Group Annual Report &
Financial Statements
For the year ended 31 March 2024
Registration number
07220790
(England and Wales)
Kodal Minerals Plc Group Annual Report & Financial Statements
B
Directors
Bernard Aylward
Charles Joseland
David Teng
Robert Wooldridge
Steven Zaninovich
Secretary
Sarah Parker
Country of Incorporation
England and Wales
Registered Number
07220790
Registered Office
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
Nominated Adviser
Allenby Capital Limited
5 St Helen’s Place
London EC3A 6AB
Solicitors
Fieldfisher LLP
Riverbank House
2 Swan Lane
London EC4R 3TT
Financial Adviser
and Joint Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
Joint Broker
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Auditor
RSM UK Audit LLP
25 Farringdon Street
London EC4A 4AB
Share Registrars
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey GU9 7XX
Company Information
Highlights
1
Strategic Report
Chairman’s Statement
3
Operational Review
5
Finance Review
12
Governance
Report of the Directors
19
Corporate Governance Report
24
Remuneration Report
29
Independent Auditor’s Report
31
Financial Statements
Consolidated Statement of
Comprehensive Income
38
Consolidated and Parent Company
Statements of Financial Position
39
Consolidated Statement of
Changes in Equity
40
Parent Company Statement of
Changes in Equity
41
Consolidated and Parent Company
Statements of Cash Flows
42
Principal Accounting Policies
43
Notes to the Financial Statements
47
Notice of Annual General Meeting
64
Contents
Connecting with the
emerging lithium
opportunity
COMPANY SNAPSHOT
Highlights
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
1
Strategic Report
Governance
The Bougouni Lithium Project with our operating
partner Hainan Mining Co. Ltd is on track to be the first
commercial producer of lithium in Mali
Project delivers high returns with an estimated
post-tax NPV of over US$440m with an IRR of
270% and a short three-month payback period.
Extension drilling has returned wide, high-
grade intersections, returning a 40% increase to
Bougouni’s mineral resource
DMS development now fully funded and construction
is well underway, with first lithium production
expected in 2024.
Company is fully funded to seek additional
investment opportunities in the lithium sector.
KODAL MINERALS PLC
KODAL MINERALS PLC
Strategic Report
Kodal Minerals Plc Group Annual Report & Financial Statements
2
I am delighted 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 2024.
This financial year saw our Group deliver on its near-
term strategy of developing the Bougouni Lithium Project
(“Bougouni” or “the Project”) into a significant producer of
spodumene concentrate, a product critical for the lithium-
ion battery industry. The completion of the financing by
our operating partner Hainan Mining Co. Limited (“Hainan”),
a subsidiary of Fosun International Ltd (“Fosun”), and the
commencement of construction of Bougouni, are key
stepping stones in our broader strategy of becoming a
focused lithium explorer and developer participating in
the rapidly expanding global electric vehicle and battery
storage industries.
The relationship with Hainan, Fosun’s industrial platform
for mining and resources, is critical to the construction
of Bougouni. This partnership was cemented through the
completion of the milestone funding package in November
2023, providing US$100m for the construction, development
and commencement of production at Bougouni, for a
51% stake in Kodal Mining UK Limited (“KMUK”), which owns
the Bougouni asset. This funding also provides capital for
an extensive exploration programme across the Bougouni
licence area. The transaction with Hainan gave rise to a
non-cash revaluation gain in the Group of £30.5 million,
recognised in the year to 31 March 2024.
As discussed in more detail in the Operational Review,
significant progress was made in the financial year, and
has continued to be made over the last six months, in
constructing the mine and building the operational teams in
Mali. We have also continued to work with and support the
local community through a wide variety of local initiatives
and look forward to continuing to build on this strong
relationship.
The Hainan agreement also provided additional funding
for continued exploration, and our ongoing drilling at the
Boumou prospect continues to exceed our expectations.
The extension drilling has returned wide, high-grade
intersections that have allowed the Company to announce
a significant 40% increase to Bougouni’s mineral resource,
adding 10.6Mt to bring the overall JORC compliant Mineral
Resource Estimate (“MRE”) to 31.9Mt at 1.06% Li2O following
3,230 metres of reverse circulation (“RC”) drilling completed
in the first half of 2023.
Chairman’s statement
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
3
DMS footings prepared by the team
at Ngoualana plant site
The Board has undertaken a review of the Group’s gold
projects during the year and intends to focus ongoing
attention on the Fatou and Niéllé gold projects, where we
believe there is a reasonable prospect of advancing the
projects towards mineral resource estimates.
The direct investment of US$17.75m into Kodal Minerals plc
by Hainan, becoming our largest single shareholder with
a stake of 14.51%, has provided a platform for the Company
to seek additional investment opportunities in the lithium
sector.
Kodal took the opportunity to further strengthen the Board
with the appointment of Lei (“David”) Teng, President and
Vice Chairman of Hainan, as a Non-executive Director in
March 2024. David is able to draw on over fifteen years’
experience from his many roles in natural resources at the
Fosun Group, from Investment Director to Co-Chairman,
and is a welcome addition to our management team at a
Board level as well as at project level in Mali. Dr Qingtao Zeng,
retired from the board in September 2023 and I would like to
thank him for his valuable contributions to the Group during
his time as a director.
Kodal remains firmly committed to the highest standards
of corporate governance and, as guided by the QCA Code,
we are continuing to look to further improve and strengthen
our team as the Company evolves from development into
production.
Outlook
As Bougouni goes into production, expected by the end
of 2024, the next twelve months will see KMUK take the
final steps to become a fully-fledged lithium producer in
West Africa. The transition from developer to producer
is a significant evolution in the business and scale of
operations at Bougouni, bringing with it many challenges as
well as opportunities, and we remain focussed on supporting
KMUK in its successful execution of this important milestone.
We are confident that the successful development of the
Bougouni lithium mine will be achieved and that the resource
base will continue to grow in this highly prospective region
which offers multiple opportunities for future expansion.
We have had enormous support from our shareholders
over the years, and most recently from our operating
partner, Hainan. We are grateful for the continued interest
and support from our shareholders, and we look forward
to providing regular updates for this exciting year ahead
as Bougouni moves into production.
Robert Wooldridge
Non-executive Chairman
2 September 2024
Chairman’s statement continued
Kodal Minerals Plc Group Annual Report & Financial Statements
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Mining commenced at Ngoualana
open pit
The year ended 31 March 2024 was a significant year in our
progress towards becoming Africa’s next lithium producer.
Despite the significant headwinds facing junior mining
companies in most international capital markets in recent
years, the closure of the US$117.5m financing is testament
to the quality, long life and upside prospects of Bougouni
and our broader strategy. The Project is now fully funded for
development and construction is well underway.
During the year, the Bougouni Lithium Project was transferred
to KMUK and Hainan took a 51% stake in KMUK for US$100m.
Kodal retains a 49% shareholding in KMUK and continues
to hold significant influence over KMUK business. Although
Kodal has a non-controlling 49% stake in KMUK, both your
Chief Executive Officer and your Operations Director are on
the board of KMUK and we are closely involved in the day-
to-day decision making surrounding the construction and
development at Bougouni.
As the Bougouni Lithium Project remains the most important
asset for the Group, both in terms of management attention
and impact on the financial position, the main focus of this
Operational Review is on the Project’s progress and the
strategy for completion of its development.
Following completion of the Hainan investment in November
2023, the team in Bougouni were able to progress the
onsite activity and construction of the Stage 1 dense media
separation ("DMS") processing plant at a more rapid rate, with
first production planned by the end of 2024. In addition, we
continued our exciting exploration and resource extension
drilling that continued to highlight significant potential for
expansion of the Bougouni resource. A summary of progress is
provided below.
Development progress
Following a formal tender process in the first quarter of
2024, the KMUK group entered into contracts with the main
contractors for the mine construction, all of whom have made
significant progress since the year end:
•
The manufacture of the DMS processing plant and crushing
circuit modules was commissioned during the year and
has now been completed in China. The items are currently
being shipped to the port of Abidjan prior to transport
to site.
•
Structural steelwork fabrication is complete for the main
process plant buildings and is currently being transported
to Bougouni, along with spare parts, consumables and
essential supplies.
•
A consortium of mining contractors comprising Auxin
Mining Services Mali SARL (“Auxin”) and Enterprise
Générale Traoré et Frères SARL (“EGTF”) (the “Mining
Contractors”) was awarded the Mining Contract at
Bougouni during the financial year under review and
mobilised to site in April 2024.
•
The Mining Contractors have now completed site clearing,
topsoil removal and storage and have commenced the
removal of overburden and waste at the Ngoualana
open-pit site in order to expose the Ngoualana
spodumene bearing ore in readiness for commissioning
later in the year.
•
Since the year end, the contract for the site civil
construction has been awarded to Bambara Resources
SARL (“Bambara”), a local Malian company, working
together with an established and experienced Malian-
based company, GZB Mali (“GZB”), part of the China-based
Gezhouba Group.
•
The preparation of foundations and concreting for the
processing plant is continuing on schedule and is expected
to be completed in advance of the arrival of the plant and
crushing circuit for construction on site.
•
With the absence of reticulated power in the Bougouni
region, a 5MW diesel power plant was procured from
Jiangsu Fukangsi in China, comprising Cummins engines.
The power solution will include in its design the installation
of complementary solar power, however due to the short
time frame for project construction the solar circuit will be
deferred into the future; likely after 12 months of operation.
The development schedule and capital budget for the Stage
1 DMS operation has been reviewed in conjunction with the
Hainan team, with costs updated to reflect the awarded
contracts and the finalisation of design and construction of
the plant items. The confirmed capital expenditure estimate
to build the Project remains at US$65 million, as per the 2020
feasibility study, testament to the conservative nature of our
approach, further emphasised by the ongoing inflationary
environment within global supply chains.
Operational review
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Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
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Bougouni Development Activity
Registration of KMUK’s new subsidiary mining company
in Mali, Le Mines de Lithium de Bougouni SA (“LMLB”), has
been completed and LMLB will be the operator of the
Bougouni lithium mine with the Government of Mali entitled
to a 10% free carried interest and the right to purchase an
additional 10% equity interest according to the 2019 Mining
Code. The transfer of the Bougouni mining licence from
Future Minerals SARL to LMLB is still pending formal approval
of the Direction Nationale de la Geologie et des Mines
(“DNGM”) in Mali, however the moratorium on dealing with
mining concessions imposed by the Malian Government has
prevented the transfer to date. The Government announced
on 9 July 2024 that the moratorium will be lifted and Kodal
continues to liaise with the DNGM to secure completion of
the transfers as soon as possible.
DMS Plant and crushing circuit
The manufacture of the crushing circuit and the DMS
processing equipment is complete with both suppliers
delivering on schedule all equipment and associated spares.
The material is now in transit in two cargo shipments from
China to the port of Abidjan in Côte d’Ivoire ahead of trucking
to site.
The crushing modules were manufactured by Beijing
HighDynamic Technology Co., Ltd. (“BHD”), and the DMS
equipment manufactured by Haiwang Technology Group
(“Haiwang”) in Shandong Province, China. These fabrication
groups are specialists in the manufacture of mining plant and
have completed several projects of similar size and nature
to Bougouni. The Haiwang group will send key construction
specialists to site to supervise the final installation and remain
for the commissioning of the plant to ensure full working order
in accordance with contractual performance warranties.
Mining Contract
The mining contract has been awarded to the Mining
Contractors. EGTF, a fully owned Malian company, mobilised
earthworks equipment to the site in April, and immediately
commenced bush clearing, topsoil stripping, and bulk
earthworks.
The process plant area earthworks are completed and
assistance has been provided to the civil concrete
contractor to ensure the construction of foundations and
footings for the plant area continues on schedule.
In May 2024, the Mining Contractors commenced the
removal of weathered overburden and waste material from
the Ngoualana open pit area that will be the source of the ore
to be processed at the Bougouni DMS plant.
Operational review continued
Aerial view of process plant and
office area
Kodal Minerals Plc Group Annual Report & Financial Statements
6
Civil Construction - Concrete Contract
Following a tender process to four companies with local
region experience and based on the designs from Haiwang,
the concrete contract was awarded under budget to a Malian
company, Bambara Resources SARL (“Bambara”). Bambara
is a Malian company established in 2017 to provide services
to the mining industry in Mali. Kodal Minerals plc worked with
Bambara previously to acquire the concessions at Mafélé
Ouest and Nkeméné Ouest that formed the “Bougouni
West” project, further details of which were announced on
30 January 2019.
Bambara is engaged as the head contractor and will utilise
under sub-contract the services of GZB, an established and
experienced Malian-based company with a China parent.
GZB boasts 13 years construction experience in Mali, which
includes the development of several prominent roads and
bridges, and most notably the supply of concrete to the third
bridge over the Niger River in Bamako.
Bambara will provide all local labour and services and
manage GZB, which will provide much of the equipment,
engineering technicians and on-site supervision. The Project
team believes this contracting arrangement will be crucial
to correctly interpreting the designs and drawings during
construction, since they are developed in Chinese, as part of
the Haiwang package.
Offtake Agreement
In March 2024, we reached an agreement to terminate the
right of first refusal granted to Suay Chin over 80% of the
spodumene product produced at the Bougouni Lithium
Project. Kodal and KMUK are continuing negotiations with
Hainan to finalise an offtake agreement with Hainan for
100% of the spodumene product produced at the Bougouni
Lithium Project. It has been agreed between Kodal and
Hainan that any offtake agreement reached between KMUK
and Hainan will be based on market prices for spodumene
and will require express written approval from Kodal as a
shareholder of KMUK. The offtake agreement with Hainan
will initially relate to spodumene production from only the
Stage 1 DMS processing plant.
Ngoualana DMS process plant
footings in construction
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Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
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Operational review continued
Exploration update
On the 14 November 2023, Kodal announced a significant 40% increase to Bougouni’s mineral resource, adding 10.6Mt to bring the
overall JORC compliant (refer notes below) MRE to 31.9Mt at 1.06% Li2O following 3,230 metres of reverse circulation (“RC”) drilling
completed in the first half of 2023.
The updated JORC compliant Mineral Resource estimate for the Bougouni Lithium Project, including the Sogola-Baoulé,
Ngoualana and Boumou prospects is tabulated below:
Indicated
Inferred
Total
Prospect
Tonnes
(Mt)
Li2O%
Grade
Contained
Li2O
(kt)
Tonnes
(Mt)
Li2O%
Grade
Contained
Li2O
(kt)
Tonnes
(Mt)
Li2O%
Grade
Contained
Li2O
(kt)
Ngoualana
3.2
1.19
38.0
3.5
0.82
28.5
6.7
1.00
66.7
Sogola-Baoulé
8.4
1.09
91.9
3.8
1.13
42.8
12.2
1.10
134.8
Boumou
–
–
–
13.1
1.04
135.8
13.1
1.04
135.8
TOTAL
11.6
1.12
129.9
20.4
1.02
207.1
32.0
1.06
337.3
Notes:
These mineral resources are reported in accordance with the Australasian Joint Ore Reserves Committee Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves 2012 (the “JORC Code” or “the Code”). The Code sets out minimum standards, recommendations and guidelines
for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves.
Sogola-Baoulé resource estimate unchanged from 2019. A 0.5% Li2O lower cut-off applied, and resource wireframe defined by a 0.3% Li2O selected
boundary. Estimate completed utilising Surpac software.
Ngoualana resource estimate reported utilising a 0.5% Li2O lower cut-off. All pegmatite mineralisation modelled including zones of waste material for
a fully diluted model. Estimate completed using Leapfrog modelling software.
Boumou resource reported using a 0.75% Li2O lower cut-off. All pegmatite mineralisation modelled including zones of waste material for a fully diluted
model. Estimate completed using Leapfrog modelling software.
Figures in table may not sum due to rounding. The contained metal is determined by the estimate tonnage and grade.
Boumou prospect diamond drill core
highlighting coarse spodumene mineralisation
Kodal Minerals Plc Group Annual Report & Financial Statements
8
The Boumou prospect, located centrally within the Bougouni
granted mining licence area, was a key driver in this increase
with the drilling completed in 2023 highlighting wide, high
grade pegmatite veins that remained open along strike and
at depth. Following the success of the 2023 campaign and
the expansion of the MRE for the Boumou prospect to 13.1Mt
at 1.04% Li2O, the exploration drilling continued in early 2024
with a focus on the continued extension and definition to
prepare for an updated mineral resource estimate and future
planning of the Project development strategy.
The 2024 drilling campaign has continued to return strongly
mineralised pegmatite intersections up to 66m at 1.26% Li2O
from 72m in drill hole KLRC211 and has added significantly
to the strike length of the prospect. Diamond core drilling
is ongoing to provide detailed geological information to
support the interpretation of the mineralised zones. The
initial geological logging and comparison of the diamond drill
core and the logging of the RC drill holes has confirmed the
continuity of the pegmatite veins and highlighted the coarse
nature of the spodumene mineralisation.
Bougouni Environmental Sustainability
and Community Relations
We have achieved two key milestones during the year that
are of critical importance to the Project, the Company and
our stakeholders; an updated Environmental, Social Impact
Assessment (ESIA) and the establishment of our Community
Development Programme.
Strong relations with the Malian government are key to our
success at Bougouni and in early 2024, KMUK received
approval for the updated ESIA for Bougouni Project Phase 1
DMS processing from Mali’s Department of the Environment.
Professor Tiémoko Sangaré, Minister for Environment, was
welcomed to the Project site in early February 2024 and our
team presented the Minister with the features and plans
for the Phase 1 DMS operation, with a specific focus on the
environment and our programme for future community
development.
The approval of the ESIA alongside Kodal’s Community
Development Plan marks the completion of all outstanding
permitting. Our positive engagement with the local
community in Bougouni is crucial to the ongoing success of
the Project, and I am delighted with our team’s continued
work over the past twelve months. KMUK’s financing
of current social initiatives has been informed by our
community consultations and includes the funding of a
full-time school teacher at Kola Sokoura, the village closest
to Bougouni, and the donation of several tractors to local
communities to support sustainable agriculture. In addition,
KMUK has addressed key local infrastructure requirements
with the replacement of a broken water pump in the
community, upgrades to existing access roads and the
installation of additional solar capacity at the local water well
at Ngoualana village.
We remain committed to open dialogue and ongoing
engagement with community leaders to ensure we maintain
our active partnership, and to supporting the communities
directly and indirectly as a part of our Community
Development Programme.
Community relations in focus with
donation of two tractors
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
9
Kodal Minerals 100% Controlled Assets
Kodal retains a portfolio of gold focussed exploration assets in Mali and Côte d’Ivoire. Kodal’s management has continued to
review the projects with a particular focus on the legal ownership, the age of concessions and prospectivity and ensures that
all government compliance, reporting and fees are kept up to date and that future expenditure on the projects is in line with
the Company targets and expectations.
Exploration Concession Review
The Company’s gold projects have been reviewed, and the table below contains the assets on which the Company will focus
future exploration activity in Mali and Côte d’Ivoire.
Table of Concessions – Kodal Gold Concessions in West Africa:
Tenements
Country
Kodal Economic
Ownership
Project
Validity
Boundiali
Côte d’Ivoire
100% direct ownership
(under application)
Gold Exploration
Licence application submitted and in process.
Application updated during 2020 and
application remains in good standing.
Niéllé
Côte d’Ivoire
100% direct ownership
Gold Exploration
Licence valid and in good standing. Initial
licence expired on 7 January 2017, and Renewal
decree received on 28 February 2018 for a 3
year- period. Second Renewal decree received
on 18 December 2020 for a 3 year-period.
On 8 March 2023 the Company received
a further 2 year extension of the Niéllé
concession with Decree number No. 000298
MMPE/DGMG/DCM
M’Bahiakro
Côte d’Ivoire
100% direct ownership
(under application)
Gold Exploration
Licence application submitted and in process.
Application updated during 2020 and
application remains in good standing.
Fininko
Mali
Held through option
agreement giving right to
acquire 100% ownership
Fatou Project Gold
Exploration
Licence in good standing. First renewal granted
by Arrêté number 2021-2876/MMEE-SG of
6 August 2021 for a period of 3 years.
Foutiere
Mali
Held through option
agreement giving right to
acquire 100% ownership
Fatou Project Gold
Exploration
Licence in good standing. Arrêté number
2017-0170/MM-SG of 2 February 2017.
Application for second three-year renewal has
been lodged and all fees and taxes have been
paid.
Renewal approval pending.
Operational review continued
Kodal Minerals Plc Group Annual Report & Financial Statements
10
The Board has undertaken a review of the Group’s gold
projects during the year, which has resulted in certain of the
Group’s gold projects being removed from the concession
table.
The Dabakala and Tiebissou projects in Côte d’Ivoire have
been removed from the concession table due to significant
delays in receiving approval for the renewal of concession
in the case of the Korhogo project, and for the Dabakala
project the ongoing review of the potential forestry permit
and discussions with the DGMG of Côte d’Ivoire have lowered
confidence with these licences.
In Mali, the Djelibani Sud, Nangalasso, Sotian and
Tiedougoubougou concessions have been removed from
the table following the Company’s review of the age,
prospectivity and low potential for exploration expenditure
relative to the focus on the Fatou project. The Company has
negotiated a sale of the Djelibani Sud, Nangalasso, Sotian
and Tiedougoubougou concessions to the original vendors
of the concessions which is being documented and these
concessions are therefore included within assets held for
resale at the year end.
As a result of the review of gold projects outlined above,
an impairment charge of £1,572,000 (2023: £nil) has been
recognised in the year.
Gold Exploration Strategy
Following the completion of the Hainan financing transaction,
Kodal is well funded to undertake the necessary exploration
at the Fatou and Niéllé prospects to advance these projects
towards maiden minerals resource estimates. Kodal’s
exploration geologists have visited both the Fatou and
Niéllé sites during the year and developed an exploration
targeting assessment to finalise planning of the exploration
programmes.
In northern Côte d’Ivoire, the Niéllé project remains a high
priority for infill and definition drilling along the 4.5km gold
anomalous trend for which previous drilling has returned
significant gold intersections including 26m @ 1.95 g/t Au
from 32m, and 26m @1.79 g/t Au from 108m. The geological
review of this project highlights the potential for resource
definition drilling supported by additional geophysics and
surface geochemistry to further extend the prospective gold
anomalous corridor.
In southern Mali, the Fatou project is a further priority for gold
exploration and geological field visits have confirmed the
surface geochemical anomalies, the presence of substantial
artisanal mining sites and limited effective historic drilling.
Previous exploration at the Fatou project completed
between 2009 and 2014 targeted limited areas of artisanal
workings and concluded an historical resource estimate of
approximately 350 koz Au. Kodal geologists have outlined
additional extensions to the historic exploration drilling
as well as identifying new priority areas. The Group has
completed one exploration drilling programme that returned
drill intercepts of 23m @ 1.63 g/t Au from 82m, and 6m @
1.49 g/t Au from 40m.
Kodal retains a primary focus on the continued exploration
and development of the Bougouni Project, however as
development is proceeding the Company is now able to
focus more attention on the priority projects of Fatou and
Niéllé and expects to undertake exploration programmes
over the next 12 months to include detailed geological review,
geochemical sampling, geophysical surveys, and drilling
campaigns.
Outlook
In summary, the year to 31 March 2024 saw a rapid
acceleration of our transition from explorer to developer,
whilst the next financial period will see us emerge as a
leading West African producer of high quality spodumene
concentrates, when Bougouni starts production as currently
expected by the end of 2024.
I look forward to reporting on construction progress at
Bougouni and on our exploration activities in the months
ahead as we edge closer to becoming the first ever London-
listed Lithium producer in West Africa.
Finally, I would like to recognise the important contributions
of all our stakeholders and partners this year and thank
them for their support. Along with them, I look forward to our
continued progress and success.
Bernard Aylward
Chief Executive Officer
2 September 2024
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
11
Finance review
Results of operations
For the year ended 31 March 2024, the Group reported
an operating loss of £3,344,000, including share-
based payment costs of £242,000 (2023: £517,000)
and impairment of exploration and evaluation assets of
£1,572,000 (2023: £nil), compared to a loss of £1,461,000 in
the previous year. The Group has continued to run the offices
in Mali and Côte d’Ivoire and significant additional exploration
activity for both gold and lithium was undertaken during the
year, although lithium expenditure by the Group ceased in
November 2023 following the sale of the Bougouni Lithium
Project to KMUK Limited. Further information is provided in
the Operational Review above.
During the year, the Group invested £2,971,000 (2023:
£3,227,000) in exploration and evaluation expenditure on its
various projects. The sale of the Bougouni Lithium Project
reduced the carrying value of exploration and evaluation
expenditure by £13,488,000. Following a strategic review,
an impairment charge of £1,572,000 was made against the
Group’s remaining gold assets. As a result, the carrying
value of the Group’s capitalised exploration and evaluation
expenditure decreased from £14,522,000 to £2,162,000
after taking account of the effects of foreign exchange. At
31 March 2024, after taking account of the effects of foreign
exchange, the carrying value of the gold projects in Mali and
Côte d’Ivoire was £2,162,000 (2023: £3,306,000) and of the
lithium projects in Mali was £nil (2023: £11,216,000).
As outlined on page 5, on 15 November 2023 the Group
transferred ownership of the Bougouni Lithium Project into
KMUK Limited. The company completed a funding package
with Hainan in November 2023, that provided US$100m
for the construction, development and commencement of
production at Bougouni, for a 51% stake in KMUK.
Kodal continues to hold significant influence over KMUK and
is able to participate in the financial and operating decisions
of KMUK through its two appointed board members. As a
result, KMUK is recognised as an associate by Kodal for the
year ended 31 March 2024 and Kodal’s share of the profit
or loss of KMUK is shown in the consolidated statement of
comprehensive income. The value of Kodal’s investment in
KMUK as at 31 March 2024 was £31.3 million and of KMUK’s
loss for the period was £84,000.
As a results of the transaction with Hainan, Kodal has
undertaken a revaluation of its remaining 49% stake in KMUK,
which has given rise to a gain of £30.5 million, recognised in
the year to 31 March 2024. Hainan also made a direct equity
investment of US$17.75m into Kodal Minerals Plc.
Cash balances as at 31 March 2024 were £16,327,000, an
increase of £15,782,000 on the previous year’s level of
£545,000. Net assets of the Group at the year-end were
£57,430,000 (2023: £14,883,000).
Financing
In November 2023, the Company completed a funding
transaction with the Hainan group regarding the Bougouni
Lithium Project in Mali. Alongside funding for the Project,
the transaction also included a US$17.75 million equity
subscription by the Hainan group into Kodal.
In addition, the Company has raised £700,000 during
the year from the exercise of share options, warrants and
performance share rights in May 2023 and November 2023.
Going concern and funding
The Group is still in the exploration and development phase
of its business and the operations of the Group are currently
being financed by funds which the Company has raised from
the issue of new ordinary shares.
The Directors have prepared cash flow forecasts for
the period ending 31 March 2026. The forecasts include
additional exploration expenditure for the Group’s gold
assets, as well as covering ongoing overheads and include a
contingency for cash calls on the Bougouni Lithium Project
during its development phase. 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
for a further financing. As at 27 August 2024 the Group has
cash at bank amounting to £18,477,000. Accordingly, the
financial statements have been prepared on a going concern
basis.
Kodal Minerals Plc Group Annual Report & Financial Statements
12
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 2024 31 March 2023
Cash and cash equivalents (a)
£16,327,000
£545,000
Administrative expense (b)
£1,389,000
£944,000
Exploration and evaluation
expenditure (c)
£2,971,000
£3,227,000
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 £15,782,000 in the year following the equity
investment by the Hainan group.
b. ‘Administrative expenses’ monitored as a KPI above
excludes one-off legal fees relating to the Hainan
funding transaction, ‘Administrative expenses’ is used to
measure the Group’s administrative costs and operating
results. Administrative expenses for the year were
£1.39 million, an increase of £0.4 million compared to
the previous year. Group corporate activity increased
this year as negotiations were concluded regarding the
future of the Bougouni Lithium Project, following which
the Remuneration Committee approved increases to
Directors’ remuneration. The Group has also continued to
run the offices in Mali and Côte d’Ivoire.
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 £0.3 million lower than prior year. Investment in
the Bougouni Lithium Project continued until November
2023 when the project was sold to KMUK. Expenditure
after that date focussed on the Group’s gold assets
which, as noted in the Operational Review on page 11, has
continued at a lower level.
As the Bougouni Lithium Project enters the development and
production phases, additional KPIs are being developed and
used by the Board to assist in tracking KMUK’s operational
progress, including monitoring performance against the
production timetable and forecast construction spend and
the level of lithium reserves.
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.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
13
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
Operational risk
The Bougouni Lithium Project is operated through KMUK, in which
the Group is a minority shareholder and does not have control over
matters such as costs associated with development or adherence
to schedule.
As the Bougouni Lithium Project enters the development phase,
KMUK will be entering into a significant number of new contracts
for construction, mining, transportation etc, which mean that the
Project will be dependent on the performance of third parties. In
addition, the Project will be employing a large workforce and its
success will depend on the team’s ability to recruit and retain key
staff members.
If the management team is unable to manage the increased
operational risks, the Bougouni Lithium Project may not be
delivered on schedule and/or within budget.
To help manage the operational risk and work in partnership with
Hainan, our CEO and Operations Director are on the board of KMUK,
and our Operations Director has been appointed Deputy General
Manager of Bougouni Mining SA, the operations company building
the mine and processing plant.
The Operations Director spends large amounts of his time in Mali
and is very involved in the day-to-day decision making.
The operation of KMUK is governed by a shareholder agreement
between the Hainan group and Kodal, with key decisions requiring
the approval of shareholders.
Financial Risk
The Bougouni Lithium Project is now entering the development
phase and consequently has significant contracted financial
commitments. Working capital issues may arise for KMUK in the
event of project delays and/or unbudgeted overspends. Depleted
cash resources in KMUK may require the shareholders, including
Kodal, to invest more funds to ensure that the Bougouni Lithium
Project reaches production.
Aside from the interest in the Bougouni Lithium Project, 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 remain challenging but there
are recent signs of improvement.
If the Group is unable to obtain additional financing as needed,
some interests may be relinquished, and / or the scope of the
operations reduced.
Kodal’s CEO and Operations Director are on the board of KMUK
and are closely involved in the financial management of KMUK. In
addition, the Board regularly reviews the progress of the Bougouni
Lithium Project against budget and schedule to ensure that it is on
target.
The Board regularly reviews the levels of discretionary spending
on capital items and exploration expenditure within the Group’s
projects. 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.
Following the funding received by Company as part of the Hainan
financing transaction, the Company has sufficient funds to support
all future plans and has no immediate plans for additional equity
finance.
Principal risks and uncertainties
Kodal Minerals Plc Group Annual Report & Financial Statements
14
Risk
Comment and Mitigating Actions
Exploration Risk
The Group maintains exploration assets in Mali and Cote d’Ivoire and
the future success of the Company is dependent on the discovery
and/or acquisition of new 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.
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.
Reliability of Mineral Resources and Mineral Reserves
The Group’s associated undertaking KMUK 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.
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.
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.
In August 2023 a new mining code (the “2023 Mining Code”)
passed before the Republic of Mali Assemblie Nationale. The 2023
Mining Code has some significant changes from the previous 2019
code including the intention of the Government of Mali to increase
its direct ownership of projects and changes to certain taxes and
exemptions previously applicable.
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 Group notes the new 2023 Mining code has been passed by
the Government of Mali, with a key element being the potential for
the Government to purchase up to an additional 20% interest in a
project (previously 10% interest). However the Company’s licences
where currently valid remain under the provision of previous mining
codes. The Group is maintaining regular correspondence with the
Mali government.
The Company retains the rights to the disposal proceeds of the
NKéméné Ouest concession. The Company has agreed to sell this
asset, however the completion of the transaction has been delayed
due to the moratorium on the renewal and transfer of mining
concessions. The Company continues to discuss with the DNGM
and Government of Mali to progress this transfer and allow the
completion of the NKéméné Ouest sale, however no timing of the
finalisation can be provided.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
15
Principal risks and uncertainties continued
Risk
Comment and Mitigating Actions
Mali Mining Concessions
The Government has imposed a moratorium on the official
dealings with mining concessions by the DNGM. This moratorium
has resulted in significant delays in the processing and approval
of concession applications, concession renewals and concession
transfers.
The new 2023 Mining Code was approved in August 2023, however
the decree of application to provide the regulations for the
operation of the new mining code was passed on 4 July 2024.
At the date of this report, the moratorium on official dealings has
not yet been lifted.
The Group continues discussions with the Mali Government for all
mining concessions.
The Group is impacted by the delay of the transfer of the Bougouni
Mining concession to the newly established mining company
Les Mines de Lithium de Bougouni, a 100% owned subsidiary of
KMUK. This transfer is a legally required transfer to allow the Mali
Government to participate in the Project. The licence was awarded
to the KMUK’s exploration subsidiary in Mali, Future Minerals SARL,
and remains in good standing.
The Group is also impacted by the delay in completing the sale of
the Bougouni West concession Nkéméné Ouest as this concession
is awaiting completion of the renewal process. The Group confirms
that the sale agreement remains in good standing and it expects to
complete the sale during 2024.
The Group has completed a review of the Mali gold exploration
concessions and in particular noted the age, renewal requirements
where appropriate and the requirement for new applications.
The Group has determined that some concessions are no longer
appropriate to be maintained.
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 Government of Mali has announced its intention to withdraw
form the West African trading and single currency bloc of
ECOWAS. In addition the Government has announced to form
a new group with the countries of Burkina Faso and Niger.
Negotiations are ongoing.
A Transition Government was installed in Mali following the military
coup of 24 May 2021. Presidential elections, originally scheduled for
February 2024, have been postponed and no new timetable agreed.
The Company maintains communications with the Government
at the national Ministry level and local levels to ensure that the
Company’s interests are promoted and protected where possible.
The Company has maintained all regulatory compliance to ensure
concessions and operations remain in good standing.
The Company is monitoring the new position of the Mali
Government and the withdrawal from the ECOWAS bloc and
formation of a new group between Mali, Burkina Faso and Niger.
The potential impact on the Bougouni lithium operation and current
import and export routes, tax concessions and possible currency
risk is being investigated, however the full details have not yet been
finalised. The Company continues to operate under existing laws
and practices.
In general, the security risk in Mali remains high. The security
situation in the northeast of the country and neighbouring Burkina
Faso and Niger remains volatile with increased terrorist activities
and civil unrest.
The Company’s projects located in the south of Mali remain
peaceful, however the Company maintains regular security reviews
and communication with Malian officials to ensure the safety of all
our people.
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.
Kodal Minerals Plc Group Annual Report & Financial Statements
16
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:
•
the likely consequences of any decision in the long term;
•
the interests of the Company’s employees;
•
the need to foster the Company’s business relationships
with suppliers, customers and others;
•
the impact of the Company’s operations on the
community and the environment;
•
the desirability of the Company to maintain a reputation
for high standards of business conduct; and
•
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. With the Bougouni
Lithium Project now fully funded in KMUK and in construction,
the relationships with our capital equipment suppliers, local
contractors and workforce and our operating partner Hainan
are of particular importance.
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
2 September 2024
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
17
KODAL MINERALS PLC
Governance
Kodal Minerals Plc Group Annual Report & Financial Statements
18
Report of the directors
For the year ended 31 March 2024
The Directors present their report, together
with the audited consolidated financial
statements for Kodal Minerals Plc for the year
ended 31 March 2024.
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 2023 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
David Teng (appointed 19 March 2024)
Robert Wooldridge
Steven Zaninovich
Qingtao Zeng (resigned 18 September 2023)
Directors’ interests
The beneficial interests in the Company’s shares of the
current Directors and their families as at 31 March 2024 are
as follows:
Directors
Ordinary Shares
31 March 2024
Ordinary Shares
31 March 2023
Bernard Aylward
321,364,799
251,364,799
Charles Joseland
36,250,000
11,250,000
David Teng
–
–
Robert Wooldridge
186,223,858
169,973,858
Steven Zaninovich
33,809,513
7,142,847
Events after the reporting period
Events after the reporting period are outlined in note 18 to
the financial statements on page 65.
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 17 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, the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and
company financial statements for each financial year. The
directors have elected under company law and the AIM Rules
of the London Stock Exchange to prepare the group financial
statements in accordance with UK-adopted International
Accounting Standards and have elected under company law
to prepare the company financial statements in accordance
with UK-adopted International Accounting Standards and
applicable law.
The group and company financial statements are required
by law and UK-adopted International Accounting Standards
to present fairly the financial position of the group and the
company and the financial performance of the group and the
company. 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 and the
company for that period.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
19
In preparing each of the group and company financial
statements, the directors are required to:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and accounting estimates that are
reasonable and prudent;
c. state whether they have been prepared in accordance
with UK-adopted International Accounting Standards;
d. 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 requirements
of the Companies Act 2006. They are also responsible for
safeguarding the assets of the group and the company and
hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
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 published a Practical
Guide to ESG for small and mid-sized quoted companies.
Albeit the Group is only able to exert influence over
the operations of KMUK and cannot ultimately control
operational activity, we recognise our responsibility in
ensuring that the Bougouni Lithium Project is delivered in
a sustainable way. Lithium has a crucial role in helping to
decarbonise the economy and in enabling the global energy
transition through its use in electric vehicles that use Li-ion
batteries, but it is also important that the lithium is mined in
a responsible and sustainable manner.
Social considerations
As KMUK is currently in the exploration and development
stage of the mine life cycle, the principal focus has been on
the social aspects of ESG.
Strong engagement with the people of Mali is vital to the
long-term sustainability of the Bougouni Lithium Project
and we are committed to playing a positive social role in the
local community throughout the life cycle of the project,
minimising disruption, providing job opportunities, and
supporting local social projects.
Although we have been granted a formal legal licence, we also
need the goodwill of the local community to operate near
Bougouni. The compensation process for land acquisition at
the Ngoualana mine was concluded with agreement protocols
formally signed at the Bougouni local court in late March
2024. We have engaged with the Malian government and local
communities to develop our approach and have established
a community consultation committee through which local
people can feed their needs and concerns.
Key outcomes from the community consultation process in
the year have included the following:
•
As part of our commitment to improving the livelihood of
the adjacent communities, KMUK donated two tractors to
the Kola-Sokoura and Ngoualana villages.
•
KMUK provided funding to enable the employment of
a full‑time schoolteacher at Kola-Sokoura, the village
closest to the mine site, which has been without one for
some time. To further support the school and its kids,
KMUK provided school kits including books and stationery.
•
With the help of the Malian mining contractor, EGTF,
a water retention dam was constructed adjacent to
the main access road to provide stored water for the
communities.
•
Following consultation with the Ngoualana village, it was
discovered the village’s water borehole pump system
was inoperable with the community people forced
to walk some 2km each way to fetch water from the
Baoulé River. The Project team subsequently arranged
to inspect the pump system and conducted repairs to
enable successful re-commissioning of the water supply
system.
We are also committed to supporting the KMUK management
team in creating an inclusive and safe environment in which
the workforce operates. We are committed to ensuring that
people are fairly, employed from the local community as far
as practicable, and to adopting best management practices
and policies as the workforce grows and the supply chain
develops.
Report of the directors continued
Kodal Minerals Plc Group Annual Report & Financial Statements
20
Environmental considerations
All resource extraction tends to harm the local environment
in some way and the potential environmental impact
of the Bougouni Lithium Project will increase as KMUK
progresses the mine development, including mine and plant
construction, and enter into production. However, we are
ensuring that it considers 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. In early 2024, KMUK
received approval for the updated ESIA for Bougouni Project
Phase 1 DMS processing from Mali’s Department of the
Environment.
KMUK continues to develop the PFS and the project design,
not only to improve the process engineering and efficiency of
the 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.
KMUK is in the process of updating the ESIA and carrying out
further engagement with the local community and mining
ministry explaining the latest plans and responding to their
feedback.
Governance
Our approach to governance already follows the QCA Code,
as set out below in our Corporate Governance Report. 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 29 August 2024.
Robert Wooldridge
Director
2 September 2024
Kola-Soukoura village school room
supported by Bougouni Lithium Project
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
21
Board of 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.
David Teng
(Non-executive Director)
David qualified as a certified practising
accountant (“CPA”) in Australia and
has over 15 years’ experience working
in the natural resource division
(Fosun Resource Group) of Fosun
Group. At Fosun Resource Group,
David has held various senior positions,
including but not limited to, investment
director, senior investment director,
executive director, managing director
and co‑chairman with a focus on
investment, strategy and management
in the global resource sector. Most
recently, David was appointed
president and vice chairman of
Hainan Mining Co Ltd, a publicly listed
subsidiary of Fosun Group, and he is
the non‑executive board chairman of
ROC Oil Company Pty Ltd, an Australia-
based petroleum company also
controlled by Fosun Group. David is
also a global partner at the Fosun
Group where he is responsible for
global natural resource investment and
management.
The current membership of the board is set out below:
Kodal Minerals Plc Group Annual Report & Financial Statements
22
Robert Wooldridge
(Non-executive Chairman)
Robert is currently a partner at
SP Angel Corporate Finance LLP,
the leading adviser and broking
for mining companies listed on the
AIM market. 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 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.
Steven Zaninovich
(Operations Director)
Steve has more than 25 years’
experience in project management,
encompassing all stages of mine
development. Steve has been closely
involved with the delivery and
commissioning of lithium producer
Tawana Resources Ltd’s Bald Hill
Lithium Project in Western Australia.
Prior to Tawana Resources Ltd,
Steve served as COO with Gryphon
Minerals before assuming the role
of Vice President of Major Projects
and becoming part of the Executive
Management Team at Teranga Gold
Corporation, following its acquisition
of Gryphon. During his extensive
career, Steve has gained specific
expertise in the development
of multiple mining operations
across various commodities and
jurisdictions in West Africa.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
23
Corporate governance report
For the year ended 31 March 2024
Chairman’s introduction
Kodal follows the Quoted Companies Alliance (QCA)
Corporate Governance Code, believing it to be the most
appropriate code for an AIM quoted company of our size
and stage of development. A new version of the code was
published in November 2023. While we have considered
this new version and started to follow some of its
recommendations, we will report on our application of the
2023 Code in next year’s Annual Report in line with the QCA’s
recommended timetable.
As chairman, I am responsible for leading the board, ensuring
its composition with people of the right experience and
engagement, and delivering 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.
During the year Hainan took a 51% stake in our lithium assets in
Mali and provided funding to commence the construction of the
mine project. This is an exciting and important development for
Kodal shareholders, employees and the local communities, and
we have developed new governance arrangements to work with
our operating partner, Hainan. We continue to engage with the
local communities and the Malian government, mindful of our
environmental and social obligations, and the potential impact
of this next stage of our development.
Our CEO and Operations Director have continued to provide
the market with updates of our progress during the year,
made presentations and engaged with stakeholders to keep
them informed and understand their 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 Company recognises the importance of decarbonisation
and the energy transition, and the role that electric batteries
will play in that. Kodal is committed to providing lithium, an
important battery metal, in a socially and environmentally
responsible manner.
In the medium- and long-term, value can be best delivered
to shareholders though the continued development and
exploitation of the Bougouni Lithium Project located in
southern Mali. The Strategic and Operational Review above
explains the strategy, key areas of focus and the challenges,
and management’s action, including the commencement of
construction of the spodumene processing plant, further
clarification of the pegmatite ore bodies and the phased
approach to production.
The Principal Risks outlined on pages 14 to 16 highlight the
key challenges the Group faces in executing the strategy and
how the Board seeks to protect the Group from those risks.
To help manage the development risk and work in
partnership with Hainan, our CEO and Operations Director
are on the board of KMUK, and our Operations Director
has been appointed Deputy General Manager of Bougouni
Mining SA, the operations company building the mine and
processing plant. He is also spending large amounts of his
time in Mali. He developed Kodal’s Bougouni Project plan and
Preliminary Feasibility Study and has significant experience
of successful development in Africa and of lithium projects.
Compliance with mining and other applicable laws and
regulations are of critical importance to the Group. The
mining laws and regulations in Mali have recently been
updated but are not yet fully operational. Our Country
Manager meets regularly with local mining officials to ensure
the lithium and gold licences and titles are kept in good
standing. The Minister for Environment visited the lithium
project during the year and KMUK secured approval of its
updated Environmental & Social Impact study.
Although the Company’s cash position has improved
significantly during the year, the board and the executive
team closely monitor the group’s and KMUK’s financial
position and cash flow forecasts.
In addition to the lithium prospects in Mali, the Company
holds a suite of gold assets in Mali and Côte d’Ivoire. The
Company has recently reviewed its gold projects and
established priorities, with some licences being relinquished,
others sold and the remainder held for further exploration to
improve their value for 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.
Hainan, as well as investing in the Bougouni Project, also
took a 14% stake in Kodal Minerals Plc; there is a relationship
agreement in place and they have exercised their right to
appoint a Director, with David Teng joining the Kodal board in
March 2024. As a board member he is able to provide direct
input on Hainan’s views as shareholder.
Kodal Minerals Plc Group Annual Report & Financial Statements
24
The Company communicates regularly with private
shareholders through investor evenings and similar events;
audio and video interviews; and periodic webcast Question
& Answer sessions. The Company’s website also contains its
latest corporate presentations and interview recordings. In
addition, the Company encourages all shareholders 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 roadshows
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 brokers and financial PR advisers.
Principle 3. Take into account wider stakeholder
and social responsibilities and their implications for
long‑term success
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. The
Company’s Chief Executive, Operations Director 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.
As KMUK’s operations scale up to bring the Bougouni
Lithium Project into development, good relationships with
the capital equipment suppliers, engineering contracts,
local workforce, finance providers and offtake customers
will become increasingly important. Any concerns
raised are communicated to the Boards of KMUK and
the Company for further consideration. As part of the
application for a mining licence at Bougouni, the Company
supported KMUK in carrying 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
and KMUK’s workers on site and has ensured that KMUK 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 and an appropriate internal controls
framework in place. The principal risk areas identified by the
board and the mitigating actions are set out above.
At each Board meeting, the Directors review ongoing
performance – this includes a specific monthly report from
the Operations Director on the KMUK and the Bougouni
project; discussion on management accounts, budgets
and forecasts; considering any new risks and agreeing
appropriate mitigating actions with management. The Board
formally reviews and documents the principal risks to the
business at least annually as part of the annual audit process.
In addition to the Operations Director appointed as Deputy
General Manager of Bougouni Mining SA, Kodal was also
significantly involved in the selection and appointment
of the CFO, who has become resident in Mali. They have
introduced controls over procurement, cash management,
salaries, HR and expenses, as well as developing accounting
and company secretarial functions, which is supported by
the UK Financial Controller. The CFO is in the process of
implementing a new finance IT system as preparations are
made to scale up for operational readiness. The status of
operations, controls and risks are monitored by the Deputy
General Manager and reported monthly to KMUK board; this
report is also seen by the Kodal board.
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 Board is committed to ensuring
that similar measures are in place within KMUK.
The company uses a range of experts for assurance and
technical advice. Lawyers and tax advisers both in the
UK and in Mali were used as part of the transaction with
Hainan. For assessing our mineral resources the Group
employs independent experts and assayers to analyse the
results from our drilling programmes. Our nominated advisor
provides us with guidance on listing regulation compliance.
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 currently consider this necessary.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
25
RSM provide an external audit of the Annual Report &
Accounts. The Audit & Risk Committee has received
confirmation from management and board members that
there are no commercial or other relationships with RSM, who
only provide audit services to the company. The partner and
senior management on the audit have only been involved for
two years on the audit. Accordingly, RSM are considered to
be independent.
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 the Hainan transaction.
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. As noted above during the
year a non-executive director stepped down and a Hainan
representative joined the board. Although the board has just
one formal independent non-executive director (below the
QCA guidelines), there are two executive directors and three
non‑executive directors, who recognise the importance of
maintaining an independent mindset and objectivity in their
views.
With the increased level of activity with the lithium project
moving into the development phase, the chairman is looking
to recruit an additional independent non-executive, as well
as also considering the gender and diversity balance on the
board.
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, the independent director,
whose shares represent 0.18% of the Company’s capital).
Biographical details of all the directors are set out on
pages 22 and 23.
In the year ended 31 March 2024 there were 12 full board
meetings of which Robert Wooldridge attended 12, Bernard
Aylward 12, Charles Joseland 12, Steven Zaninovich 12,
Qingtao Zeng 5 and David Teng 0. 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 2024 comprised Charles Joseland (Chair)
and Robert Wooldridge. In the year ended 31 March 2024, the
Audit & Risk Committee met twice, both members attending
on each occasion.
The Board also has a Remuneration & Nomination Committee
which during the year to 31 March 2024 comprised
Robert Wooldridge (Chair), Charles Joseland and, until his
resignation, Qingtao Zeng. The Remuneration & Nomination
Committee meets as required and at least once each year.
In the year ended 31 March 2024, the Remuneration and
Nomination Committee met once, all members attending.
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 22 and 23.
The Board is satisfied that, between the Directors, it has an
effective and appropriate balance of skills and experience.
These include the CEO who has significant geology and
mineral exploration expertise, and is experienced in engaging
with shareholders. Our Operations Director has a career
in mine engineering and development both in Africa and
also with lithium projects. Our Chairman is experienced in
corporate finance, broking, working with mid-cap public
companies and capital markets. Our independent director as
a former audit partner with listed company experience brings
expertise on finance, internal controls, risk management and
corporate governance, as well as an independent mindset.
Our Hainan representative from his career in the resources
sector brings investment, strategy and management
expertise.
The directors keep their skillsets up to date by attending
industry and 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 in both UK and Mali) on the Hainan
contractual arrangements, and tax treatments across
jurisdictions for the various agreements entered into during
the year.
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.
Corporate governance report continued
Kodal Minerals Plc Group Annual Report & Financial Statements
26
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.
The reviews for the year recognised the executive directors’
success of achieving completion of the Hainan transaction
and financing to commence construction of the spodumene
processing plant; monitoring the plant development;
managing government and local relations; establishing
governance and control frameworks at the KMUK board
and operational levels, and building working relationships
with our operating partners, Hainan. The non-executives
contribution was recognised in providing robust challenge to
management on strategic priorities, budgets, and the Hainan
deal structure, as well as KMUK governance, internal control,
and financial, tax and HR matters.
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:
• The health and safety of its workers and consultants;
•
An awareness of the environmental and social impact of
its operations on the local communities and efforts to
mitigate and minimise them;
•
contributing to the overall development of the local
communities in which it operates;
•
conducting honest and transparent dealings with
employees, consultants and suppliers; and
•
adopting a zero tolerance to bribery.
Details of our social and environmental focus are included
above on pages 20 and 21.
Our Operations Director is spending much of his time in Mali,
and the CEO also visits on a frequent basis. Together with the
Country Manager, they meet regularly with mining officials
and ministers, as well as local leaders and communities. Local
engagement to understand local concerns and requirements
is an important aspect of the way we want to do business.
Nearly all of the group’s employees are based at our offices in
Mali and Côte d’Ivoire. There is near daily contact with these
offices and the regular visits by the CEO and Operations
Director provide important interaction with and guidance
to our employees. Management can hear any concerns first
hand but also ensure conduct and behaviour are in line with
the company’s ethical values and standards.
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. The independence of the Board is
considered in Principle 5 above.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
27
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 together with
Steven Zaninovich, the Operations Director. Bernard Aylward,
Steven Zaninovich and Robert Wooldridge take responsibility
for the Company’s liaison with shareholders.
Since entering the arrangements with Hainan during the year,
new governance structures and processes have been set up
with Kodal appointees on the KMUK board and the roles of
Deputy General Manager and CFO in Bougouni Mining SA, the
operations company in Mali. There is continuous monitoring
of the KMUK’s operations and Project development, and
monthly reporting to the Kodal board by the Operations
Director, Steve Zaninovich.
At year-end Charles Joseland, as chair of the Audit & Risk
Committee provided additional input into the audit process,
reviewing financial forecasts, judgments and estimates,
accounts disclosure and liaising with the auditors; and
reviewing the accounting papers prepared by the CEO,
Operations Director and/or Financial Controller.
The former shareholder’s representative left the board during
the year. Hainan has taken a 14% stake in the Company and
appointed a representative to the Board. A Relationship
Agreement between Hainan and the Company establishes
the requirements on transactions and behaviour between the
two parties.
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 on a timely basis 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.
As noted in Principle 8 above, the CEO, Operations Director
and Mali Country Manager meet with mine and environmental
officials, local leaders and communities on a regular basis.
The Company will disclose the outcome of all shareholder
votes on its website and in the case of 20% of independent
votes being cast 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 historical annual reports for
the past five years and also notices of general meetings.
Corporate governance report continued
Kodal Minerals Plc Group Annual Report & Financial Statements
28
Report from the Audit & Risk Committee
The Audit & Risk Committee comprised Charles Joseland and
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.
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 accounting for the Hainan transaction
and disclosure of the new associate; the fair presentation
and any impairment of the Company’s gold exploration and
development activities; the assumptions underlying the
calculation of warrants and share options; the carrying value
and any potential impairment of the Company’s inter-company
balances; compliance with laws and regulations including the
status of the licences; and the going concern assumption.
The Committee also considered the process for identifying
and considering risks and their mitigating actions, and their
disclosure in the Annual Report on pages 14 to 16. 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.
Remuneration Report
The Remuneration Committee performs both remuneration
and nomination functions and during the year ended 31 March
2024 comprised Robert Wooldridge (Chair), Charles Joseland,
and Qingtao Zeng (until his resignation). 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.
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 reviewed the current incentive
plans for executive management in the form of share options
and performance shares, which are focused on the stages
required for the lithium project to reach sustained levels of
production (financing & licensing; first production; 175,000t
of spodumene produced). They believed the current plans
continue to remain appropriate and no new options were
awarded in the year. They determined that the financing
hurdle (but not the licensing requirements) were met in the
year and so these options vested. Salary levels were reviewed
and were adjusted to better reflect median salaries for Aim
companies of our size.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
29
Directors’ salary and
fees year ended
31 March 2024
£
Gain on exercise of
share options
year ended
31 March
2024
£
Total
year ended
31 March
2024
£
Total
year ended
31 March
2023
£
Bernard Aylward (a)
308,442
349,125
657,567
181,707
Charles Joseland
68,332
105,000
173,332
70,044
David Teng
–
–
–
–
Robert Wooldridge
88,335
26,375
114,710
55,509
Steven Zaninovich (b)
269,000
89,333
358,333
171,299
Qingtao Zeng (c)
11,508
–
11,508
25,000
745,617
569,833
1,315,450
503,559
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 2024 and received fees of £224,694
(2023: £139,514). These fees are included within the
remuneration figure shown for Bernard Aylward.
b Zivvo Pty Ltd (“Zivvo”) a company wholly owned by
Steven Zaninovich, provided consultancy services to the
Group during the year ended 31 March 2024 and received
fees of £210,000 (2003: £140,000 in the period after his
appointment as director on 27 July 2022). These fees are
included within the remuneration figure shown for Steven
Zaninovich.
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 prior year and received fees of £nil (2023: £24,627).
Further information on the share options granted to the
Directors is set out in Note 5 on page 52.
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.
Steven Zaninovich’s appointment will continue until the
earlier of: (i) the termination of the consultancy agreement
between the Company and Zivvo Pty Ltd (a company wholly
owned by Mr Zaninovich); and (ii) termination by either the
Company or Mr Zaninovich on six months’ prior written
notice.
Charles Joseland’s, Robert Wooldridge’s and David Teng’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.
Corporate governance report continued
Kodal Minerals Plc Group Annual Report & Financial Statements
30
Independent Auditor’s Report
To the members of Kodal Minerals Plc for the year ended 31 March 2024
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 2024 which comprise of
the consolidated statement of comprehensive income,
the consolidated and parent company statements of
financial position, the consolidated and parent company
statement of changes in equity, the consolidated and parent
company statement of cashflows and notes to the financial
statements, including significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted International
Accounting Standards and, as regards the parent company
financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
•
the financial statements give a true and fair view of the
state of the group’s and of the parent company’s affairs
as at 31 March 2024 and of the group’s profit for the year
then ended;
•
the group financial statements have been properly
prepared in accordance with UK-adopted International
Accounting Standards;
•
the parent company financial statements have been
properly prepared in accordance with UK-adopted
International Accounting Standards and as applied in
accordance with the Companies Act 2006; and
•
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.
Summary of our audit approach
Key audit matters
Group
• Hainan investment in Kodal Mining UK Limited (KMUK)
Materiality
Group
• Overall materiality: £637,000 (2023: £339,000)
• Performance materiality: £477,000 (2023: 254,000)
Parent Company
• Overall materiality: £508,000 (2023: £327,000)
• Performance materiality: £381,000 (2023: £245,000)
Scope
Our audit procedures covered 100% of total assets and 98% of profit before tax.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the group
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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
31
Hainan investment in KMUK
Key audit matter
description
During the period Kodal Minerals plc and the Hainan Mining Group (“Hainan”) entered into an associate
arrangement development agreement for the Bougouni Lithium Project, with both parties consequently sharing
ownership of Kodal Mining UK Limited (“KMUK”), 49% owned by Kodal Minerals plc and 51% by the Hainan Group.
KMUK was established as a UK registered company as the development vehicle for the Bougouni Lithium Project.
Kodal Minerals plc and its associate KMUK have received funds related to the funding transaction for US$117.75
million agreed between the Company and Hainan, comprising a US$100 million investment from Hainan into KMUK,
and a further US$17.75 million received for the subscription for new ordinary shares in Kodal Minerals Plc at 0.5p per
share.
This is considered to be a Key Audit Matter due to the significance of the investment in associate that Kodal
Minerals Plc has recognised in the Consolidated Statement of Financial Position as well the gain recognised on the
partial disposal of the subsidiary in the Consolidated Statement of Comprehensive Income.
How the matter
was addressed in
the audit
Management prepared a Step Plan to determine the accounting steps taken to recognise the partial disposal of
a subsidiary and subsequent recognition of an investment in an associate. Management also prepared a paper
explaining the accounting treatment, with reference to the relevant accounting standards, alongside detailed
calculations on the gain recognised. Our work on this included:
• Review of management’s Step Plan along with the supporting documentation for each of the steps taken.
• Assessment of whether the recognition of KMUK as an associate is appropriate based on the control and
influence Kodal Minerals Plc have retained over the entity.
• Challenging management on their application of accounting standards in the calculation of the gain on partial
disposal.
• Review of management’s assessment as to whether the disposal constituted a business or an asset under IFRS 3.
• Review of management’s calculation of the gain on disposal in line with IFRS 10 and IAS 28 and checking that the
gain recognised to the extent of the unrelated investors’ interest is reasonable.
• Review of management’s fair value calculation of the 49% retained interest to check that the rationale and the
calculation itself are reasonable and checking that this was eliminated in the gain on disposal calculation.
• Auditing the share issue by Kodal Minerals Plc to Hainan to check the accuracy of the share premium recognised.
• Auditing the disclosures within the financial statements to assess whether they are fair and reasonable.
Independent Auditor’s Report continued
Kodal Minerals Plc Group Annual Report & Financial Statements
32
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
£637,000 (2023: £339,000)
£508,000 (2023: £327,000)
Basis for determining overall
materiality
Based upon 1% of total assets
Based upon 2% of total assets
Rationale for benchmark
applied
The nature of business is such that there is no 3rd
party revenue for Kodal Minerals Plc and the group
is still in its exploration stage with an associate in
the early stages of mine development. We have
considered the FRC's thematic review in relation
to materiality for this, where 1% of total assets is
used by a number of audit firms for the review of
entities/Group's in the mining industry.
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.
Performance materiality
£477,000 (2023: £254,000)
£381,000 (2023: £245,000)
Basis for determining
performance materiality
75% of overall materiality
75% of overall materiality
Reporting of misstatements
to the Audit Committee
Misstatements in excess of £31,800 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
Misstatements in excess of £26,800 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 8 components, located in the following countries;
•
United Kingdom
•
Mali
•
Bermuda
•
Ivory Coast
The coverage achieved by our audit procedures was:
Full scope audits were performed for 1 component, specific audit procedures for 4 components and analytical procedures at
group level for the remaining 3 components.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
33
Independent Auditor’s Report continued
Number of
components
Total assets
Profit before tax
Full scope audit
1
42%
9%
Specific audit procedures*
4
58%
89%
Total
5
100%
98%
*
Note that this includes one equity accounted component due to its significance to total assets and profit before tax for
the period.
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:
•
Reviewing the group’s cashflow forecasts, including challenge of the forward-looking assumptions used by management in
their assessment;
•
Checking the mathematical accuracy of management’s cashflow models and agreeing opening balances to 31 March 2024
actual figures;
•
Corroborating the inputs into the cashflow forecast by checking that they are consistent with the testing performed in
respect of management’s impairment review;
•
Reviewing management’s sensitivity analysis and performing our own analysis based on further sensitising of the models
to take account of reasonably possible scenarios that could arise from the risks identified;
•
Reviewing the accuracy and completeness of disclosures in the financial statements
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.
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.
Kodal Minerals Plc Group Annual Report & Financial Statements
34
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
•
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the
course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 19, 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.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
35
Independent Auditor’s Report continued
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit
engagement team:
•
obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that
the group and parent company operate in and how the group and parent company are complying with the legal and
regulatory framework;
•
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;
•
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:
IFRS and Companies Act
2006
Review of the financial statement disclosures and testing to supporting documentation;
Completion of disclosure checklists to identify areas of non-compliance.
UK Bribery Act
Enquiry of internal and external legal advisors;
Inspection of policies and procedures, internal reports and minutes of meetings of the Board, Committees
and management.
Licensing compliance
regulations
Review of all licenses to check validity and check expiry;
Review of the process behind application of extensions and renewals, to check that this is being conducted
appropriately and in a timely manner.
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.
DAVID HOUGH (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street, London, EC4A 4AB
2 September 2024
Kodal Minerals Plc Group Annual Report & Financial Statements
36
KODAL MINERALS PLC
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
37
Consolidated statement of
comprehensive income
For the year ended 31 March 2024
CONTINUING OPERATIONS
Note
Year ended
31 March 2024
£
Year ended
31 March 2023
£
Impairment of exploration and evaluation assets
7
(1,572,302)
-
Administrative expenses
2
(1,530,114)
(944,473)
Share based payments
5
(241,888)
(516,581)
Operating loss
(3,344,304)
(1,461,054)
Finance income
92,693
-
Revaluation gain on sale of subsidiary undertakings
9
30,521,645
-
Share of loss of an associate
9
(83,610)
-
Profit / (loss) before tax
2
27,186,424
(1, 461,054)
Taxation
6
-
-
Profit/(loss) for the year from continuing operations
27,186,424
(1, 461,054)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or loss
Currency translation gain
3,230
331,259
Total comprehensive income for the year
27,189,654
(1,129,795)
Profit / (loss) per share from continuing operations
Basic (pence)
4
0.1491
(0.0087)
Diluted (pence)
4
0.1431
(0.0087)
The profit/(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.
Kodal Minerals Plc Group Annual Report & Financial Statements
38
Consolidated and parent company statements
of financial position
As at 31 March 2024
NON-CURRENT ASSETS
Note
Group
31 March 2024
£
Group
31 March 2023
£
Company
31 March 2024
£
Company
31 March 2023
£
Intangible assets
7
2,162,452
14,521,888
-
-
Property, plant and equipment
8
664
91,771
-
-
Investment in associate undertaking
9
31,260,186
-
5,235
-
Amounts due from subsidiary undertakings
10
-
-
2,998,485
14,296,318
Amounts due from associated undertaking
11
4,312,785
-
4,312,785
-
Investments in subsidiary undertakings
10
-
-
512,373
512,373
37,736,087
14,613,659
7,828,878
14,808,691
CURRENT ASSETS
Trade and other receivables
11
3,427,357
11,175
3,301,322
11,175
Cash and cash equivalents
16,326,507
544,988
16,284,225
425,704
Non-current assets classified as held for sale
7
79,606
513,109
-
-
19,833,470
1,069,272
19,585,547
436,879
TOTAL ASSETS
57,569,557
15,682,931
27,414,425
15,245,570
CURRENT LIABILITIES
Trade and other payables
12
(139,301)
(800,007)
(139,301)
(378,171)
TOTAL LIABILITIES
(139,301)
(800,007)
(139,301)
(378,171)
NET ASSETS
57,430,256
14,882,924
27,275,124
14,867,399
EQUITY
Attributable to owners of the parent:
Share capital
13
6,325,349
5,315,619
6,325,349
5,315,619
Share premium account
13
32,624,071
18,765,206
32,624,071
18,765,206
Share based payment reserve
1,147,664
1,537,779
1,147,664
1,537,779
Translation reserve
15,862
12,632
-
-
Retained surplus / (deficit)
17,317,310
(10,748,312)
(12,821,960)
(10,751,205)
TOTAL EQUITY
57,430,256
14,882,924
27,275,124
14,867,399
The Company’s loss for the year ended 31 March 2024 from continuing operations was £2,949,953 (2023: £1,206,922) and total
comprehensive loss for the year was £2,949,953 (2023: £1,206,922).
The financial statements were approved and authorised for issue by the board of directors on 2 September 2024 and signed on its behalf by
Charles Joseland
Director
Registered number: 07220790
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
39
Consolidated statement of changes in equity
For the year ended 31 March 2024
GROUP
Share capital
£
Share
premium
account
£
Share based
payment
reserve
£
Translation
reserve
£
Retained
surplus /
(deficit)
£
Total equity
£
At 31 March 2022
4,947,595
15,933,071
1,150,678
(318,627)
(9,622,062)
12,090,655
Comprehensive income
Loss for the year
-
-
-
-
(1,461,054)
(1, 461,054)
Other comprehensive income
Currency translation gain
-
-
-
331,259
-
331,259
Total comprehensive income for the
year
-
-
-
331,259
(1,461,054)
(1,129,795)
Transactions with owners
Share based payment
-
-
721,905
-
-
721,905
Proceeds from shares issued
334,821
2,665,179
-
-
-
3,000,000
Proceeds from exercise of share options
33,203
309,171
-
-
-
342,374
Share options lapse
-
-
(334,804)
-
334,804
-
Share issue expenses
-
(142,215)
-
-
-
(142,215)
At 31 March 2023
5,315,619
18,765,206
1,537,779
12,632
(10,748,312)
14,882,924
Comprehensive income
Profit for the year
-
-
-
-
27,186,424
27,186,424
Other comprehensive income
Currency translation gain
-
-
-
3,230
-
3,230
Total comprehensive income for the
year
-
-
-
3,230
27,186,424
27,189,654
Transactions with owners
Share based payment
-
-
489,083
-
-
489,083
Proceeds from shares issued
918,063
13,251,199
-
-
-
14,169,262
Proceeds from exercise of share
options
91,667
607,666
-
-
-
699,333
Reserves movement for exercised /
lapsed options
-
-
(879,198)
-
879,198
-
At 31 March 2024
6,325,349
32,624,071
1,147,664
15 ,862
17,317,310
57,430,256
Attributable to the owners of the Parent
Kodal Minerals Plc Group Annual Report & Financial Statements
40
Parent company statement of changes in equity
For the year ended 31 March 2024
COMPANY
Share capital
£
Share
premium
account
£
Share based
payment
reserve
£
Retained
surplus /
(deficit)
£
Total equity
£
At 31 March 2022
4,947,595
15,933,071
1,150,678
(9,879,087)
12,152,257
Comprehensive income
Loss for the year
-
-
-
(1,206,922)
(1,206,922)
Total comprehensive income for the year
-
-
-
(1,206,922)
(1,206,922)
Transactions with owners
Share based payment
-
-
721,905
-
721,905
Proceeds from shares issued
334,821
2,665,179
-
-
3,000,000
Proceeds from exercise of share options
33,203
309,171
-
-
342,374
Share options lapse
-
-
(334,804)
334,804
-
Share issue expenses
-
(142,215)
-
-
(142,215)
At 31 March 2023
5,315,619
18,765,206
1,537,779
(10,751,205)
14,867,399
Comprehensive income
Loss for the year
-
-
-
(2,949,953)
(2,949,953)
Total comprehensive income for the year
-
-
-
(2,949,953)
(2,949,953)
Transactions with owners
Share based payment
-
-
489,083
-
489,083
Proceeds from shares issued
918,063
13,251,199
-
-
14,169,262
Proceeds from exercise of share options
91,667
607,666
-
-
699,333
Reserves movement for exercised / lapsed options
-
-
(879,198)
879,198
-
At 31 March 2024
6,325,349
32,624,071
1,147,664
(12,821,960)
27,275,124
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
41
Consolidated and parent company statements
of cash flows
For the year ended 31 March 2024
Note
Group
Year ended
31 March 2024
£
Group
Year ended
31 March 2023
£
Company
Year ended
31 March 2024
£
Company
Year ended
31 March 2023
£
Cash flows from operating activities
Profit / (loss) before tax
27,186,424
(1,461,054)
(2,949,953)
(1,206,923)
Adjustments for non-cash items:
Revaluation gain on sale of subsidiary undertaking
(30,521,645)
-
-
-
Impairment / (Write back of impairment) of intercompany
balances
-
-
598,000
(180,000)
Impairment of exploration and evaluation assets
1,572,302
-
-
-
Share based payments
241,888
516,581
241,888
516,581
Share of loss from associate
83,610
-
-
-
Interest income
(92,694)
-
(92,694)
-
Operating cash flow before movements in working capital
(1,530,115)
(944,473)
(2,202,759)
(870,342)
Movement in working capital
Increase in receivables
(343,785)
(5,406)
(230,946)
(5,406)
(Decrease) / increase in payables
(660,702)
393,666
(238,869)
277,213
Net movements in working capital
(1,004,487)
388,260
(469,815)
271,807
Net cash outflow from operating activities
(2,534,602)
(556,213)
(2,672,574)
(598,535)
Cash flows from investing activities
Purchase of tangible assets
8
-
(103,633)
-
-
Purchase of intangible assets
7
(2,736,084)
(3,006,324)
-
-
Disposal of intangible assets
400,000
-
-
-
Loans to subsidiary undertakings
-
-
(2,173,695)
(3,125,764)
Loan repayments from associated undertakings
5,807,937
-
5,807,937
-
Net cash outflow from investing activities
3,471,853
(3,109,957)
3,634,242
(3,125,764)
Cash flow from financing activities
Interest income
28,258
-
28,258
-
Net proceeds from share issues
14,169,262
2,857,785
14,169,262
2,857,785
Net proceeds from exercise of share options
699,333
342,374
699,333
342,374
Net cash inflow from financing activities
14,896,853
3,200,159
14,896,853
3,200,159
Increase / (decrease) in cash and cash equivalents
15,834,104
(466,011)
15,858,521
(524,140)
Cash and cash equivalents at beginning of the year
544,988
1,045,515
425,704
949,844
Exchange gain / (loss) on cash
(52,585)
(34,516)
-
-
Cash and cash equivalents at end of the year
16,326,507
544,988
16,284,225
425,704
Cash and cash equivalents comprise cash on hand and bank balances.
Kodal Minerals Plc Group Annual Report & Financial Statements
42
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.
The Company is incorporated in England and Wales with registered
number 07220790. The Company’s registered office is at Prince
Frederick House, 35-39 Maddox Street, London W1S 2PP.
Basis of preparation
The consolidated financial statements of Kodal Minerals Plc are
prepared in accordance with the historical cost convention and in
accordance with UK-adopted International Accounting Standards.
The Company’s ordinary shares are quoted on AIM, a market
operated by the London Stock Exchange.
In accordance with the exemption allowed by Section 408(3) of
the Companies Act 2006, the Company has not presented its own
income statement or statement of comprehensive income.
Going concern
The Group is still in the exploration and development phase of
its business and the operation of the Group are currently being
financed by funds which the Company has raised from the issue of
new ordinary shares.
The Directors have prepared cash flow forecasts for the period
ending 31 March 2026. The forecasts include additional exploration
expenditure for the Group’s gold assets, as well as covering ongoing
overheads. The forecasts , which include a contingency for cash
calls on the Bougouni Lithium Project during its development phase,
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 for a
further financing. As at 27 August 2024 the Group has cash at bank
amounting to £18,477,000. 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.
If the Group loses control over a subsidiary, it derecognises the related
assets and liabilities and any resultant gain is recognised in profit or loss.
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 (2023: XOF 1 : £0.00135).
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.
Investments in associates
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating decisions of the investee but has no control
over those policies.
Under the equity method, the investment in an associate is initially
recognised at fair value (see note 9). Thereafter the Group recognises
its share of the profit or loss of an associate and it is shown on the face
of the statement of profit or loss outside operating profit, and added to
or subtracted from the carrying value of the associate.
Where the recoverable amount of the investment is less than the
carrying amount, an impairment is recognised.
Assets held for resale
When it becomes probable that the carrying amount of an asset will be
recovered principally through a sale transaction rather than through its
continuing use, it is reclassified as a current asset held for resale. The
asset is revalued immediately before reclassification and then carried at
the lower of this amount and fair value less costs to sell.
If assets no longer meet the criteria to be classified as non-current
assets held for resale, they are reclassified back to non-current
assets and valued at the lower of their carrying amount before they
were classified for resale, adjusted for depreciation, amortisation or
revaluations that would have been recognised had they not been
classified as held for resale.
Principal accounting policies
For the year ended 31 March 2024
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
43
Principal accounting policies continued
When an asset is disposed of, the value of the asset in the balance
sheet is written off to, and receipts from disposals are credited to,
the statement of comprehensive income as part of the gain or loss
on disposal.
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:
• 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
• 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.
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.
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.
Kodal Minerals Plc Group Annual Report & Financial Statements
44
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 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, account is taken of service
and performance conditions (vesting conditions), in addition to
performance conditions linked to the price of the shares of the
Company (market conditions). No expense is recognised for awards
that do not ultimately vest.
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, or for options
awarded to executive directors, the award is considered as part
of their remuneration and the overall cost is allocated between
operating costs and exploration and evaluation cost.
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 UK-adopted International Accounting Standards
(“IFRS”) 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 – judgement
and estimate
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 reviewed the Group’s gold projects in Mali and
Côte d’Ivoire and determined that where a project is not expected to
be commercially viable the licences will be relinquished and the costs
capitalised as exploration and evaluation assets should be written off
in full. No impairment has been charged on those gold licences to be
retained.
During the year, the assets relating to the Bougouni Lithium Project
were transferred into the associated undertaking.
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
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 2024 was £2.2million (2023: £14.5 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.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
45
Valuation of warrants and share options - estimate
No share options or warrants were issued in the year.
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. Any assumed exercise
dates have been reviewed and are considered to still be appropriate.
The assumptions used to value the options and warrants are
detailed in note 5.
For options awarded to the non-executive 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. For options awarded to executive directors, the award
is considered as part of their remuneration. This overall cost is
allocated between operating costs and exploration and evaluation
cost, the latter of which are 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.
Hainan transaction – judgement and estimate
Kodal Minerals Plc relinquished 51% of its ownership in the Bougouni
Lithium Project in return for financing and participation with Hainan
to bring the project into development. No cash was received by
the Group for its part disposal of the project, but $94m of equity
funding from Hainan was retained for development use within KMUK,
of which Kodal retains 49% ownership.
The board has considered the tests under IFRS3 and in their
judgment determined that the 51% disposal of the Bougouni Lithium
Project was the sale of an asset, not of a business. On reviewing
the terms of the shareholders agreement with Hainan, KMUK is not
judged to be a joint arrangement.
Under the requirements of IFRS10 the retained 49% interest was
re‑measured to fair value. The best indicator of value was estimated
to be the Hainan purchase of 51% of KMUK, being a recent, arm’s
length transaction for the same asset.
Considering IFRS10 para B99A, IAS28 and the IASB guidance of
September 2014 ‘Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture (Amendments to IFRS 10 and
IAS 28), the Company has judged that more reliable and relevant
information is provided by recognising the gain on the Hainan
transaction only to the extent of the unrelated investor interest in
KMUK. Accordingly, only 51% of the gain has been recognised, with
the remaining part of the gain eliminated against the Company’s
investment in KMUK. That value has been used as the cost on the
initial recognition of the investment in KMUK, its associate.
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.
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.
Standard
Details of amendment /
New Standards and
Interpretations
Annual
periods
beginning
on or after
IAS 1
Presentation
of Financial
Statements
Non-current Liabilities with
Covenants (Amendments
to IAS 1) to clarify how
conditions with which an
entity must comply within
twelve months after the
reporting period affect the
classification of a liability.
1 January
2024
IFRS 16 Leases
Lease Liability in a Sale and
Leaseback (Amendments to
IFRS 16) with amendments
that clarify how a seller-lessee
subsequently measures sale
and leaseback transactions
1 January
2024
IFRS 7
Financial
Instruments
Supplier Finance
Arrangements (Amendments
to IAS 7 and IFRS 7) to add
disclosure requirements, and
‘signposts’ within existing
disclosure requirements,
that ask entities to provide
qualitative and quantitative
information about supplier
finance arrangements.
1 January
2024
IAS 21 The
Effects of
Changes
in Foreign
Exchange
Rates
Lack of Exchangeability
(Amendments to IAS 21)
to provide guidance to
specify when a currency is
exchangeable and how to
determine the exchange rate
when it is not.
1 January
2025
IFRS 18
Presentation
and Disclosure
in Financial
Statements
IFRS 18 Presentation and
Disclosure in Financial
Statements includes
requirements for all entities
applying IFRS for the
presentation and disclosure
of information in financial
statements.
1 January
2027
There are other standards and amendments in issue but not yet
effective, which are not likely to be relevant to the Group which have
therefore not been listed.
Principal accounting policies continued
Kodal Minerals Plc Group Annual Report & Financial Statements
46
Notes to the financial statements
For the year ended 31 March 2024
1. SEGMENTAL REPORTING
The operations and assets of the Group in the year ended 31 March 2024 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 2024, the Group had not commenced commercial production from its exploration sites and therefore
had no revenue for the year.
YEAR ENDED 31 MARCH 2024
UK
£
West Africa
Gold
£
West Africa
Lithium
£
Total
£
Impairment of exploration and evaluation assets
-
(1,572,302)
-
(1,572,302)
Administrative expenses
(1,407,702)
(80,926)
(41,486)
(1,530,114)
Share based payments
(241,888)
-
-
(241,888)
Finance income
92,693
-
-
92,693
Revaluation gain on sale of subsidiary undertaking
-
-
30,521,645
30,521,645
Share of loss from associate
-
-
(83,610)
(83,610)
Profit from continuing operations for the year
(1,556,897)
(1,653,228)
30,396,549
27,186,424
At 31 March 2024
Trade and other receivables
18,605
-
7,721,537
7,740,142
Cash and cash equivalents
16,284,228
42,279
-
16,326,507
Non-current assets classified as held for sale
-
79,606
-
79,606
Trade and other payables
(139,301)
-
-
(139,301)
Intangible assets - exploration and evaluation
expenditure
-
2,162,452
-
2,162,452
Investment in associated undertaking
-
-
31,260,186
31,260,186
Property, plant and equipment
-
664
-
664
Net assets at 31 March 2024
16,163,532
2,285,001
38,981,723
57,430,256
YEAR ENDED 31 MARCH 2023
UK
£
West Africa
Gold
£
West Africa
Lithium
£
Total
£
Administrative expenses
(912,390)
(4,288)
(27,795)
(944,473)
Share based payments
(516,581)
-
-
(516,581)
Loss for the year
(1,428,971)
(4,288)
(27,795)
(1,461,054)
At 31 March 2023
Other receivables
11,175
-
-
11,175
Cash and cash equivalents
425,704
90,426
28,858
544,988
Non-current assets classified as held for sale
-
-
513,109
513,109
Trade and other payables
(129,332)
-
(670,675)
(800,007)
Intangible assets - exploration and evaluation
expenditure
-
3,305,948
11,215,940
14,521,888
Property, plant and equipment
-
1,042
90,729
91,771
Net assets at 31 March 2023
307,547
3,397,416
11,177,961
14,882,924
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
47
Notes to the financial statements continued
2. PROFIT/LOSS BEFORE TAX
The profit/loss before tax from continuing activities is stated after charging:
Group
Year ended
31 March 2024
£
Group
Year ended
31 March 2023
£
Impairment of exploration and evaluation assets
1,572,302
-
Fees payable to the Company’s auditor
100,000
53,000
Share based payments (note 5)
241,888
516,581
Directors’ salaries and fees
471,840
182,247
Employer’s National Insurance
33,476
10,598
Amounts payable to RSM UK Audit LLP and its associates in respect of audit services are as follows;
Group
Year ended
31 March 2024
£
Group
Year ended
31 March 2023
£
Audit services
- statutory audit of parent and consolidated accounts
100,000
53,000
3. EMPLOYEES AND DIRECTORS’ REMUNERATION
The average number of people employed in the Company and the Group is as follows:
Group
31 March 2024
Number
Group
31 March 2023
Number
Company
31 March 2024
Number
Company
31 March 2023
Number
Average number of employees (including directors):
60
45
5
5
The directors are key management personnel of the Company. The remuneration expense for directors and employees is as follows:
Group
31 March 2024
£
Group
31 March 2023
£
Company
31 March 2024
£
Company
31 March 2023
£
Directors’ remuneration
471,840
182,247
471,840
182,247
Employee wages and salaries
24,726
-
12,000
-
Social security costs
33,476
10,598
33,476
10,598
Total
530,042
192,845
517,316
192,845
In addition to the amounts included above, £273,777 (2023: £282,267) of the directors’ remuneration cost and £194,032 (2023: £150,525) of
employee wages and local social security costs have been treated as Exploration and Evaluation expenditure within the Group.
Kodal Minerals Plc Group Annual Report & Financial Statements
48
Directors’
salary and
fees year ended
31 March 2024
£
Gain on exercise
of share options
year ended
31 March
2024
£
Total
year ended
31 March
2024
£
Bernard Aylward (a)
308,442
349,125
657,567
Charles Joseland
68,332
105,000
173,332
David Teng
–
–
–
Robert Wooldridge
88,335
26,375
114,710
Steven Zaninovich (b)
269,000
89,333
358,333
Qingtao Zeng (c)
11,508
–
11,508
745,617
569,833
1,315,450
Included within the amounts shown above for Directors’ salary and fees for the year ended 31 March 2024, £43,500 has been recharged to
the associated undertaking (2023: £nil).
Directors’
salary and
fees year ended
31 March 2023
£
Gain on
exercise of
share options
31 March
2023
£
Total
year ended
31 March
2023
£
Bernard Aylward (a)
177,847
3,860
181,707
Charles Joseland
50,000
20,044
70,044
Robert Wooldridge
45,000
10,509
55,509
Steven Zaninovich (b)
166,667
4,632
171,299
Qingtao Zeng (c)
25,000
–
25,000
464,514
39,045
503,559
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 2024 and received fees of £224,694 (2023: £139,514). These fees are included within the
remuneration figure shown for Bernard Aylward.
b
Zivvo Pty Ltd (“Zivvo”) a company wholly owned by Steven Zaninovich, provided consultancy services to the Group during the year
ended 31 March 2024 and received fees of £210,000 (2003: £140,000 in the period after his appointment as director on 27 July 2022).
These fees are included within the remuneration figure shown for Steven Zaninovich.
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 prior year and received fees of £nil (2023: £24,627).
4. PROFIT / (LOSS) PER SHARE
Basic profit / (loss) per share is calculated by dividing the profit / (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:
Profit /
(loss)
£
Weighted
average
number
of shares
Diluted
weighted
average
number
of shares
Basic (profit) /
loss per share
(pence)
Diluted (profit)
/ loss per share
(pence)
Year ended 31 March 2024
27,186,424
18,228,192,472
19,000,275,806
0.1491
0.1431
Year ended 31 March 2023
(1,461,054)
16,812,417,355
16,812,417,355
(0.0087)
(0.0087)
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
49
Notes to the financial statements continued
4. PROFIT / (LOSS) PER SHARE continued
Diluted profit / (loss) per share is calculated by dividing the profit / (loss) attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the year plus the number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into ordinary shares. In previous years, options in issue were not considered diluting to
the loss per share as the Group was loss making. Diluted loss per share was 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.
Share options outstanding
Year ended
31 March 2024
Number
Year ended
31 March 2023
Number
Opening balance
582,500,000
250,000,000
Lapsed in the year
(43,333,333)
(77,500,000)
Issued in the year
-
470,000,000
Exercised in the year
(186,666,667)
(60,000,000)
Closing balance
352,500,000
582,500,000
Performance share rights outstanding
Year ended
31 March 2024
Number
Year ended
31 March 2023
Number
Opening balance
240,000,000
175,000,000
Issued in the year
-
75,000,000
Exercised in the year
(80,000,000)
(10,000,000)
Closing balance
160,000,000
240,000,000
Warrants outstanding
Year ended
31 March 2024
Number
Year ended
31 March 2023
Number
Opening balance
326,250,000
205,000,000
Lapsed in the year
-
(12,500,000)
Issued in the year
-
170,000,000
Exercised in the year
(26,666,666)
(36,250,000)
Closing balance
299,583,334
326,250,000
Group profit for the year was stated after a share based payment charge of £241,888 (2023: £516,581). In addition, a share based payment charge
of £247,195 (2023: £205,324) has been treated as Exploration Expenditure within the Group. The reference to ‘share based payments’ relates to a
theoretical calculation of the non-cash cost to the Group of share options and warrants that have been awarded and have yet to vest.
Kodal Minerals Plc Group Annual Report & Financial Statements
50
Options, warrants and performance share rights outstanding for each of the directors at the year-end are outlined below:
Exercisable date
Bernard
Aylward
Robert
Wooldridge
Charles
Joseland
Steven
Zaninovich
6 November 2021
-
-
-
33,333,334
To be determined (Note 1)
-
-
-
90,000,000
To be determined (Note 1)
75,000,000
-
-
-
27 Aug 2021 – 27 Aug 2026
-
5,000,000
-
-
27 Aug 2022 – 27 Aug 2027
-
7,500,000
-
-
27 Aug 2023 – 27 Aug 2028
-
7,500,000
-
-
15 November 2023
30,000,000
-
-
72,500,000
To be determined (Note 1)
40,000,000
-
-
77,500,000
To be determined (Note 2)
60,000,000
-
-
95,000,000
18 Aug 2022 – 18 Aug 2027
-
23,333,334
-
-
18 Aug 2023 – 18 Aug 2028
-
33,333,333
-
-
18 Aug 2024 – 18 Aug 2029
-
33,333,333
25,000,000
-
Closing balance
205,000,000
110,000,000
25,000,000
368,333,334
1.
Exercisable from date of first commercial production from the Bougouni Project
2.
Exercisable from date of production of 175,000 tonnes of spodumene concentrate from the Bougouni project
Details of share options outstanding at 31 March 2024:
Date of grant
Number of options
Option price
Exercisable between
8 May 2017
12,500,000
0.38 pence
8 May 2019 – 8 May 2024
27 August 2021
5,000,000
0.36 pence
27 Aug 2021 – 27 Aug 2026
27 August 2021
7,500,000
0.36 pence
27 Aug 2022 – 27 Aug 2027
27 August 2021
7,500,000
0.36 pence
27 Aug 2023 – 27 Aug 2028
18 August 2022
37,500,000
0.3 pence
To be determined
18 August 2022
47,500,000
0.34 pence
To be determined
18 August 2022
70,000,000
0.38 pence
To be determined
18 August 2022
26,666,668
0.3 pence
18 Aug 2022 – 18 Aug 2027
18 August 2022
36,666,666
0.34 pence
18 Aug 2023 – 18 Aug 2028
18 August 2022
61,666,666
0.34 pence
18 Aug 2024 – 18 Aug 2029
Details of performance share rights outstanding at 31 March 2024:
Date of grant
Number of
performance
share rights
Option price
Exercisable between
27 August 2021
85,000,000
nil
To be determined
27 July 2022
25,000,000
nil
To be determined
27 July 2022
25,000,000
nil
To be determined
27 July 2022
25,000,000
nil
To be determined
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
51
Notes to the financial statements continued
5. SHARE BASED PAYMENTS continued
Details of warrants outstanding at 31 March 2024:
Date of grant
Number of warrants
Option price
Exercisable between
22 May 2017
6,250,000
0.38 pence
22 May 2019 – 22 May 2024
23 November 2018
33,333,334
0.14-0.38 pence
To be determined
23 November 2018
90,000,000
0.14-0.38 pence
To be determined
27 July 2022
47,500,000
0.28 pence
To be determined
27 July 2022
52,500,000
0.325 pence
To be determined
27 July 2022
70,000,000
0.38 pence
To be determined
Additional disclosure information:
Weighted average exercise price of share options and warrants:
• outstanding at the beginning of the period
0.27 pence
• granted during the period
N/A
• outstanding at the end of the period
0.28 pence
• exercisable at the end of the period
0.34 pence
Weighted average remaining contractual life of share options outstanding at the end of the period
5.2 years
Warrants, Options and Performance Share Rights issued in the year to 31 March 2023
On 27 July 2022 the Company granted warrants over 170,000,000 ordinary shares and Performance Share Rights of up to 75,000,000
ordinary shares to Steven Zaninovich. The warrants are registered in the name of Zivvo Pty Ltd, a company wholly owned by Steven
Zaninovich.
The Warrants and Performance Share Rights carry vesting conditions that are linked to achievement of milestones critical to the development
of the Bougouni Project as follows:
•
Securing of finance for the Bougouni mine and completion of all Mali Government Agreements, Update and Variation of Mining Licence
and Environment permitting in relation to the Bougouni Project;
•
Receipt of funds from first sale of spodumene concentrate from the Bougouni Project within 18 months of receipt of finance; and
•
175,000 tonnes of spodumene concentrate produced from the Bougouni Project.
Subject to the vesting conditions being satisfied, Mr Zaninovich may call for Ordinary Shares, as set out in the table below, to be issued to
him at any time within five years of the vesting condition being met and upon payment by them of the nominal value for the Ordinary Shares
in relation the Performance Share Rights and the exercise price in relation to the share options.
Warrants
Vesting criteria
Exercise Price
Number
Performance Share Rights
Securing of finance for the Bougouni mine
£0.00280p
47,500,000
25,000,000 capped at
£250,000 value
Receipt of funds from first sale of spodumene concentrate from
Bougouni within 18 months of receipt of finance
£0.00325p
52,500,000
25,000,000 capped at
£250,000 value
Production of 175,000 tonnes of spodumene concentrate from
Bougouni
£0.00380p
70,000,000
25,000,000 capped at
£250,000 value
Total
£0.00335p average
170,000,000
75,000,000 total capped at
£750,000 value
On 18 August 2022 the Company granted options over 155,000,000 ordinary shares to Bernard Aylward and Mohamed Niare (Country
Manager, Mali).
Kodal Minerals Plc Group Annual Report & Financial Statements
52
The Share Options carry vesting conditions that are linked to achievement of milestones critical to the development of the Bougouni Project
as follows:
•
Securing of finance for the Bougouni mine and completion of all Mali Government Agreements, Update and Variation of Mining Licence
and Environment permitting in relation to the Bougouni Project;
•
Receipt of funds from first sale of spodumene concentrate from the Bougouni Project within 18 months of receipt of finance; and
•
175,000 tonnes of spodumene concentrate produced from the Bougouni Project.
Subject to the vesting conditions being satisfied, the holders of the Share Options may call for Ordinary Shares, as set out in the table below,
to be issued to them at any time within five years of the vesting condition being met.
Share Options
Vesting criteria
Exercise price
Bernard Aylward
Mohamed Niare
Securing of finance for the Bougouni mine
0.3 pence
Up to 30 million ordinary shares
Up to 7.5 million ordinary shares
Receipt of funds from first sale of spodumene concentrate 0.34 pence
Up to 40 million ordinary shares
Up to 7.5 million ordinary shares
175,000 tonnes of spodumene concentrate produced
0.38 pence
Up to 60 million ordinary shares
Up to 10 million ordinary shares
Total
Up to 130 million ordinary shares
Up to 25 million ordinary shares
On 18 August 2022, the Company granted options over 315,000,000 Ordinary Shares to members of the management team, of which those
granted to Non-Executive Directors were as set out in the table below. The options will vest in equal tranches with the first one third vesting
immediately and exercisable at 0.3 pence per share, and the remaining two thirds vesting in two equal tranches on the first and second
anniversaries of the grant and exercisable at 0.34 pence per share.
Director
Number of
Options granted
Charles Joseland
75,000,000
Robert Wooldridge
100,000,000
Qingtao Zeng
130,000,000
The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs to the model were:
27 July 2022
18 August 2022
Strike price
0.00p – 0.38p
0.30p – 0.38p
Share price
0.11p – 0.25p
0.11p – 0.26p
Volatility
75%
75%
Expiry date
15/3/28 – 15/12/30
15/3/28 – 15/12/30
Risk free rate
0.24% - 0.26%
0.23% - 0.30%
Dividend yield
0.0%
0.0%
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
53
6. TAXATION
Group
Year ended
31 March 2024
£
Group
Year ended
31 March 2023
£
Taxation charge for the year
–
–
Factors affecting the tax charge for the year
Profit / (loss) from continuing operations before income tax
27,186,424
(1,461,054)
Revaluation gain on sale of subsidiary undertakings
(30,521,645)
–
Profits subject to corporation tax
(3,335,221)
(1,461,054)
Tax at 25% (2023: 19%)
(833,805)
(277,600)
Expenses not deductible
354
636
Losses carried forward not deductible
772,979
178,814
Deferred tax differences
60,472
98,150
Income tax expense
–
–
During the year the UK corporation tax rate was increased from 19% to 25%.
The Group has tax losses and other potential deferred tax assets (including in relation to share options) totalling £3,993,000 (2023:
£3,759,000) which will be able to be offset against future income. No deferred tax asset has been recognised in respect of these losses as
their utilisation is uncertain at this stage.
7. INTANGIBLE ASSETS
GROUP
Exploration and
evaluation
£
COST
At 1 April 2022
11,442,403
Additions in the year
3,226,956
Classified as held for sale
(513,109)
Effects of foreign exchange
365,638
At 1 April 2023
14,521,888
Additions in the year
2,971,083
Disposals in the year
(13,488,010)
Classified as held for sale
(79,606)
Licences written off in the year
(1,572,302)
Effects of foreign exchange
(190,601)
At 31 March 2024
2,162,452
NET BOOK VALUES
At 31 March 2024
2,162,453
At 31 March 2023
14,521,888
At 31 March 2022
11,442,403
Notes to the financial statements continued
Kodal Minerals Plc Group Annual Report & Financial Statements
54
The Company did not have any Intangible Assets as at 31 March 2022, 2023 and 2024.
Group
31 March 2024
£
Group
31 March 2023
£
Company
31 March 2024
£
Company
31 March 2023
£
Non-current assets classified as held for sale
79,606
513,109
–
–
79,606
513,109
–
–
During the year the Group received an offer of US$100,000 to purchase the gold projects at Djelibani Sud, Nangalasso, Sotian and
Tiedougoubougou. The carrying value of these projects was impaired by £877,422 and the projects transferred to current held as assets for
sale at 31 March 2024. The assets relating to the Bougouni West project were held as assets held for sale at 31 March 2023. These assets were
transferred to Kodal Mining UK Limited in November 2023 as part of the Hainan financing transaction. However, Kodal remains entitled to
receive the sale proceeds (see note 18).
8. PROPERTY, PLANT AND EQUIPMENT
GROUP
Plant and
machinery
£
COST
At 1 April 2022
27,633
Additions in the year
103,633
Effects of foreign exchange
137
At 1 April 2023
131,403
Disposals in the year
(101,148)
Effects of foreign exchange
(2,702)
At 31 March 2024
27,555
DEPRECIATION
At 1 April 2022
24,324
Depreciation charge
15,308
At 1 April 2023
39,632
Disposals in the year
(25,883)
Depreciation charge
13,140
At 31 March 2024
26,889
NET BOOK VALUES
At 31 March 2024
664
At 31 March 2023
91,771
At 31 March 2022
3,309
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 2022, 2023 and 2024.
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
55
9. ASSOCIATED UNDERTAKING
On 15 November 2023, the Group’s interest in Kodal Mining UK Limited (“KMUK”) reduced to 49% as a result of Hainan’s subscription for 51%
of the newly issued share capital of KMUK. Prior to the transaction with Hainan, KMUK was accounted for as a subsidiary undertaking of the
Group. With the reduction to a 49% interest and loss of control but retention of significant interest, KMUK has been accounted for as an
associated undertaking from that date.
As a result of the transaction with Hainan, Kodal has revalued its remaining 49% stake in KMUK to fair value, reflecting the price paid by Hainan
for its 51% stake, and the payment for the termination of the Suay Chin offtake agreement. This has given rise to a non-cash gain on partial
disposal of a subsidiary undertaking of £30.5 million. The fair value has been used as the cost for the initial recognition of KMUK as an associate.
The assets and liabilities of KMUK at 15 November 2023 and at 31 March 2024 were:
15 November 2023
£
31 March 2024
£
Assets
Cash and cash equivalents
71,113,968
70,813,016
Other debtors
–
43,003
Property, plant and equipment
107,179
357,588
Intangible assets – Exploration and Evaluation
14,659,493
18,937,151
Accounts receivable
8,557,667
–
Liabilities
Trade and other payables
(30,525,750)
(26,408,836)
Net Assets
63,912,557
63,741,922
Group’s share in equity – 49%
31,317,153
31,233,543
Goodwill
26,643
26,643
Group’s carrying value of the investment
31,343,796
31,260,186
Trade and other payables includes an amount of £11,144,868 payable to Suay Chin for the termination of their off-take agreement. From the
date of acquisition, KMUK contributed a loss of £83,610 to the profit before tax from continuing operations of the Group:
Period to
31 March 2024
Financing income
443,225
Administrative expenses
(482,451)
Financing costs
(131,407)
Loss before tax
(170,633)
Group’s share of loss for the year
(83,610)
The associate had no contingent liabilities or capital commitments at 15 November 2023 and 31 March 2024.
10. SUBSIDIARY UNDERTAKINGS
a. AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS
Company
31 March 2024
£
Company
31 March 2023
£
Amounts due from subsidiary undertakings
2,998,485
14,296,318
2,998,485
14,296,318
Notes to the financial statements continued
Kodal Minerals Plc Group Annual Report & Financial Statements
56
Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company’s intercompany
balances, including the project being put into operation, the project being sold and the project collapsing. Management has updated its
calculations reflecting:
a)
additional amounts advanced to its subsidiaries for work on its gold projects during the year;
b)
the status of the Group’s gold licences, in particular where renewal is not considered possible and there is no prospect of recovery;
c)
the expected sale proceeds where there is an expectation of a project being sold; and
d)
the reduced risk of project collapse following the grant of a mining license, assessed at 5%.
The review has concluded that at 31 March 2024 a credit loss provision of £1,099,000 should be held against amounts due from subsidiaries
(2023: £501,000).
b. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
The consolidated financial statements include the following subsidiary companies:
Company
Subsidiary of
Country of
incorporation
Registered office
Equity
holding
Nature of
business
Kodal Norway (UK) Ltd
Kodal Minerals Plc
United Kingdom
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP
100% Operating company
International Goldfields
(Bermuda) Limited
Kodal Minerals Plc
Bermuda
MQ Services Ltd
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
100%
Holding company
International Goldfields Côte
d’Ivoire SARL
International
Goldfields
(Bermuda) Limited
Côte d’Ivoire
Abidjan Cocody Les Deux
Plateaux 7eme Tranche
BP Abidjan
Côte d’Ivoire
100%
Mining exploration
International Goldfields Mali
SARL
International
Goldfields
(Bermuda) Limited
Mali
Bamako, Faladi, Mali Univers,
Rue 886 B, Porte 487
Mali
100%
Mining exploration
Jigsaw Resources CIV Ltd
International
Goldfields
(Bermuda) Limited
Bermuda
MQ Services Ltd
Victoria Place,
31 Victoria Street,
Hamilton HM 10
Bermuda
100%
Holding company
Corvette CIV SARL
Jigsaw Resources
CIV Ltd
Côte d’Ivoire
Abidjan Cocody Les Deux
Plateaux 7eme Tranche
BP Abidjan
Côte d’Ivoire
100%
Mining exploration
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 2024 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 2024.
CARRYING VALUE OF INVESTMENT IN SUBSIDIARIES
Year ended
31 March 2024
£
Year ended
31 March 2023
£
Opening balance
512,373
512,373
Impairment in the year
–
–
Closing balance
512,373
512,373
Strategic Report
Governance
Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
57
11. CURRENT AND NON-CURRENT RECEIVABLES
Group
31 March 2024
£
Group
31 March 2023
£
Company
31 March 2024
£
Company
31 March 2023
£
Non-current receivables
Receivable from the associate
4,312,785
–
4,312,785
–
4,312,785
–
4,312,785
–
Current receivables
Trade receivables
336,355
–
223,516
–
Receivable from the associate
3,072,398
–
3,059,202
–
Other receivables
18,604
11,175
18,604
11,175
3,427,357
11,175
3,301,322
11,175
No receivables are past due. The Directors consider that the carrying amount of all receivables, both current and non-current,approximates
their fair value and there are no expected credit losses.
Amounts receivable from the associate relate to amounts advanced to KMUK and its subsidiary undertakings, all of which is repayable on
demand. £4.3 million of this balance, shown as a non-current receivable, was advanced under the terms of a facility agreement and accrues
interest at a rate of 4% per annum.
12. TRADE AND OTHER PAYABLES
Group
31 March 2024
£
Group
31 March 2023
£
Company
31 March 2024
£
Company
31 March 2023
£
Trade payables
37,369
616,877
37,369
195,041
Other payables
101,932
183,130
101,932
183,130
139,301
800,007
139,301
378,171
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.
13. SHARE CAPITAL
GROUP AND COMPANY
Allotted, issued and fully paid:
Note
Nominal Value
Number of
Ordinary Shares
Share Capital
£
Share Premium
£
At 31 March 2022
15,832,302,387
4,947,595
15,933,071
May 2022
a
£0.0003125
1,071,428,569
334,821
2,522,964
March 2023
b
£0.0003125
106,250,000
33,203
309,171
At 31 March 2023
17,009,980,956
5,315,619
18,765,206
May 2023
c
£0.0003125
12,500,000
3,906
43,594
November 2023
d
£0.0003125
2,937,801,971
918,064
13,251,198
November 2023
e
£0.0003125
280,833,333
87,760
564,073
At 31 March 2023
20,241,116,260
6,325,349
32,624,071
a)
On 10 May 2022, a total of 1,071,428,569 shares were issued via a placing and subscription at a price of 0.28 pence per share.
b)
On 20 March 2023, a total of 106,250,000 shares were issued pursuant to the exercise of options, warrants and Performance Share
Rights from certain directors, senior management and consultants of the Company. The shares were issued at between 0.14 and
0.38 pence per share.
c)
On 12 May 2023, a total of 12,500,000 shares were issued pursuant to the exercise of options by a former director of the Company.
The shares were issued at 0.38 pence per share.
Notes to the financial statements continued
Kodal Minerals Plc Group Annual Report & Financial Statements
58
d)
On 14 November 2023, 2,937,801,971 share were issued via a subscription to Xinmao Investment Co. Limited for gross proceeds of
US$17.75 million.
e)
On 16 November 2023, 280,833,333 shares were issued pursuant to the exercise of options, warrants and Performance Share Rights from
certain directors, senior management and consultants of the Company. The shares were issued at between par and 0.38 pence per share.
14. RESERVES
Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Share based payment reserve
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.
Translation reserve
Gains/losses arising on re-translating the net assets of overseas operations into sterling.
Retained earnings
Cumulative net gains and losses recognised in the consolidated statement of financial position, including
both distributable and non-distributable earnings
15. 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 2024 earned interest of £92,694 (2022: £nil).
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, including receivables from the associated undertaking. The Company’s
financial assets also include amounts receivable from subsidiary undertakings.
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.
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Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
59
15. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT continued
Financial instruments by category – Group
Financial assets
at amortised cost
Other financial
liabilities at
amortised cost
Total
31 March 2024
Assets
Amounts due from associated undertaking
4,312,785
–
4,312,785
Trade and other receivables
3,427,357
–
3,427,357
Cash and cash equivalents
16,326,507
–
16,326,507
Total
24,066,649
–
24,066,649
Liabilities
Trade and other payables
–
(139,301)
(139,301)
Total
–
(139,301)
(139,301)
31 March 2023
Assets
Other receivables
11,175
–
11,175
Cash and cash equivalents
544,988
–
544,988
Total
556,163
–
556,163
Liabilities
Trade and other payables
–
(800,007)
(800,007)
Total
–
(800,007)
(800,007)
Financial instruments by category – Company
Financial assets
at amortised cost
Other financial
liabilities at
amortised cost
Total
31 March 2024
Assets
Amounts due from associated undertaking
4,312,785
–
4,312,785
Trade and other receivables
3,301,322
–
3,301,322
Cash and cash equivalents
16,284,225
–
16,284,225
Total
23,898,332
–
23,898,332
Liabilities
Trade and other payables
–
(139,301)
(139,301)
Total
–
(139,301)
(139,301)
31 March 2023
Assets
Amounts due from subsidiary undertaking
14,296,318
–
14,296,318
Other receivables
11,175
–
11,175
Cash and cash equivalents
425,704
–
425,704
Total
14,733,197
–
14,733,197
Liabilities
Trade and other payables
–
(378,171)
(378,171)
Total
–
(378,171)
(378,171)
Notes to the financial statements continued
Kodal Minerals Plc Group Annual Report & Financial Statements
60
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.
The Group incurs certain exploration costs in the CFA Franc, US Dollars, Australian Dollars and South African Rand 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
GBP
USD
ZAR
AUD
XOF
EUR
Total
31 March 2024
Assets
Amounts due from
associated undertaking
–
4,312,785
–
–
–
–
4,312,785
Trade and other
receivables
3,354,961
72,396
–
–
–
3,427,357
Cash and cash
equivalents
12,477,576
3,799,067
–
–
42,282
7,582
16,326,507
Total
15,832,537
8,184,248
42,282
7,582
24,066,649
Liabilities
Trade and other
payables
(139,301)
–
–
–
–
–
(139,301)
GBP
USD
ZAR
AUD
XOF
EUR
Total
31 March 2023
Assets
Other receivables
11,175
–
–
–
–
–
11,175
Cash and cash
equivalents
425,704
–
–
–
119,284
–
544,988
Total
436,879
–
–
–
119,284
–
556,163
Liabilities
Trade and other
payables
(122,278)
(446,098)
(98,621)
(65,094)
(67,916)
–
(800,007)
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Kodal Minerals Plc Group Annual Report & Financial Statements
61
15. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT continued
Financial instruments by currency – Company
GBP
USD
ZAR
AUD
XOF
EUR
Total
31 March 2024
Assets
Amounts due from
associated undertaking
-
4,312,785
-
-
-
–
4,312,785
Trade and other
receivables
3,236,886
64,436
-
-
-
-
3,301,322
Cash and cash
equivalents
12,477,576
3,799,067
-
-
-
7,582
16,284,225
Total
15,714,462
8,176,288
-
-
-
7,582
23,898,332
Liabilities
Trade and other
payables
(139,301)
-
-
-
-
(139,301)
GBP
USD
ZAR
AUD
XOF
Total
31 March 2023
Assets
Amounts due
from subsidiary
undertakings
14,296,318
-
-
-
-
-
14,296,318
Other receivables
11,175
-
-
-
-
11,175
Cash and cash
equivalents
425,704
-
-
-
-
425,704
Total
14,733,197
–
–
–
–
14,733,197
Liabilities
Trade and other
payables
(122,278)
(24,262)
(98,621)
(65,094)
(67,916)
(378,171)
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:
• Monitoring the maturity profiles of financial assets and liabilities in order to match inflows and outflows;
• Monitoring liquidity ratios (working capital); and
• Capital management procedures, as defined below.
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.
Notes to the financial statements continued
Kodal Minerals Plc Group Annual Report & Financial Statements
62
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.
16. RELATED PARTY TRANSACTIONS
During the year ended 31 March 2024, the associated undertaking repaid to the Group expenses paid on its behalf of £336,355 (2023:
£nil). The balance due to the Group at 31 March 2024 was £7,385,182 (2023: £nil). Further information on the balance is shown in note 11 on
page 60.
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 2024, the Company paid fees to SP Angel of £32,500 (2023: £173,605). The balance due to
SP Angel at 31 March 2024 was £nil (2023: £nil).
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 2024 and received fees of £224,694 (2023: £139,514). These fees are included within the
remuneration figure shown for Bernard Aylward in note 3. The balance due to Matlock at 31 March 2024 was £nil (2023: £nil).
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 2024 and received fees of £nil (2023: £24,627). The balance due to Geosmart at 31 March 2024 was
£nil (2023: £nil).
Zivvo Pty Ltd (“Zivvo”), a company wholly owned by Steven Zaninovich, a Director, provided consultancy services to the Group during the
year ended 31 March 2024 and received fees of £210,000 (2023: £140,000). These fees are included within the remuneration figure shown for
Steven Zaninovich in note 3. The balance due to Zivvo at 31 March 2024 was £nil (2023: £nil).
17. CONTROL
No one party is identified as controlling the Group.
18. CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had capital commitments to exploration and evaluation expenditure of £nil (2022: £nil).
With respect to the sale of Bougouni West as agreed with Leo Lithium in April 2023, one of the licences, N’kemene Ouest, has not yet been
renewed by the Mali mining authorities (a sale condition), pending the completion of the new mining code and related regulations, and the
moratorium on the renewal and transfer of mining concessions. Accordingly, the Company has not yet recognised the income from the sale
proceeds of £1.5 million. The licence is considered to be of good standing and the renewal is expected to occur but no timing of finalisation
can be provided.
The Company and KMUK have continued to be in discussion with the Ministry of Mines and the Ministry of Economy and Finance in Mali in
the context of the mining licence transfer from Future Minerals to Les Mines de Lithium de Bougouni (a subsidiary undertaking of KMUK). In
recent communications the ministries have sought information on various aspects of the Hainan funding transaction and the development
and future operation of the Bougouni Lithium Project. There has been no challenge to the validity of the licence or to its transfer to LMLB.
At the current time, the Company cannot determine the outcome of the discussions, and hence the nature and amount of any payments or
concessions which may be required, if any, and which may result in an economic outflow from the Company. The Company and KMUK will
continue to work with the authorities to provide the information and explanations requested.
19. EVENTS AFTER THE REPORTING PERIOD
On 12 May 2024, the Company received notice for the exercise of warrants from an adviser to the Company to subscribe for a total of
6,250,000 ordinary shares at an exercise price of 0.38 pence per share. The exercise of the warrants generated proceeds of £23,750 for the
Company.
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Kodal Minerals Plc Group Annual Report & Financial Statements
63
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
Thursday 26 September 2024 at 11:00 am for the purposes of
considering and, if thought fit, passing the following resolutions,
of which Resolutions 1 to 8 (inclusive) will be proposed as
ordinary resolutions and Resolution 9 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
2024 and the reports of the directors of the Company
(the “Directors”) and the auditors thereon.
2. To re-appoint David Teng as a Director, who retires in
accordance with article 24.2 of the articles of association
of the Company and offers himself for re-appointment.
3. To re-appoint Robert Wooldridge as a Director, who
retires and offers himself for re-appointment.
4. To re-appoint Steven Zaninovich as a Director, who retires
and offers himself for re-appointment.
5. To re-appoint Bernard Aylward as a Director, who retires
and offers himself for re-appointment.
6. To re-appoint Charles Joseland as a Director, who retires
and offers himself for re-appointment.
7. 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
8. 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 £3,163,650
and this authority will (unless renewed, revoked or varied by
the Company in general meeting) expire at the conclusion
of the next Annual General Meeting of the Company 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.
9. That, conditional on the passing of Resolution 8, 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 8 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 £1,265,460, and the
power hereby granted shall expire at the conclusion
of the next Annual General Meeting of the Company
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
REGISTERED OFFICE
Sarah Parker
Prince Frederick House
Company Secretary
35-39 Maddox Street
London
3 September 2024
W1S 2PP
Notice of Annual General Meeting
Kodal Minerals Plc (Registered in England and Wales No. 07220790)
Kodal Minerals Plc Group Annual Report & Financial Statements
64
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 11:00 am on 24 September 2024
(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 11:00 am on 24 September 2024 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. You can register your vote(s) for the Annual General
Meeting either:
•
by visiting www.shareregistrars.uk.com, clicking on the
“Proxy Vote” button and then following the on‑screen
instructions (you can find your log-in details for the
on‑line portal on the top of your proxy form);
•
by post or by hand to Share Registrars Limited,
3 The Millennium Centre, Crosby Way, Farnham,
Surrey GU9 7XX using the proxy form accompanying
this notice;
•
in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance
with the procedures set out in notes 7 to 10 below.
In order for a proxy appointment to be valid the proxy must
be received by Share Registrars Limited by 11:00 am on
24 September 2024.
4. 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
5. 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.
6. 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, 3 The Millennium Centre, Crosby Way, Farnham,
Surrey GU9 7XX by hand, or sent by post, 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
7. 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.
8. 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 & International 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 11:00 am on 25 September
2024. 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.
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Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
65
9. CREST members and, where applicable, their CREST
sponsors or voting service providers should note that
Euroclear UK & International 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.
10. 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
11. To change your proxy instructions, simply submit a new
proxy appointment using one of the methods set out above.
12. 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.
TERMINATION OF PROXY APPOINTMENTS
13. In order to revoke a proxy appointment, you must notify
the Company by no later than 11.00 am on 24 September
2024. 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
14. 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
15. 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 8 (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 9 will be proposed as a special resolution. For a
special resolution to be passed, at least three quarters of the
votes cast must be in favour of the resolution.
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 2024.
Resolution 2 - This resolution seeks approval from
shareholders to re-appoint David Teng as a director of
the Company (“Director”), who retires in accordance with
article 24.2 of the articles of association of the Company
(the “Articles”) and offers himself for re-appointment.
Resolutions 3 to 6 – The Articles require that at each
Annual General Meeting of the Company, one third of
the Directors for the time being (or their number is not
a multiple of three, then the number nearest to but not
less than one third) shall retire from office. However, the
Directors have chosen to adopt the recommendations of
the Quoted Companies Alliance that all directors should
seek re-election annually. Accordingly, these resolutions
seek approval from shareholders to re-appoint Robert
Wooldridge, Steven Zaninovich, Bernard Aylward and Charles
Joseland as Directors, who each retire and offers himself for
re‑appointment.
Resolution 7 - 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.
Notice of Annual General Meeting continued
Kodal Minerals Plc Group Annual Report & Financial Statements
66
Resolution 8 - 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 next Annual General Meeting
of the Company, unless the authority is renewed or revoked
prior to such time. This authority is limited to the issue of a
maximum of 10,123,680,000 ordinary shares (representing
approximately 50 per cent. of the Company’s entire issued
share capital as at the date of this notice). This is consistent
with the level of authority approved at the Company’s
previous Annual General Meeting.
Resolution 9 - 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
next Annual General Meeting of the Company. This authority
is limited to the allotment of a maximum of 4,049,472,000
ordinary shares for cash, free of pre-emption rights
(representing approximately 20 per cent. of the Company’s
entire issued share capital as at the date of this notice).
ISSUED SHARES AND TOTAL VOTING RIGHTS
As at 6.00 p.m. on 2 September 2024, the Company’s issued
share capital comprised 20,247,366,260 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 2 September 2024 is 20,247,366,260. The
Company does not hold any shares in treasury.
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Financial Statements
Kodal Minerals Plc Group Annual Report & Financial Statements
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Kodal Minerals Plc Group Annual Report & Financial Statements
68
Notes
Kodal Minerals Plc Group Annual Report & Financial Statements
1