Orion Metals Limited
Annual Report 2022

Plain-text annual report

Ormonde Mining plc Annual Report and Group Financial Statements For the year ended 31 December 2022 Ormonde Mining plc Annual Report and Group Financial Statements Contents Chair's Review ............................................................................................................................................... 3 Directors’ Report ........................................................................................................................................... 5 Consolidated Statement of Comprehensive Income .................................................................................... 21 Consolidated Statement of Financial Position ............................................................................................. 22 Company Statement of Financial Position ................................................................................................... 23 Consolidated Statement of Cashflows ......................................................................................................... 24 Company Statement of Cashflows ............................................................................................................... 25 Consolidated Statement of Changes in Equity............................................................................................. 26 Company Statement of Changes in Equity .................................................................................................. 27 Notes to the Financial Statements ................................................................................................................ 28 Directors and other information................................................................................................................... 49 Page | 2 Ormonde Mining plc Chair's Review Introduction I am pleased to present my second annual review to shareholders since I took over as Ormonde’s Chairman in October 2021. During the year, the Board, with the assistance of our technical advisory team, began delivering upon its commitment to leverage the Group’s balance sheet to generate value for shareholders. This has involved extensive review of a range of potential opportunities leading to a shortlist of attractive possible investments. We are of course cognisant that shareholders have been waiting some time for news of further investments; however, this is a process that requires both time and diligence to ensure the transactions we pursue deliver the maximum opportunity for value creation. I would like to assure shareholders that discussions continue to progress, as does our partnership with our first investee company, Peak Nickel Limited. The investment in Peak Nickel Limited announced in February 2023 provides Ormonde’s shareholders with exposure to the fast growing and active battery metals sector. The Board expects further investments to follow. This investment activity was undertaken whilst the Board worked to monetise the legacy La Zarza asset in Spain. Ormonde continues to seek value adding options for the Group’s remaining Spanish gold assets. Investment – Peak Nickel Limited Subsequent to year end, the Group acquired a 20% interest in Peak Nickel Limited (“PNL”) for total payments of £512,500. PNL is a UK company which is advancing exploration on a very promising battery metals project. The Group's investment was designed to enable a fast-track initial drilling programme aimed at identifying a modern, code-compliant resource in those minerals. At the time of investment, Ormonde was granted an exclusive option by PNL to either invest up to a further £4 million in cash in PNL for further exploration work, bringing Ormonde's interest to 49.9%; or acquire the remaining 80% of PLN by way of issuance of ordinary shares in Ormonde to PNL. La Zarza disposal While new opportunities with significant value upside potential were being shortlisted, the Board continued to advance negotiations with interested parties towards monetising the value within the legacy La Zarza Copper- Gold Project in Spain (“La Zarza”). On 28 September 2022, shareholders approved at an EGM a proposal from the Board for the sale of the Group's landholding, drill core and data assets associated with La Zarza for a cash consideration of €2.3 million to La Zarza Mineria Metalica S.L.U., a subsidiary of the Spanish company Tharsis Mining S.L., which controls the mining rights to La Zarza. Under the terms of this sale agreement, the Group received the first tranche payment of €800,000 on closing, with the balance to be paid in three equal payments of €500,000 on the first, second and third anniversaries of completion. The next payment is due to be received on or around 30 September 2023, further boosting the Group’s balance sheet. Ormonde holds security in respect of the deferred cash payments. Ormonde Mining plc Spanish Assets The Group’s interest in a number of gold investigation permits (IPs) situated in Spain, held for over a decade, expired during the Covid period, and the Group has applied for renewal of these exploration licenses. In the event that these IPs are renewed, Ormonde intends to undertake exploration activity on the licenses. There is no certainty, however, regarding to the renewal of the IPs, and, accordingly, these assets have been subject to an impairment of €167,000 as at 31 December 2022. Financials Ormonde recorded a total comprehensive loss for the period of €1.1 million for 2022, compared with a loss of €1.6 million in 2021. As of 31 December 2022, the Group had net assets of €4.9 million, including a cash balance of €3.56 million, providing the Group with a platform from which to invest further. Suspension of Shares The Board is mindful of the continued suspended status of the Group’s shares under market rules pending an announcement and publication of an admission document. As announced on 7 February 2023, following the PNL investment, Ormonde is required to execute a further transaction with PNL or another party, which would be categorised as a reverse takeover under AIM Rule 14. This transaction would require both shareholder approval and the publication of an AIM admission document. Ormonde continues to review its investment options in relation to this requirement and the Board looks forward to sharing its strategy with shareholders in due course. Conclusions and Outlook During 2022 and the first part of 2023, the Board has delivered on extracting value from legacy assets to boost the Company’s balance sheet and commenced its proposed strategy of leveraging Ormonde’s strong balance sheet to generate new value enhancing deals for shareholders. The sale of the La Zarza assets and subsequent investment into PNL represent the first steps in shareholder value creation and provide the platform for further exciting investments in prospective mining jurisdictions. The Board continues to advance discussions with interested parties to move onto the next stages of this strategy. On behalf of the Board, I would like to thank our shareholders for their continued support and especially for their patience displayed during the past 18 months. I look forward to updating you all on Ormonde’s progress in due course. Brian Timmons Chairman 27 June 2023 Page | 4 Ormonde Mining plc Directors’ Report For the year ended 31 December 2022 The Directors present the Annual Report and the Group Financial Statements for the year ended 31 December 2022 of Ormonde Mining plc ("the Company") and its subsidiaries (collectively "the Group"). Principal Activity The Company is listed on the Euronext Growth Market of Euronext Dublin and AIM, part of the London Stock Exchange. On 7 February 2023, the Company announced that its shares were being suspended from trading in accordance with AIM Rule 14, until such time as an AIM admission document and Euronext Growth information document have been published seeking readmission to trade. The principal activity of the Company and its subsidiaries comprises acquisition, exploration and development of mineral resource projects. Review of Business and Future Developments A detailed review of activities for the year and future prospects of the Group is contained in the Chair's Review at the commencement of this report. Results and Dividends The Consolidated Statement of Comprehensive Income for the year ended 31 December 2022 and the Consolidated Statement of Financial Position as at that date, are set out on pages 21 and 22 respectively. No dividends were paid during the year and the Directors do not recommend the payment of a dividend. Principal Risks and Uncertainties The Group undertakes periodic reviews to identify risk factors which may affect its business and financial performance. The summary set out below is not exhaustive as it is not possible to identify all risks that may affect the Group, but the Directors consider the principal risks and uncertainties to be the following: Exploration Risk Exploration and development activities may be delayed or adversely affected by factors outside the Group's control, in particular: global pandemics; climatic conditions; performance of partners or suppliers; availability of qualified staff and contractors; availability, delays or failures in installing and commissioning plant and equipment; unknown geological conditions; remoteness of location; actions of host governments or other regulatory authorities relating to the grant, maintenance or renewal of any required authorisations; and environmental regulations or changes in law. The Company mitigates against these risks by carrying out appropriate due diligence in relation to the taking on of new licenses, the exploration location and ensuring the suitability of both staff and contractors. Commodity Price Risk The demand for, and price of, commodities is dependent on factors including global and local supply and demand, investment trends, actions of governments or cartels and general global economic and political developments. The Company where relevant will review commodity prices and would if suitable hedge future prices accordingly Political Risk The Group holds assets in Europe so therefore the Group may be subject to political, economic and other uncertainties, including but not limited to regime change, changes in national laws and mining policies and exposure to different legal systems. Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 The Company reviews carefully the countries in which it operates and is likely to do so to ensure that the political and economic situation is suitable and will consult with local partners before entering a new territory Financial Risk Financial risk is explained in Note 24. Share Price The share price movement in the year ranged from a low of €0.006 to a high of €0.012 (2021: €0.008 to €0.03). The share price at the year-end was €0.008 (2021: €0.009). Directors The names of the current Directors are set out at the back of this report. Details of Executive Directors Brian Timmons Chairman Brian has over 30 years of experience in senior positions within companies across a range of industries, including fund management, investment banking, healthcare technology, bioscience, alternative energy and resource companies, e-commerce, telecoms and software IT. He is Non-Executive Chairman of Solar Alliance Energy, Inc., a TSX listed corporation and a director of Terrabiogen Technologies Inc., a Canadian agri-bioscience research & development company. From February 2023, Brian is also a director of Peak Nickel Ltd. Brian is a Fellow of the Association of Chartered Certified Accountants. Brendan McMorrow Chief Executive Officer Brendan has over 25 years' experience in base and precious metals mining and oil & gas public companies listed in London, Toronto and Dublin. He has formerly been Chief Financial Officer of Circle Oil plc and served as a senior finance executive in Ivernia Inc. and Ivernia West plc - at the time these companies were respectively developing significant base metal mines in Western Australia and at Lisheen in Ireland. He is a non-executive Director of Karelian Diamond Resources plc, Conroy Gold and Natural Resources plc and Finance Director of Dunraven Resources PLC. Brendan is a Fellow of the Association of Chartered Certified Accountants. Details of Non-Executive Directors Keith O’Donnell Non-Executive Director Keith is a banker with 30 years' experience in cross border investment and corporate advisory roles. He is currently Senior Advisor at Portland Advisers, a boutique firm based in London with global expertise in the Conventional Energy, Renewable Energy, Mining, Satellite, and Infrastructure sectors. Keith is also Risk Adviser at Responsibility AG, a Swiss based fund manager focused on energy access and clean energy solutions for the developing world. He is a director of JZ Consultancy Ltd. Keith is a member of the Chartered Institute of Bankers and holds an MBA from Bayes Business School, City University, London. Page | 6 Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 In accordance with Section 329 of the Companies Act 2014, the beneficial shareholdings of the directors and company secretary and the movements thereon during the year ended 31 December 2022 were as follows. Directors Brian Timmons Brendan McMorrow Keith O’Donnell 31 Dec '22 Ordinary Shares 1 Jan '22 Ordinary Shares - - - - - - No director, secretary or any member of their immediate families had an interest in any subsidiary. There were no changes in shareholdings and share options held between 31 December 2022 and the date of signing the financial statements. Details on Director’s remuneration and the share options held is shown later in the Directors report on page 12. Transactions Involving Directors Other than remuneration and the share options held, there have been no contracts or arrangements of significance during the year in which directors of the Company were interested. Significant Shareholders The Company has been informed or is aware that, at 31 December 2022 and the date of this report, the following shareholders own 3% or more of the issued share capital of the Company: Thomas Anderson * As notified on 24 December2021 Percentage of issued share capital 27 June '23 24.4%* 31 Dec '22 24.4% The Directors are not aware of any other holding of 3% or more of the share capital of the Company. Subsidiary Undertakings Details of the Company's subsidiaries are set out in Note 12 to the financial statements. Political Donations There were no political donations during the year as defined by the Electoral Act 1997 (2021: €Nil). Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 Directors' Responsibility Statement The Directors are responsible for preparing the Directors' Report and the Group and Parent Company financial statements, in accordance with applicable law and regulations. Irish Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under company law and in accordance with AIM and Euronext Growth Market rules, the Directors have elected to prepare the Group and the Parent Company's financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU ("EU IFRS") as applied in accordance with the provisions of the Companies Act 2014. Under that 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 Parent Company and the Group and of the profit or loss of the Group for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to: • select suitable accounting policies and apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether the financial statements have been prepared in accordance with IFRS as adopted by the EU, and note the effect and the reasons for any material departures in the financial statements from those standards and the Companies Act 2014; and • prepare the Group and Parent Company financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The Directors confirm that they have complied with the above requirements in preparing the Group and Parent Company financial statements. The directors are also responsible for ensuring that they meet their responsibilities under the AIM rules. The Directors are responsible for ensuring that the company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Group and Parent Company, enable at any time the assets, liabilities, financial position and profit or loss of the Group be determined with reasonable accuracy, enable them to ensure that the financial statements and Directors' Report comply with the Companies Act 2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Going Concern As further disclosed in Note 2, the Directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group is in a position to have adequate financial resources to continue in operational existence for a period of twelve months from the date the financial statements were approved by the Directors. The business has sufficient cash resources to meet the Group's annual operating costs for the foreseeable future. Page | 8 Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 The future of the Company and the Group is also dependent on the successful future outcome of its exploration interests and the identification of additional assets in which to apply its cash resources. Additional resources may be required to bring such interests into production. The Directors consider that in preparing the financial statements they have taken into account all information that could reasonably be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going concern basis. Corporate Governance The Directors are committed to maintaining the highest standards of corporate governance commensurate with the size, stage of development and financial status of the Group. The London Stock Exchange's AIM Rule 26 requires that each AIM company must include on its website details of a recognised Corporate Governance Code that the Board of Directors has decided to apply, how the Company complies with that Code, and where it departs from its chosen Corporate Governance Code an explanation of the reasons for doing so. The Ormonde Board of Directors has elected to apply the Quoted Companies Alliance Corporate Governance Code ("the QCA Code"). The QCA Code is constructed around ten broad principles and a set of disclosures that focus on the pursuit of growth in the medium to long-term, and a dynamic management framework accompanied by good communication to promote confidence and build trust. A detailed report on Ormonde's corporate governance practices and related disclosure under each of these ten principles is posted on the corporate governance page of the Company's website. Details of the following Principles which require disclosure are set out as follows Principle 1 Establish a strategy and business model which promotes long-term value for shareholders. Our priority is to evaluate and execute new opportunities through which we can leverage our listing and balance sheet to generate shareholder value. We are doing so alongside reviewing our existing assets in Spain to maximise values therein. Principle 4 Embed effective risk management, consideringboth opportunities and threats, throughout the organisation The Board has embedded effective risk management within the Company’s strategy in the following ways: Exploration risk: Risks associated with the Company’s current exploration projects are high, as there can be no certainty that these or any such exploration projects will result in identifying an economic resource Commodity price risk: The nature of the Company’s business means it remains exposed to the cyclical nature of commodity prices, but the Company’s strategy reduces this risk exposure by focusing on quality projects and commodities with a positive supply-demand outlook. Political risk: The Company’s mineral exploration and development activities are currently focused in the European jurisdiction, minimising exposure to political and economic uncertainties and unexpected changes to resource related legislation. Growth opportunities are being considered in other jurisdictions, with political and legislative stability continuing to be taken into account. Financial risk: The Company’s financial risks are typical for an emerging international exploration and development company, including exposure to costs being higher than budgeted, results being below forecast, availability of required capital being affected by prevailing metal prices, etc. The Board is responsible for maintaining the Group’s system of internal control to monitor shareholders’ investments and Group assets. The internal control system currently in place is described on page 13 of the Annual Report. Ormonde Mining plc Principle 5 Maintain the board as a well-functioning, balanced team led by the chair The Board currently has three directors, comprising a non-executive director, a chairman and one executive director. The Directors and their biographical details are presented on the Company’s website and in the Annual Report. Mr Brian Timmons, Chairman, and Mr Brendan Mc Morrow, CEO have been nominated by the Company’s largest shareholder and are not considered to be independent by the Board. Mr Keith O’Donnell, Non-executive Director, was also nominated by the Company’s largest shareholder, but is considered to be independent by the Board. Directors are not appointed for specific terms, with at least one of Directors up for re-election each year and each new Director is subject to election at the next Annual General Meeting following the date of appointment. Each of the Directors is able to meet the time commitments necessary to fulfil their roles, including attending Board meetings in person or by phone and attending to ad hoc Board matters as they arise. The Board is supported by remuneration, audit, and technical & ESG committees. Each committee possesses the skills and knowledge required to effectively discharge its duties and responsibilities. The Board met formally on 9 occasions during the year ended 31 December 2022. An agenda and supporting board papers were circulated in advance of most of these meetings. Whilst only one of the Non-Executive directors is considered to be Independent, the Directors consider the size and composition of the Board to be commensurate with the Company’s current size and status. Principle 6 Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities The Directors and their respective biographical details are presented on the Company’s website and in the Annual Report. The Board as a whole contains an appropriate balance of experience, skills, personal qualities and capabilities at the current stage of the Company’s development to deliver its strategy for the benefit of shareholders. Specifically, the Directors’ combined skills and experience in the resource sector, from technical, financial and corporate perspectives place the Company in a strong position from which to create value from its current projects and to evaluate opportunities in the resource sector, and when appropriate, permit, fund and develop such resource projects. The Board considers that these strengths and abilities will continue to support the Company’s future development, but also recognise that, as the Company evolves, the Board composition will need to evolve to reflect change. The Board endeavours to ensure that each Director’s skills remain effective to the Company’s growth and development. The small size of the Board enables the close engagement with senior management and regular information exchange on corporate and technical developments within the Company and in the broader resource sector. The Board benefits from the Directors’ collective and extensive personal and professional networks within the resource sector and investment community which bring regular and relevant knowledge and insight to the Company’s business. External legal and financial advice is made available to the Directors as required. The Board engages external board advisers from time to time, to advise on general corporate matters. Principle 7 Evaluate board performance based on clear and relevant objectives, seeking continuous improvement The Board considers that it is performing effectively as a unit, at committee level and on an individual Director basis, however it does not currently conduct a formal evaluation process. The Board was refreshed during 2021, with two Board members being newly appointed. Principle 8 Promote a corporate culture that is based on ethical values and behaviours The Board works to encourage and nurture a corporate culture that is consistent with the Company’s vision and supports its strategic objectives. An ongoing, open and constructive dialogue between the Board and senior management facilitates the Board to monitor, assess and promote a healthy, questioning, corporate culture Page | 10 Ormonde Mining plc across the Company’s operations. As a small company with a clear focus on creating shareholder value, the Board has identified the following key cultural values as being visible across the Company’s business: • Focus on project delivery: At all levels of the Company, including its contractors and partners, there is a clear focus on delivering the best possible results from its projects, in the interest of creating wealth for the Company’s shareholders, employees, host communities and governments. • Dedication and flexibility: The Board, management and employees form a loyal and productive group. This is evident in the average length of service of its management and staff, and through the flexibility shown by the Ormonde team in doing whatever is required to achieve its corporate goals. • Acting with care and responsibility: Delivering the Company’s strategy requires that its workforce and partners act with care and responsibility towards each other, the environment and the host communities where the Company operates. The Company’s commitment to this area has been demonstrated by the formation of a Technical and ESG Committee. Ethical values and behaviours are further promoted and governed by the Board through the Company’s Code of Business Conduct, and Ethics, Anti-Bribery & Corruption, Gifts & Hospitality, and Safety Environmental & Social Responsibility policies, each of which are reviewed and certified on an annual basis. The following committees deal with the specific aspects of the Group affairs: Audit Committee This Committee comprises one Executive Director and one Non-Executive Director. The external auditors have the opportunity to meet with members of the Audit Committee without executive management present at least once a year. The duties of the Committee include the review of the accounting principles, policies and practices adopted in preparing the financial statements, external compliance matters and the review of the Group's financial results and the effectiveness of the Group’s system of internal financial control. Nominations Committee Given the current size of the Group a Nominations Committee is not considered necessary. The Board reserves to itself the process by which a new director is appointed. All directors co-opted to the Board during any financial period are subject to election by shareholders at the first opportunity following their appointment. Consideration to setting up a Nominations Committee is under continuous review. Technical & ESG Committee The Technical & ESG Committee has three members of whom one is Non-Executive Directors, plus two Executive Directors. The duties of the Committee are to provide technical oversight of developments on the Company’s projects and technical reviews of opportunities which may be under consideration by executive management from time to time. It also provides oversight of the Company’s management and performance of Environmental, Social and Governance matters, which the Board considers to be of paramount importance in the management and operational conduct of the Group. Remuneration Committee This Committee comprises the Chairman and one Non-Executive Director. This Committee determines the contract terms, remuneration and other benefits of any Executive Directors, the Chair and the Non-Executive Directors. Further details of the Group's policies on remuneration, service contracts and compensation payments are given in the following Remuneration Committee Report. Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 The Group's policy on senior executive remuneration is designed to attract and retain individuals of the highest calibre who can bring their experience and independent views to the policy, strategic decisions and governance of the Group. In setting remuneration levels, the Remuneration Committee takes into consideration the remuneration practices of other companies of similar size and scope. A key philosophy is that staff must be properly rewarded and motivated to perform in the best interests of the shareholders. Total remuneration to Directors during the year ended 31 December 2022 was €136,250 (31 December 2021: €309,250). Executive Directors Jonathan Henry Brendan McMorrow (from Oct 2021) Brian Timmons Total Executive Directors' remuneration Non-Executive Directors Richard Brown (resigned Sept 2021) Tim Livesey (retired Sep 2021) Keith O’Donnell Total Non-Executive Directors' remuneration Total Directors' remuneration 31 Dec '22 31 Dec '21 € - 65,000 65,000 130,000 - - 6,250 6,250 € 170,000 10,000 39,250 219,250 45,000 45,000 - 90,000 136,250 309,250 Directors Brian Timmons Brendan McMorrow Keith O’Donnell 31 Dec '22 Share Options 1 Jan '22 Share Options 3,000,000 2,500,000 2,500,000 3,000,000 2,500,000 2,500,000 All share options are exercisable at €0.011. Share options issued in 2021 vest in equal proportions, with the first half vesting on the issue date in November 2021 and the remaining amounts vesting in November 2022. These share options are exercisable at any point from vesting to 17 November 2031. See Note 20 for details of the share option scheme. In addition, the rules of the Company's share option scheme are available for inspection at the registered office of the Company. (See directors remuneration details in Note 6 of the financial statements). Page | 12 Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 Communications The Group maintains regular contact with shareholders through publications such as the annual and interim reports, via press releases and the Group's website, www.ormondemining.com. The Directors and managers are responsive to shareholder telephone and e-mail enquiries throughout the year. The Board regards the Annual General Meeting as a particularly important opportunity for shareholders, directors and management to meet and exchange views. The 2022 AGM was held in person. Environment Ormonde recognises the importance of climate change and the effect that its business operations can have on the environment. The Group is committed to operating in an environmentally responsible manner and to minimising the impact from its activities. Since the disposal of its interest in the Barruecopardo Tungsten Mine in Spain in 2020, the Group’s activities and their potential environmental impact are currently limited, however Ormonde still seeks to ensure that it assesses its environment impact and seeks to minimise or offset any negative effects. Internal Control The Board is responsible for maintaining the Group's system of internal control to safeguard shareholders investments and Group assets. The Directors have overall responsibility for the Group's system of internal control and have delegated responsibility for the implementation of this system to executive management. This system includes financial controls that enable the Board to meet its responsibilities for the integrity and accuracy of the Group's accounting records. The Group's system of internal financial control provides reasonable, though not absolute, assurance that assets are safeguarded, transactions authorised and recorded properly, and that material errors or irregularities are either prevented or detected within a timely period. Having made appropriate enquiries, the Directors consider that the system of internal financial, operational and compliance controls and risk management operated effectively during the period covered by the financial statements and up to the date on which the financial statements were signed. The internal control system includes the following key features, which have been designed to provide internal financial control appropriate to the Group's businesses: • budgets are prepared for approval by the Board; • expenditure and income are compared to previously approved budgets; • a detailed investment approval process which requires Board approval of all major capital projects and regular review of the physical performance and expenditure on these projects; • Cash flow forecasting is performed on an ongoing basis to ensure efficient use of cash resources. • all commitments for expenditure and payments are compared to previously approved budgets and are subject to approval by personnel designated by the Board; and • The Directors, via the Audit Committee, review the effectiveness of the Group's system of internal financial control. Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 Accounting records The measures taken by the Directors to ensure compliance with the requirements of Sections 281 to 285 of the Companies Act 2014, with regard to the keeping of accounting records, are the employment of appropriately qualified accounting personnel and the maintenance of computerised accounting systems. The Company's accounting records are maintained at its operational head office in Bracetown Business Park, Clonee, Co. Meath, Ireland. Events after the reporting date Subsequent to the year end the Group acquired a 20% equity interest in Peak Nickel Limited (“PNL”) for total payments of £512,500. PNL is a private UK company which is advancing exploration on a potentially significant battery metals project,. Further details on the above transaction are set out in the Chair’s Review at the start of the Annual Report. Other than those noted above or disclosed in the financial statements, the Directors confirm that there have been no events since the end of the financial year which would require adjustment to or disclosure in the financial statements. Directors' Compliance Statement The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Group and Parent Company's compliance with certain obligations specified in that Section arising from the Companies Act 2014, and tax laws ("relevant obligations"). The Directors confirm that: • The requisite documentation has been drawn up setting out the Group and Parent Company's policies that in their opinion are appropriate with regards to such compliance; • Appropriate arrangements and structures have been put in place that, in their opinion, are designed to provide reasonable assurance of compliance in all material respects with those relevant obligations; and • A review has been conducted, during the financial year, of those arrangements and structures. Statement on Relevant Audit Information The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information and have established that the Group's statutory auditors are aware of that information. In so far as they are aware, there is no relevant information of which the Group's statutory auditors are unaware. Page | 14 Ormonde Mining plc Directors’ Report (continued) For the year ended 31 December 2022 Auditors Pursuant to Section 383(2) of the Companies Act 2014, the auditors, CLA Evelyn Partners (Ireland) Limited, have indicated their willingness to continue in office. On behalf of the Board ________________ Brian Timmons Director Date: 27 June 2023 _______________ Brendan McMorrow Director 27 June 2023 Ormonde Mining plc Independent Auditors' Report to the Members of Ormonde Mining plc Report on the audit of the financial statements Opinion We have audited the financial statements of Ormonde Mining plc (“the parent company”) and its subsidiaries (the “group”) for the year ended 31 December 2022, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cashflows, the Company Statement of Cashflows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is Irish law and International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU IFRS"). In our opinion, the financial statements: - - - give a true and fair view of the assets, liabilities and financial position of the group and parent company as at 31 December 2022 and of the group's loss for the year then ended; have been properly prepared in accordance with EU IFRS as applied in accordance with the provisions of the Companies Act 2014; and have been properly prepared in accordance with the requirements of the Companies Act 2014 and as regards the group financial statements Article 4 of the IAS Regulation. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (Ireland) ("ISAs (Ireland)") and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial statements section of our Report. We are independent of the group and the parent company in accordance with the ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (“IAASA”) as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our approach to the audit Of the group’s six reporting components, we subjected one to audit for group reporting purposes and two to specific audit procedures where the extent of our audit work was based on our assessment of the risk of material misstatement and of the materiality of that reporting component. The components within the scope of our work represented 99% of the group loss before tax, and 99% of group net assets. For the remaining three components, we performed an analysis at group level to re-examine our assessment that there were no significant risks of material misstatement within each of these. Page | 16 Ormonde Mining plc Independent Auditors' Report to the Members of Ormonde Mining plc (continued) Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Carrying value of the group’s other debtors from the sale of La Zarza exploration and evaluation assets and the parent company’s amounts due from group undertakings Description of the risks As described in Note 14, the La Zarza exploration and evaluation assets formed a significant part of the group’s total assets which were classified as held for sale as at 31 December 2021. During the year, the group sold these assets for €2.3 million, having received €0.8m on closing of the transaction, with €1.5 million to be received over the next three years. The outstanding balances are initially recorded as other debtors at fair value and then subsequently measured at amortised cost under amounts falling due within one year of €0.5 million and other debtors under amounts falling due after one year of €0.7 million. Separately to this, there is a €1.2m balance due from its subsidiaries in the parent company’s balance sheet totalling to €1.39m as at 31 December 2022. If the €1.2m is not recovered from the third party, this intercompany debtor balance may not be recoverable. Our response to the risk In respect of these assets, our work included: - tested the fair value of the deferred consideration as at 31 December 2022; - reviewed the sale agreement, including the warranties and conditions of the sale; - examined evidence of establishment of the registered charge over the land; and - considered the recoverability of the parent company’s amounts due from its subsidiaries which substantially relates to this receivable. Carrying value and impairment of the group’s exploration and evaluation assets Description of the risks As described in Note 10, the group’s exploration and evaluation assets comprise intangible assets relating to various exploration licenses which the group is attempting to renew. After the year end, some of the licences lapsed and for which their renewal were subsequently denied as such an impairment charge of €0.167 million was then recorded. As at 31 December 2022, the book value of the remaining assets was €0.157 million. An application to renew these licences has been submitted and there is no certainty that it will be successful. Ormonde Mining plc Independent Auditors' Report to the Members of Ormonde Mining plc (continued) Our response to the risk In respect of these assets, our work included: - discussions with management regarding the likelihood that these licenses will be renewed; - consideration of the cumulative expenditure incurred to date in respect of the licenses and whether they met the requirements of IFRS 6 for the recognition of exploration and evaluation assets; and - reviewed evidence of steps undertaken by the group to pursue the renewal of these licenses, specifically minutes of meetings and discussions held by senior group executives with the Director of the Regional Mines Department in Leon, Spain Our application of materiality The materiality for the group financial statements as a whole (“group materiality”) was set at €244,000. This has been determined with reference to the benchmark of the group’s net assets, which we consider to be one of the principal considerations for members of the company in assessing the group’s performance. Group materiality represents 5% of the group’s net assets. The materiality for the parent company financial statements as a whole (“parent materiality”) was set at €195,200. This has been determined with reference to the benchmark of the parent company’s net assets as it exists only as a holding company for the group and carries on no trade with customers. Parent materiality represents the minimum of the 5% of the parent company’s net assets and the group’s performance materiality. Performance materiality for the group financial statements was set at €195,000, being 80% of group FS materiality, for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further audit procedures. We have set it at this amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds group FS materiality. We judged this level to be appropriate based on our understanding of the group and its financial statements, as updated by our risk assessment procedures and our expectation regarding current period misstatements. Performance materiality for the parent company financial statements was set at €156,160, being 80% of parent FS materiality. It was set at 80% to reflect the fact that few misstatements were expected in the current 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 and parent company’s ability to continue to adopt the going concern basis of accounting included: • Challenging the assumptions used in the detailed budgets and forecasts prepared by management for the financial years ending 31 December 2023 and 31 December 2024; • Comparing the forecast results to those actually achieved in the 2023 financial period so far; • Reviewing bank statements to monitor the cash position of the group post year end, and obtaining an understanding of significant expected cash outflows (such as capital expenditure) in the forthcoming 12-month period; • Considering the group’s funding position and requirements; and • Considering the sensitivity of the assumptions and re-assessing headroom after sensitivity. Page | 18 Ormonde Mining plc Independent Auditors' Report to the Members of Ormonde Mining plc (continued) 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 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 and Financial Statements, other than the financial statements and our Auditor’s Report thereon. The directors are responsible for the other information contained within the Annual Report and Financial Statements. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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. Opinion on other matters prescribed by the Companies Act 2014 Based solely on the work undertaken in the course of the audit, we report that, in our opinion: • • the information given in the Directors' Report is consistent with the financial statements; and the Directors' Report has been prepared in accordance with applicable legal requirements. We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion the accounting records of the group and the parent company were sufficient to permit the financial statements to be readily and properly audited, and the group and the parent company Statement of Financial Position are in agreement with the accounting records. Matters on which we are required to report by exception Based on the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified any material misstatements in the Directors' Report. The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions required by sections 305 to 312 of the Act are not made. We have nothing to report in this regard. Ormonde Mining plc Independent Auditors' Report to the Members of Ormonde Mining plc (continued) Responsibilities of directors As explained more fully in the Directors' Responsibilities Statement set out on page 8, 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 group and the parent company financial statements, the directors are responsible for assessing the 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 management either intends to liquidate the company or to cease operations, or has 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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the Irish Auditing and Accounting Supervisory Authority's website at: https://iaasa.ie/publications/description-of-the- auditors-responsibilities-for-the-audit-of-the-financialstatements/. This description forms part of our Auditors' Report. The purpose of the audit work and to whom we owe our responsibilities This Report is made solely to the company's shareholders, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the company's shareholders those matters we are required to state to them in an Auditors' 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 shareholders, as a body, for our audit work, for this Report, or for the opinions we have formed. John O’Callaghan For and on behalf of CLA Evelyn Partners (Ireland) Limited Chartered Accountants and Statutory Audit Firm Paramount Court Corrig Road Sandyford Business Park Dublin 18 Date: 27 June 2023 Page | 20 Ormonde Mining plc Consolidated Statement of Comprehensive Income for the year ended 31 December 2022 Revenue Administration expenses Impairment of intangibles Loss on ordinary activities Finance costs Loss for the year Taxation Loss for the Period after tax Total comprehensive (loss)/income for the period Earnings per share Basic & diluted (loss) per share (in cent) Total earnings per share Basic & diluted earnings/ (loss) per share (in cent) 8 8 Year ended 31-Dec-22 €000s Year ended 31-Dec-21 €000s Notes 0 0 10 (881) (167) ______ (1,048) (17) ______ (1,065) 0 ______ (1,065) ______ (1,065) (0.23) (0.23) (1,194) (400) ______ (1,594) (24) ______ (1,618) 0 ______ (1,618) ______ (1,618) (0.34) (0.34) All activities are derived from continuing activities. All (losses)/profits and total comprehensive loss for the year (and preceding year) are attributable to the equity holders of the Company. The Group has not recognised gains or losses other than those dealt within the Statement of Comprehensive Income. The accompanying notes on pages 28 to 48 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 27 June 2023 and signed on its behalf by: On behalf of the Board _______________ Brian Timmons Director ___________________ Brendan McMorrow Director Ormonde Mining plc Consolidated Statement of Financial Position as at 31 December 2022 Notes 31-Dec-22 €000s 31-Dec-21 €000s Assets Non-current assets Intangible assets Trade and other receivables Total Non-Current Assets Current assets Trade and other receivables Asset classified as held for sale Cash & cash equivalents Total Current Assets Total Assets Equity & liabilities Capital and Reserves Issued capital Share premium account Share based payment reserve Capital conversion reserve fund Capital redemption reserve fund Retained losses Equity attributable to the Owners of the Company Current Liabilities Trade & other payables Total Liabilities Total Equity & Liabilities 10 14 14 13 15 17 17 18 18 18 19 16 157 700 _______ 857 613 0 3,564 _______ 4,177 _______ 5,034 _______ 4,725 29,932 281 29 7 (30,078) _______ 4,896 138 _______ 138 _______ 5,034 _______ 309 0 _______ 309 93 2,000 3,746 _______ 5,839 _______ 6,148 _______ 4,725 29,932 281 29 7 (29,013) _______ 5,961 187 _______ 187 _______ 6,148 _______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 27 June 2023 and signed on its behalf by: On behalf of the Board _______________ Brian Timmons Director Page | 22 ___________________ Brendan McMorrow Director Ormonde Mining plc Company Statement of Financial Position as at 31 December 2022 Assets Investment in subsidiaries Trade and other receivables Total Non-Current Assets Current assets Trade and other receivables Cash & cash equivalents Total Current Assets Total Assets Equity & Liabilities Capital and Reserves Issued capital Share premium account Share based payment reserve Capital conversion reserve fund Capital redemption reserve fund Retained losses Equity attributable to the Owners of the Company Current Liabilities Trade & other payables Total Liabilities Total Equity & Liabilities 31-Dec-22 €000s As regrouped 31-Dec-21 €000s Notes 12 14 14 15 17 17 18 18 18 19 16 130 1,388 _______ 1,518 95 3,554 _______ 3,649 _______ 5,167 _______ 4,725 29,932 281 29 7 (30,051) _______ 4,923 244 _______ 244 _______ 5,167 _______ 443 2,079 _______ 2,522 76 3,740 _______ 3,816 _______ 6,338 _______ 4,725 29,932 281 29 7 (28,935) _______ 6,039 299 _______ 299 _______ 6,338 _______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 27 June 2023 and signed on its behalf by: On behalf of the Board _________________ Brian Timmons (Director) _____________________ Brendan McMorrow (Director) Ormonde Mining plc Consolidated Statement of Cashflows for the year ended 31 December 2022 Cashflows from operating activities Loss for the year before taxation Adjustments for: Impairment of intangible assets Impairment of Asset classified as held for resale Non cash items: Share Option cost Movement in Working Capital Movement in receivables Movement in liabilities Net Cash used in operations Investing activities Expenditure on intangible assets Proceeds from disposal of assets held for resale Net cash used in investing activities Notes Year ended 31-Dec-22 €000s Year ended 31-Dec-21 €000s (1,065) ________ (1,065) 167 0 0 ________ (898) (20) (49) ________ (967) (15) 800 ________ 785 (1,618) ________ (1,618) 0 400 72 ________ (1,146) (35) (24) ________ (1,205) (14) 0 ________ (14) Net (decrease) in cash and cash equivalents (182) (1,219) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 15 15 3,746 ______ 3,564 ______ 4,965 ______ 3,746 ______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. Page | 24 Ormonde Mining plc Company Statement of Cashflows for the year ended 31 December 2022 Cashflows from operating activities Loss for the year before taxation Non cash items: Share Option cost Impairment of financial asset Cashflow from operating activities Movement in Working Capital Movement in receivables Movement in creditors Net Cash used in operating activities Notes Year ended 31-Dec-22 €000s Year ended 31-Dec-21 €000s (1,116) 0 312 ________ (804) 673 (55) ________ (186) (1,610) 72 0 ________ (1,538) 343 (16) ________ (1,211) Net (decrease) in cash and cash equivalents (186) (1,211) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 15 15 3,740 ______ 3,554 ______ 4,951 ______ 3,740 ______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. Ormonde Mining plc Consolidated Statement of Changes in Equity for the year ended 31 December 2022 Share Share Capital Premium €000s €000s Share based Payment Reserve €000s Other Reserves €000s Retained Losses €000s Total €000s Balance at 1 January 2021 4,725 29,932 283 36 (27,469) 7,507 Loss for the year Total comprehensive income for the year Release relating to expired share options Employee share-based compensation Balance at 31 December 2021 Loss for the year Total comprehensive income for the year Balance at 31 December 2022 - ______ 0 - - ______ 4,725 - ______ 0 ______ 4,725 ______ - ______ 0 - - ______ 29,932 - ______ 0 ______ 29,932 ______ - ______ 0 (74) 72 ______ 281 - ______ 0 ______ 281 ______ - ______ 0 - - ______ 36 - ______ 0 ______ 36 ______ (1,618) ______ (1,618) 74 - ______ (29,013) (1,065) ______ (1,065) ______ (30,078) ______ (1,618) ______ (1,618) 0 72 ______ 5,961 (1,065) ______ (1,065) ______ 4.896 ______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. Page | 26 Ormonde Mining plc Company Statement of Changes in Equity for the year ended 31 December 2022 Share Share Capital Premium €000s €000s Share based Payment Reserve €000s Other Retained Losses Reserves €000s €000s Total €000s Balance at 1 January 2021 4,725 29,932 283 36 (27,399) 7,577 Loss for the year Total comprehensive income for the year Release relating to expired share options under Share based payment reserve Employee share-based compensation Balance at 31 December 2021 Loss for the year Balance at 31 December 2022 - ______ - ______ - ______ - ______ (1,610) ______ (1,610) ______ 0 - - ______ 4,725 - ______ 4,725 ______ 0 - - ______ 29,932 - ______ 29,932 ______ 0 (74) 72 ______ 281 - ______ 281 ______ 0 - - ______ 36 - ______ 36 ______ (1,610) (1,610) 74 - - ______ (28,935) (1,116) ______ (30,051) ______ 72 ______ 6,039 (1,116) ______ 4,923 ______ The accompanying notes on pages 28 to 48 form an integral part of these financial statements. Ormonde Mining plc Notes to the Financial Statements Accounting policies 1. Ormonde Mining plc (the “Company") is a company incorporated in Ireland. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the "Group"). The company’s registered office is c/o Evelyn Partners, Paramount Court, Corrig Road, Sandyford Business Park, Dublin D18 R9C7 and its principal place of business is Bracetown Business Park, Clonee, Co Meath, D15YN2P The Company is listed on AIM, part of the London Stock Exchange and the Euronext Growth Market in Dublin. On 7 February 2023, the Company announced that its shares were being suspended from trading in accordance with AIM Rule 14, until such time as an AIM admission document and Euronext Growth information document have been published seeking readmission to trade. The Group and Parent Company financial statements were authorised for issue by the Directors on 27 June 2023. Basis of preparation The financial statements have been prepared on the historical cost basis, other than for disposal groups and held for sale assets as described below. The accounting policies have been applied consistently to all financial periods presented in the Consolidated Financial Statements. Statement of compliance As permitted by the European Union the Group financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and their interpretations issued by the International Accounting Standards Board ("IASB") as adopted by the EU ("EU IFRS"). The individual financial statements of the Company ("Company Financial Statements") have been prepared in accordance with EU IFRS and as applied in accordance with the Companies Act 2014, which permits a company, that publishes its company and group financial statements together, to take advantage of the exemption in Section 304(2) of the Companies Act 2014, from presenting to its members its Company Statement of Comprehensive Income and related notes that form part of the approved Company Financial Statements. The EU IFRS as applied by the Company and the Group in the preparation of these financial statements are those that were effective on or before 31 December 2022. New accounting standards and interpretations effective from 1 January 2022 A number of new accounting standards’ amendments and interpretations apply from 1 January 2022; however, they had no material impact on the financial statements. At the date of the authorization of these financial statements, the following revised accounting standards which have been issued but are not yet effective include: • • • • • IAS 1 Presentation of Financial Statements - effective 1 January 2023 IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors – effective 1 January 2023 IAS 12 Income Taxes (amended) – effective 1 January 2023 IAS 1 Presentation of Financial Statements - effective 1 January 2024 IFRS 16 Leases – effective 1 January 2024 There would not have been a material impact on the financial statements if these standards had been applied in the current year. Functional and Presentation Currency These Consolidated Financial Statements are presented in Euro (€), which is the Company's functional currency. Page | 28 Ormonde Mining plc Use of Estimates The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making estimates about carrying values of assets and liabilities that are not readily apparent from other sources. Use of Judgements The preparation of financial statements in conformity with IFRS requires management to make judgements that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These judgements are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. In particular, there are significant areas of critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements in the following area: • Note 10: Intangible assets Consolidation The Consolidated Financial Statements comprise the financial statements of Ormonde Mining plc and its subsidiaries for the year ended 31 December 2022. Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intragroup balances and transactions including any unrealised gains or losses or income or expenses arising from intragroup transactions are eliminated in preparing the Group financial statements, except to the extent that they provide evidence of impairment. The statutory financial statements of subsidiary companies have been prepared under the accounting policies applicable in their country of incorporation with adjustments made to the results and financial position of such companies to bring their accounting policies into line with those of the Group for consolidation purposes. Investments in subsidiaries Investments in subsidiaries are shown in the Company's own Statement of Financial Position. Investments in subsidiaries are stated at cost less provisions for any permanent diminution in value. Exploration and Evaluation Assets In accordance with International Financial Reporting Standard 6 - Exploration for and Evaluation of Mineral Resources, the Group uses the cost method of recognition. Exploration costs include license costs, survey, geophysical and geological analysis and evaluation costs, costs of drilling and project-related overheads. Exploration expenditure in respect of properties and licenses not in production is capitalised and is carried forward in the Consolidated Statement of Financial Position under intangible assets in respect of each area of interest where: (i) the operations are ongoing in the area of interest and exploration or evaluation activities have not reached a stage which permits a reasonable assessment of the existence or not of economically recoverable reserves; or Ormonde Mining plc (ii) such costs are expected to be recouped through successful development and exploration of the area of interest or alternatively by its realisation. When the Directors decide that no further expenditure on an area of interest is worthwhile, the related expenditure is written off or down to an amount which is considered representative of the residual value of the Group's interest therein. Impairment The carrying amounts of the Group's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For intangible assets that have indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that is expected to generate cash flows that largely are independent from other assets and groups. Impairment losses are recognised in the Statement of Comprehensive Income. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. The recoverable amount of an asset or cash generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. Property, Plant and Equipment Property, Plant and Equipment are stated at cost, less accumulated depreciation. Subsequent costs are included in an asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group. Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows: Computer equipment Fixtures and fittings 33% Straight line 33% Straight line The residual value and useful lives of the property, plant and equipment are reviewed annually and adjusted if appropriate at each Statement of Financial Position date. On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Statement of Comprehensive Income. Taxation Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Statement of Comprehensive Income except to the extent that it relates to items in other comprehensive income or recognised directly in equity, in which case it is recognised in other comprehensive income or equity, respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted Page | 30 Ormonde Mining plc or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. Foreign Currencies Ormonde’s reporting currency and the functional currency of the majority of its operations is the Euro as this is assessed to be the principal currency of the economic environment in which it operates. (i) Foreign currency transactions: Transactions in foreign currencies are converted into the functional currency of each entity using the exchange rate prevailing at the transaction date. Monetary assets and liabilities outstanding at year-end are converted at year-end rates. The resulting exchange differences are recorded in the consolidated statement of comprehensive income. Share Based Payments The fair value of share options granted to directors and employees under the Company's share option scheme is recognised as an expense with a corresponding credit to the share based payment reserve. The fair value is measured at grant date and spread over the period during which the awards vest. The fair value is measured using the Black-Scholes-Merton formula. The options issued by the Group are subject to both market-based and non-market-based vesting conditions. Market conditions are included in the calculation of fair value at the date of the grant. Non-market vesting conditions are not taken into account when estimating the fair value of awards as at grant date; such conditions are taken into account through adjusting the equity instruments that are expected to vest. The reserves relating to lapsed options are transferred to the profit and loss reserve; the cumulative charge for any forfeited options is credited to the Statement of Comprehensive Income. The proceeds received net of any directly attributable transaction costs will be credited to share capital (nominal value) and share premium when options are converted into ordinary shares. Share Capital Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a reduction in equity. Earnings per Share The Group presents basic and diluted earnings per share ("EPS") data for its ordinary shares. EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Ormonde Mining plc Financial Instruments Cash and cash equivalents Cash and cash equivalents in the Statement of Financial Position comprise of cash at bank and in hand and short term deposits with an original maturity of three months or less. Trade and other receivables and payables Trade and other receivables and payables are stated at cost less impairment, which approximates fair value given the short dated nature of these assets and liabilities. The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost. For trade receivables, the Group applies the simplified approach permitted by IFRS 9 'Financial Instruments', which requires expected lifetime losses to be recognised from the initial recognition of the receivables. The other receivables relating to the disposal of La Zarza assets are initially recorded at fair value, which is ordinarily equal to the proceeds received net of transaction costs. These assets are subsequently measured at amortised cost, using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset and allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. 2. Going Concern The Group’s total comprehensive income was a deficit of €1,064,952 and it had cash and cash equivalents of €3,563,793 as at 31 December 2022. The Directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group is in a position to have adequate financial resources to continue in operational existence for a period of twelve months from the date the financial statements were approved. On that basis, the Directors do not consider that a material uncertainty exists in relation to going concern and have deemed it appropriate to prepare the financial statements on a going concern basis. Page | 32 Ormonde Mining plc 3. Segment Information In the opinion of the Directors, the operations of the Group comprise one class of business, being the exploration and development of mineral resources. The Group's main operations are currently located in Spain. The information reported to the Group's Chair’s Review, who is the chief operating decision maker, for the purposes of resource allocation and assessment of segmental performance is specifically focused on the exploration areas in Spain. It is the opinion of the Directors, therefore, that the Group has only one reportable segment under IFRS 8 Operating Segments, which is exploration carried out in Spain. Other operations "Corporate" includes cash resources held by the Group and other operational expenditure incurred by the Group. These assets and activities are not within the definition of an operating segment. Information regarding the Group's reportable segment is presented below. Segment Revenues and Results The following is an analysis of the Group's revenue and results from continuing operations by reportable segment: Segment Revenue Segment (Loss) Corporate admin expenses Exploration - Spain Total for continuing operations (Loss) for year 2022 €000's 2021 €000's - - (933) (132) (1,065) (1,131) (487) (1,618) (1,065) (1,618) Consolidated comprehensive loss for the year (1,065) (1,618) Segment Assets and Liabilities Segment Assets Corporate - Group asset Exploration - Spain Consolidated assets Segment Liabilities Corporate - Group liabilities Exploration - Spain Consolidated liabilities 2022 €000's 3,602 1,432 5,034 120 18 138 2021 €000's 3,739 2,409 6,148 175 12 187 Ormonde Mining plc Other segment information Depreciation & Amortization 2022 €000’s 2021 €000’s Additions to Non-Current Assets 2022 €000’s 2021 €000’s Exploration - Spain 0 0 15 14 Revenue from major products and services There was no revenue in either 2022 or 2021. Geographical information The Group operates in two principal geographical areas - Ireland (country of residence of Ormonde Mining plc) and Spain (country of residence of Ormonde España S.L.U., Ormonde Mineria Iberica S.L.U., Valomet S.L.U. (currently non-operational) and Orillum S.L.U.). The Group also includes a holding company, Ormonde Mining BV which is incorporated in The Netherlands. Information about the Group’s non-current assets by geographical location are detailed below: Non-Current Assets Ireland Spain 4. Statutory Information 2022 €000's - 857 857 2021 €000's - 309 309 The loss for the financial year is stated after charging: Impairment of Assets classified as held for sale Impairment of Intangible asset Directors remuneration Share based option expense Auditors' remuneration Auditors' remuneration from non-audit work 2022 €000's 2021 €000's 0 167 136 0 33 4 400 0 310 72 28 2 As permitted by Section 304 of the Companies Act 2014, the Company Income Statement and Statement of Other Comprehensive Income have not been separately presented in these financial statements. Page | 34 Ormonde Mining plc Employees 5. Number of employees The average monthly numbers of employees (including the Directors) during the year were: Directors Administration /Technical Employment costs (including the Directors) Wages and salaries Social welfare 2022 Number 2021 Number 3 2 5 3 4 7 2022 €000's 2021 €000's 204 8 212 580 29 609 6. Directors’ remuneration and Key Management Compensation Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including the directors of the entity. The compensation paid or payable to key management for employee services is shown below: Salaries and other short-term employee benefits 2022 €000’s 136 2021 €000’s 540 There were no payments made to third parties for their services as Directors of the company. On 18 November 2021, the key management received the following share options, all exercisable at €0.011 each. The share options vested 50% on 18 November 2021 and the remaining 50% on 18 November 2022. The options are exercisable for a 10-year period to 17 November 2031. Brian Timmons Brendan McMorrow Keith O’Donnell 3,000,000 2,500,000 2,500,000 The detailed Directors’ emoluments are shown in the Directors’ report on page 12 of this annual report and form part of these financial statements. 7. Finance Costs Finance costs These costs include bank related costs. 2022 €000s 17 2021 €000s 24 Ormonde Mining plc 8. Earnings Per Share Basic earnings per share The basic and weighted average number of ordinary shares used in the calculation of basic earnings per share is as follows: (Loss)/profit for the year attributable to equity holders of the parent: (Loss) for year (1,065) (1,618) 2022 €000's 2021 €000's Weighted average number of ordinary shares for the purposes of basic earnings per share: (1,065) (1,618) Shares 472,507,482 472,507,482 Basic (loss) per ordinary share € (cents) (0.23) (0.34) Basic (loss) per ordinary share € (cents) (0.23) (0.34) Diluted earnings per share For the years ended 31 December 2022 and 31 December 2021 the basic and diluted loss per share are the same. Please see Note 20 for details on outstanding share options. Page | 36 Ormonde Mining plc 9. Income Tax Expense Current tax Current tax expense in respect of the current year Total tax charge 2022 €000's 2021 €000's - - - - The difference between the total current tax shown above and the amount calculated by applying the standard rate of Irish corporation tax of 12.5% to the loss before tax is as follows: Loss for the period Income tax expense calculated at 12.5% (31 Dec 21: 12.5%) Effects of: Deferred tax assets not recognised Income tax expense recognised in the profit or loss 2022 €000's (1,065) (133) 133 - 2021 €000's (1,618) (202) 202 - The tax rate used for the year end reconciliations above is the corporate rate of 12.5% payable by entities in Ireland on taxable profits under tax law in that jurisdiction. At 31 December 2022, the Company had unused tax losses of €12,505,130 (2021: €11,531,831) available for offset against future profits which equates to a deferred tax asset of €1,563,141 (2021: €1,441,479) based on the current corporation tax rate of 12.5% in Ireland. No deferred tax asset has been recognised due to the unpredictability of future profit streams. Losses may be carried forward indefinitely. Ormonde Mining plc 10. Intangible Assets - Group Cost At 1 January 2021 Additions Impairment At 31 December 2021 Additions Impairment Disposals At 31 December 2022 Classified as: Held for sale (Note 13 & 14) Non-current assets Exploration & Evaluation Assets €000's 2,695 14 (400) 2,309 15 (167) (2,000) 157 2021 €000's 2,000 309 2,309 2022 €000's - 157 157 Expenditure on exploration and evaluation activities is deferred on areas of interest until a reasonable assessment can be determined of the existence or otherwise of economically recoverable reserves. No amortisation has been charged in the period. The Directors have reviewed the carrying value of the exploration and evaluation assets and consider it to be fairly stated at 31 December 2022. The recoverability of the intangible assets is dependent on the future realisation or disposal of the mineral resources and related assets. In relation to the non-current assets totaling €157,000, this represents intangible assets relating to a number of gold licenses the Group has an interest in situated in Spain. The Group has applied for renewal of these exploration licenses and intends to undertake exploration activity on the licenses, once they are renewed. As any planned exploration activities have been affected as a result of the pandemic, it is possible that the application for licenses’ renewal may be declined, which would result in the licenses becoming impaired Any impairment of the Group's Intangible assets of €157,000 would also result in a corresponding impairment of the Company's investment in subsidiaries, currently valued at €130,000. An impairment of €167,000 was recorded during the year in respect of the group’s intangible assets (2021: €400,000 impairment for Assets classified as held for resale). In September 2022, the Company agreed the disposal of certain land and data assets associated with the La Zarza Project, located in south-west Spain, for an amount of €2.3million.- see Note 14 for details of the transaction. Page | 38 Ormonde Mining plc 11. Property, Plant and Equipment - Group Cost At 1 January 2021 At 31 December 2022 Accumulated Depreciation At 1 January 2021 Depreciation charge At 31 December 2022 Net Book Value At 31 December 2022 At 31 December 2021 Property, Plant and Equipment - Company Cost At 1 January 2021 At 31 December 2022 Accumulated Depreciation At 1 January 2021 Depreciation charge At 31 December 2022 Net Book Value At 31 December 2022 At 31 December 2021 Fixtures & Fittings €000's Computer Equipment €000's Total €000's 2 2 2 - 2 - - 16 16 16 - 16 - - 18 18 18 - 18 - - Fixtures & Fittings €000's Computer Equipment €000's Total €000's 2 2 2 - 2 - - 16 16 16 - 16 - - 18 18 18 - 18 - - Ormonde Mining plc 12. Investments in subsidiaries – Company Cost At 1 January 2021 At 31 December 2021 At 31 December 2022 Accumulated amortisation and impairment At 1 January 2021 Impairment losses recognised in profit and loss (2021) At 31 December 2021 Impairment losses recognised in profit and loss (2022) At 31 December 2022 Net book values At 31 December 2022 At 31 December 2021 Subsidiary Undertakings €000's 15,152 15,152 15,152 (14,709) - (14,709) (313) (15,022) 130 443 Subsidiary Activity Incorporated in Ormonde España, S.L.U. Mineral Exploration Orillum S.L.U. Mineral Exploration Ormonde Mineria Iberica, SLU Mineral Exploration Valomet SLU Mineral Exploration Spain Spain Spain Spain Proportion of ownership interest and voting power held 2022 100% 2021 100% 100% 100% 100% 100% 100% 100% Ormonde Mining BV Holding Company The Netherlands 100% 100% The value of the investments is dependent on future realisation or disposal. Should the future realisation or disposal prove unsuccessful, the carrying value in the Statement of Financial Position will be written off. In the opinion of the Directors the carrying value of the investments at 31 December 2022 is appropriate. In 2022 there is an impairment charge of €312,757 on the investments in subsidiaries held by the Company (2021: €nil). Page | 40 Ormonde Mining plc Financial Assets – Company (continued) The aggregate of the share capital and reserves as at 31 December 2022 and the profit/(loss) for the year ended on that date for the subsidiary undertakings were as follows: Subsidiary Ormonde España SLU Orillum SLU Ormonde Mineria Iberica SLU Valomet SLU Ormonde Mining BV 13. Assets Classified as Held for Sale Intangible assets Aggregate of share capital and reserves €'000 (2,916) (529) (370) (78) 130 Profit/ (loss) €'000 (92) (242) (11) 0 0 2022 €000's 0 0 2021 €000's 2,000 2,000 This asset was sold in September 2022 (See Note 14 for details) 14. Trade and Other Receivables Amounts falling due within one year: Other debtors Prepayments and accrued income Amounts falling due after one year: Other debtors Amounts owed by Group undertakings Group Group Company 2022 €000's 2021 €000's 2022 €000's Company (as regrouped) 2021 €000's 524 89 613 34 59 93 8 87 95 18 58 76 Group Group Company 2022 €000's 2021 €000's 2022 €000's Company (as regrouped) 2021 €000's 700 - 700 - - - - 1,388 1,388 - 2,079 2,079 Ormonde Mining plc In September 2022, the Company agreed the disposal of certain land and data assets associated with the La Zarza Project, located in south-west Spain, for an amount of €2.3million, with €800,000 received on closing of the transaction and a deferred consideration of €1.5 million remaining payable. The deferred consideration will be received in 3 tranches of €500,000 each to be received on 30 September 2023 and subsequently on the following two anniversaries. In accordance with IFRS 9 these future cashflows are required to be initially recorded at a “fair value” and subsequently measured at amortised costs by discounting the cash flows using an effective interest rate. Accordingly, the debtor item of €1.5million relating to the La Zarza receivable is recorded as an amount of €1.2million, with €500,000 classified under current assets and the balance as a non-current receivable. The receivable is secured by a property mortgage in favour of the Company. There have been no impairment losses during the year in the Group accounts (2021: Nil). In the Company accounts there is a net write off in the receivable from Group undertakings of €44,868 in the current year. The Company amounts receivable under “amounts owed by Group undertakings” are dependent on the Group undertakings receiving the money over the next 3 years from the disposal of the assets held for sale during the year (see Note 10). In the opinion of the directors, the amounts owed by Group undertakings arise in the ordinary course of business to fund group companies. The balances contain no fixed repayment terms, are interest free and are dependent on the group undertaking’s ability to repay these loans. As a result, these balances are classified in the Statement of Financial Position as being non-current assets. The ageing analysis of total receivables is as follows; Up to 3 months 3 to 6 months Over 6 months but not overdue Total Group 2022 €000's 113 0 1,200 1,313 Group 2021 €000's 93 0 0 93 Company 2022 €000's 95 0 1,388 Company 2021 €000's 76 0 2,079 1,483 2,155 As at 31 December 2022 (and at 31 December 2021) none of the trade receivables of the Group and Company were overdue. No provisions have been made against the receivables as there has been no change in credit quality and the amounts are considered fully recoverable. 15. Cash and Cash Equivalents Group 2022 €000's Group 2021 €000's Company 2022 €000's Company 2021 €000's Cash at bank 3,564 3,746 3,554 3,740 Page | 42 Ormonde Mining plc 16. Trade and Other Payables Current Liabilities Trade creditors Amounts owed to Group undertakings Other taxes and social welfare costs Accruals Group 2022 €000's 13 - 33 92 138 Group Company 2022 2021 €000's €000's Company 2021 €000's 91 - 15 81 187 13 124 33 74 244 91 124 15 69 299 Trade creditors comprise amounts outstanding for on going costs in the normal course of business, and together with accruals are the only financial liabilities measured at amortised cost. The average credit period taken for trade purchases is a month (2021: 1 month). No interest is charged on the outstanding balance. The directors consider that the carrying amount of trade and other payables is a reasonable approximation of their true value. The Group's exposure to currency and liquidity risks related to trade and other payables is set out in Note 24. In the opinion of the directors, the amounts owed to Group undertakings arise in the ordinary course of business to fund group companies. The balances have no fixed repayment terms and are interest free. As a result, these balances are classified in the Statement of Financial Position as being current liabilities. 17. Share capital - Group and Company Authorised equity 950,000,000 Ordinary Shares of €0.01 each Issued capital Share capital Share premium Issued capital comprises: 472,507,482 Ordinary Shares of €0.01 each 31 Dec '22 €000's 31 Dec '21 €000's 1 Jan '21 €000's 9,500 9,500 9,500 9,500 6,500 6,500 4,725 29,932 4,725 29,932 4,725 29,932 34,657 34,657 34,657 4,725 4,725 4,725 4,725 4,725 4,725 The authorised share capital was increased by 300,000,000 ordinary shares of €0.01 each in September 2021 by a Special Resolution with notification to the Companies Registration Office. Capital Management The Board's policy is to maintain a strong capital base so as to maintain investor and market confidence and to sustain future developments of the business. There were no changes in the Group's approach to capital management during the year. The Group deems its shareholders' funds to be its capital. It is Group policy to incentivise the Directors through the award of share options. At the year end, the Directors in place at that time held 0% of issued ordinary shares, or 1.16% assuming that all outstanding share options vest and are exercised. The upper limit on the number of share options that can be granted under the share Ormonde Mining plc option scheme, including options granted under the existing scheme (see Note 20), is 10% of issued share capital. 18. Other Reserves - Group and Company Share Based Payment Reserve Capital Conversion Reserve Capital Redemption Reserve €000’s €000’s €000’s Balance as 1 January 2021 Shared based option expense Release relating to expired share options Balance at 31 December 2021 Balance at 1 January 2022 Balance at 31 December 2022 283 72 (74) 281 281 281 29 - - 29 29 29 7 - - 7 7 7 a) Share based payment reserve The share based payment reserve is used to capture the cumulative impact of options issued, exercised, disposed of and expired under the Group’s Share Option Scheme – see details in Note 20. b) Capital Conversion reserve The capital conversion reserve fund means the amount equivalent to the aggregate diminution in share capital consequential upon renominalisation of share capital. c) Capital Redemption reserve A non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares out of distributable profits or from the proceeds of a fresh issue of shares. 19. Retained Losses Deficit at beginning of year Transfer from reserves Share based reserve adjustment Loss for the year Group 2022 €000’s (29,013) - - (1,065) Group 2021 €000’s Company 2022 €000’s Company 2021 €000’s (27,469) - 74 (1,618) (28,935) - - (1,116) (27,399) - 74 (1,610) Deficit at end of year (30,078) (29,013) (30,051) (28,935) In accordance with the provisions of the Irish Companies Act 2014, the Company has not presented the Company Statement of Comprehensive Income. The Company's loss for the period of €1.116 million (2021: loss of €1.610 million) has been dealt with in the Statement of Comprehensive Income of the Group. Page | 44 Ormonde Mining plc 20. Share-Based Payments Employee share option plan The Group has an ownership-based compensation scheme for directors and employees of the Group. In accordance with the provisions of the plan, as approved by shareholders at a previous general meeting, directors and employees may be granted options to purchase ordinary shares. Each share option converts into one ordinary share of Ormonde Mining plc on exercise. A nominal amount is payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry, subject to certain vesting conditions. There were 9,150,000 options granted during 2021 at an exercise price of €0.011 each. Half of these share options had vested in November 2021, with the remaining options vesting in November 2022. No options were exercised during the year (2021: €nil) however, a number of options expired in 2021 consequent upon Directors and executives leaving the Company – see note 6. In 2021 an expense for the issue of these new share options was calculated using the Black-Sholes-Merton valuation method, using an expected life to November 2031, a standard deviation of 158.5%, a current share price of €0.008, an assumed risk rate of 1% and zero expected dividends. The following reconciles the outstanding share options granted under the employee share option plan at the beginning and end of the financial year: 31 Dec 2022 31 Dec 2021 Number of options 000's Weighted average exercise price Balance at beginning of the financial year Expired during the financial year Granted during the year Balance at end of the financial year Exercisable at end of the financial year 20,650 - - 20,650 20,650 €0.017 - - €0.017 €0.017 Number of options 000's 27,200 (15,700) 9,150 20,650 15,075 Weighted average exercise price €0.016 €0.012 €0.011 €0.017 €0.019 Balance at end of the financial year The share options outstanding at the end of the financial year had the following exercise prices: Option Series 7 Option Series 8 Option Series 9 Option Series 10 Exercise Price Number of Share Options Outstanding 000's 5,850 2,650 3,000 9,150 20,650 €0.025 €0.027 €0.010 €0.011 The options outstanding at 31 December 2022 had a remaining average contractual life of 6.7 years. Ormonde Mining plc 21. Related Party Transactions Details of subsidiary undertakings are shown in Note 12. During the year, the Company lent the subsidiaries €143,500. In addition OESL repaid €800,000 back to the Company. The balances due from and to the subsidiaries, are interest free and are detailed in Note 14 and 16. The total balance owed at 31 December 2022 is €1,387,998. In the Company books there is a net impairment charge of €44,868 on the receivable from Group undertakings in the year ending 31 December 2022, which consolidates out to €nil in the Group accounts. In the Company there is a non current payable of €124,284 to Ormonde BV at 31 December 2022. 22. Capital Commitments There is a work program commitment amounting to €977,000 to be carried out over a three year period once the exploration licenses in Spain are renewed. 23. Events After the Reporting Date Subsequent to the year end, the Group acquired a 20% equity interest in Peak Nickel Limited (“PNL”) for total payments of £512,500. PNL is a private UK company which is advancing exploration on a potentially significant battery metals project. Further details on the above transaction are set out in the Chair’s Review at the start of the Annual Report. Other than those noted above and disclosed in the financial statements, there were no further events after the reporting date that requires disclosure. 24. Financial Instruments and Financial Risk Management The Group and Company’s principal financial instruments comprise cash and cash equivalents. The main purpose of these financial instruments is to provide finance for the Group and Company’s operations. The Group has various other financial assets and liabilities such as receivables and trade payables, which arise directly from its operations. It is, and has been throughout 2022 and 2021, the Group and Company’s policy that no trading in derivatives be undertaken. The main risks arising from the Group and Company’s financial instruments are credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group and Company’s financial assets comprise receivables and cash and cash equivalents. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by international credit rating agencies. The Group and Company’s exposure to credit risk arise from default of its counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents and the La Zarza receivable in its Consolidated Statement of Financial Position. The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics Page | 46 Ormonde Mining plc if they are connected entities. Liquidity risk management Liquidity risk is the risk that the Group will not have sufficient funds to meet liabilities. Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company’s short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group. The Group and Company’s financial liabilities as at 31 December 2022 and 31 December 2021 were all payable on demand, except the amount owed to group undertakings. The expected maturity of the Group and Company’s financial assets (excluding prepayments) as at 31 December 2022 and 31 December 2021 was less than one month. The Group expects to meet its other obligations from operating cash flows. The Group further mitigates liquidity risk by maintaining an insurance programme to minimise exposure to insurable losses. The Group had no derivative financial instruments as at 31 December 2022 and 31 December 2021. Interest rate risk The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and Company’s holdings of cash and short-term deposits. As at year end, the Company was being charged interest on the majority of its funds held in current accounts. Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the years ended 31 December 2022 and 31 December 2021. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses, as disclosed in the Consolidated Statement of Changes in Equity. Fair values The carrying amount of the Group and Company’s financial assets and financial liabilities is a reasonable approximation of the fair value. 25. Reclassification of Comparative information The prior year figures of amounts owed by group undertakings of €2,079,000 have been regrouped or reclassified from being current assets in the prior year date to non-current assets in the current year to conform to the current year's presentation as we do not expect these amounts to be realised in 12 months. Such reclassifications do not affect the previously reported profit and net assets of the company. Ormonde Mining plc 26. Approval of Financial Statements The financial statements were approved by the Board on 27 June 2023. Page | 48 Ormonde Mining plc Directors and other information Directors Registered Office Brian Timmons (Executive Director & Chairman) Brendan McMorrow (Executive Director & CEO) Keith O’Donnell (Non-Executive Director) c/o CLA Evelyn Partners (Ireland) Limited Paramount Court Corrig Road Sandyford Business Park Dublin D18 R9C7 Secretary Brendan McMorrow Group Auditors Business Address Bankers Solicitors CLA Evelyn Partners (Ireland) Limited Chartered Accountants and Statutory Audit Firm Corrig Road, Sandyford Business Park, Dublin 18 Bracetown Business Park Clonee, Co. Meath Ireland D15 YN2P Allied Irish Bank plc Market Square, Navan Co. Meath La Caixa Centro de Empresas de Salamanca C. Rector Lucena 1137002 Salamanca Spain OBH Partners 17 Pembroke Street Dublin 2, Ireland Lex Iusta C/Hortaleza 81, 3 Izq. 28004 Madrid Spain Ormonde Mining plc Brokers Registrars Financial PR NOMAD, Euronext Growth Advisor Broker & Financial Advisor Davy Davy House, 49 Dawson Street, Dublin 2, Ireland Computershare Investor Services (Ireland) Ltd 31000 Lake Drive Citywest Business Campus, Dublin 24 D24 AK82, Ireland Vigo Consulting Limited Sackville House, 40 Piccadilly London W1J 0DR United Kingdom Registered Number 96863 Republic of Ireland Date of Incorporation 13 September 1983 Website www.ormondemining.com Page | 50 

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