Registration number 07220790 (England and Wales)
KODAL MINERALS PLC
GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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CONTENTS
Company Information
Strategic Report
Chairman’s Statement
Operational Review
Finance Review
Report of the Directors
Corporate Governance Report
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated and Parent Company Statements of Financial Position
Consolidated Statement of Changes in Equity
Parent Company Statement of Changes in Equity
Consolidated and Parent Company Statements of Cash Flows
Principal Accounting Policies
Notes to the Financial Statements
Page
2
3
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4
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21
25
33
39
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51
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COMPANY INFORMATION
DIRECTORS
SECRETARY
Bernard Aylward
Charles Joseland
Robert Wooldridge
Qingtao Zeng
Weaver Financial Limited
Stapeley House
London Road
Nantwich CW5 7JW
COUNTRY OF INCORPORATION
England and Wales
REGISTERED NUMBER
07220790
REGISTERED OFFICE
NOMINATED ADVISER
SOLICITORS
FINANCIAL ADVISER & BROKER
AUDITOR
SHARE REGISTRARS
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
Allenby Capital Limited
5 St Helen’s Place
London EC3A 6AB
Fieldfisher LLP
Riverbank House
2 Swan Lane
London EC4R 3TT
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
RSM UK Audit LLP
25 Farringdon Street
London EC4A 4AB
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surrey GU9 7DR
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STRATEGIC REPORT
for the year ended 31 March 2021 – Chairman’s Statement
Chairman’s Statement
I am pleased to present the Annual Report of Kodal Minerals plc (“Kodal” or the “Company” and together with its subsidiaries, the
“Group”) for the year ended 31 March 2021.
This has been an extraordinary and, at times, difficult year with the worldwide impact of the Covid-19 pandemic as well as turbulence
in financial markets and other operational pressures. Our Company was not immune from such challenges, however I am pleased
to report that all Kodal staff, consultants and employees remain safe and healthy and the Company continues to prioritise the welfare
and security of its personnel. We have also closely monitored the political situation in Mali and, following a period of political upheaval,
we are pleased to note the commitment of the transitional government to undertaking new elections in February 2022.
Our focus for this coming year will be on the development of our Bougouni Lithium project in Mali. Our mining licence application
is passing through its final approvals and we expect to receive our mining licence in the near future, which is the final approval needed
for the project to be fully permitted for development. The Company will continue its development plans including the further
optimisation and design of the proposed open pit mines, the refinement of the processing flowsheet to include updated metallurgical
testwork and the potential scheduling of development.
In 2021 we have seen a resurgence of interest in the lithium sector driven by the focus of governments, industry and consumers on
the future of energy usage and storage and on the implementation of infrastructure projects. The demand for lithium continues to
exceed previous forecasts as the utilisation of lithium-ion batteries increases in the green energy solutions both on a large
infrastructure scale as well as on the personal level through vehicles and personal devices. Kodal’s advanced project is well positioned
to take advantage of this supply shortfall and the strongly rising prices for the lithium spodumene concentrate will underpin our
efforts to secure financing for the Bougouni project development.
Kodal has also expanded its portfolio of gold exploration projects during the year with the acquisition of the Fatou gold project
located in southern Mali. This is an advanced exploration project where previous work has outlined the potential for the Company
to delineate a mineral resource with targeted drilling which is scheduled to take place later this year. Kodal also regained management
of and retained a 100% interest in the Nielle gold concession in northern Côte d’Ivoire following the termination of the joint venture
with Resolute Mining Limited (“Resolute”). Previous exploration work had identified a new zone of gold mineralisation and our
recently completed drilling campaign has returned very encouraging high-grade gold mineralisation that requires further follow-up.
Kodal has developed and is implementing an exploration programme across its gold projects in Mali and Côte d’Ivoire with the aim
of rapidly defining new mineral resources that will underpin the value of these highly prospective assets.
During the year, Kodal has successfully completed a number of fundraisings. These included a £0.5 million equity financing facility and
a $1.5 million convertible loan note both of which have been fully converted, with no further amounts outstanding to the investors.
In March 2021, we successfully completed an equity fundraising of £3.5 million (before expenses) that has resulted in Kodal moving
into the new year in a strong financial position.
This coming year offers great opportunity for Kodal with the focus on our Bougouni Lithium project in a very positive market as
well as our exciting gold exploration and development projects. I look forward to reporting to you on our progress during this year.
Robert Wooldridge
Non-executive Chairman
25 August 2021
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Operational Review
Operational Review
Kodal’s operational focus during this year has been on progressing the mining licence application for the Bougouni Lithium project
that was initially lodged in January 2020. The approval of this application has been delayed due to the impact of the Covid-19
pandemic, however we have been very pleased with the progress of the application in the first half of 2021 with the final approval
meetings being held in May 2021. We are confident that the process of obtaining the final permit is on-track and no further information
or payment is required from the Company.
In addition to advancing the mining licence application, we have continued to review our proposed mining and processing operation
for the Bougouni Lithium project. The focus of this work has been on defining improvements in the processing flow sheet to lead to
an expected increase in the metallurgical recovery of the lithium bearing spodumene minerals. This has a significant impact on the
profitability of the proposed operation and this review work continues to indicate a very robust project.
Kodal has also taken the opportunity to expand its gold portfolio through the acquisition of the Fatou project in southern Mali and
we have taken back management of the Nielle and Tiebiessou concessions in Côte d’Ivoire following the termination of the Joint
Venture with Resolute. Details of the gold projects and proposed exploration are summarised in the sections below.
Concession and Exploration Licence Review
Kodal maintains extensive tenure in Mali and Côte d’Ivoire. Kodal’s management ensures that all government compliance, reporting
and fees are kept up to date and all concessions are retained in good standing.
Kodal’s Bougouni and Bougouni West lithium exploration projects are located in southern Mali, with the rights and concessions held
by subsidiary company Future Minerals SARL (“Future Minerals”), a Malian registered company owned 100% by the Group. During
the year, the Company agreed modifications to the Foulaboula, Sogola Nord and Fariedele concessions with the Direction Nationale
de la Geologie et des Mines (“DNGM”) of Mali in preparation for the granting of the mining licence. The new mining licence will be
issued to replace the Foulaboula concession and the changes were agreed to ensure all areas of mineralisation and the proposed
mining infrastructure and processing plant for Bougouni are included within the one licence area.
Kodal acquired the Fatou project in December 2020 consisting of the Fininko and Foutiere concessions located in southern Mali.
These concessions are prospective for gold mineralisation, and details of the concessions are included in the table below.
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Table of Concessions – All Kodal concessions in West Africa
Tenements Country
Dogobala
Mali
Kodal Economic
Ownership Project Validity
90% economic interest via direct ownership
following completion of option payments
Bougouni Lithium
Project
Foulaboula
Mali
90% economic interest via direct ownership
following completion of option payments
Bougouni Lithium
Project
Sogola Nord
Mali
90% economic interest. Concession
replaces part Madina concession, which had
reached time limit
Bougouni Lithium
Project
Fariedele
Mali
90% economic interest. Concession
replaces part Madina concession, which had
reached time limit
Bougouni Lithium
Project
Mafele Ouest
Mali
Held through Option to Purchase giving
right to acquire 80% economic interest
Bougouni West
Lithium
Nkemene Ouest
Mali
Held through Option to Purchase giving
right to acquire 80% economic interest
Bougouni West
Lithium
Boundiali
Côte d’Ivoire
100% direct ownership (under application). Gold Exploration
Korhogo
Côte d’Ivoire
100% direct ownership
Gold Exploration
Licence valid and in good standing. Arrêté
No. 2018-1115 granted on13 April 2018 for
initial 3 year period, with option for 2 extensions of
2 years validity each.
Application for first renewal has been lodged and
all fees paid.
Licence valid and in good standing. Arrêté
No. 2018-1116 granted on 13 April 2018 for initial
3 year period, with option for 2 extensions of
2 years validity each.
Licence subject to modification during 2020 to
prepare for Mining Licence application. Granting of
Mining Exploitation permit in progress.
Licence valid and in good standing. Arrêté number
2020-0072 granted 22 January 2020 for an initial
3 year period, with option for 2 extensions of
2 years validity each.
Licence area modified during 2020 to account for
the future Foulaboula Exploitation permit.
Licence valid and in good standing. Arrêté number
2020-0073 granted 22 January 2020 for an initial
3 year period, with option for 2 extensions of
2 years validity each.
Licence area modified during 2020 to account for
the future Foulaboula Exploitation permit.
Licence valid and in good standing. Arrêté
No. 2018-4537 granted on 31 December 2018 for
initial 3 year period, with option for 2 extensions of
2 years validity each.
Licence valid and in good standing. Arrêté
No. 2018-4486 granted on 28 December 2018 for
initial 3 year period, with option for 2 extensions of
2 years validity each.
Licence application submitted and in process.
Application updated during 2020 and application
remains in good standing.
Licence valid and in good standing. Renewal
granted on 31 March 2020 for a 3 year term
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Operational Review (continued)
Tenements Country
Kodal Economic
Ownership Project Validity
Dabakala
Côte d’Ivoire
100% direct ownership
Gold Exploration
Niéllé
Côte d’Ivoire
100% direct ownership
Gold Exploration
Tiebissou
Côte d’Ivoire
100% direct ownership
Gold Exploration
Licence valid and in good standing. Renewal
granted on 31 March 2020 for a 3 year term.
Licence valid and in good standing. Initial licence
expired on 7 January 2017, and Renewal decree
received on the 28 February 2018 for a 3 year
period. Second Renewal decree received
18 December 2020 for a 3 year period.
Licence valid and in good standing. Initial term
expired 30 September 2018. An application for
renewal has been lodged, fees paid and approved.
Renewal decree is pending signature.
M’Bahiakro
Côte d’Ivoire
100% direct ownership
Gold Exploration
Licence application submitted and in process.
Djelibani Sud
Mali
100% direct ownership
Gold Exploration
Nangalasso
Mali
100% direct ownership following
completion of option payments
Nangalasso Project
Gold Exploration
Sotian
Mali
Kodal completed Option agreement and is
beneficial owner of concession
Nangalasso Project
Gold Exploration
Tiedougoubougou
Mali
Kodal completed Option agreement and is
beneficial owner of concession
Nangalasso Project
Gold Exploration
Fininko
Mali
Held through Option Agreement giving
right to acquire 100% ownership
Fatou Project
Gold Exploration
Application updated during 2020 and application
remains in good standing.
Convention d’Etablissement granted on
21 December 2018. The Conventions allows for
non-ground disturbing work and application has
been made for the granting of an Arrêté to allow
more detailed exploration.
Application for Arrêté made and all fees paid.
Nangalasso Arrêté completed second renewal on
4 February 2021. A new convention application
covering the same permit has been lodged with the
DNGM and is awaiting approval.
Arrêté No. 2018-1925 granted on 12 June 2018 for
initial 3 year period, with option for 2 extensions of
2 years validity each.
Application for first renewal has been lodged and
all fees paid.
Arrêté No. 2018-3319 granted on 4 September
2018 for initial 3 year period, with option for
2 extensions of 2 years validity each.
Application for first renewal will be lodged
imminently.
Arrêté No. 2018-0369 granted on 21 February
2018 for initial 3 year period, with option for
2 extensions of 2 years validity each.
Application for first renewal has been lodged and
all fees paid.
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Tenements Country
Foutiere
Mali
Kodal Economic
Ownership Project Validity
Held through Option Agreement giving
right to acquire 100% ownership
Fatou Project
Gold Exploration
Convention d’Etablissement granted on
18 December 2012.
Application for Arrêté made and all fees paid.
Figure 1: Location of Kodal projects in Mali
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Operational Review (continued)
Figure 2: Location of Kodal projects in Côte d’Ivoire
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Bougouni Lithium Project – Mining Licence Update and Feasibility Study Summary
Kodal’s application for a mining licence for the Bougouni Lithium project has made significant progress during 2021.
Figure 3: Bernard Aylward with the Mali Minister of Mines, Energy and Water
In May 2021, Kodal representatives attended a committee at the DNGM in Bamako to formally review the feasibility study and
proposed mining development for Bougouni. At the meeting, the feasibility study and mining development plan were ratified and
approved by the DNGM committee, subject to the Company making some minor corrections to bring the mining licence application
in line with the new Mali Mining Code of 2019. These corrections have been completed and lodged with the DNGM. Following this
lodgement, Kodal received formal notification of the acceptance of the application and a request to pay the Mining licence application
fee, which the Company immediately paid.
The new Exploitation Decree (mining licence) has been drafted and verified by the Ministry of Mines, Energy and Water and
forwarded to the Secretary General's office. From this point the licence application is prepared for presentation at the Conseil des
Ministres of Mali and following agreement will be formally approved.
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Operational Review (continued)
Figure 4: Bougouni Metallurgy and Process Plant
Summary of the Bougouni Project Feasibility Study
The Bougouni Lithium project feasibility study has demonstrated the potential for a robust mining operation with attractive economic
fundamentals. Further studies continue with a particular focus on optimising the processing plant flow sheet to further improve
lithium recovery and lower capital and operating costs.
The key highlights of the Bougouni Project Feasibility Study are:
o Robust project with pre-tax NPV7% of USD$300m
o Total life of mine production of 1.94Mt of concentrate and revenue exceeding US$1.4bn, with an initial assumed concentrate
sale price of $680/t increasing 2% year-on-year;
o Minimum 8.5-year mine life, producing on average approximately 220,000 tonnes of ~6% spodumene concentrate per annum,
at life of mine lithium average metallurgical recovery of 71%, based on laboratory metallurgical recoveries of 75%;
o Proposed 2Mtpa processing plant utilising a conventional flotation circuit to maximise spodumene recovery;
o Estimated C1* cash costs of US$431 per tonne of concentrate (US$466 including royalties and sustaining capital);
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o Capital requirement for development estimated to be US$117M plus contingency; and
o Forecast payback period of 1.7 years and IRR of 58% (51% post tax).
* C1 is the net direct cash cost that represents the cash cost at each processing stage from mining through to recoverable metal as indicated in the Company’s
announcement on 27 January 2020.
Gold Exploration Projects and Exploration Programme
Kodal has expanded its gold exploration portfolio through the acquisition of the Fatou project as announced on 17 December
2020.
The Fatou project consists of two concessions, the Fininko (also known as Fatou) and Foutière concessions, located 280km south
of Bamako, the capital city of Mali. The project forms a contiguous landholding exceeding 300km2 and has been acquired through
agreements with local vendors.
The Fatou project is complementary to Kodal’s existing activities in southern Mali being 100km to the south of the town of Bougouni
and only 30km to the west of the Nangalasso gold project. The Fatou project is an advanced project with previous exploration
defining preliminary mineral resource estimates and Kodal considers the project to have excellent exploration prospects that are
drill ready and have potential to expand the defined zones of gold mineralisation. Historical exploration has been completed by
AngloGold Ashanti and Rockridge Capital Corp, a Canadian listed company, which explored the project from 2010 to 2014 resulting
in a preliminary mineral resource estimate exceeding 350,000 ounces of gold for the Fatou Main prospect.
Kodal has developed an exploration programme to test the defined geological structures and extensions. The geological field team
has made reconnaissance visits to the project area to confirm areas of historical exploration, the location of artisanal mining and
host rock of mineralisation, and to determine suitable access for exploration drilling.
Details of the acquisition terms and geological summary have been provided in the Company’s announcement of 17 December
2020.
During the reporting year, Kodal regained management of, and retained a 100% interest in, the Nielle, Tiebissou and M'Bahiakro
(application) gold concessions after termination of the joint venture with Resolute following the decision by Kodal to refuse an
extension request.
The Company has reviewed its gold portfolio and defined priority targets based on the potential to define JORC compliant mineral
resources quickly, as well as projects that have potential to host large scale gold mineralisation. The priority exploration targets for
this exploration campaign are:
l Fatou project in Mali, with drilling commencing at Fatou Main prospect where historical exploration defined a NI43-101 Mineral
Resource estimate exceeding 350,000oz gold. The drilling will aim to confirm and expand the known gold mineralisation and
provide data to support data for a JORC compliant Mineral Resource estimate to be completed.
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Operational Review (continued)
Figure 5: Fatou Location Figure 6: Fatou historical workings
l Nielle project in Côte d’Ivoire, where exploration completed by Resolute has defined an extensive zone of gold mineralisation
with positive initial drilling results. The mineralised zone remains open along strike and at depth and Kodal’s initial programme is
designed to confirm and extend the mineralised zone and provide confidence in the geological interpretation prior to undertaking
a maiden mineral resource assessment.
l Dabakala project in Côte d’Ivoire, where exploration activity completed by Kodal continues to confirm a major surface
geochemical anomaly with assay results up to 6.14g/t gold returned. This new anomaly has never been previously drill tested and
Kodal will focus on infill geochemical sampling to define the key targets for reconnaissance drill testing.
Figure 7: Dabakala hard rock workings Figure 8: Geologist and land manager at Dabakala
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Kodal has commenced this exploration campaign with exploration drilling completed at the Nielle concession in northern
Côte d’Ivoire and additional surface geochemistry completed at Dabakala in central Côte d’Ivoire. The initial results from this
exploration are very encouraging with high-grade gold mineralisation intersected in the new gold mineralised zone at Nielle, and
the continued definition of the extensive surface geochemical anomaly at Dabakala has developed a new high priority
exploration target.
I look forward to being able to report back on these exciting opportunities for the advancement of the Bougouni Lithium project
towards mine development and the results of our gold exploration campaign during the coming year.
Bernard Aylward
Chief Executive Officer
25 August 2021
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Finance Review
FINANCE REVIEW
Results of operations
For the year ended 31 March 2021, the Group reported a loss before other comprehensive income for the year of £623,000
compared to a loss of £630,000 in the previous year. Operational activity has remained broadly in line with last year as the Group
has completed the Feasibility Study work at Bougouni and has continued the running of offices in Mali and Côte d’Ivoire. Further
information is provided in the Operational Review above.
During the year, the Group invested £542,000 (2020: £1,602,000) in exploration and evaluation expenditure on its various projects.
As a result, the carrying value of the Group’s capitalised exploration and evaluation expenditure increased from £8,643,000 to
£8,964,000 after taking account of the effects of foreign exchange. At 31 March 2021, after taking account of the effects of foreign
exchange, the carrying value of the gold projects in Mali and Côte d’Ivoire was £1,476,000 (2020: £1,179,000) and of the lithium
projects in Mali was £7,488,000 (2020: £7,464,000).
Cash balances as at 31 March 2021 were £2,433,000, an increase of £2,400,000 on the previous year’s level of £33,000, due to the
receipt of £1.7 million from the successful £3.5m equity fundraising completed in March 2021, the final £1.8 million of which was
received by the Company after the year end in April 2021. Net assets of the Group at the year-end were £12,636,000
(2020: £8,052,000).
Financing
During the year, the Group has successfully completed a number of fundraisings.
In April 2020 the Company entered into an equity financing facility with Riverfort Global Opportunities PCC and YA II PN Ltd
(the ‘Investors’), who subscribed for 1,428,571,429 ordinary shares at an average price of 0.04686 pence per share, raising £670,000
before expenses. These subscription proceeds were used immediately to satisfy the Company's obligation to pay £0.5 million to the
Investors to enter into an Equity Sharing Agreement, under which the Investors undertook to make cash payments to the Company
for a period of up to 12 months based on the performance of Kodal's share price. All obligations under the Equity Sharing Agreement
were satisfied prior to the year end with the Company receiving over £650,000.
In July 2020, the Company entered into a Convertible Loan Note Agreement with the Investors for a total commitment of $1.5 million
before expenses with the first tranche of $750,000 advanced at closing, and the second tranche drawn down in October 2020.
Investors had fully exercised the option to convert outstanding principal and interest into new ordinary shares in the Company
prior to the year end.
In December 2020, at the time of securing the acquisition of the Fatou project, the Company entered into a conditional term sheet
with Riverfort Global Capital Limited (“Riverfort”) in connection with a proposed $2.5 million funding facility. To secure exclusivity,
Riverfort advanced an initial amount of $300,000 to the Company which is to be repaid by the Company in October 2021 as the
Company and Riverfort agreed not to go ahead with the funding facility.
In March 2021, Kodal announced that it had completed an equity fundraising of £3.5 million before expenses, for the purpose of
supporting Kodal in undertaking exploration, drilling and development activities at its priority gold assets in Mali and Côte d'Ivoire,
as well as advancing its flagship Bougouni Lithium Project.
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Impact of the Covid-19 pandemic
During the year to 31 March 2021, the pandemic resulted in lockdowns and the imposition of travel bans in many countries, including
in West Africa. As a result, field exploration operations ceased for most of 2020, but limited activities recommenced in early 2021
with sampling work in Dabakala, and other site visits to the Fatou and Nielle projects undertaken. Further drilling work has been
taking place on the gold assets with further drilling work planned later in the year as operations increasingly return to normal.
After the substantial disruption to global equity markets in early 2020, markets rebounded strongly during the year. This specifically
included the mining sector, and particularly for gold, which has always been regarded as a safe haven in times of economic turbulence.
The market for lithium also improved with the increasing focus on the need to reduce carbon emissions and the anticipated demand
for batteries in electric vehicles.
The Company was able to take advantage of this improving environment for financing and entered into a convertible loan note
agreement for $1.5 million in July 2020, which provided important funds to sustain the Group’s continued development. With the
loan note fully converted in March 2021 the Company completed an over-subscribed placing of ordinary shares to raise £3.5 million
(before expenses) for further exploration and development activities.
Although vaccine roll outs still have some way to go, particularly in West Africa, we anticipate that, with the appropriate health
precautions, field activities and the ability to travel will increasingly return to normal during the rest of the year.
Going concern and funding
The Group has not earned revenue during the year to 31 March 2021 as it is still in the exploration and development phases of
its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue
of new ordinary shares and other equity linked instruments.
At 31 March 2021, the Group held cash balances of £2,433,000 (2020: £33,000). As noted above an equity placement for
£3.5 million took place in late March 2021, with £1.8 million of the proceeds only being received after the year-end in April 2021.
The Group’s cash balances at 20 August 2021 were £3,248,876.
The Directors have prepared cash flow forecasts for the period ending 30 September 2022. The forecasts include payments for
the Bougouni mining licence and second stage concession payments for the Fatou project, repayment of the $300,000 advance
from Riverfort, further development of the Bougouni Feasibility Study, additional exploration activity for both gold and lithium, as
well as covering ongoing overheads.
Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to
allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date
of approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been
prepared on a going concern basis.
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Finance Review (continued)
Utilising key performance indicators (“KPIs”)
The following KPIs are used by the Group to assist it in monitoring its cash position and assessing costs and exploration and
development activities:
KPI 31 March 2021 31 March 2020
Cash and cash equivalents (a) £2,433,000 £33,000
Administrative expense (b) £513,000 £590,000
Exploration and evaluation expenditure (c) £542,000 £1,602,000
The directors have provided more information on the state of the Group’s financing and operational activity above.
a
‘Cash and cash equivalents’ is used to measure the Group’s financial liquidity. Cash and cash equivalents have increased by
£2.4 million in the year.
b ‘Administrative expenses’ is used to measure the Group’s administrative costs and operating results. Administrative expenses for
the year were £513,000 compared to £590,000 in the previous year.
c
‘Exploration and evaluation expenditure’ is used to measure expenditure on the Group’s gold and lithium projects. Exploration
and evaluation expenditure in the year was £1.1 million lower than prior year as Kodal’s operational focus has been on progressing
our application for the mining licence for its key Bougouni Lithium project.
Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash and trade and other payables. It is, and has been throughout the year
under review, the Group’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group’s
financial instruments are liquidity risk, price risk and foreign exchange risk. The Board reviews and agrees policies for managing each
of these risks and they are summarised below.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash reserves to fund the Group’s exploration and operating activities.
Management prepares and monitors forecasts of the Group’s cash flows and cash balances monthly and ensures that the Group
maintains sufficient liquid funds to meet its expected future liabilities. The Group intends to raise funds in discrete tranches to provide
sufficient cash resources to manage the activities through to revenue generation.
Price risk
The Group is exposed to fluctuating prices of commodities, including gold and lithium, and the existence and quality of these
commodities within the licence and project areas. The Directors will continue to review the prices of relevant commodities as
development of the projects continues and will consider how this risk can be mitigated closer to the commencement of mining.
Foreign exchange risk
The Group operates in a number of overseas jurisdictions and carries out transactions in a number of currencies including Sterling,
CFA Franc, US dollars and Australian dollars. The Group does not have a policy of using hedging instruments but will continue to
keep this under review. The Group operates foreign currency bank accounts to help mitigate the foreign currency risk.
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Principal Risks and Uncertainties
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to a number of risks which it seeks to mitigate as set out in the table below:
Risk
Comment and Mitigating Actions
Exploration and Development Risk
The Group is a mineral exploration company and the success of
the Company is dependent on the discovery and/or acquisition
of Mineral Reserves and Mineral Resources and the successful
development of mines therefrom. Significant risk exists within
technical, legal and financial aspects of the exploration for and
the development of mines, which may have an adverse effect on
the Group’s business.
Reliability of Mineral Resources and Mineral Reserves
The Group has reported Mineral Resources for its Bougouni
Lithium project in West Africa. Any estimates will be based on a
range of assumptions, including geological, metallurgical and
technical factors; there can be no assurance that the anticipated
tonnages or grades will be achieved.
Licensing and Title Risk
The Group’s exploration and future development opportunities
are dependent upon maintaining clear tenure and access to
licences as well as ensuring the relevant operation licences,
permits and regulatory consents are valid. The licences and
regulatory permits may be withdrawn or made subject to
limitations.
The granting of licences and permits are a practical matter subject
to the discretion of the applicable government or government
office. The interpretations, amendments to existing laws and
regulations, or more stringent enforcement of existing laws and
regulations could have a material adverse impact on the Group’s
results of operations and financial condition.
A new Mining Code has passed before the Republic of Mali
Assembliee Nationale. The Company’s licences have been
granted under the previous Mining Code (June 21 2012
(modified)) and remain subject to these conditions. In addition,
future Mining Licence applications will remain subject to the 2012
Mining code unless the Company specifically request a variation
to the new code.
There is no assurance that the Group’s exploration and potential
future development activities will be successful, and statistically
few properties that are explored are ultimately developed into
profitable producing mines.
The Group ensures that there is regular review of projects,
expenditure and exploration activity to maintain focus on targets
and ensure best possible information in the decision-making
process to focus resources and expenditure upon key
exploration and development targets.
The Mineral Resource estimates are prepared by third party
consultants who have considerable experience and are certified
by appropriate bodies.
Mineral Resources are reported as general indicators and should
not be interpreted as assurances of minerals or the profitability
of current or future operations.
The Group complies with existing laws and regulations.
The Group ensures that the regulatory reporting and the
government compliance requirements for each licence are met.
There is a risk that negotiations with a government in relation to
the grant, renewal or extension of a licence may not result in the
grant, renewal or extension taking effect prior to the expiry of
the previous licence period, and there can be no assurance of
the terms of any extension, renewal or grant.
The Group regularly monitors the good standing of its licences.
The Company has received an Environmental Permit for the
development of the Bougouni Lithium project following
submission and acceptance of the Company’s Environmental and
Social Impact Assessment (“ESIA”).
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Principal Risks and Uncertainties (continued)
Risk
Comment and Mitigating Actions
Political Risk
The Group has significant activities in Mali and Côte d’Ivoire in
West Africa. The success of the Group will be influenced by the
legal, political and economic situation in Mali, Côte d’Ivoire and
the wider African region. Countries in the region have
experienced political instability and economic uncertainty in the
past.
Government policy in the countries in which the Group operates
can be unpredictable, and the institutions of government and
market economy may be unstable and subject to rapid change,
which may result in a material adverse effect on the Group’s
operations.
The renewal of exploration and exploitation licences is an area
of risk given the countries in which the Group operates. Whilst
the Group has in place legal titles on the assets in its portfolio,
there remains a risk to the Group that changes within regimes
could put the ownership of these assets at risk.
The Group is also at risk of taxation reviews that may change or
apply more stringently the laws and regulations of the countries
in which it operates.
The Company has applied for a mining licence for the
development of the Bougouni Lithium project and this remains
in progress at the reporting date. The Company has detailed the
progress of the application in this report and confirms
communication with the Mali government officials indicates the
application remains on track. The Company has paid the licence
application fee and has no further obligations prior to the
granting of the Mining Licence.
Mali has undergone political upheaval in this last year.
A military coup d’etat was staged on the 18 August 2020 following
several months of non-violent protest and general strikes. The
coup overthrew the government of President Ibrahim Keita who
resigned his office to avert violence.
A Transitional government was established following the coup and
had an aim of returning to democratically elected governance with
elections planned for February 2022.
A second military coup d’etat was staged on the 24 May 2021
following attempts at Transitional Government re-shuffle.
Following this coup Colonel Assimi Goita was appointed
President.
The Transition government remains committed to the stated aim
of General elections in February 2022.
In general, the security risk in Mali remains high and the United
Nations peacekeeping mission has helped maintain the security
situation throughout most of the country but the situation in the
north of the country remains fragile.
In Côte d’Ivoire, the political situation has been calm since 2011.
The election in 2015 returned the government of President
Ouattara with increased popular support and on 31 October
2020 President Ouattara was returned for a further 5 year
mandate.
The economic situation in Côte d’Ivoire is improving dramatically
with significant government expenditure on infrastructure and
development activity.
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Risk
Comment and Mitigating Actions
Financial Risk
The Group is an exploration company and does not generate
revenue or self-sustaining funding at this stage. The Group
requires funds to support ongoing exploration and future
development of mineral properties. The Group’s access to
funding will depend on its ability to obtain financing through the
raising of equity capital, joint venture projects, debt financing, farm
outs or other means.
There is no assurance that the Group will be successful in
obtaining the necessary financing in a timely manner on
acceptable terms to complete its investment strategy. The equity
markets and ability to raise finance were significantly affected by
the Covid-19 pandemic, but have subsequently improved.
If the Group is unable to obtain additional financing as needed,
some interests may be relinquished, and / or the scope of the
operations reduced.
Covid-19 Pandemic
The Company is pre-revenue, in an exploration and evaluation
phase, and much of its work is sub-contracted; accordingly, the
Company has few employees and limited operational activity.
During the year, there has been relatively limited activity on the
ground in Mali and Côte d’Ivoire as a result of the lockdowns
and travel bans imposed in many countries.
Vaccine availability is limited in West Africa and so its roll-out may
yet take some time. Efficacy of the vaccines against new variants
also remains a risk.
Because of the disruption caused to normal working patterns,
the decision on the granting of a mining licence by the Malian
authorities was delayed but is now progressing again.
The most significant impact on the Company during the year was
the ability to raise funding at an important time in the Group’s
development caused by the substantial disruption to global equity
markets; however, additional finance has recently been raised as
noted above.
The Board regularly reviews the levels of discretionary spending
on capital items and exploration expenditure. This includes
regularly updating working capital models, reviewing actual costs
against budget and assessing potential impacts on future funding
requirements and performance targets.
In the past, the Group has been successful in raising additional
equity finance to support its ongoing activities.
In March 2021 the group raised £3.5 million before expenses
with an equity placement. These funds will enable the Group to
finance its plans to further develop the Feasibility Study, pay for
the mining
licence and the second Fatou concession
commitment, repay the outstanding Riverfort loan, fund additional
exploration activity of the gold and lithium assets and cover
ongoing administrative overheads.
The Company continues to monitor the status of travel in Mali
and Côte D'Ivoire, and also the ability for employees and sub-
contractors to be able to operate safely. Travel restrictions
continue to be eased, and limited field visits have recently been
undertaken; drilling has been taking place and more is planned
over the next few months, as activities increasingly return to
normal.
Further engineering development studies and additional work in
connection with offtake and financing arrangements will continue
as planned.
The Company and local country manager continue to remain in
contact with the Malian government authorities over the timing
of issuing the mining licence for the Bougouni Lithium project.
Corporate activities remain relatively unaffected, carried out
remotely via video-conferencing.
Although vaccine roll outs still have some way to go, particularly
in West Africa, we anticipate appropriate health measures will
need to remain in place for some time but operations will
increasingly return to normal during the rest of the year.
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STRATEGIC REPORT (continued)
for the year ended 31 March 2021 – Principal Risks and Uncertainties (continued)
S172 Statement
The Directors of the Company have a duty to promote the success of the Company. A director of the Company must act in the
way they consider, in good faith, to promote the success of the Company for the benefit of its members, and in doing so have regard
(amongst other matters) to:
l the likely consequences of any decision in the long term;
l the interests of the Company's employees;
l the need to foster the Company's business relationships with suppliers, customers and others;
l the impact of the Company's operations on the community and the environment;
l the desirability of the Company to maintain a reputation for high standards of business conduct; and
l the need to act fairly between members of the Company.
The Directors are committed to developing and maintaining a governance framework that is appropriate to the business and
supports effective decision making coupled with robust oversight of risks and internal controls.
The Board believes that long-term success requires good relations with a range of different stakeholder groups both internal and
external. The board has identified Kodal’s stakeholders to include employees and consultants working for the Company, the local
communities and governments in Mali and Côte d’Ivoire in which it operates, suppliers and contractors, as well as shareholders.
In the Corporate Governance Report, we explain the regular engagement with employees, communities and local governments in
West Africa where we operate; and the impact assessment we have performed on the environment and local society as part of our
permitting process. We also comment on the decision-making for the long term success of the Company, its governance and culture;
as well as the nature and methods of communication with all shareholders.
The Group relies heavily on having suppliers and contractors with appropriate levels of experience and expertise of working
successfully with junior miners in West Africa, as well as professional advice for AIM quoted companies in London. Accordingly Kodal
is committed to maintaining constructive relationships with all its suppliers and advisers, and operating in line with its Corporate
Code of Conduct.
Signed on behalf of the Board
Bernard Aylward
Chief Executive Officer
25 August 2021
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REPORT OF THE DIRECTORS
for the year ended 31 March 2021
The Directors present their report, together with the audited consolidated financial statements for Kodal Minerals Plc for the year
ended 31 March 2021.
Principal activity
The Company was incorporated for the purposes of exploring and developing mineral assets. The Company’s shares are traded on
AIM.
Domicile and principal place of business
Kodal Minerals Plc is domiciled in the United Kingdom and has its registered office at Prince Frederick House, 35-39 Maddox Street,
London W1S 2PP. Its principal place of business as at 31 March 2021 was West Africa, and specifically Mali and Côte d’Ivoire.
Directors
The current membership of the board and the Directors who held office during the year are set out below:
Bernard Aylward
Charles Joseland
Robert Wooldridge
Qingtao Zeng
Biographical details of the Directors
Bernard Aylward (Chief Executive Officer)
Bernard is a geologist with over 20 years’ experience as a manager and exploration geologist in the mining and exploration industry
in a variety of commodities. Bernard’s experience includes serving as the Managing Director of Taruga Gold Limited from its initial
listing on the ASX, Chief Operating Officer of International Goldfields Ltd, General Manager of Azumah Resources Ltd (Ghana), and
Exploration Manager for Croesus Mining NL. Bernard has been involved in the discoveries and management of the Bepkong, Julie,
Collette and Kunche deposits in Ghana, as well as the Deep South gold deposit, Gladstone North deposit, St Patrick’s, Norseman
Reef, and the Safari Bore gold deposit in Western Australia. Bernard has experience operating in Europe (Greece Sappes deposit),
Siberia, South America and extensive experience throughout West Africa. He brings significant experience in geology, mineral
exploration and evaluation, and mine engineering and development; he has the leadership, public communication skills and legal &
regulatory understanding required for a publicly listed, junior miner.
Charles Joseland (Independent Non-executive Director)
Charles is a former Chartered Accountant with 32 years' experience. After graduating with a degree in Classics from Cambridge
University, he joined PwC where he was an audit partner for 20 years as part of its Energy, Utilities & Mining Group, including
secondments to Moscow and Madrid. Charles has been responsible for providing services to many international resources groups,
including those with operations in Russia, Kazakhstan and Africa, as well as North & South America. Charles has also acted as reporting
accountant and advisor for many companies quoted on both LSE’s AIM and Main Market. He brings knowledge and skills to the
board in the areas of finance & accounting, audit, corporate governance, internal control & risk management frameworks for public
quoted, mining companies. As an audit partner for 20 years, he is experienced in providing an independent point of view.
Robert Wooldridge (Non-executive Chairman)
Robert is currently a partner at SP Angel Corporate Finance LLP. After graduating with a degree in Natural Sciences from Cambridge
University, he spent eight years at PricewaterhouseCoopers International Limited, qualifying as a Chartered Accountant in 1989. He
left in 1994 to join the international equity capital markets division of HSBC Investment Bank where he spent a further eight years
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REPORT OF THE DIRECTORS (continued)
for the year ended 31 March 2021
and was responsible for completing a number of landmark equity transactions across Europe, India and the Middle East & Africa. In
2003 he joined an investment banking boutique, to head up its corporate finance and securities operation and was then one of the
founding partners of SP Angel in 2006. SP Angel is an independent corporate finance and broking operation which focuses on advising
small and mid-cap companies in the mining, oil and gas, healthcare and technology sectors. He brings knowledge of and skills in capital
markets, broking, corporate finance and corporate governance in small & mid-cap miners.
Qingtao Zeng (Non-executive Director)
Dr Zeng completed a PhD in geology at the University of Western Australia in 2013. Dr Zeng has been engaged as a consulting
geologist, principally working with CSA Global based in Perth, Australia, and has a range of geological and commercial specialities.
Since 2015, Dr Zeng has been extensively involved in the lithium exploration and development sector and through his strong network
of contacts throughout China has helped clients complete a range of contracts relating to the supply or purchase of lithium in the
form of concentrate or direct shipping ores. He brings detailed knowledge of the mining sector, in particular of lithium, with extensive
Chinese contacts across the value chain from engineering, construction, processing, financing & investment, and commercial markets.
Directors' interests
The beneficial interests in the Company's shares of the current Directors and their families as at 31 March 2021 are as follows:
Directors Ordinary Shares Ordinary Shares
31 March 2021 31 March 2020
Bernard Aylward 221,007,656 119,834,948
Charles Joseland 6,250,000 6,250,000
Robert Wooldridge 153,723,858 89,438,144
Qingtao Zeng 6,250,000 6,250,000
Events after the reporting period
Events after the reporting period are outlined in note 18 to the financial statements on page 68.
Directors’ and Officers’ liability insurance
The Group has Directors’ and Officers’ liability insurance to cover claims up to a maximum of £1.0 million.
Strategic Report
The Directors have chosen, in accordance with s414(c) of the Companies Act, to include in the Strategic Report on pages 3 to 20
information on the Group’s principal activities, business review and key performance indicators which would otherwise be required
to be included in the Directors’ Report and which they consider to be of strategic importance to the Company.
Statement as to disclosure of information to auditors
The Directors have confirmed that, as far as they are aware, there is no relevant audit information of which the auditor is unaware.
Each of the Directors has confirmed that he has taken all the steps that he ought to have taken as a Director, in order to make
himself aware of any relevant audit information and to establish that it has been communicated to the auditor.
Directors’ responsibilities statement
The Directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in accordance
with applicable law and regulations.
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Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are
required by the AIM Rules for Companies of the London Stock Exchange to prepare Group financial statements in accordance with
International Accounting Standards in conformity with the requirements of the Companies Act 2006 and have elected under company
law to prepare the Company financial statements in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and applicable law.
The Group financial statements are required by law and International Accounting Standards in conformity with the requirements of
the Companies Act 2006 to present fairly the financial position of the Group and the Company and the financial performance of
the Group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that
Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.
In preparing the Group and Company financial statements, the Directors are required to:
l select suitable accounting policies and then apply them consistently;
l make judgments and accounting estimates that are reasonable and prudent;
l state whether they have been prepared in accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006; and
l prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the Company
will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the
assets of the 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 Group’s
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
Environmental, Social & Governance (ESG) and Sustainability
The Directors recognise the importance of operating in a sustainable manner with high levels of governance, and with respect for
environmental and social considerations. As this also helps drive value for shareholders over the long term, there is increasing investor
and public interest in understanding how companies address ESG issues. We note the Quoted Companies Alliance has recently
published a Practical Guide to ESG for small and mid-sized quoted companies.
We recognise lithium has a crucial role to help decarbonise the economy through its use in batteries in Electric Vehicles, but it is also
important that the lithium is mined in a responsible and sustainable manner.
As we are currently at the early stage of our Company’s life cycle, our focus has been on the more social aspects. We have been
engaging with the Mali government and local communities to adapt our planned approach for their comments and suggestions. This
is in order both to be granted a formal legal licence as well as to receive the social licence to operate in their community near
Bougouni. It is important to continue to manage these social aspects throughout the life cycle of our Bougouni project, minimising
disruption, providing job opportunities, and supporting local social projects.
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REPORT OF THE DIRECTORS (continued)
for the year ended 31 March 2021
The potential environmental impacts will only arise when we commence construction and enter into production. However, we are
considering those environmental aspects now within our design plans. Our Environmental Social Impact Assessment (ESIA) considered
air quality, water & waste water management, energy sources, waste & hazardous materials management, as well as the potential
ecological impacts. These results formed part of our Preliminary Feasibility Study (PFS) and feed into our engineering design plans.
We continue to develop our PFS and the project design not only to improve the process engineering and efficiency of our plant but
also to ensure the impact of potential climate change events is managed, and improvements to greenhouse gas emissions and energy
sources are also considered.
Our approach to governance already follows the QCA Code, as set out below in our Corporate Governance section; this details
the way we approach governance considering the 10 principles.
As we develop our projects over the next few years, we will also develop our narrative to explain how we address environmental
and social matters, and our ESG objectives, targets and results alongside our normal financial performance reporting.
Auditors and Annual General Meeting
RSM UK Audit LLP offer themselves for reappointment as auditors in accordance with section 489(4) of the Companies Act 2006.
A resolution to reappoint RSM UK Audit LLP will be proposed at the Annual General Meeting.
Approved by the board of directors and signed on behalf of the board on 25 August 2021.
Robert Wooldridge
Director
25 August 2021
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CORPORATE GOVERNANCE REPORT
for the year ended 31 March 2021
Chairman’s introduction
We formally adopted the Quoted Companies Alliance Corporate Governance Code 2018 (the “QCA Code”) in September 2018,
believing it to be the most appropriate code for an AIM quoted company of our size and stage of development. As chairman, I am
responsible for leading the board; ensuring its composition with people of the right experience and engagement; and focusing on
our strategy to bring our African lithium project to production.
As a small company, we are aware that the board’s and senior management’s actions and attitude have a strong impact on the culture
of our organisation; the regular, on site presence of our CEO and Project Manager in Mali and Côte d’Ivoire, as well as regular
communication with our local manager are important aspects of conveying and monitoring our culture and values.
I believe for the size of our company we have a well-functioning board, the right corporate structures, appropriate engagement and
information flow with our small senior management team, and a clear strategy to drive value for our shareholders, employees,
communities where we operate, and our suppliers. We have engaged closely with local communities and the Malian government
through the Environmental and Social Impact Assessment process and taken their considerations into account; in addition to our
market updates, our CEO makes regular presentations, gives media interviews and engages with shareholders, to keep stakeholders
informed and understand expectations. We explain more under the QCA Code’s ten principles below.
Principle 1. Establish a strategy and business model which promote long-term value for shareholders
The Board has concluded that highest medium- and long-term value can be delivered to shareholders though a primary focus on
the continued exploration and development of its Bougouni Lithium project (the “Project”) located in southern Mali. The medium-
term objective is to develop the Project through feasibility studies and bring it in to production as rapidly as possible. The Strategic
and Operational Review above explains the strategy, key areas of focus and challenge, and management action, including completing
full engineering design, obtaining financing for construction and further exploration of the gold assets. The Principal Risks outlined on
pages 17 to 19 highlight the key challenges the Group faces in executing the strategy and how the Board seeks to protect the Group
from those risks.
The Company has already secured a strategic investor and off-take partner and will continue to explore similar opportunities to
fund mine and plant construction in order to enter production rapidly.
The key drivers to the continued growth of the lithium market are the increasing demand for electric vehicles and battery storage
as well as growth in the use of personal electric devices driven by social choice, government regulations and an improvement in the
performance and affordability of high quality battery products.
In addition to the lithium prospects in Mali, the Company holds a suite of gold assets in Mali and Côte d’Ivoire. With the increase in
the gold price, the Company continues to assess and rank the projects it holds directly to determine priorities for further exploration
or for ways to deliver value to our shareholders.
Principle 2. Seek to understand and meet shareholder needs and expectations
The Board is committed to communicating openly and regularly with both its private and institutional shareholders to ensure that
its strategy and performance are understood. Significant developments are disseminated through RNS announcements which are
then made available on the Company’s website.
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CORPORATE GOVERNANCE REPORT (continued)
for the year ended 31 March 2021
The Company communicates regularly with private shareholders through investor evenings and similar events; audio and video
interviews; periodic webcast Question & Answer sessions. The Company’s website also contains its latest corporate presentations
and interview recordings. In addition, the Company encourages all shareholder to attend the Annual General Meeting which provides
an excellent opportunity to meet with management and engage directly with them.
Kodal has an active and effective investor relations programme which includes regular institutional road-shows to meet shareholders
and potential shareholders. It also meets its corporate brokers and other research analysts to assist them in preparing and publishing
their research on the Company.
These promotional and marketing activities are co-ordinated by its corporate broker and financial PR advisers.
Principle 3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
The Board believes that long-term success requires good relations with a range of different stakeholder groups both internal and
external. The board has identified Kodal’s stakeholders to include employees and consultants working for the Company, the local
communities in Mali and Côte d’Ivoire in which it operates, local governments, suppliers, customers and partners. The Company’s
CEO, Project Manager and Country Manager in Mali regularly visit the locations in which Kodal operates and meets with these
stakeholders in order to gain their feedback on the Company’s operations, although this has been limited in the past year due to
Covid-19 travel restrictions. Any concerns raised are communicated to the Board for further consideration.
A key part of Kodal’s business model is assessing the impact that the Company’s business activities will have on the host communities
and environment in which it operates. As part of its application for a mining licence at Bougouni, the Company has recently carried
out an Environmental and Social Impact Assessment (ESIA) engaging with and responding to comments from officials of the
departments of Geology & Mines, Forestry & Water, Heritage & Culture, as well as the local community as a whole.
The Company is also committed to ensuring the safety of its workers on site and has strict health and safety policies which it firmly
enforces.
Principle 4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation.
The Board is responsible for identifying and managing areas of significant business risk for the Company; the Audit & Risk Committee
assists the board in ensuring that there is an effective system for risk management in place.
At each Board meeting, the Directors review ongoing operational performance, discuss budgets and forecasts and new risks associated
with ongoing operations; appropriate mitigating actions and controls are discussed with management, and subsequently monitored
by the Directors. The Board formally reviews and documents the principal risks to the business at least annually as part of the annual
audit process.
The Company has in place an anti-bribery and corruption policy as well as other policies and procedures to which employees,
management, consultants and, where appropriate, key suppliers are required to adhere. Robust financial procedures and safeguards
are in place regarding expenditure and accounting functions.
The principal risk areas identified by the board and the mitigating actions are set out above. The Board has considered the need for
an internal audit function to provide assurance on the effectiveness of risk management and internal controls; however, given the
size of the group and the stage of its development, the board does not consider this necessary. The Board works closely with and
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has regular ongoing dialogue with its finance functions across the Group and has established appropriate reporting and control
mechanisms to ensure the effectiveness of its control systems.
Principle 5. Maintaining the Board as a well-functioning, balanced team led by the Chair
The Board meets approximately each month throughout the year to discuss important operational and strategic matters and to
review financial and operational performance. In addition, there are additional board meetings to consider specific proposals, including
for example to issue further shares to raise funds or to consider significant contracts or actions. Board papers are provided in
advance with the information necessary to facilitate a proper assessment of the issues under consideration. The non-executive
directors spend between 2 and 6 days a month working on Company matters.
The structure and composition of the Board has been kept under review by the Chair during the year. No replacements have been
sought for the two directors who resigned in the year ended 31 March 2020. Although this reduces the board to just one formal
independent non-executive director (below the QCA Guide of two), there is one executive director and three non-executive
directors, who recognise the importance of maintaining an independent mind-set and objectivity in their views. The board size and
structure is considered appropriate given the lower level of activity in the Company and focus on cash preservation during the
Covid-19 crisis. Although these directors hold some share options and company shares, the holdings are not considered to be of
sufficient size to impact their independent judgments (including Charles Joseland whose shares in the Company were worth £8,750
at year-end). Biographical details of all the directors are set out on pages 21-22.
The Directors believe that this Board provides the Company and its shareholders with the necessary skills and experience to drive
the business forward balanced by a sufficient level of independent analysis and judgement to provide challenge and oversight. As a
Board, the Directors are also mindful of the need to control costs and provide value for shareholders.
In the year ended 31 March 2021 there were 10 full board meetings of which Robert Wooldridge attended 10, Bernard Aylward
10, Charles Joseland 10 and Qingtao Zeng 9. In addition to the full board meetings, additional ad hoc meetings were convened as
required to issue shares and for other procedural matters.
The Board has an Audit & Risk Committee which during the year to 31 March 2021 comprised Charles Joseland (Chair) and Robert
Wooldridge. The Board also has a Remuneration & Nomination Committee which during the year to 31 March 2020 comprised
Robert Wooldridge (Chair), Charles Joseland and Qingtao Zeng. The Remuneration & Nomination Committee meets as required
and at least once each year.
Principle 6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities.
Biographical details of the Directors are on pages 21-22.
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in
the areas of geology, mineral exploration, mine engineering and development, public company and capital markets, finance and
corporate governance.
The directors keep their skillsets up to date by attending industry and qualification relevant seminars and training sessions. During
the year, the Directors sought advice from their corporate advisers (including the Company’s nominated adviser, lawyers and
accountants) on the contractual arrangements and the various financing agreements entered into during the year. The Company
has also employed the services of Weaver Financial Limited to act as Company Secretary.
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CORPORATE GOVERNANCE REPORT (continued)
for the year ended 31 March 2021
When considering the composition of the Board and the appointment of new Directors, the Board has established a Remuneration
& Nomination Committee to oversee this process and make recommendations to the Board. The Board recognises that it currently
has limited diversity, and this will form a part of any future recruitment consideration.
Principle 7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
The Chairman reviews the performance of individual Directors on an on-going basis and assesses each Director’s contribution to
the effective operation and management of the Company.
The Chairman sets individual objectives for each Director within the context of the overall strategy and objectives for the Company;
at the end of the year, he considers each director’s performance, including the level of achievement of their objectives, and their
overall contribution to the Company’s performance. The review establishes further objectives for the coming year, identifying any
additional training or other support that may be required.
Succession planning is the responsibility of the Remuneration and Nomination Committee and is reviewed by the Board at least on
an annual basis. When considering succession planning, the Remuneration and Nomination Committee takes into account the skills
and experience required as the Company grows and develops its projects.
Principle 8. Promote a culture that is based on ethical values and behaviours
As a small company the Board’s and senior management’s actions and attitude have a strong impact on the culture of our organisation.
The Board believes that it has established a culture of responsible and ethical behaviour which it follows and which it believes has
been successfully transmitted to its employees overseas.
Foremost amongst these are its focus on:
l The health and safety of its workers and consultants;
l An awareness of the environmental and social impact of its operations on the local communities and efforts to mitigate and
minimise them;
l contributing to the overall development of the local communities in which it operates;
l conducting honest and transparent dealings with employees, consultants and suppliers; and
l adopting a zero tolerance to bribery.
At this stage of its development, Kodal has only approximately five non-Board employees all of whom are based at its offices in Mali
and Côte d’Ivoire. There is near daily contact with these offices and regular visits by the CEO, although this has been limited by the
pandemic in the year ended 31 March 2021. This enables the Board to monitor employees’ conduct and behaviour to ensure that
the Company’s ethical values and standards are recognised and respected, and appropriate action taken where necessary.
Principle 9. Maintain governance structures and processes that are fit for purpose and support good decision-making
by the Board.
Kodal’s key strategic, financial and operational decisions are reserved exclusively for the decision of the Board. The Board seeks to
meet formally approximately once a month and is supplied with appropriate and timely information ahead of each meeting. The
Directors are free to seek any further information they consider necessary. In addition, there are additional Board meetings to
consider specific matters that require decision between the regular board meetings and to which all Directors are invited. In addition
to the formal meetings, there is regular contact and communication between the Board members to discuss day-to-day operational
matters.
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Robert Wooldridge, the Non-executive Chairman, is responsible for the running of the Board and Bernard Aylward, the Chief Executive
Officer, has executive responsibility for running the Company’s operational activities. Bernard Aylward and Robert Wooldridge take
responsibility for the Company’s liaison with shareholders. At year-end Charles Joseland provided additional input into the audit process,
reviewing financial forecasts, judgments and estimates, accounts disclosure and liaising with the auditors; independence is maintained
as the underlying judgments, accounts preparation and forecasts are made by the CEO, Project Manager and/or Financial Controller.
The Company has a significant shareholder, Suay Chin International Pte Ltd (“Suay Chin”), which owns 14.56% of the Company’s
issued share capital. It is a Singapore registered company which has extensive connections with the Chinese lithium market including
lithium carbonate producers and lithium-ion battery manufacturers. Suay Chin has entered into a Relationship Agreement with the
Company and its advisers, under which it undertakes to do all such things as it is reasonably able to do to ensure that the Company
is capable of carrying on its business independently of Suay Chin. Under this agreement, it also has the right to appoint a Director
to the Board of Kodal and Qingtao Zeng has been appointed in this capacity.
The Board is supported by the Audit & Risk Committee and the Remuneration & Nomination Committee. The reports of those
committees are set out below.
The Board continues to monitor its governance framework on an ongoing basis. The Directors have not engaged the services of
external governance advisers
Principle 10. Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board attaches great importance to providing shareholders with clear and transparent information on the Group's activities,
strategy and financial position. All material information is released to the London Stock Exchange via RNS announcements which
are then made available on the Company’s website. The Company prepares and updates a corporate presentation which is also
available on its website along with other news and information about the Company and its operations.
As detailed in Principle 2 above, the directors believe that the Company has an effective and well-established programme for
communicating with both its institutional and private shareholders.
The Company will disclose the outcome of all shareholder votes on its website and in the case of 20% of independent votes being
case against a resolution, provide an explanation of the actions that will be taken to enable the Board to understand the reasons for
this result and any future actions it will take to address such concerns.
The Company’s website contains historic annual reports for the past five years and also notices of general meetings.
Report from the Audit & Risk Committee
The Audit & Risk Committee comprised Charles Joseland, Robert Wooldridge and was chaired by Charles Joseland during the year.
The Committee meets at least twice a year to consider the integrity of the financial statements of the Group, including its annual
and interim accounts, the accounting policies and auditor reports, as well as the terms of appointment and remuneration for the
auditors, the effectiveness of the Group’s internal controls and risk management systems, and external compliance matters.
The Board is responsible for maintaining a strong system of internal control to safeguard shareholders’ investments and the Group’s
assets and for reviewing its effectiveness. The system of internal financial control is designed to provide reasonable, but not absolute,
assurance against material misstatement or loss.
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CORPORATE GOVERNANCE REPORT (continued)
for the year ended 31 March 2021
The Committee met with the auditors to discuss their audit plan and scope of work, and also the findings from their audit. There
was specific focus on the fair presentation of the Company’s exploration and development activities, the assumptions underlying the
calculation of warrants and share options, the carrying value and any potential impairment of the evaluation and exploration assets
and inter-company balances, compliance with laws and regulations including the status of the licences, and the going concern
assumption, including the impact of Covid-19.
The Committee also considered the process for identifying and considering risks and their mitigating actions, and their disclosure in
the Annual Report on pages 17 to 19. They also considered the need for an internal audit function but decided the size and
complexity of the Group did not justify it at present. However, it will keep this decision under annual review.
Report from the Remuneration & Nomination Committee
The Remuneration Committee performs both remuneration and nomination functions and during the year ended 31 March 2021
comprised Robert Wooldridge (Chair), Charles Joseland, and Qingtao Zeng. It meets as and when required but at least annually.
The purpose of the remuneration function is to ensure that the directors are fairly rewarded for their individual contributions to the
overall performance of the Group, to determine all elements of the remuneration of the executive directors and to demonstrate
to the Group's shareholders that the remuneration of the directors is set by a Board committee whose Chairman has no personal
interest in the outcome of the committee's decision and will have appropriate regard to the interests of the shareholders.
The purpose of the nomination function is to identify and nominate potential new directors to the Board as considered necessary
and make recommendations on such appointments to be considered by the Board as a whole.
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REMUNERATION REPORT
for the year ended 31 March 2021
Directors’ remuneration
The Board recognises that Directors’ remuneration is of legitimate concern to shareholders and is committed to following current
best practice. The Group operates within a competitive environment and its performance depends on the individual contributions
of the Directors.
The policy of the Board is to provide executive remuneration packages designed to attract, motivate and retain directors of the
calibre necessary to maintain the Group’s position and to reward them for enhancing shareholder value and return. It aims to provide
sufficient levels of remuneration to do this, but to avoid paying more than is necessary; the remuneration will also reflect the Directors’
responsibilities. The Remuneration Committee is considering a new long term incentive plan for management aligned with the
Group’s objectives and to drive shareholder value.
In light of the slowdown in activity of the Company and the risks to the business arising from the Covid-19 pandemic, together with
the Company’s limited working capital in the early months of the year, the Chairman and Chief Executive in April 2020 agreed to
receive shares in the Company in lieu of their accrued but unpaid salaries and fees for the previous 6 months. In addition, over the
first 7 months of the financial year certain directors agreed to forego part of their salaries and fees as follows:
Percentage
of annual
Amount remuneration
Director foregone (£) foregone
Robert Wooldridge 17,750 39%
Bernard Aylward 44,205 31%
Qingtao Zeng 6,250 25%
In November 2020, following a review of the Chief Executive’s remuneration, the Board agreed to increase his annual remuneration
by approximately 6.5%.
Other Board fees have remained unchanged during the year.
The remuneration of the Directors of the Company who served during the year ended 31 March 2021 was as follows:
Fees and Share based
salary year to payments year to Total year to Total year to
31 March 2021 31 March 2021 31 March 2021 31 March 2020
£ £ £ £
Bernard Aylward (a) 96,510 – 96,510 113,539
Luke Bryan – – – 7,161
Charles Joseland (b) 35,000 – 35,000 42,994
Mark Pensabene – – – 13,955
Robert Wooldridge 27,250 – 27,250 45,888
Qingtao Zeng (c) 18,750 – 18,750 26,321
177,510 – 177,510 249,858
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REMUNERATION REPORT (continued)
for the year ended 31 March 2021
a Matlock Geological Services Pty Ltd (“Matlock”) a company wholly owned by Bernard Aylward, provided consultancy services
to the Group during the year ended 31 March 2021 and received fees of £76,094 (2020 £76,764). These fees are included
within the remuneration figure shown for Bernard Aylward.
b In addition to the amounts included above, Carolus Consulting Ltd, a company wholly owned by Charles Joseland, provided
consultancy services to the Group during the year and received fees of £nil (2020: £1,500).
c
In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned by Qingtao Zeng, provided
consultancy services to the Group during the year and received fees of £10,595 (2020: £13,480).
The reference to “Share based payments” recorded in the consolidated statement of comprehensive income relate to a theoretical
calculation of the non-cash cost to the Group of any share options granted to the directors that were awarded and still vesting to
the Directors during the year. These would not represent cash payments to the Directors either made in the past or due in the
future.
Notice periods of the Directors
Bernard Aylward’s appointment will continue until the earlier of: (i) the termination of the consultancy agreement between the
Company and Matlock Geological Services Pty Ltd (a company wholly owned by Mr Aylward); and (ii) termination by either the
Company or Mr Aylward on three months' prior written notice. Charles Joseland’s, Robert Wooldridge’s and Qingtao Zeng’s service
agreements are subject to three months’ notice of termination by either party.
Pensions
In compliance with the Pensions Act 2008 the Company has established a Workplace Pension Scheme for its UK based employees
and Directors with effect from 1 July 2017. Prior to this date, the Company has not made any pension arrangements for the Directors.
The Company made no contributions into the scheme on behalf of the Directors in the year.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KODAL MINERALS PLC
for the year ended 31 March 2021
Opinion
We have audited the financial statements of Kodal Minerals plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year
ended 31 March 2021 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated Statement of Changes in Equity, the 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
International Accounting Standards in conformity with the requirements of the Companies Act 2006 and, as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
l 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 March
2021 and of the group’s loss for the year then ended;
l the group financial statements have been properly prepared in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006;
l the parent company financial statements have been properly prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and as applied in accordance with the Companies Act 2006; and
l the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 review of the forecast costs for a period of at least
12 months from the date of this report, consideration of the cash position of the group as at the date of this report and discussions
with management regarding the necessity of planned expenditure and the possibilities available to them.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s or the parent company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KODAL MINERALS PLC (continued)
for the year ended 31 March 2021
Summary of our audit approach
Key audit matters
Group
l Valuation of exploration and evaluation intangible assets
Parent Company
l Impairment of non-current intercompany receivables
Materiality
Group
l Overall materiality: £298,000 (2020: £213,000)
l Performance materiality: £223,000 (2020: £160,000)
Parent Company
l Overall materiality: £287,000 (2020: £192,000)
l Performance materiality: £215,000 (2020: £144,000)
Our audit procedures covered 100% of total assets and loss
before tax.
Scope
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group and
parent company 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 group and parent company financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Valuation of exploration and evaluation intangible assets (Group)
Key audit matter
description
As shown in the Statement of Financial Position and discussed in note 7, the group’s main assets are in
exploration and evaluation assets of £9.0m.
This is considered to be a Key Audit Matter due to the significance of the balance to the Group
Statement of Financial Position and the level of judgement involved in the impairment review. There is
a risk that the carrying value of the assets are not supportable.
How the matter was
addressed in the audit
Management completed impairment assessments for both the lithium and gold exploration and
evaluation assets, on which our work included:
l Agreed a sample of additions in the year to supporting documentation and recalculated the
exchange rate used,
l Discussing and challenging the assumptions, inputs and judgements with management and the audit
committee,
l Reviewing copies of correspondence with relevant licensing authorities and the terms of the license
agreements,
l Discussing future plans and management’s intentions for the licenses held,
l Considering the results of exploration activities, changes in commodity prices and foreign exchange
fluctuations,
l Audit of the disclosures included in the financial statements with reference to IFRS 6.
The related disclosures are included in note 7 in the financial statements.
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Key observations
The majority of the additions to the intangible assets in 2021 relate to the gold assets, with minimal
spend incurred on the lithium licenses during the year.
Impairment of non-current intercompany receivables (Parent company)
Key audit matter
description
At 31 March 2021 the Parent Company statement of financial position includes amounts owed by
subsidiary undertakings of £7,916,150 (2020: £7,104,085), which includes an impairment of £876,686,
recognised in 2020. There is a risk that these balances may not be recoverable owing to the pre-revenue
state of the group’s subsidiary undertakings and the uncertainty over the future cashflows. The balance
is required to be assessed for impairment using the expected credit loss model under IFRS 9. Given the
uncertainty over the recoverability, the size and the judgement involved in calculating the expected
credit loss, this is considered a Key Audit Matter to the parent company.
How the matter was
addressed in the audit
Management prepared an IFRS 9 expected credit loss model. Our work on this included:
l Discussion with management and the audit committee regarding the scenarios applied and
considered these against those used in the prior year for consistency,
l Challenged management on the expected recovery under each scenario and the percentage
likelihoods applied to each,
l Re-calculated the expected credit loss,
l Audit of the disclosures included in the financial statements with reference to IFRS 9. The related
disclosures are included in note 9 in the financial statements.
Key observations
The expected credit loss model prepared by management gave a trivial loss for 2021 which has not
been recognised on the grounds of materiality.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of
our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a
whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the size of
the misstatements. Based on our professional judgement, we determined materiality as follows:
Group
Parent company
Overall materiality
£298,000 (2020: £213,000)
£287,000 (2020: £192,000)
Basis for determining overall materiality
2.25% of total assets
2.27% of total assets
Rationale for benchmark applied
The group is in the early stages of E&E
development and consequently
the
majority of expenses are capitalised under
IFRS 6. The carrying value of assets is
therefore the key metric considered by
users of the financial statements.
The value of the company is reflected in
its investment and intercompany balances
with its subsidiaries and as such total assets
is considered to be the appropriate
benchmark.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KODAL MINERALS PLC (continued)
for the year ended 31 March 2021
Performance materiality
£223,000 (2020: £160,000)
£215,000 (2020: £144,000)
Basis for determining performance
materiality
Reporting of misstatements to the Audit
Committee
75% of overall materiality
75% of overall materiality
Misstatements in excess of £14,900 and
misstatements below that threshold that,
in our view, warranted reporting on
qualitative grounds.
Misstatements in excess of £14,300 and
misstatements below that threshold that,
in our view, warranted reporting on
qualitative grounds.
An overview of the scope of our audit
The group consists of three components, located in the following countries;
l United Kingdom,
l Mali,
l Ivory Coast.
Full scope audits were performed on all three components and therefore 100% coverage of total assets and loss before tax was
achieved.
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
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the 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:
l 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
l 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.
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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:
l 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
l the parent company financial statements are not in agreement with the accounting records and returns; or
l certain disclosures of directors’ remuneration specified by law are not made; or
l 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 set out on pages 22 and 23, the directors are responsible for the
preparation of the 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 financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate
audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts
and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws
and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected
non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements
due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud
through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified
during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the
entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection
of fraud.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KODAL MINERALS PLC (continued)
for the year ended 31 March 2021
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team:
l obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the group
and parent company operates in and how the group and parent company are complying with the legal and regulatory framework;
l inquired of management, and those charged with governance, about their own identification and assessment of the risks of
irregularities, including any known actual, suspected or alleged instances of fraud;
l discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and
where the financial statements may be susceptible to fraud.
The most significant laws and regulations were determined as follows:
Legislation/Regulation
Additional audit procedures performed by the group audit engagement team included:
Review of the financial statement disclosures and testing to supporting documentation;
Completion of disclosure checklists to identify areas of non-compliance.
International
Accounting Standards
in conformity with the
Companies Act 2006
and Companies Act
2006
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Management override
of controls
Testing the appropriateness of journal entries and other adjustments;
Assessing whether the judgements made in making accounting estimates are indicative of a potential
bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside the normal
course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: http://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.
PAUL WATTS (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
Date: 25 August 2021
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2021
Year ended Year ended
31 March 31 March
2021 2020
Note £ £
Continuing operations
Revenue – –
Administrative expenses (512,885) (590,389)
Share based payments 5 (77,979) (39,226)
OPERATING LOSS (590,864) (629,615)
Finance charge (32,506) –
Finance income – 111
LOSS BEFORE TAX 2 (623,370) (629,504)
Taxation 6 – –
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS (623,370) (629,504)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss
Currency translation (loss) / gain (223,635) 148,618
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (847,005) (480,886)
Loss per share
Basic and diluted (pence) 4 (0.0054) (0.0072)
The loss for the current and prior years and the total comprehensive income for the current and the prior years are wholly
attributable to owners of the parent company.
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CONSOLIDATED AND PARENT COMPANY STATEMENTS
OF FINANCIAL POSITION
as at 31 March 2021
Registered number: 07220790
Group Group Company Company
31 March 31 March 31 March 31 March
2021 2020 2021 2020
Note £ £ £ £
NON-CURRENT ASSETS
Intangible assets 7 8,964,089 8,642,568 – –
Property, plant and equipment 8 8,677 14,549 – –
Amounts due from subsidiary undertakings 9 – – 7,916,150 7,104,085
Investments in subsidiary undertakings 9 – – 512,373 512,373
8,972,766 8,657,117 8,428,523 7,616,458
CURRENT ASSETS
Other receivables 10 1,854,908 19,978 1,854,908 19,978
Cash and cash equivalents 2,432,807 33,221 2,376,329 28,147
4,287,715 53,199 4,231,237 48,125
TOTAL ASSETS 13,260,481 8,710,316 12,659,760 7,664,583
CURRENT LIABILITIES
Trade and other payables 11 (624,616) (658,713) (321,851) (239,230)
TOTAL LIABILITIES (624,616) (658,713) (321,851) (239,230)
NET ASSETS 12,635,865 8,051,603 12,337,909 7,425,353
EQUITY
Attributable to owners of the parent:
Share capital 12 4,916,364 2,889,606 4,916,364 2,889,606
Share premium account 12 15,841,134 12,514,604 15,841,134 12,514,604
Share based payment reserve 807,802 729,823 807,802 729,823
Translation reserve (210,460) 13,175 – –
Retained deficit (8,718,975) (8,095,605) (9,227,391) (8,708,680)
TOTAL EQUITY 12,635,865 8,051,603 12,337,909 7,425,353
The Company’s loss for the year ended 31 March 2021 was £518,711 (2020: £1,454,166).
The financial statements were approved and authorised for issue by the board of directors on 25 August 2021 and signed on its
behalf by
Charles Joseland
Director
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2021
Attributable to the owners of the Parent
Share Share based
Share premium payment Translation Retained Total
capital account reserve reserve deficit equity
£ £ £ £ £ £
GROUP
At 31 March 2019 2,566,418 12,147,792 690,597 (135,443) (7,466,101) 7,803,263
Comprehensive income
Loss for the year – – – – (629,504) (629,504)
Other comprehensive income
Currency translation gain – – – 148,618 – 148,618
Total comprehensive income for the year – – – 148,618 (629,504) (480,886)
Transactions with owners
Share based payment – – 39,226 – – 39,226
Proceeds from shares issued 323,188 366,812 – – – 690,000
At 31 March 2020 2,889,606 12,514,604 729,823 13,175 (8,095,605) 8,051,603
Comprehensive income
Loss for the year – – – – (623,370) (623,370)
Other comprehensive income
Currency translation (loss) – – – (223,635) – (223,635)
Total comprehensive income for the year – – – (223,635) (623,370) (847,005)
Transactions with owners
Share based payment – – 77,979 – – 77,979
Proceeds from shares issued 2,026,758 3,548,315 – – – 5,575,073
Share issue expenses – (221,785) – – – (221,785)
At 31 March 2021 4,916,364 15,841,134 807,802 (210,460) (8,718,975) 12,635,865
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PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2021
Share Share based
Share premium payment Retained Total
capital account reserve deficit equity
£ £ £ £ £
COMPANY
At 31 March 2019 2,566,418 12,147,792 690,597 (7,254,514) 8,150,293
Comprehensive income
Loss for the year – – – (1,454,166) (1,454,166)
Total comprehensive income for the year – – – (1,454,166) (1,454,166)
Transactions with owners
Share based payment – – 39,226 – 39,226
Proceeds from shares issued 323,188 366,812 – – 690,000
At 31 March 2020 2,889,606 12,514,604 729,823 (8,708,680) 7,425,353
Comprehensive income
Loss for the year – – – (518,711) (518,711)
Total comprehensive income for the year – – – (518,711) (518,711)
Transactions with owners
Share based payment – – 77,979 – 77,979
Proceeds from shares issued 2,026,758 3,548,315 – – 5,575,073
Share issue expenses – (221,785) – – (221,785)
At 31 March 2021 4,916,364 15,841,134 807,802 (9,227,391) 12,337,909
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CONSOLIDATED AND PARENT COMPANY STATEMENTS
OF CASH FLOWS
for the year ended 31 March 2021
Group Group Company Company
Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March
2021 2020 2021 2020
Note £ £ £ £
Cash flows from operating activities
Loss before tax (623,370) (629,504) (518,711) (1,454,166)
Adjustments for non-cash items:
Share based payments 77,979 39,226 77,979 39,226
Operating cash flow before
movements in working capital (545,391) (590,278) (440,732) (1,414,940)
Movement in working capital
Decrease in receivables 3,965 1,033 3,965 1,033
(Decrease) / increase in payables (34,097) 61,463 82,621 44,828
Net movements in working capital (30,132) 62,496 86,586 45,861
Net cash outflow from
operating activities (575,523) (527,782) (354,146) (1,369,079)
Cash flows from investing activities
Purchase of intangible assets 7 (535,947) (1,554,353) – –
Loans to subsidiary undertakings – – (812,065) (592,171)
Net cash outflow from
investing activities (535,947) (1,554,353) (812,065) (592,171)
Cash flow from financing activities
Net proceeds from share issues 12 2,419,241 690,000 2,419,241 690,000
Net proceeds from convertible
loan notes 1,095,152 – 1,095,152 –
Net cash inflow from financing activities 3,514,393 690,000 3,514,393 690,000
Increase / (decrease) in cash and
cash equivalents 2,402,923 (1,392,135) 2,348,182 (1,271,250)
Cash and cash equivalents at
beginning of the year 33,221 1,408,393 28,147 1,299,397
Exchange (loss) / gain on cash (3,337) 16,963 – –
Cash and cash equivalents at end of the year 2,432,807 33,221 2,376,329 28,147
Cash and cash equivalents comprise cash on hand and bank balances.
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PRINCIPAL ACCOUNTING POLICIES
for the year ended 31 March 2021
The Group has adopted the accounting policies set out below in the preparation of the financial statements. All of these policies
have been applied consistently throughout the period unless otherwise stated.
Basis of preparation
The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in
accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006. The Company’s
ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.
Going concern
The Group has not earned revenue during the year to 31 March 2021 as it is still in the exploration and development phases of its
business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new
shares and other equity linked instruments.
At 31 March 2021, the Group held cash balances of £2,433,000 (2020: £33,000). An equity placement for £3.5 million took place
in late March, but £1.8m of the proceeds were only received after the year-end in April. The Group’s cash balances at 20 August
2021 were £3,248,876.
The Directors have prepared cash flow forecasts for the period ending 30 September 2022. The forecasts include payments for the
Bougouni mining licence and second stage concession payments for the Fatou project, repayment of the $300,000 advance from
the Riverfort Investors, further development of the Feasibility Study, additional exploration activity for both gold and lithium, as well
as covering ongoing overheads.
Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow
it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of
approval of these financial statements without the need to raise further financing. Accordingly, the financial statements have been
prepared on a going concern basis.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to the statement
of financial position date. Subsidiary undertakings are entities over which the Group has the power to control the financial and
operating policies so as to obtain benefits from their activities. The Group obtains and exercises control through voting rights.
Unrealised gains on transactions between the Company and its subsidiaries are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the
Group.
Foreign currency translation
Items included in the Group’s consolidated financial statements are measured using the currency of the primary economic
environment in which the Group operates (“the functional currency”). The financial statements are presented in pounds sterling
(“£”), which is the functional and presentational currency of the Parent Company and the presentational currency of the Group.
End of year balances in the Group’s West African subsidiary undertakings were converted using an end of year rate of XOF 1 :
£0.00130 (2020: XOF 1 : £0.00135).
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Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the reporting date and the gains or
losses on translation are included in profit and loss. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the original transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation,
which is included in administrative expenses, is charged so as to write off the costs of assets down to their residual value, over their
estimated useful lives, using the straight-line method, on the following basis:
Plant and machinery 4 years
Motor vehicles 4 years
Fixtures, fittings and equipment 4 years
Where property, plant and equipment are used in exploration and evaluation activities, the depreciation of the assets is capitalised
as part of the cost of exploration and evaluation assets. The assets’ residual values and useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment. Where the recoverable amount of the investment is
less than the carrying amount, an impairment is recognised.
Exploration and evaluation expenditure
In accordance with IFRS 6 (Exploration for and Evaluation of Mineral Resources), exploration and evaluation costs incurred before
the Group obtains legal rights to explore in a specific area (a “project area”) are taken to profit or loss.
Upon obtaining legal rights to explore in a project area, the fair value of the consideration paid for acquiring those rights and
subsequent exploration and evaluation costs are capitalised as exploration and evaluation assets. The costs of exploring for and
evaluating mineral resources are accumulated with reference to appropriate cost centres being project areas or groups of project
areas.
Upon the technical feasibility and commercial viability of extracting the relevant mineral resources becoming demonstrable, the
Group ceases further capitalisation of costs under IFRS 6.
Exploration and evaluation assets are not amortised prior to the conclusion of appraisal activities, but are carried at cost less
impairment, where the impairment tests are detailed below.
Exploration and evaluation assets are carried forward until the existence (or otherwise) of commercial reserves is determined:
l where commercial reserves have been discovered, the carrying value of the exploration and evaluation assets are reclassified as
development and production assets and amortised on an expected unit of production basis; or
l where a project area is abandoned, or a decision is made to perform no further work, the exploration and evaluation assets are
written off in full to profit or loss.
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PRINCIPAL ACCOUNTING POLICIES (continued)
for the year ended 31 March 2021
Exploration and evaluation assets – impairment
Project areas, or groups of project areas, are determined to be cash generating units for the purposes of assessment of impairment.
With reference to a project area or group of project areas, the exploration and evaluation assets (along with associated production
and development assets) are assessed for impairment when such facts and circumstances suggest that the carrying amount of the
assets may exceed the recoverable amount.
Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 and include the point at which a
determination is made as to whether or not commercial reserves exist.
The aggregate carrying value is compared against the expected recoverable amount, generally by reference to the present value of
the future net cash flows expected to be derived from production of the commercial reserves. Where the carrying amount exceeds
the recoverable amount, an impairment is recognised in profit or loss.
Intangible assets and impairment
Externally acquired intangible assets are initially recognised at cost and subsequently amortised over their useful economic lives.
Amortisation, which is included in administrative expenses, is charged so as to write off the costs of intangible assets, over their
estimated useful lives, using the straight-line method, on the following basis:
Software 3 years
Deferred taxation
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred tax is
realised, or the deferred liability is settled.
Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be available against which the
temporary differences can be utilised.
Financial instruments
Financial assets and financial liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the
contractual provisions of the instrument.
IFRS 7 (Financial Instruments: Disclosures) requires information to be disclosed about the impact of financial instruments on the
Group’s risk profile, how the risks arising from financial instruments might affect the entity's performance, and how these risks are
being managed. The required disclosures have been made in Note 14 to the financial statements.
The Group's policies include that no trading in derivative financial instruments shall be undertaken.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position comprise cash at bank and in hand.
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Other receivables
Other receivables are carried at amortised cost less provision made for impairment of these receivables. A provision for impairment
of receivables is established when there is an expected credit loss on amounts due according to the original terms of the receivables.
The amount of the provision is the difference between the assets’ carrying amount and the recoverable amount. Provisions for
impairment of receivables are included in profit or loss.
Trade and other payables
Trade payables and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial
year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these
goods and services. These amounts are carried at amortised cost. The amounts are unsecured and are usually paid within 30 days
of recognition.
Provisions
A provision is recognised when a present obligation (legal or constructive) has arisen as a result of a past event and it is probable
that a future outflow of resources will be required to settle the obligation, provided that a reliable estimate can be made of the
amount of the obligation.
When the effect of discounting is material, the amount recognised for a provision is the present value at the end of the reporting
period of the future expenditures expected to be required to settle the obligation. The increase in the discounted present value
amount arising from the passage of time is included in profit or loss.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction from the proceeds.
Equity settled transactions (Share based payments)
The Group has issued shares as consideration for services received. Equity settled share-based payments are measured at fair value
at the date of issue.
The Group has also granted equity settled options and warrants. The cost of equity settled transactions is measured by reference
to the fair value at the date on which they were granted and is recognised as an expense over the vesting period, which ends on
the date the recipient becomes fully entitled to the award. Fair value is determined by using the Black-Scholes option pricing model.
In valuing equity settled transactions, no account is taken of any service and performance conditions (vesting conditions), other than
performance conditions linked to the price of the shares of the Company (market conditions). Any other conditions which are
required to be met in order for the recipients to become fully entitled to an award are considered to be non-vesting conditions.
Market performance conditions and non-vesting conditions are taken into account in determining the grant value.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market or
non-vesting condition, which are vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided
that all other performance or service conditions are satisfied.
At each reporting date before vesting, the cumulative expense is calculated; representing the extent to which the vesting period has
expired and management’s best estimate of the number of equity instruments that will ultimately vest. The movement in the
cumulative expense since the previous reporting date is recognised in profit and loss, with a corresponding entry in equity.
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PRINCIPAL ACCOUNTING POLICIES (continued)
for the year ended 31 March 2021
Where the terms of the equity-settled award are modified, or a new award is designated as replacing a cancelled or settled award,
the cost based on the original award terms continues to be recognised over the original vesting period. In addition, an expense is
recognised over the remainder of the new vesting period for the incremental fair value of any modification, based on the difference
between the fair value of the original award and the fair value of the modified award, both as measured on the date of the
modification. No reduction is recognised if the difference is negative.
Where an equity-based award is cancelled (including when a non-vesting condition within the control of the entity or employee is
not met), it is treated as if it had vested on the date of the cancellation, and the cost not yet recognised in profit and loss for the
award is expensed immediately. Any compensation paid up to the fair value of the award at the cancellation or settlement date is
deducted from equity, with any excess over fair value being treated as an expense.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors, which has
been identified as the Chief Operating Decision Maker. The Board of Directors is responsible for allocating resources and assessing
performance of the operating segments in line with the strategic direction of the Company.
Critical accounting judgements and estimates
The preparation of these consolidated financial statements in accordance with International Financial Reporting Standards requires
the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the
consolidated financial statements and the reported amounts of income and expenses during the reporting period. Although these
estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those
estimates. IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and
liabilities within the next financial year are addressed below.
Exploration and evaluation expenditure
In accordance with the Group’s accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal
rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation
assets.
The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that
the carrying value of the assets may exceed the recoverable amount.
The directors have assessed the Group’s gold Projects in Mali and Côte d’Ivoire that are not part of the joint venture agreements
and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences
and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been
conducted on these assets.
The directors have assessed the Group’s Bougouni Lithium project in Mali, taking into account the Preliminary Feasibility Study
published during the year. This project continues to be evaluated and has not yet entered into development; there is no indication
of impairment. Accordingly, no impairment review has been conducted on these assets.
The Group’s exploration activities and future development opportunities are dependent upon maintaining the necessary licences
and permits to operate, which typically require periodic renewal or extension. In Mali and Côte d’Ivoire, the process of renewal or
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extension of a licence can only be initiated on expiry of the previous term and takes time to be processed by the relevant government
authority. Until formal notification is received there is a risk that renewal or extension will not be granted.
As detailed in the Operational Review, at the date of these financial statements, the Group’s key exploration licences are current.
As detailed in note 7, the total carrying value of the exploration and evaluation assets at 31 March 2021 was £9.0 million (2020:
£8.6 million). The Group complies with the prevailing laws and regulations relating to these licences and ensures that the regulatory
reporting and government compliance requirements for each licence are met.
Valuation of warrants and share options
In accordance with the Group’s accounting policy for equity settled transactions, all equity settled share-based payments are measured
at fair value at the date of issue. Fair value is determined by using the Black-Scholes option pricing model based on the terms of the
options and warrants, the Company’s share price at the time and assumptions for volatility and exercise date. The assumptions used
to value the options and warrants are detailed in note 5.
For options awarded to the directors, the award has been considered to be in relation to their overall contribution to the Group
and, accordingly, the charge has been included within operating costs in the Consolidated Statement of Comprehensive Income
rather than treated as an exploration and evaluation cost and capitalised against specific projects. For the award of warrants associated
with the raising of funds through the issue of new shares, the charge has been treated as a share issue expense and offset against
the share premium account.
Recoverability of Intercompany Balances to Subsidiary Undertakings
The Company has outstanding intercompany balances from its directly held subsidiaries resulting from the primary method of
financing the activity of those subsidiaries. The balances are shown in the Company Statement of Financial Position. However, there
is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the
intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run
various scenarios on the expected credit loss of the Company’s intercompany balances, including entering production, project/asset
sales, and insolvency. Management has updated its calculations reflecting additional amounts advanced to its subsidiaries for work on
its lithium and gold projects during the year, and also slightly reduced the risk of credit loss given improvements since last year in the
financial, lithium and gold markets. At 31 March 2021 a credit loss provision of £877,000 is held against amounts due from subsidiaries
(2020: £877,000).
Adoption of New and Revised Standards
The Group has adopted all of the new or amended Accounting Standards and interpretations issued by the International Accounting
Standards Board (“IASB”) that are mandatory and relevant to the Group’s activities for the current reporting period.
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PRINCIPAL ACCOUNTING POLICIES (continued)
for the year ended 31 March 2021
New standards and interpretations not applied
At the date of authorisation of these consolidated financial statements, certain new standards, amendments and interpretations to
existing standards have been published but are not yet effective and have not been adopted early by the Group. These are listed
below. The Board anticipates that all of the pronouncements will be adopted in the Group's accounting policies for the first period
beginning after the effective date of the pronouncement. The amendments to the standards noted below are not expected to have
a material impact on the Group's consolidated financial statements.
Annual periods
Standard Details of amendment / New Standards and Interpretations beginning on or after
IAS 1 Presentation of
Financial Statements
Amendments to IAS 1 Presentation of Financial Statements to specify the
requirements for classifying liabilities as current or non-current.
1 January 2023
IAS 1 Presentation of
Financial Statements
Amendments to IAS 1 Presentation of Financial Statements to specify the
requirements for disclosure of accounting policies.
1 January 2023
There are other standards in issue but not yet effective, which are not likely to be relevant to the Group which have therefore not
been listed.
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NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2021
1.
SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2021 are focused in the United Kingdom and West Africa
and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that
the Group had three operating segments being the West African Gold Projects, the West African Lithium Projects and the
UK administration operations. The Parent Company acts as a holding company. At 31 March 2021, the Group had not
commenced commercial production from its exploration sites and therefore had no revenue for the year.
Year ended 31 March 2021
Administrative expenses
Share based payments
Finance charge
Loss for the year
At 31 March 2021
Other receivables
Cash and cash equivalents
Trade and other payables
Intangible assets - exploration and
evaluation expenditure
Property, plant and equipment
UK
£
(512,349)
(77,979)
(32,506)
(622,834)
1,854,908
2,377,831
(321,851)
West Africa
Gold
£
West Africa
Lithium
£
Total
£
(512,885)
(77,979)
(32,506)
(623,370)
(127)
–
–
(127)
–
24,130
(302,765)
1,854,908
2,432,807
(624,616)
(409)
–
–
(409)
–
30,846
–
–
–
1,491,269
–
7,472,820
8,677
8,964,089
8,677
Net assets at 31 March 2021
3,910,888
1,522,115
7,202,862
12,635,865
Year ended 31 March 2020
Administrative expenses
Share based payments
Finance income
Loss for the year
At 31 March 2020
Other receivables
Cash and cash equivalents
Trade and other payables
Intangible assets - exploration and
evaluation expenditure
Property, plant and equipment
UK
£
(589,806)
(39,226)
111
(628,921)
19,978
29,516
(239,230)
West Africa
Gold
£
West Africa
Lithium
£
(500)
–
–
(500)
–
3,536
(1,488)
(83)
–
–
(83)
–
169
(417,995)
Total
£
(590,389)
(39,226)
111
(629,504)
19,978
33,221
(658,713)
–
–
1,178,567
–
7,464,001
14,549
8,642,568
14,549
Net (liabilities) / assets at 31 March 2020
(189,736)
1,180,615
7,060,724
8,051,603
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
2.
LOSS BEFORE TAX
The loss before tax from continuing activities is stated after charging:
Group Group
Year ended Year ended
31 March 2021 31 March 2020
£ £
Fees payable to the Company’s auditor 35,000 30,000
Share based payments (note 5) 77,979 39,226
Directors’ salaries and fees 127,265 164,939
Employer’s National Insurance 5,672 1,956
Amounts payable to RSM UK Audit LLP and its associates in respect of both audit and non-audit services are as follows;
Group Group
Year ended Year ended
31 March 2021 31 March 2020
£ £
Audit services
– statutory audit of parent and consolidated accounts 35,000 30,000
3.
EMPLOYEES’ AND DIRECTORS’ REMUNERATION
The average number of people employed in the Company and the Group is as follows:
Group Group Company Company
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Number Number Number Number
Average number of employees
(including directors): 9 9 4 4
The remuneration expense for directors of the Company is as follows:
Year ended Year ended
31 March 2021 31 March 2020
£ £
Directors’ remuneration 115,014 164,939
Directors’ social security costs 5,673 1,956
Total 120,687 166,895
In addition to the amounts included above, £62,496 (2020: £67,300) of the directors’ remuneration cost has been treated as
Exploration and Evaluation expenditure.
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3.
EMPLOYEES’ AND DIRECTORS’ REMUNERATION (continued)
Directors’ Share based
salary and fees payments Total
year ended year ended year ended
31 March 2021 31 March 2021 31 March 2021
(see note 5)
£ £ £
Bernard Aylward (a) 96,510 – 96,510
Charles Joseland (b) 35,000 – 35,000
Robert Wooldridge 27,250 – 27,250
Qingtao Zeng (c) 18,750 – 18,750
177,510 – 177,510
Directors’ Share based
salary and fees payments Total
year ended year ended year ended
31 March 2020 31 March 2020 31 March 2020
(see note 5)
£ £ £
Bernard Aylward (a) 111,763 1,776 113,539
Luke Bryan 5,385 1,776 7,161
Charles Joseland (b) 33,430 9,564 42,994
Mark Pensabene 11,661 2,294 13,955
Robert Wooldridge 45,000 888 45,888
Qingtao Zeng (c) 25,000 1,321 26,321
232,239 17,619 249,858
a Matlock Geological Services Pty Ltd (“Matlock”) a company wholly owned by Bernard Aylward, provided consultancy
services to the Group during the year ended 31 March 2021 and received fees of £76,094 (2020 £76,764). These fees
are included within the remuneration figure shown for Bernard Aylward.
b
c
In addition to the amounts included above, Carolus Consulting Ltd, a company wholly owned by Charles Joseland, provided
consultancy services to the Group during the year and received fees of £nil (2020: £1,500).
In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned by Qingtao Zeng,
provided consultancy services to the Group during the year and received fees of £10,595 (2020: £13,480).
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
4.
LOSS PER SHARE
Basic loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year.
The following reflects the result and share data used in the computations:
Weighted Basic
average number loss per
Loss of shares share (pence)
£
Year ended 31 March 2021 (623,370) 11,529,513,459 0.0054
Year ended 31 March 2020 (629,504) 8,786,936,058 0.0072
Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that
would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Options in issue are not
considered diluting to the loss per share as the Group is currently loss making. Diluted loss per share is therefore the same as
the basic loss per share.
5.
SHARE BASED PAYMENTS
The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees,
including key management personnel, as part of their remuneration.
Year ended Year ended
31 March 2021 31 March 2020
Share options outstanding Number Number
Opening balance 205,000,000 195,000,000
Issued in the year – 20,000,000
Lapsed in the year – (10,000,000)
Closing balance 205,000,000 205,000,000
Year ended Year ended
31 March 2021 31 March 2020
Warrants outstanding Number Number
Opening balance 205,000,000 205,000,000
Issued in the year 389,282,755 –
Exercised in the year (308,927,092) –
Closing balance 285,355,663 205,000,000
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5.
SHARE BASED PAYMENTS (continued)
Options outstanding for each of the directors at the year-end are outlined below:
Robert
Exercisable between Bernard Aylward Wooldridge Qingtao Zeng Charles Joseland
8 May 2017 – 8 May 2022 25,000,000 12,500,000 – –
8 May 2018 – 8 May 2023 12,500,000 6,250,000 – –
8 May 2019 – 8 May 2024 12,500,000 6,250,000 – –
20 Nov 2017 – 20 Nov 2022 – – 5,000,000 –
20 Nov 2018 – 20 Nov 2023 – – 2,500,000 –
20 Nov 2019 – 20 Nov 2024 – – 2,500,000 –
18 April 2019 – 18 April 2024 – – – 3,333,334
18 April 2020 – 18 April 2025 – – – 3,333,333
18 April 2021 – 18 April 2026 – – – 3,333,333
Closing balance 50,000,000 25,000,000 10,000,000 10,000,000
The total value of options and warrants granted in the year was £29,912 (2020: £39,226). Included within operating losses is
a charge for issuing share options and making share-based payments of £77,979 (2020: £39,226).
Details of share options and warrants outstanding at 31 March 2021:
Date of grant
Number of options Option price
Exercisable between
20 December 2013
20 December 2013
20 December 2013
8 May 2017
8 May 2017
8 May 2017
22 May 2017
22 May 2017
22 May 2017
20 November 2017
20 November 2017
20 November 2017
23 November 2018
23 November 2018
23 November 2018
18 April 2019
18 April 2019
18 April 2019
15 July 2020
27 October 2020
13,333,333
13,333,333
13,333,333
72,500,000
36,250,000
36,250,000
12,500,000
6,250,000
6,250,000
5,000,000
2,500,000
2,500,000
39,999,999
50,000,001
90,000,000
3,333,334
3,333,333
3,333,333
48,790,008
31,565,656
0.7 pence
0.7 pence
0.7 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.38 pence
0.14-0.38 pence
0.14-0.38 pence
0.14-0.38 pence
0.14-0.25 pence
0.14-0.25 pence
0.14-0.25 pence
0.061 pence
0.09 pence
30 Dec 2014 – 30 Dec 2024
30 Dec 2015 – 30 Dec 2025
30 Dec 2016 – 30 Dec 2026
8 May 2017 – 8 May 2022
8 May 2018 – 8 May 2023
8 May 2019 – 8 May 2024
22 May 2017 – 22 May 2022
22 May 2018 – 22 May 2023
22 May 2019 – 22 May 2024
20 Nov 2017 – 20 Nov 2022
20 Nov 2018 – 20 Nov 2023
20 Nov 2019 – 20 Nov 2024
1 March 2019 – 1 March 2024
To be determined at a future date
To be determined at a future date
18 April 2020 – 18 April 2025
18 April 2021 – 18 April 2026
18 April 2022 – 18 April 2027
15 July 2023
27 October 2023
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
5.
SHARE BASED PAYMENTS (continued)
Additional disclosure information:
Weighted average exercise price of share options and warrants:
l outstanding at the beginning of the period
l granted during the period
l outstanding at the end of the period
l exercisable at the end of the period
Weighted average remaining contractual life of
share options outstanding at the end of the period
Warrants issued in the year to 31 March 2021
0.41 pence
0.06 pence
0.35 pence
0.33 pence
3.2 years
The Company entered into option agreements dated 7 April 2020, 15 July 2020 and 27 October 2020 with Riverfort Global
Opportunities PCC Limited and YA II PN Ltd under which the following warrants were issued:
Date Warrants issued Exercise price
7 April 2020 228,571,428 0.04375 pence
15 July 2020 97,580,016 0.061 pence
27 October 2020 63,131,311 0.09 pence
The warrants are all exercisable for a period of 36 months from the date of grant. Of the total warrants issued in the year,
308,927,092 had been exercised prior to the year end.
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into
the model were:
7 April 2020 15 July 2020 27 October 2020
Strike price 0.04375p 0.061p 0.09p
Share price 0.0294p 0.0294p 0.0294p
Volatility 75% 75% 75%
Expiry date 7 April 2020 – 15 July 2020 – 27 October 2020 –
7 April 2023 15 July 2023 27 October 2023
Risk free rate 0.28% 0.28% 0.28%
Dividend yield 0.0% 0.0% 0.0%
Share options issued in the year to 31 March 2020
The Company entered into option agreements dated 18 April 2019 with Charles Joseland and dated 8 May 2019 with Mark
Pensabene under which up to 10 million share options may be issued to each of Mr Joseland and Mr Pensabene in three
tranches as follows:
Exercise price per share Tranche 1 Tranche 2 Tranche 3 Total
0.14p 1,666,667 1,666,667 1,666,666 5,000,000
0.25p 1,666,667 1,666,666 1,666,667 5,000,000
Total 3,333,334 3,333,333 3,333,333 10,000,000
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5.
SHARE BASED PAYMENTS (continued)
All the options have a life of 5 years from vesting. 34 per cent. of the options vest in one year, with a further 33 per cent.
vesting in two years and the remaining 33 per cent. vesting in three years' time. The options issued to Mr Pensabene lapsed
on 31 October 2019 when Mr Pensabene resigned before the options had vested.
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into
the model were:
18 April 2019 8 May 2019
Strike price 0.14p – 0.25p 0.14p – 0.25p
Share price 0.08p – 0.11p 0.07p – 0.09p
Volatility 69% 69%
Expiry date 18 April 2020 – 8 May 2020 –
18 April 2027 8 May 2027
Risk free rate 0.11% - 0.19% 0.12% - 0.20%
Dividend yield 0.0% 0.0%
6. TAXATION
Group Group
Year ended Year ended
31 March 2021 31 March 2020
£ £
Taxation charge for the year – –
Factors affecting the tax charge for the year
Loss from continuing operations before income tax (623,370) (629,504)
Tax at 19% (2019: 19%) (118,440) (119,606)
Expenses not deductible – 606
Losses carried forward not deductible 103,624 111,547
Deferred tax differences 14,816 7,453
Income tax expense – –
The Group has tax losses and other potential deferred tax assets totalling £2,425,000 (2020: £2,258,000) which will be able
to be offset against future income. No deferred tax asset has been recognised in respect of these losses as the timing of their
utilisation is uncertain at this stage.
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
7.
INTANGIBLE ASSETS
Exploration and
evaluation
GROUP £
COST
At 1 April 2019 6,951,209
Additions in the year 1,601,526
Effects of foreign exchange 89,833
At 1 April 2020 8,642,568
Additions in the year 541,772
Effects of foreign exchange (220,251)
At 31 March 2021 8,964,089
AMORTISATION
At 1 April 2019 and 1 April 2020 and 31 March 2021 –
NET BOOK VALUES
At 31 March 2021 8,964,089
At 31 March 2020 8,642,568
At 31 March 2019 6,951,209
The Company did not have any Intangible Assets as at 31 March 2019, 2020 and 2021.
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8.
PROPERTY, PLANT AND EQUIPMENT
Plant and
machinery
GROUP £
COST
1 April 2019 26,447
Additions in the year –
Effects of foreign exchange 577
At 1 April 2020 27,024
Additions in the year 526
Effects of foreign exchange (1,471)
At 31 March 2021 26,079
DEPRECIATION
At 1 April 2019 6,546
Depreciation charge 5,929
At 1 April 2020 12,475
Depreciation charge 5,825
Effects of foreign exchange (898)
At 31 March 2021 17,402
NET BOOK VALUES
At 31 March 2021 8,677
At 31 March 2020 14,549
At 31 March 2019 19,901
All tangible assets are wholly associated with exploration and development projects and therefore the amounts charged in
respect of depreciation are capitalised as evaluation and exploration assets within intangible assets.
The Company did not have any Property, Plant and Equipment as at 31 March 2019, 2020 and 2021.
9.
SUBSIDIARY UNDERTAKINGS
a. Amounts due from subsidiary undertakings
Company Company
31 March 2021 31 March 2020
£ £
Amounts due from subsidiary undertakings 7,916,150 7,104,085
7,916,150 7,104,085
Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company’s
intercompany balances, including entering production, project/asset sales, and insolvency. Management has updated its calculations
reflecting additional amounts advanced to its subsidiaries for work on its lithium and gold projects during the year, and also
slightly reduced the risk of credit loss given improvements since last year in the financial, lithium and gold markets. At 31 March
2021 a credit loss provision of £877,000 is held against amounts due from subsidiaries (2020: £877,000).
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
9.
SUBSIDIARY UNDERTAKINGS (continued)
b.
Investments in subsidiary undertakings
The consolidated financial statements include the following subsidiary companies:
Country of Equity Nature of
Company Subsidiary of incorporation Registered office holding business
Kodal Norway (UK) Ltd Kodal Minerals Plc
United
Kingdom
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP
100%
International
Goldfields (Bermuda)
Limited
Kodal Minerals Plc
Bermuda
International
Goldfields Côte
d’Ivoire SARL
International Goldfields
(Bermuda) Limited
Côte d’Ivoire
International
Goldfields Mali SARL
International Goldfields
(Bermuda) Limited
Mali
Jigsaw Resources CIV
Ltd
International Goldfields
(Bermuda) Limited
Bermuda
Corvette CIV SARL
Jigsaw Resources CIV
Ltd
Côte d’Ivoire
Future Minerals
SARL
International Goldfields
(Bermuda) Limited
Mali
Operating
company
Holding
company
100%
MQ Services Ltd
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
100%
Abidjan Cocody Les
Deux Plateaux 7eme
Tranche BP Abidjan
Côte d’Ivoire
Mining
exploration
100%
Bamako, Faladi, Mali
Univers, Rue 886 B,
Porte 487 Mali
Mining
exploration
100%
MQ Services Ltd
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
Mining
exploration
100%
Abidjan Cocody Les
Deux Plateaux 7eme
Tranche BP Abidjan
Côte d’Ivoire
Mining
exploration
100%
Bamako, Faladi, Mali
Univers, Rue 886 B,
Porte 487 Mali
Mining
exploration
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9.
SUBSIDIARY UNDERTAKINGS (continued)
Kodal Minerals plc has issued a guarantee under section 479C to its subsidiary, Kodal Norway (UK) Ltd (“Kodal Norway”,
company number 08491224) in respect of its activities for the year ended 31 March 2021 to allow Kodal Norway to take
advantage of the exemption under s479A of the Companies Act 2006 from the requirements of the Act relating to audit of
its individual accounts for the year ended 31 March 2021.
Year ended Year ended
Carrying value of investment in subsidiaries 31 March 2021 31 March 2020
£ £
Opening balance 512,373 512,373
Impairment in the year – –
Closing balance 512,373 512,373
10. OTHER RECEIVABLES
Group Group Company Company
31 March 2021 31 March 2020 31 March 2021 31 March 2020
£ £ £ £
Share issue proceeds receivable 1,838,895 – 1,838,895 –
Other receivables 16,013 19,978 16,013 19,978
1,854,908 19,978 1,854,908 19,978
All receivables at each reporting date are current. No receivables are past due. The Directors consider that the carrying amount
of the other receivables approximates their fair value and there are no expected credit losses.
11. TRADE AND OTHER PAYABLES
Group Group Company Company
31 March 2021 31 March 2020 31 March 2021 31 March 2020
£ £ £ £
Trade payables 357,514 456,847 55,401 147,438
Other payables 267,102 201,866 266,451 91,792
624,616 658,713 321,852 239,230
All trade and other payables at each reporting date are current. The Directors consider that the carrying amount of the trade
and other payables approximates their fair value.
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
12. SHARE CAPITAL
GROUP AND COMPANY
Allotted, issued and fully paid:
Nominal Number of
Note Value Ordinary Shares Share Capital Share Premium
£ £
At 31 March 2019 8,212,539,503 2,566,418 12,147,792
July 2019 a £0.0003125 718,750,000 224,609 228,516
July 2019 – Treasury shares held £0.0003125 (250,000,000) (78,125) –
August 2019 b £0.0003125 65,451,616 20,454 44,546
October 2019 c £0.0003125 250,000,000 78,125 93,750
October 2019 – Treasury shares sold £0.0003125 250,000,000 78,125 –
At 31 March 2020 9,246,741,119 2,889,606 12,514,604
April 2020 d £0.0003125 1,428,571,429 446,429 202,102
April 2020 e £0.0003125 378,323,379 118,226 14,187
June 2020 f £0.0003125 56,987,211 17,809 2,137
September 2020 g £0.0003125 228,571,428 71,429 28,571
October 2020 h £0.0003125 125,034,486 39,073 40,199
November 2020 i £0.0003125 85,063,264 26,582 27,348
December 2020 j £0.0003125 118,600,205 37,063 38,130
January 2021 k £0.0003125 176,190,315 55,059 56,645
January 2021 l £0.0003125 347,078,879 108,462 111,586
February 2021 m £0.0003125 153,379,428 47,931 74,314
March 2021 n £0.0003125 128,080,136 40,025 68,131
March 2021 o £0.0003125 210,896,619 65,905 114,538
March 2021 p £0.0003125 168,489,949 52,653 91,507
March 2021 q £0.0003125 2,800,000,000 875,000 2,424,075
March 2021 r £0.0003125 48,790,008 15,247 14,515
March 2021 s £0.0003125 31,565,656 9,864 18,545
At 31 March 2021 15,732,363,511 4,916,364 15,841,134
a) On 29 July 2019, a total of 718,750,000 shares were issued in a placing at an issue price of 0.08 pence per share. Of these
placing shares, 250,000,000 shares were allotted to SVS Securities plc which entered administration on 5 August 2019 and
did not complete its placing participation. These shares were held as treasury shares at 30 September 2019 and were
then placed on 28 October 2019.
b) On 2 August 2019, a total of 65,451,616 shares were issued to Bambara Resources SARL at an issue price of 0.099 pence
per share.
c) On 28 October 2019, a total of 250,000,000 shares were issued in a placing and subscription at a price of 0.05 pence per
share. In addition, the Company placed the 250,000,000 shares allotted to SVS Securities plc in July 2019 at the same
price.
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12. SHARE CAPITAL (continued)
d) On 7 April 2020, a total of 1,428,571,429 shares were issued to Riverfort Global Opportunities PCC Limited and YA II PN Ltd
(the "Investors") in connection with the Equity Sharing Agreement (“ESA”). The shares issued under the ESA were issued at
an average price of 0.04686 pence per share. Share issue expenses of £20,860 were offset against the share premium account.
e) On 7 April 2020, a total of 378,323,379 shares were issued at an issue price of 0.035 pence per share to a number of
Directors and senior management as payment for salaries or fees owed.
f) On 29 May 2020, a total of 56,987,211 shares were issued at a price of 0.035 pence per share to satisfy payment of
certain third party professional fees.
g) On 7 September 2020, a total of 228,571,428 shares were issued to the Investors at a price of 0.04375 pence per share
in connection with the exercise of warrants issued in connection with the ESA.
h) On 15 October 2020, the Investors elected to convert a total amount of $102,352.31 (equivalent to £79,271.86), made
up of a principal amount of US$100,004.40 and accrued interest of $2,347.91, into 125,034,486 ordinary shares at a price
of 0.06340 pence per share.
i) On 2 November 2020, the Investors elected to convert a total amount of $70,358.92 (equivalent to £53,930.11), made
up of a principal amount of $70,000.00 and accrued interest of $358.92, into 85,063,264 ordinary shares at a price of
0.06340 pence per share.
j) On 15 December 2020, the Investors elected to convert a total amount of $101,160.41 (equivalent to £75,192.53), made
up of a principal amount of $100,000.00 and accrued interest of $1,160.41, into 118,600,205 ordinary shares at a price of
0.06340 pence per share.
k) On 5 January 2021, the Investors elected to convert a total amount of $150,809.59 (equivalent to £111,704.66), made
up of a principal amount of $150,000.00 and accrued interest of $809.59, into 176,190,315 ordinary shares at a price of
0.06340 pence per share.
l) On 8 January 2021, the Investors elected to convert a total amount of $300,242.88 (equivalent to £220,048.01), made
up of a principal amount of $300,000.00 and accrued interest of $242.88, into 347,078,879 ordinary shares at a price of
0.06340 pence per share.
m) On 19 February 2021, the Investors elected to convert a total amount of $169,384.70 (equivalent to £122,244.94), made
up of a principal amount of $150,000.00 and accrued interest of $19,384.70, into 153,379,428 ordinary shares at a price
of 0.079701 pence per share.
n) On 17 March 2021, the Investors elected to convert a total amount of $150,971.51 (equivalent to £108,155.99), made
up of a principal amount of $150,000 and accrued interest of $971.51, into 128,080,136 ordinary shares at a price of
0.084444 pence per share.
o) On 22 March 2021, the Investors elected to convert a total amount of $250,337.33 (equivalent to £180,443.15), made
up of a principal amount of $250,000 and accrued interest of $337.33, into 210,896,619 ordinary shares at a price of
0.08556 pence per share.
p) On 22 March 2021, the Investors elected to convert a total amount of US$200,000 (equivalent to £144,160), made up
of a principal amount of US$200,000 and no accrued interest, into 168,489,949 ordinary shares at a price of 0.08556
pence per share.
q) On 25 March 2021, a total of 2,800,000,000 shares were issued in a placing at a price of 0.125 pence per share. Share
issue expenses of £200,925 were offset against the share premium account.
r) On 25 March 2021, a total of 48,790,008 shares were issued to the Investors at a price of 0.061 pence per share in
connection with the exercise of warrants.
s) On 25 March 2021, a total of 31,565,656 shares were issued to the Investors at a price of 0.09 pence per share in
connection with the exercise of warrants.
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
13. RESERVES
Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Share based payment reserve
Translation reserve
Retained earnings
Cumulative fair value of options and share rights recognised as an expense. Upon exercise
of options or share rights, any proceeds received are credited to share capital. The
share-based payment reserve remains as a separate component of equity.
Gains/losses arising on re-translating the net assets of overseas operations into sterling.
Cumulative net gains and losses recognised in the consolidated statement of financial
position.
14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Group's principal financial instruments comprise cash and cash equivalents, other receivables and trade and other payables.
The main purpose of cash and cash equivalents is to finance the Group’s operations. The Group’s other financial assets and
liabilities such as other receivables and trade and other payables, arise directly from its operations.
It has been the Group’s policy, throughout the periods presented in the consolidated financial statements, that no trading in
financial instruments was to be undertaken, and no such instruments were entered in to.
The main risk arising from the Group’s financial instruments is market risk. The Directors consider other risks to be more minor,
and these are summarised below. The Board reviews and agrees policies for managing each of these risks.
Market risk
Market risk is the risk that changes in market prices, and market factors such as foreign exchange rates and interest rates will
affect the Group’s results or the value of its assets and liabilities.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters while
optimising the return.
Interest rate risk
The Group does not have any borrowings and does not pay interest.
The Group's exposure to the risks of changes in market interest rates relates primarily to the Group's cash and cash equivalents
with a floating interest rate. These financial assets with variable rates expose the Group to interest rate risk. All other financial
assets and liabilities in the form of receivables and payables are non-interest bearing.
In regard to its interest rate risk, the Group periodically analyses its exposure. Within this analysis consideration is given to
alternative investments and the mix of fixed and variable interest rates. The Group does not engage in any hedging or derivative
transactions to manage interest rate risk.
The Group in the year to 31 March 2021 earned interest of £nil (2020: £111). Due to the Group’s relatively low level of
interest-bearing assets and the very low interest rates available in the market the Group is not exposed to any significant
interest rate risk.
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14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Credit risk
Credit risk refers to the risk that a counterparty could default on its contractual obligations resulting in financial loss to the
Group. The Group’s principal financial assets are cash balances and other receivables.
The Group has adopted a policy of only dealing with what it believes to be creditworthy counterparties and would consider
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s
exposure to and the credit ratings of its counterparties are continuously monitored. An allowance for impairment is made
where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of
the receivables concerned.
Other receivables consist primarily of prepayments and other sundry receivables and none of the amounts included therein
are past due or impaired.
Financial instruments by category – Group
Other financial
Loans and liabilities at
receivables amortised cost Total
31 March 2021 £ £ £
Assets
Other receivables 1,854,908 – 1,854,908
Cash and cash equivalents 2,432,807 – 2,432,807
Total 4,287,715 – 4,287,715
Liabilities
Trade and other payables – (624,616) (624,616)
Total – (624,616) (624,616)
31 March 2020
Assets
Other receivables 19,978 – 19,978
Cash and cash equivalents 33,221 – 33,221
Total 53,199 – 53,199
Liabilities
Trade and other payables – (658,713) (658,713)
Total – (658,713) (658,713)
Foreign exchange risk
Throughout the periods presented in the consolidated financial statements, the functional currency for the Group's West African
subsidiaries has been the CFA Franc.
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
The Group incurs certain exploration costs in the CFA Franc, US Dollars and Australian Dollars and has exposure to foreign
exchange rates prevailing at the dates when Sterling funds are translated into other currencies. The CFA Franc has a fixed
exchange rate to the Euro and the Group therefore has exposure to movements in the Sterling : Euro exchange rate. The
Group has not hedged against this foreign exchange risk as the Directors do not consider that the level of exposure poses a
significant risk.
The Group continues to keep the matter under review as further exploration and evaluation work is performed in West Africa
and other countries and will develop currency risk mitigation procedures if the significance of this risk materially increases.
The Group’s consolidated financial statements have a low sensitivity to changes in exchange due to the low value of assets and
liabilities (principally cash balances) maintained in foreign currencies. Once any project moves into the development phase a
greater proportion of expenditure is expected to be denominated in foreign currencies which may increase the foreign exchange
risk.
Financial instruments by currency – Group
31 March 2021 GBP USD NOK AUD XOF Total
Assets
Other receivables 1,854,908 – – – – 1,854,908
Cash and cash equivalents 2,202,748 173,586 1,497 – 54,976 2,432,807
Total 4,057,656 173,586 1,497 – 54,976 4,287,715
Liabilities
Trade and other payables (83,714) (539,503) – (749) (650) (624,616)
31 March 2020
Assets
Other receivables 19,978 – – – – 19,978
Cash and cash equivalents 28,147 – 1,370 – 3,704 33,221
Total 48,125 – 1,370 – 3,704 53,199
Liabilities
Trade and other payables (179,506) (314,468) – (54,665) (110,074) (658,713)
Liquidity risk
Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.
The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meet its liabilities when they fall due, under both normal and stressed conditions.
The Group has established policies and processes to manage liquidity risk. These include:
l Monitoring the maturity profiles of financial assets and liabilities in order to match inflows and outflows;
l Monitoring liquidity ratios (working capital); and
l Capital management procedures, as defined below.
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14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT (continued)
Capital management
The Group's objective when managing capital is to ensure that adequate funding and resources are obtained to enable it to
develop its projects through to profitable production, whilst in the meantime safeguarding the Group's ability to continue as a
going concern. This is to enable the Group, once projects become commercially and technically viable, to provide appropriate
returns for shareholders and benefits for other stakeholders.
The Group has historically relied on equity to finance its growth and exploration activity, raised through the issue of shares.
In the future, the Board will utilise financing sources, be that debt or equity, that best suits the Group’s working capital
requirements and taking into account the prevailing market conditions.
Fair value
The fair value of the financial assets and financial liabilities of the Group, at each reporting date, approximates to their carrying
amount as disclosed in the Statement of Financial Position and in the related notes.
The fair values of the financial assets and liabilities are included at the amounts at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale.
The cash and cash equivalents, other receivables, trade payables and other current liabilities approximate their carrying value
amounts largely due to the short-term maturities of these instruments.
Disclosure of financial instruments and financial risk management for the Company has not been performed as they are not
significantly different from the Group’s position described above.
15. RELATED PARTY TRANSACTIONS
The Directors represent the key management personnel of the Group and details of their remuneration are provided in note 3.
Robert Wooldridge, a Director, is a member of SP Angel Corporate Finance LLP (“SP Angel”) which acts as financial adviser and
broker to the Company. During the year ended 31 March 2021, the Company paid fees to SP Angel of £240,381 (2020: £58,323).
The balance due to SP Angel at 31 March 2021 was £nil (2020: £7,979).
Matlock Geological Services Pty Ltd (“Matlock”) a company wholly owned by Bernard Aylward, a Director, provided consultancy
services to the Group during the year ended 31 March 2021 and received fees of £76,094 (2019 £76,764). These fees are included
within the remuneration figure shown for Bernard Aylward in note 3. The balance due to Matlock at 31 March 2021 was £nil
(2020: £21,626).
Geosmart Consulting Pty Ltd (“Geosmart”), a company wholly owned by Qingtao Zeng, a Director, provided consultancy services
to the Group during the year ended 31 March 2021 and received fees of £10,595 (2020: £13,480). The balance due to Geosmart
at 31 March 2021 was £nil (2020: £2,502).
Carolus Consulting Ltd (“Carolus”), a company wholly owned by Charles Joseland, a Director, provided consultancy services to
the Group during the year ended 31 March 2021 and received fees of £nil (2020: £1,500). The balance due to Carolus at 31
March 2021 was £nil (2020: £nil).
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NOTES TO THE FINANCIAL STATEMENTS (continued)
for the year ended 31 March 2021
16. CONTROL
No one party is identified as controlling the Group.
17. CAPITAL COMMITMENTS
The Group had capital commitments to exploration and evaluation expenditure of £nil (2020: £130,000).
18. EVENTS AFTER THE REPORTING PERIOD
On 21 May 2021, a total of 80,355,664 shares were issued to the Investors in connection with the exercise of warrants.
48,790,008 warrants were issued in July 2020 with an exercise price of 0.061 pence per share and 31,565,656 warrants were
issued in October 2020 with an exercise price of 0.09 pence per share.
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NOTICE OF ANNUAL GENERAL MEETING
Kodal Minerals plc
(Registered in England and Wales No. 07220790)
Notice is hereby given that the Annual General Meeting of Kodal Minerals plc (the “Company”) will be held at Fieldfisher LLP,
9th Floor, Riverbank House, 2 Swan Lane, London EC4R 3TT on Tuesday 28 September 2021 at 11:00am for the purposes of
considering and, if thought fit, passing the following resolutions, of which Resolutions 1 to 5 (inclusive) will be proposed as ordinary
resolutions and Resolution 6 will be proposed as a special resolution:
Ordinary Business
1. To receive the audited financial statements of the Company for the financial period ended 31 March 2021 and the reports of
the directors of the Company (the "Directors") and the auditors thereon.
2. To re-appoint Bernard Aylward as a Director, who retires in accordance with article 30.2 of the articles of association of the
Company (the "Articles") and offers himself for re-appointment.
3. To re-appoint Charles Joseland as a Director, who retires in accordance with article 30.2 of the Articles and offers himself for
re-appointment.
4. To re-appoint RSM UK Audit LLP as the auditors of the Company until the next Annual General Meeting and to authorise the
Directors to fix their remuneration.
Special Business
5. That the Directors, and any committee to which the Directors delegate relevant powers, be and they are hereby, generally and
unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the "Act") to allot shares in the Company
or grant rights to subscribe for or convert any security into shares in the Company ("Rights") up to a maximum aggregate
nominal amount of £2,470,737 and this authority will (unless renewed, revoked or varied by the Company in general meeting)
expire at the conclusion of the Annual General Meeting of the Company to be held in 2022 but the Company may, before this
authority expires, make an offer or agreement which would or might require shares to be allotted or Rights to be granted after
the authority expires and the Directors may allot shares or grant Rights pursuant to such offer or agreement as if the authority
conferred hereby had not expired, such authority to be in substitution for any existing authorities conferred on the Directors
pursuant to section 551 of the Act.
6. That, conditional on the passing of Resolution 5, the Directors, and any committee to which the Directors delegate relevant
powers, be and they are hereby generally empowered pursuant to section 570 of the Act to allot equity securities (as defined
in section 560 of the Act) for cash pursuant to the authority conferred by Resolution 5 above as if section 561(1) of the Act did
not apply to any such allotment, provided that this power shall be in substitution for any previous powers conferred on the
Directors pursuant to section 570 of the Act and shall be limited to:
(a)
the allotment of equity securities in connection with an issue in favour of the holders of ordinary shares of the Company
in proportion (as nearly as may be) to their respective holdings of ordinary shares, subject only to such exclusions or other
arrangements as the Directors may deem necessary or expedient to deal with fractional entitlements, legal or practical
problems arising in any overseas territory or the requirements of any regulatory body or stock exchange in any territory;
and
(b)
the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount
of £1,482,442,
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NOTICE OF ANNUAL GENERAL MEETING (continued)
and the power hereby granted shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2022
save that the Company may before such expiry make an offer or agreement which would or might require equity securities to
be allotted after such expiry but otherwise in accordance with the foregoing provisions of this power in which case the Directors
may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
BY ORDER OF THE BOARD
Weaver Financial Limited
Company Secretary
31 August 2021
Registered Office:
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
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Notes:
Entitlement to attend, speak and vote
1.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), the Company has specified that only those members entered on the
register of members at 11:00am on 24 September 2021 (or in the event that this meeting is adjourned, on the register of members 48 hours excluding
non-business days before the time of any adjourned meeting) shall be entitled to attend, speak and vote at the meeting in respect of the number of ordinary
shares in the capital of the Company held in their name at that time. Changes to the register after 11:00am on 24 September 2021 shall be disregarded in
determining the rights of any person to attend, speak and vote at the meeting.
Appointment of proxies
2. Members are entitled to appoint a proxy or proxies to exercise all or any of their rights to attend, speak and vote at the meeting. A proxy need not be a
shareholder of the Company. A shareholder may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is appointed
to exercise the rights attached to a different share or shares held by that shareholder. Please see the instructions on the enclosed Form of Proxy.
3. The completion and return of a Form of Proxy whether in hard copy form or in CREST will not preclude a member from attending in person at the meeting
and voting should he or she wish to do so.
Appointment of proxies using hardcopy proxy form
4.
Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not
exceed the number of shares held by you) in the boxes indicated on the form. Please also indicate if the proxy instruction is one of multiple instructions being
given. To appoint more than one proxy please see the instructions on the enclosed Form of Proxy. All forms must be signed and should be returned together in
the same envelope.
5. To be valid, the Form of Proxy and the power of attorney or other authority (if any) under which it is signed or a certified copy of such power or authority must
be lodged at the offices of the Company’s registrars, Share Registrars Limited, The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR by hand, or sent by
post, or scanned copy can be sent via e-mail to voting@shareregistrars.uk.com, so as to be received not less than 48 hours excluding non-business days before
the time fixed for the holding of the meeting or any adjournment thereof (as the case may be).
Appointment of proxies using CREST
6. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the meeting and any
adjournment(s) of it by using the procedures described in the CREST Manual (available from https://www.euroclear.com/site/public/EUI). CREST Personal
Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST
sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
7.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly
authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described
in the CREST Manual. The message must be transmitted so as to be received by the issuer's agent (ID: 7RA36) by 11:00am on 24 September 2021. For this
purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
8. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST Personal Member or sponsored
member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary
to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their
CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST
system and timings.
9. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations
2001.
Changing proxy instructions
10. To change your proxy instructions, simply submit a new proxy appointment using one of the methods set out above. Note that the cut-off time for receipt of
proxy appointments also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
If the Company receives more than one appointment of a proxy in respect of any one share, the appointment received last revokes each earlier appointment
and the Company's decision as to which appointment was received last is final.
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NOTICE OF ANNUAL GENERAL MEETING (continued)
Termination of proxy appointments
11.
In order to revoke a proxy appointment you must notify the Company by no later than 11.00 am on 24 September 2021. If you attempt to revoke your proxy
appointment but the revocation is received after the time specified your original proxy appointment will remain valid.
Joint shareholders
12.
In the case of joint shareholders, the vote of the senior who tenders a vote, whether in person (including by corporate representative) or by proxy, shall be
accepted to the exclusion of the votes of the other joint shareholders. Seniority is determined by the order in which the names of the joint holders appear in
the Company’s register of members.
Corporate representatives
13. A corporation which is a member can appoint one or more corporate representatives who may exercise, on its behalf, all its powers as a member provided that
no more than one corporate representative exercises powers over the same share.
Explanatory Notes to the Resolutions
An explanation of each of the resolutions contained in the notice of meeting is set out below.
Resolutions 1 to 5 (inclusive) will be proposed as ordinary resolutions. For an ordinary resolution to be passed, more than half of the votes cast must be in favour
of the resolution.
Resolution 6 will be proposed as a special resolutions. For a special resolution to be passed, at least three quarters of the votes cast must be in favour of the
resolution.
14. Resolution 1 - This resolution seeks approval from shareholders for the receipt of the directors’ and auditors’ reports and the financial statements of the Company
for the year ended 31 March 2021.
15. Resolution 2 - This resolution seeks approval from shareholders to re-appoint Bernard Aylward as a director of the Company ("Director") who retires and
offers himself for re-appointment pursuant to Article 30.2 of the Company’s Articles of Association ("Articles").
16. Resolution 3 - This resolution seeks approval from shareholders to re-appoint Charles Joseland as a Director who retires and offers himself for re-appointment
pursuant to Article 30.2 of the Articles.
17. Resolution 4 - This resolution seeks approval from shareholders to reappoint RSM UK Audit LLP as the auditors of the Company and to authorise the Directors
to fix their remuneration as they see fit.
18. Resolution 5 - This resolution, to be proposed as an ordinary resolution, relates to the grant to the Directors of the authority to allot ordinary shares and grant
rights to subscribe for or convert securities into ordinary shares with such authority expiring at the conclusion of the Annual General Meeting of the Company
to be held in 2022, unless the authority is renewed or revoked prior to such time. This authority is limited to the issue of a maximum of 7,906,359,587 ordinary
shares (representing approximately 50 per cent. of the Company’s entire issued share capital as at the date of this notice).
19. Resolution 6 - The Companies Act 2006 (the "Act") requires that, if the Directors decide to allot ordinary shares in the Company for cash, the shares proposed
to be issued be first offered to existing shareholders in proportion to their existing holdings. These are known as shareholders’ pre-emption rights. However, to
act in the best interests of the Company the Directors may require flexibility to allot shares for cash without regard to the provisions of Section 561(1) of the
Act. Therefore, this resolution, to be proposed as a special resolution, seeks authority to enable the Directors to allot equity securities for cash free of such
pre-emption rights, with such authority expiring at the conclusion of the Annual General Meeting of the Company to be held in 2022. This authority is limited
to the allotment of a maximum of 4,743,815,752 ordinary shares for cash, free of pre-emption rights (representing approximately 30 per cent. of the Company’s
entire issued share capital as at the date of this notice).
Issued shares and total voting rights
20. As at 6.00 p.m. on 31 August 2021, the Company’s issued share capital comprised 15,812,719,175 ordinary shares of £0.0003125 each fully paid. Each ordinary
share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 6.00 p.m. on
31 August 2021 is 15,812,719,175. The Company does not hold any shares in treasury.
Kodal Minerals Report & Accounts 2021 72
Registration number 07220790 (England and Wales)
KODAL MINERALS PLC
GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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