the issue of new shares; “Other reserves” represents the merger reserve, foreign currency translation reserve, redemption reserve and share option reserve where; o o o o “Merger reserve” represents the difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange; “Foreign currency translation reserve” represents the translation differences arising from translating the financial statement items from functional currency to presentational currency; “Reverse acquisition reserve” represents a non-distributable reserve arising on the acquisition of Finland Investments Limited; “ Capital redemption reserve” represents a non-distributable reserve made up of share capital; 35 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 o “Share option reserve" represents share options awarded by the group; • “Retained earnings” represents retained losses. 2.15. Share capital, share premium and deferred shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient premium not be available placing costs are recognised in the Income Statement. Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of £100,000 per each share held. 2.16. Share based payments The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers’ services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted: • • • including any market performance conditions; excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and including the impact of any non-vesting conditions. The fair value of the share options and warrants are determined using the Black Scholes valuation model. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity. When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised. 2.17. Taxation No current tax is yet payable in view of the losses to date although during the year ended 31 December 2023, the Company received £61,343 in Research and Development (“R&D”) tax credits. Deferred tax is recognised using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets and liabilities are not discounted. 36 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 3. Financial risk management 3.1. Financial risk factors The Group’s activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. None of these risks are hedged. Risk management is carried out by the London based management team under policies approved by the Board of Directors. Market risk (a) Foreign currency risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Danish Krone and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds, Euros, USD or Danish Krone. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts as most of the foreign exchange movements result from the retranslation of intercompany loans. The Group has sensitised the figures for fluctuations in foreign exchange rates, as the Directors acknowledge that, at the present time, the foreign exchange retranslations have resulted in rather higher than normal fluctuations which are separately disclosed and is predominantly due to the exceptional nature of the Euro exchange rate in the last two years in the current economic climate. Further detail is in note 3.3. (b) Price risk The Group is not exposed to commodity price risk as a result of its operations, which are still in the exploration phase. The Directors will revisit the appropriateness of this policy should the Group’s operations change in size or nature. The Group has exposure to equity securities price risk, as it holds listed equity investments. Credit risk Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board. The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk. Liquidity risk In keeping with similar sized mineral exploration groups, the Group’s continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed. With exception to deferred taxation, financial liabilities are all due within one year. 3.2. Capital risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts. At 31 December 2023 the Group had borrowings of £nil (31 December 2022: £nil) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time. Given the Group’s level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial. 37 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 3.3. Sensitivity analysis On the assumption that all other variables were held constant, and in respect of the Group and the Company’s expenses the potential impact of a 10% increase/decrease in the UK Sterling:Euro and UK Sterling:DKK Foreign exchange rates on the Group’s loss for the period and on equity is as follows: Potential Euro expenses: 2023 impact on (Loss)/profit before tax for the year ended 31 December 2023 Equity before tax for the year ended 31 December 2023 Group Company Group Company Increase/(decrease) foreign exchange rate in 10% -10% £ (1,806,238) (1,812,524) £ (1,023,812) (1,023,812) £ 39,827,251 38,926,003 £ 45,265,863 45,265,863 Potential DKK expenses: 2023 impact on Loss before tax for the year ended 31 December 2023 Equity before tax for the year ended 31 December 2023 Group Company Group Company Increase/(decrease) foreign exchange rate in 10% -10% £ (1,867,325) (1,751,437) £ (1,023,812) (1,023,812) £ 39,944,064 38,809,190 £ 45,265,863 45,265,863 4. Critical accounting estimates and judgements The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the period. Actual results may vary from the estimates used to produce these Financial Statements. Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Items subject to such estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial years, include but are not limited to: Impairment of intangible assets – exploration and evaluation costs Exploration and evaluation costs have a carrying value at 31 December 2023 of £31,237,336 (2022: £31,850,128). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target, results indicate there is no additional upside a decision will be made to discontinue exploration or impairment indicators under IFRS 6 are identified, an impairment charge will then be recognised in the Income Statement. Useful economic lives of property, plant and equipment The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the seasonality of the licence locations. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets. See note 6 for the carrying amount of the property plant and equipment and note 2.9 for the useful economic lives for each class of assets. Share based payment transactions The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received. In the year ended 31 December 2023, no share options were issued however during the year ended 31 December 2022, 17,000,000 share options were issued to Robert Edwards. The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 18. 38 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 5. Segment information Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in three geographical segments: the United Kingdom, Greenland and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Greenland and Finland relate to exploration and evaluation work. The Group had no turnover during the period. 2023 Revenue Cost of sales Administrative expenses Impairment Share of earnings from joint venture Increase in share of net asset Valuation losses on fair value through profit and loss equity investments Other net gains Foreign exchange Finance expense Other income (Profit)/loss before tax per reportable segment Additions to PP&E Greenland Finland £ - 213,523 548,395 - 13,779 (283,697) - £ - - UK £ - - Total £ - 213,523 131,464 949,414 1,629,273 - - - - 3,535,254 3,535,254 - - 13,779 (283,697) 1,468,750 1,468,750 (20,719) (4,365,970) (44,830) (4,431,519) - - (3,503) 1,975 53,318 (5,511) 53,318 (7,039) (219,825) (101,100) - (320,925) 247,953 (4,333,631) 5,956,395 1,870,717 87,815 - 13,425 101,240 Additions to intangible asset 2,875,772 707,184 - 3,582,956 Reportable segment assets 31,450,603 6,210,310 2,859,641 40,520,554 Increase in share of net asset (2,457,596) 2022 Revenue Cost of sales Administrative expenses Share of earnings from joint venture Other net gains Foreign exchange Finance expense Other income (Profit)/loss before tax per reportable segment Additions to PP&E Additions to intangible asset Greenland Finland £ - 5,716 230,347 - - 76 - UK £ - - Total £ - 629,930 979,818 1,886,271 - - 71,956 (2,457,596) 111,095 112,533 (103,543) (103,543) £ - 624,214 676,106 71,956 1,362 - 1,371 815 (4,839) (2,653) (1,641,536) (114,616) (45,287) (1,801,439) (2,724,123) 122,338 937,244 (1,664,541) 238,908 4,634,039 - 14,891 253,799 110,651 - 4,744,690 Reportable segment assets 34,764,714 4,938,310 1,328,314 41,031,338 39 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 6. Property, plant and equipment Group Cost As at 1 January 2022 Exchange Differences Additions Disposals As at 31 December 2022 As at 1 January 2023 Exchange Differences Additions Disposals Software £ Machinery & equipment Office equipment £ £ Total £ 53,817 - 7,417 - 3,203,738 166,306 238,312 (136,336) 76,155 266 8,070 3,333,710 166,572 253,799 - (136,336) 61,234 3,472,020 84,491 3,617,745 61,234 3,472,020 84,491 3,617,745 - - (73,952) 87,815 (2,666) 13,425 (76,618) 101,240 (43,819) (104,731) (45,539) (194,089) As at 31 December 2023 17,415 3,381,152 49,711 3,448,278 Depreciation As at 1 January 2022 Charge for the year Disposals Exchange differences As at 31 December 2022 As at 1 January 2023 Charge for the year Disposals Exchange differences As at 31 December 2023 45,381 8,435 - - 1,432,010 350,402 (87,825) 85,839 53,940 10,877 - 349 1,531,331 369,714 (87,825) 86,188 53,816 1,780,426 65,166 1,899,408 53,816 5,437 1,780,426 333,319 65,166 7,504 1,899,408 346,260 (43,819) (96,367) (43,386) (183,572) - (39,144) - (39,144) 15,434 1,978,234 29,284 2,022,952 Net book value as at 31 December 2022 7,418 1,691,594 19,325 1,718,337 Net book value as at 31 December 2023 1,981 1,402,918 20,427 1,425,326 Depreciation expense of £346,260 (31 December 2022: £369,714) for the Group has been charged in administration expenses. 40 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 Company Cost As at 1 January 2022 Additions Disposals As at 31 December 2022 As at 1 January 2023 Additions Disposals As at 31 December 2023 Depreciation As at 1 January 2022 Charge for the year Disposals As at 31 December 2022 As at 1 January 2023 Charge for the year Disposals As at 31 December 2023 Net book value as at 31 December 2022 Net book value as at 31 December 2023 Software Office equipment £ £ 53,817 7,417 - 61,234 61,234 - (43,819) 17,415 45,381 8,435 - 53,816 53,816 5,437 (43,819) 15,434 7,418 1,981 68,872 7,474 - 76,346 76,346 13,425 (45,539) 44,232 46,657 10,877 - 57,534 57,534 9,964 (43,386) 24,112 18,812 20,120 Total £ 122,689 14,891 - 137,580 137,580 13,425 (89,358) 61,647 92,038 19,312 - 111,350 111,350 15,401 (87,205) 39,546 26,230 22,101 Depreciation expense of £15,401 (31 December 2022: £19,312) for the Company has been charged in administration expenses. 41 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 7. Intangible assets Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are measured at cost. Once the pre-production phase has been entered into, the exploration and evaluation assets will cease to be capitalised and commence amortisation. Group 31 December 31 December Exploration & Evaluation Assets - Cost and Net Book Value Cost As at 1 January Transfer of licence to JV Additions Disposal of Finnaust Mining Northern Oy (note 9) Exchange differences As at year end Provision for impairment As at 1 January Disposal of Finnaust Mining Northern Oy (note 9) Impairments As at year end Net book value 2023 £ 40,723,713 - 3,582,956 (2,877,609) (660,494) 40,768,566 8,873,585 (2,877,609) 3,535,254 9,531,230 31,237,336 2022 £ 36,796,174 (2,085,147) 4,744,690 - 1,267,996 40,723,713 8,873,585 - - 8,873,585 31,850,128 In the year ended 31 December 2018, the Directors concluded that an impairment charge of £2,877,609 was prudent in relation to the Finnaust Mining Northern Oy exploration assets. The impairment charge was recognised as being the difference between the fair value of the intangibles and the carrying amount. On 31 July 2023, the Company sold the entirety of its shareholding in Finnaust Mining Northern Oy to Metals One Plc and following the disposal, the impairment charge was reversed (note 9). The Dundas project in Greenland has a current JORC compliant mineral resource of 29.7 million tonnes at 1.99% ilmenite (in-situ). Exploration projects in Finland and the Disko project in Greenland are at an early stage of development and there are no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment: The Group’s right to explore in an area has expired, or will expire in the near future without renewal; • • No further exploration or evaluation is planned or budgeted for; • A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or • Sufficient data exists to indicate that the book value will not be fully recovered from future development and production. Further, following an in-depth assessment of deficiencies in the 2022 work programs at Dundas, alongside consultations with various independent consultants, the Company has determined that there is sufficient evidence to warrant the reinstatement of the 2019 Mineral Resource Estimate (MRE) at the Dundas Ilmenite Project. After joining the Company in late December 2023, significant concerns were raised by the new management team regarding the accuracy and representativeness of the 2023 MRE. This decision to reinstate the 2019 MRE reflects the Company's well-informed position that the downgrade in the 2023 MRE was the result of multiple factors, including the use of unsuitable drilling methods. Post year end, the Company is now working on the preparation of the 2024 and 2025 work programmes designed to progress both government engagement and project development. Following their assessment, the Directors concluded that an impairment charge of £3,535,254 was prudent in relation to the Disko exploration assets, Thunderstone and Kangerluarsuk, for the year ended 31 December 2023. The impairment charge 42 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 was recognised as being the difference between the fair value of the intangibles and their carrying amounts. Disko will continue to focus on the joint venture with Kobold Metals. Following their assessment, the Directors concluded that no further impairment charge was required as at 31 December 2023. 8. Fair Value Through Profit And Loss Equity Investments During the year ended 31 December 2023, Bluejay received shares 62,500,000 new Ordinary Shares in Metals One Plc following its admission to AIM. 1 January 2023 Additions at cost Change in fair value recognised in profit and loss 31 December 2023 Fair value through profit and loss equity investments include the following: Quoted: Equity securities – United Kingdom £ - 3,125,000 (1,468,750) 1,656,250 31 December 2023 £ 1,656,250 1,656,250 The fair value of quoted securities is based on published market prices of £0.0265 as at 31 December 2023. All assets and liabilities for which fair value is measured are categorised within the fair value hierarchy. The fair value hierarchy prioritises the inputs to valuation techniques used to measure fair value. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments and other assets and liabilities for which the fair value was used: • • • level 1: quoted prices in active markets for identical assets or liabilities; level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). The following tables set forth, by level, equity investments measured at fair value on a recurring basis as 31 December 2023: Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) 31 December 2023 £ Significant Other Observable Inputs (Level 2) 31 December 2023 £ Significant Unobservable Inputs (Level 3) 31 December 2023 £ 1,656,250 - - Description Equity securities: 31 December 2023 43 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 9. Investments in subsidiary undertakings Shares in Group Undertakings At beginning of period At end of period Loans to Group undertakings Total Company 31 December 2023 £ 31 December 2022 £ 558,342 558,342 42,000,536 42,558,878 558,342 558,342 42,458,182 43,016,524 Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision. Subsidiaries Name of subsidiary Registered office address Centurion Mining Limited 6 Heddon Street, London, W1B 4BT Centurion Universal Limited 6 Heddon Street, London, W1B 4BT Finland Investments Limited 6 Heddon Street, London, W1B 4BT Country of incorporation and place of business Proportion of ordinary shares held by parent (%) Proportion of ordinary shares held by the Group (%) Nature of business United Kingdom United Kingdom United Kingdom 100% 100% Dormant 100% 100% Holding 100% 100% Holding FinnAust Mining Finland Oy (1) Kummunkatu 23, FI-83500 Outokumpu, Finland Finland Nil 100% Exploration Disko Exploration Limited 6 Heddon Street, London, W1B 4BT United Kingdom 100% 100% Exploration Dundas Titanium A/S c/o Nuna Advokater ApS, Qullilerfik 2, 6, Postboks 59, Nuuk 3900, Greenland Greenland Nil 100% Exploration (1) On 31 July 2023, the Company sold the entirety of its shareholding in Finnaust Mining Northern Oy to Metals One PLC (“Metals One”). The consideration for this transaction is £150,000 in cash, due no later than 18 months and 1 day subsequent to the date of completion, the allotment of 62,500,000 new ordinary shares in Metals One for a total value of £3,125,000 with a further allotment of new ordinary shares, equating to £1,000,000 at any time following completion and a warrant over 7,500,000 new ordinary shares at an exercise price of £0.09 exercisable for a period of 5 years from admission of Metals One to the AIM market. All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held. 44 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 10. Investments in Joint Venture During the 2021 financial year, Disko Exploration Ltd entered into a joint venture agreement with Kobold Metals to drill in Greenland for critical materials used in electric vehicles. On 1 February 2022, the joint venture company, Nikkeli Greenland AS (“Nikelli”), was incorporated and the specific licence’s were transferred to Nikkeli. Proportion of ownership interest held Name Registered office address Country of incorporation and place of business 31 December 2023 31 December 2022 Nikkeli Greenland A/S c/o Nuna Advokater ApS, Qullilerfik 2, 6, Postboks 59, Nuuk 3900, Greenland Greenland 49% 49% At 1 January Interest in joint venture Share of loss in joint venture Increase in share of net asset As at 31 December Summarised financial information Opening net assets Additions in Exploration assets Additions in PPE Loss for the period Other comprehensive income Foreign exchange differences Closing net assets Interest in joint venture at 49% Carrying value Revenues (Loss) after tax from continuing operations Current assets Non-current assets Current liabilities 45 2023 £ 4,470,787 - (13,779) 283,697 4,740,705 2023 £ 9,124,054 - 552,991 (13,779) - 11,643 2022 £ - 2,085,147 (71,956) 2,457,596 4,470,787 2022 £ - 2,085,147 7,110,863 (71,956) - - 9,674,909 9,124,054 4,740,705 4,470,787 4,740,705 4,470,787 2023 £ - (28,121) (28,121) 2023 £ 76,516 9,598,393 - 2022 £ - (146,850) (146,850) 2022 £ 366,587 8,928,292 (170,825) 9,674,909 9,124,054 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 The financial statements of the JV are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company (refer to note 2.3.b). Increase in share of net assets is a non-cash adjustment to increase the Company’s ownership in the Joint Venture to 49% from additional contributions by the JV Partner (refer to note 2.8). Nikkeli Greenland A/S had no contingent liabilities or commitments as at 31 December 2023. 11. Trade and other receivables Current Receivable from related party Amounts owed by Group undertakings Prepayments VAT receivable Other receivables (note 9) Total Group Company 31 December 31 December 31 December 31 December 2023 £ 2022 £ 39,107 873,666 2023 2022 £ - £ - - 65,761 19,281 1,136,088 - 373,847 189,988 50,933 31,109 39,421 58,522 - 1,100,000 49,214 10,702 5,159 1,260,237 995,129 1,532,369 255,063 Other receivables in both the Group and Company includes £1,100,000 of consideration payable by Metals One Plc following the disposal, by the Company, of Finnaust Mining Finland Oy during the year ended 31 December 2023 (note 9). The fair value of all receivables is the same as their carrying values stated above. At 31 December 2023 all trade and other receivables were fully performing. No ageing analysis is considered necessary as the Group has no significant trade receivable receivables which would require such an analysis to be disclosed under the requirements of IFRS 7. None of the amounts above are overdue or impaired. The carrying amounts of the Group and Company’s trade and other receivables are denominated in the following currencies: UK Pounds Euros Danish Krone Group Company 31 December 31 December 31 December 31 December 2023 £ 2022 £ 2023 £ 2022 £ 1,182,628 821,767 1,532,369 255,063 56,100 21,509 25,353 148,009 - - - - 1,260,237 995,129 1,532,369 255,063 The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security. 12. Cash and cash equivalents Group Company 31 December 31 December 31 December 31 December 2023 £ 2022 £ 2023 £ 2022 £ Cash at bank and in hand 200,700 1,996,957 17,550 1,366,568 46 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 All the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland and Greenland entities cash at bank is held with institutions whose credit rating is unknown. The carrying amounts of the Group and Company’s cash and cash equivalents are denominated in the following currencies: UK Pounds Euros Danish Krone US Dollar 13. Deferred tax An analysis of deferred tax liabilities is set out below. Group Company 31 December 31 December 31 December 31 December 2023 £ 2022 £ 2023 £ 2022 £ 92,906 1,835,746 17,550 1,366,568 53,304 35,197 36,625 126,014 17,865 - - - - - - - 200,700 1,996,957 17,550 1,366,568 Group 2023 £ Company 2022 £ 2023 £ 2022 £ Deferred tax liabilities - Deferred tax liability after more than 12 months 496,045 496,045 Deferred tax liabilities 496,045 496,045 - - - - During the year ended 30 June 2016, a deferred tax liability of £373,343 arose as a result of a fair value adjustment on the assets acquired and liabilities assumed upon the acquisition of 60.37% of the share capital of Bluejay Mining Limited on 8 March 2016. During the year ended 31 December 2017, a deferred tax liability of £122,702 arose as a result of a fair value adjustment on the assets acquired and liabilities assumed upon the acquisition of Disko Exploration Limited. The Group has additional capital losses of approximately £8,550,740 (2022: £8,661,772) and other losses of approximately £7,425,016 (2022: £6,955,765) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset. 14. Trade and other payables Trade payables Accrued expenses Other creditors Group Company 31 December 31 December 31 December 31 December 2023 £ 250,040 268,050 129,792 2022 £ 141,615 256,439 126,232 2023 £ 344,120 164,092 13,073 2022 £ 172,378 98,361 10,850 647,882 524,286 521,285 281,589 Trade payables include amounts due of £90,048 (31 December 2022: £397,302) in relation to exploration and evaluation activities. 47 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 The carrying amounts of the Group and Company’s trade and other payables are denominated in the following currencies: Group Company 31 December 31 December 31 December 31 December 2023 £ 2022 £ 2023 £ 2022 £ 338,529 63,649 363,765 120,065 123,161 132,952 3,082 27,461 186,192 327,685 154,438 134,063 647,882 524,286 521,285 281,589 UK Pounds Euros Danish Krone 15. Share capital and premium Group and Company Number of shares Share capital Ordinary shares Deferred shares Deferred A shares Total 31 December 2023 31 December 2022 31 December 2023 31 December 2022 1,195,885,079 1,049,714,747 558,104,193 558,104,193 119,588 558,104 104,971 558,104 68,289,656,190 68,289,656,190 6,828,966 6,828,966 70,043,645,462 69,897,475,130 7,506,658 7,492,041 Issued at 0.01 pence per share Number of Ordinary shares Share capital Share premium £ £ Total £ As at 1 January 2022 972,857,613 97,285 55,705,882 55,803,167 Issue of new shares – 23 March 2022 (1) 76,857,134 7,686 5,198,113 5,205,799 As at 31 December 2022 As at 1 January 2023 1,049,714,747 104,971 60,903,995 61,008,966 1,049,714,747 104,971 60,903,995 61,008,966 Issue of new shares – 20 February 2023 5,800,000 Issue of new shares – 20 February 2023 3,798,911 580 380 - 580 179,620 180,000 Issue of new shares – 3 July 2023 (2) 74,285,707 7,429 1,234,298 1,241,727 Issue of new shares – 3 July 2023 571,429 Issue of new shares – 4 August 2023 1,714,285 57 171 9,943 10,000 29,829 30,000 Issue of new shares – 1 September 2023 (3) 60,000,000 6,000 558,000 564,000 As at 31 December 2023 1,195,885,079 119,588 62,915,685 63,035,273 (1) Includes issue costs of £174,200 (2) Includes issue costs of £58,272 (3) Includes issue costs of £36,000 2022 On 23 March 2022, the Company issued and allotted 76,857,134 new Ordinary Shares at a price of 7 pence per share. 2023 On 20 February 2023, the Company issued and allotted 5,800,000 new Ordinary Shares at nominal value and 3,798,911 new Ordinary Shares at a price of 5 pence per share. 48 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 On 3 July 2023, the Company issued and allotted 74,285,707 new Ordinary Shares at a price of 1.75 pence per share and 571,429 new Ordinary Shares at a price of 1.75 pence per share in lieu of fees. On 4 August 2023, the Company issued and allotted 1,714,285 new Ordinary Shares at a price of 1.75 pence per share. On 1 September 2023, the Company issued and allotted 60,000,000 new Ordinary Shares at a price of 1 pence per share. Deferred Shares (nominal value of 0.1 pence per share) As at 1 January 2022 As at 31 December 2022 As at 1 January 2023 As at 31 December 2023 Deferred A Shares (nominal value of 0.1 pence per share) As at 1 January 2022 As at 31 December 2022 As at 1 January 2023 As at 31 December 2023 16. Other reserves Share capital £ 558,104 558,104 558,104 558,104 Share capital £ 6,828,966 6,828,966 6,828,966 6,828,966 Number of Deferred shares 558,104,193 558,104,193 558,104,193 558,104,193 Number of Deferred A shares 68,289,656,190 68,289,656,190 68,289,656,190 68,289,656,190 Group Foreign currency translation reserve Reverse acquisition reserve Redemption reserve £ £ £ Merger reserve £ Share option reserve £ Total £ At 1 January 2022 166,000 (434,596) (8,071,001) 364,630 761,693 (7,213,274) Currency translation differences Expired Options Issued Options - - - 1,493,125 - - - - - - - - - 1,493,125 (33,771) (33,771) 118,751 118,751 At 31 December 2022 166,000 1,058,529 (8,071,001) 364,630 846,673 (5,635,169) At 1 January 2023 166,000 1,058,529 (8,071,001) 364,630 846,673 (5,635,169) Currency translation differences Forfeited options Expired Options - - - (731,885) - - - - - - - - - (119,428) (731,885) (119,428) (42,356) (42,356) At 31 December 2023 166,000 326,644 (8,071,001) 364,630 684,889 (6,528,838) 49 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 17. Financial Instruments by Category Group 31 December 2023 31 December 2022 Assets per Statement of Financial Performance Trade and other receivables (excluding prepayments) Amortised cost FVTP Total Amortised cost FVTP Total £ £ £ £ £ £ 194,476 1,000,000 1,194,476 944,196 - 944,196 Cash and cash equivalents 200,700 - 200,700 1,996,957 - 1,996,957 395,176 1,000,000 1,395,176 2,941,153 - 2,941,153 Group 31 December 2023 31 December 2022 Liabilities per Statement of Financial Performance Trade and other payables (excluding non-financial liabilities) Amortised cost Total Amortised cost £ £ £ Total £ 647,882 647,882 524,286 524,286 647,882 647,882 524,286 524,286 Company 31 December 2023 31 December 2022 Amortised cost FVTP Total Amortised cost FVTP Total Assets per Statement of Financial Performance Trade and other receivables (excluding prepayments) £ £ £ £ 473,847 1,000,000 1,473,847 205,849 £ - £ 205,849 Cash and cash equivalents 17,550 - 17,550 1,366,568 - 1,366,568 491,397 1,000,000 1,491,397 1,572,417 - 1,572,417 Company 31 December 2023 31 December 2022 Liabilities per Statement of Financial Performance Trade and other payables (excluding non-financial liabilities) Amortised cost Total Amortised cost Total £ £ £ £ 521,285 521,285 281,591 281,591 521,285 521,285 281,591 281,591 50 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 18. Share based payments The Company has established a share option scheme for Directors, employees and consultants to the Group. Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise prices: Grant Date 23 July 2019 23 July 2019 23 July 2019 10 July 2020 10 July 2020 15 February 2021 15 February 2021 15 February 2021 24 October 2022 24 October 2022 24 October 2022 24 October 2022 Expiry Date 23 July 2023 23 July 2023 23 July 2023 30 July 2025 30 July 2025 15 February 2025 15 February 2025 15 February 2025 1 October 2023 1 October 2024 1 October 2025 1 October 2026 Exercise price in £ per share 0.10 0.15 0.20 0.10 0.15 0.15 0.20 0.25 0.10 0.15 0.20 0.25 Options & Warrants 31 December 2023 31 December 2022 - - - 5,200,000 5,200,000 5,600,000 4,400,000 4,400,000 1,100,000 1,100,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 - - - - 1,500,000 3,000,000 4,500,000 8,000,000 38,500,000 71,500,000 The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash. The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below: Granted on: Life (years) Share price (pence per share) Risk free rate Expected volatility Expected dividend yield Marketability discount Total fair value (£000) Granted on: Life (years) Share price (pence per share) Risk free rate Expected volatility Expected dividend yield Marketability discount Total fair value (£000) 2019 Options 2019 Options 2019 Options 2020 Options 23/7/2019 23/7/2019 23/7/2019 10/7/2020 4 years 7.45p 0.5% 21.64% - 20% 31 4 years 7.45p 0.5% 21.64% - 20% 5 4 years 7.45p 0.5% 5 years 6.16p 0.5% 21.64% 30.24% - 20% 1 - 20% 31 2020 Options 2021 Options 2021 Options 2021 Options 10/7/2020 15/2/2021 15/2/2021 15/2/2021 5 years 6.16p 0.5% 30.24% - 20% 5 4 years 9.20p 0.5% 61.47% - 20% 270 4 years 9.20p 0.5% 30.24% - 20% 173 4 years 9.20p 0.5% 61.47% - 20% 213 51 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 Granted on: Life (years) Share price (pence per share) Risk free rate Expected volatility Expected dividend yield Marketability discount Total fair value (£000) 2022 Options 2022 Options 2022 Options 2022 Options 24/10/2022 24/10/2022 24/10/2022 24/10/2022 1 year 5.3p 3.26% 69.64% - 20% 6,178 2 years 5.3p 3.26% 69.64% - 20% 16,043 4 years 5.3p 3.26% 69.64% - 20% 3 years 5.3p 3.26% 69.64% - 20% 66,107 30,423 The expected volatility of the options is based on historical volatility for the six months prior to the date of granting. The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life. A reconciliation of options and warrants granted over the year to 31 December 2023 is shown below: 2023 2022 Outstanding at beginning of period 71,500,000 Expired Forfeited Granted Weighted average exercise price (£) Number (17,500,000) (15,500,000) 0.1888 0.1469 0.2161 Weighted average exercise price (£) 0.1830 0.1650 0.1786 Number 57,275,000 (1,025,000) (1,750,000) - - 17,000,000 0.2058 Outstanding as at period end Exercisable at period end 38,500,000 38,500,000 0.1969 0.1969 71,500,000 71,500,000 0.1888 0.1888 2023 2022 Range of exercise prices (£) Weighted average exercise price (£) Number of shares Weighted average remaining life expected (years) Weighted average remaining life contracted (years) Weighted average exercise price (£) Number of shares Weighted average remaining life expected (years) Weighted average remaining life contracted (years) 0.05 – 2.00 0.1969 38,500,00 1.1943 1.1943 0.1888 71,500,000 1.9887 1.9887 During the period there was a credit of £119,428 (2022: charge £118,751) in respect of share options. 52 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 19. Expenses by nature Cost of Sales Exploitation licence fees Other Total cost of sales Administrative expenses Employee expenses Establishment expenses Travel & subsistence Professional & consultancy fees IT & Software Insurance Depreciation Share option expense Share option credit Other expenses Group Year ended 31 December 2023 £ Year ended 31 December 2022 £ 161,642 51,881 213,523 624,214 5,716 629,930 421,869 495,425 39,625 21,756 765,716 24,644 74,962 349,792 - (119,428) 50,337 70,184 50,182 573,035 25,671 101,223 369,714 118,751 - 82,086 Total administrative expenses 1,629,273 1,886,271 Services provided by the Company’s auditor and its associates During the year, the Group (including overseas subsidiaries) obtained the following services from the Company’s auditors and its associates: Fees payable to the Company’s auditor and its associates for the audit of the Parent Company and Consolidated Financial Statements Fees payable to the Company’s auditor for other services Group Year ended 31 December Year ended 31 December 2023 £ 2022 £ 72,500 67,751 670 2,000 20. Employee benefit expense Staff costs (excluding Directors) Salaries and wages Social security costs Retirement benefit costs Other employment costs Group Company Year ended 31 December 2023 Year ended 31 December 2022 Year ended 31 December 2023 Year ended 31 December 2022 £ £ £ £ 210,446 40,447 3,640 16,220 186,994 38,191 11,324 75,693 297,520 38,905 3,640 468 128,618 34,753 11,324 - 270,753 312,202 340,533 174,695 53 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 The average monthly number of employees for the Group during the year was 14 (year ended 31 December 2022: 13) and the average monthly number of employees for the Company was 7 (year ended 31 December 2022: 6). Of the above Group staff costs, £252,313 (year ended 31 December 2022: £105,459) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year. 21. Directors' remuneration Executive Directors Robert Edwards 1 Bo Møller Stensgaard 1 Eric Sondergaard 2 Non-executive Directors Peter Waugh 1 Michael Hutchinson Roderick McIllree 2 Harry Ansell 2 Troy Whittaker 2 Year ended 31 December 2023 Short-term benefits £ 60,185 122,733 - 10,000 12,500 - - 205,418 Accruals £ 57,669 - 1,107 14,000 - 553 1,383 553 75,265 Post- employment benefits £ 2,658 - - 222 - - - 2,880 Share based payments £ - - - - - - - - For the year ending 31 December 2023, a further £2,118 was paid to Bo Stensgaard during his non-directorship employment in the year. (1) Resigned on 19 December 2023 (2) Appointed on 19 December 2023 Executive Directors Roderick McIllree 3 Robert Edwards 4 Bo Møller Stensgaard Eric Sondergaard 5 Non-executive Directors Johannus Hansen 6 Peter Waugh Michael Hutchinson Year ended 31 December 2022 Short-term benefits Post- employment benefits Share based payments £ £ £ 200,212 19,067 198,000 200,466 24,167 24,000 40,000 9,250 587 - - - 533 - - 118,751 - - - - - Total £ 120,512 122,733 1,107 24,222 12,500 553 1,383 553 283,563 Total £ 209,462 138,405 198,000 200,466 24,167 24,533 40,000 For the year ending 31 December 2022, a further £13,408 was paid to Eric Sondergaard during his non-directorship employment in the year. 705,912 10,370 118,751 835,033 (3) Resigned on 22 June 2022 (4) Appointed on 24 October 2022 (5) Appointed 27 January 2022; resigned 2 November 2022 (6) Resigned 26 October 2022 54 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 Of the above Group directors’ remuneration, £129,567 (31 December 2022: £522,689) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year. The above figures do not include employer portion of NIC. Directors NIC for the year ending 31 December 2023 was £9,292 (31 December 2022: £28,747). These have been included in Note 20. Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have been disclosed in Note 28. The remuneration of Directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. 22. Other gain/(losses) Gain/(loss) on disposal of property, plant and equipment Group Year ended Year ended 31 December 31 December 2023 £ 2022 £ 20,291 (22,739) Gain on disposal of Finnaust Mining Northern Oy (Note 9) 4,296,421 Valuation (losses) on fair value through profit and loss equity investments (Note 8) (1,468,750) - - Other gains/(losses) Other gain/(losses) 23. Finance income Interest income from cash and cash equivalents Finance Income 24. Other Income Income from related parties Other income Other Income 114,807 (89,794) 2,962,769 (112,533) Group Year ended Year ended 31 December 31 December 2023 £ 7,039 7,039 2022 £ 2,653 2,653 Group Year ended Year ended 31 December 31 December 2023 £ 2022 £ 281,247 1,641,536 39,678 159,903 320,925 1,801,439 Nikkeli Greenland A/S, joint venture company, was invoiced £224,141 during the year ended 31 December 2023 (31 December 2022: £1,641,536) for management services provided 55 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 25. Income tax expense No charge to taxation arises due to the losses incurred. The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the losses of the consolidated entities as follows: (Loss)/profit before tax Tax at the applicable rate of 25.08% (2022: 16.75%) Effects of: Expenditure not deductible for tax purposes Depreciation in excess of/(less than) capital allowances Net tax effect of losses carried forward Tax (charge)/refund Group Year ended 31 December 2023 Year ended 31 December 2022 £ £ (1,870,717) 1,664,541 (469,251) 278,871 88,198 111,032 331,364 61,343 63,453 42,261 (384,585) - The R&D tax credit is based on specific projects undertaken and claims submitted to HMRC. The reclaim for 2022, totalling of £61,343, was recognised and paid during the year ended 31 December 2023. Research and development tax credits are recognised upon receipt of payment from HMRC. The weighted average applicable tax rate of 25.08% (2022: 16.75%) used is a combination of the 25% standard rate of corporation tax in the UK, 20% Finnish corporation tax and 25% Greenlandic corporation tax. The Group has a potential deferred income tax asset of approximately £1,231,872 (2022: £900,508) due to tax losses available to carry forward against future taxable profits. The Company has tax losses of approximately £7,425,016 (2022: £6,955,765) available to carry forward against future taxable profits. No deferred tax asset has been recognised on accumulated tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset. On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or after 31 December 2023. However, this legislation does not apply to the Group in the financial year beginning 1 January 2024 as its consolidated revenue does not meet the legislation requirements of being greater than €750m in two of the four preceding years, the group will continue to monitor the legislation in future years. 26. Earnings per share Group The calculation of the total basic earnings per share of (0.16) pence (31 December 2022: 0.16 pence) is based on the loss attributable to equity holders of the parent company of £1,809,374 (31 December 2022: profit £1,664,541) and on the weighted average number of ordinary shares of 1,117,083,397 (31 December 2022: 1,032,448,213) in issue during the year. In accordance with IAS 33, basic and diluted earnings per share are identical for the Group as the effect of the exercise of share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 18. 27. Commitments License commitments As at 31 December 2023, Bluejay owned 7 mineral exploration licenses and one exploitation licence in Greenland. Licence 2015/08, 2020/114 and 2021/08 is a part of the Dundas project and licences 2011/31, 2020/03, 2020/06, and 2020/22 are 56 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 part of the Disko projects, Thunderstone and Kangerluarsuk, in Greenland. These licences include commitments to pay annual licence fees and minimum spend requirements. As at 31 December 2023 these are as follows: Group Not later than one year Later than one year and no later than five years Total 28. Related party transactions Loans to/(from) Group undertakings Group Minimum spend requirement £ License fees £ Total £ 83,642 2,180,278 2,263,920 234,706 13,102,713 13,337,419 318,348 15,282,991 15,601,339 Amounts receivable as a result of loans granted to/(from) subsidiary undertakings are as follows: Finland Investments Ltd FinnAust Mining Finland Oy (Note 9) Centurion Mining Limited Dundas Titanium A/S Disko Exploration Limited At 31 December (Note 9) Company 31 December 31 December 2023 £ 2022 £ (4,390,218) - 9,279,549 8,278,416 345 345 32,139,516 29,470,669 4,971,344 4,708,752 42,000,536 42,458,182 Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and foreign exchange loss of £941,103 (31 December 2022: £2,049,375), given that no loans were repaid during the year. These amounts are unsecured and repayable in Euros and Danish Krone on demand from the Company. All intra Group transactions are eliminated on consolidation. Other transactions The Group defines its key management personnel as the Directors of the Company as disclosed in the Directors’ Report. PMW Consultancy Services, operated by Peter Waugh as a sole trader, was paid a fee of £8,000 for the year ended 31 December 2023 (31 December 2022: £42,000) for consulting services to the Company. There was a balance of £nil owing at year end (31 December 2022: £5,000). Egholm Consult, operated by Johannus Hansen, was paid a fee of £nil for the year ended 31 December 2023 (31 December 2022: £10,500) for consulting services to the Company. There was a balance of £nil owing at year end (31 December 2022: £nil). Nikkeli Greenland A/S, joint venture company, was invoiced £224,141 during the year ended 31 December 2023 (31 December 2022: £1,641,536) for management services provided. There was a balance of £nil receivable at year end (31 December 2022: £873,666). Nikelli Greenland A/S show this balance as part of their contributed capital. 57 BLUEJAY MINING PLC NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2023 29. Ultimate controlling party The Directors believe there is no ultimate controlling party. 30. Events after the reporting date On 30 January 2024, the Company issued 150,145,715 Ordinary Shares at a price of 0.4 pence per share. On 6 February 2024, the Company issued 149,854,285 Ordinary Shares at a price of 0.4 pence per share and 10,178,810 Ordinary Shares at a price of 0.71 pence per share in lieu of Directors Settlement fees. On 20 June 2024, the Company announced it had reached agreement with the major shareholder of White Flame Energy Ltd (“White Flame”) to purchase the Company in two tranches. Subject to receiving the required acceptances from the balance of the White Flame shareholders, the Company will initially acquire up to 51% of the issued share capital of White Flame and will be granted a 3 year option to acquire the remaining 49% on the same terms. 58
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