201 Temple Chambers, 3-7 Temple Avenue, London, England, EC4Y 0DT
Power Metal Resources plc
A N N U A L R E P O R T
For the year ended 30 September 2022
www.powermetalresources.com
Power Metal Resources plc
Registered number: 07800337
POWER METAL RESOURCES PLC
CONTENTS
Company Information
Chief Executive Officer’s Review
Highlights
Introduction
Operations Review
Corporate Social Responsibility
Financial Review
Targets for 2023
Board Changes
Outlook
Strategic Report
The Board of Directors
Directors’ Report
Chairman’s Corporate Governance Statement
Independent Auditor’s Report to the Members of
Power Metal Resources PLC
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
- 30 September 2021
Consolidated Statement of Changes in Equity
- 30 September 2022
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statement of Changes in Equity
- 30 September 2021
Company Statement of Changes in Equity
- 30 September 2022
Company Statement of Cash Flows
Notes to the Financial Statements
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46
POWER METAL RESOURCES PLC
COMPANY INFORMATION
Directors:
P Johnson
S Richardson Brown
Ed Shaw
Owain Morton
Chief Executive Officer
Interim Non-Executive Chairman
Non-Executive Director
Non-Executive Director (appointed
10 October 2022)
Company secretary:
ONE Advisory Limited
Company number:
07800337
Registered office:
Auditor:
201 Temple Chambers
3-7 Temple Avenue
London EC4Y 0DT
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
London E14 4HD
Nominated Adviser and broker:
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
Joint brokers:
Solicitor:
SI Capital Limited
46 Bridge Street
Godalming
Surrey GU7 1HL
First Equity Limited
Salisbury House
London Wall
Finsbury
London EC2M 5QQ
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
Page 1
POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Highlights from the year under review:
Operational
The year saw the Company complete a number of new acquisitions to advance its global project
portfolio whilst in parallel continue to develop and strengthen its existing business interests.
The dual pathway of proactive exploration of retained project interests continued across multiple
projects, alongside the advancement of corporate activities seeking the outright disposal or planned
spin-out Initial Public Offering (“IPO”) of certain project interests.
In Canada, during the financial year and thereafter, the Company continued to acquire new
uranium project interests through direct staking and existing project acquisitions in the Athabasca
Basin region of Saskatchewan, reflecting the Company’s view that the uranium commodity is to
experience a renaissance due to global expansion of nuclear power generation.
In July 2022, First Class Metals PLC (LON:FMC) listed in London, with Power Metal holding a
c.28% interest valued at c.£1.8m on listing. FMC holds the former Power Metal Schreiber-Hemlo
project interests, sold to FCM for equity in September 2021.
In November 2021, the Company completed the acquisition of the Pilot Mountain Project, a
tungsten focused project and completing the four-project portfolio of Golden Metal Resources PLC
(“GMT”) which raised £750,000 in pre-IPO financing in December 2021 and during the year
continued its IPO preparatory work.
The Company confirmed its continuation into year two of the Authier North/Duval East lithium
project earn-in to 100% in July 2022.
A diamond drill programme was conducted at the Silver Peak project in British Columbia, Canada,
demonstrating bonanza grade silver at the project.
In Africa, a diamond drill programme was also conducted in late 2021/early 2022 at the Haneti
Project in Tanzania targeting nickel, copper, and platinum group elements (held with joint venture
(“JV”) partner Katoro Gold PLC (LON:KAT). The programme provided additional geological
information to enable the JV partners to review and consider next steps exploration.
Following exploration work at the Kanye Resources JV in Botswana (Ditau and Kalahari Copper
Belt Projects), a conditional disposal of the Company’s 50% JV interest back to partner Kavango
Resources PLC (LON:KAV) was announced.
Power Metal signed a conditional acquisition of 56.7% of the shares in Kalahari Key Mineral
Exploration Pty Ltd (“KKME”), holder of the Molopo Farms Complex Project (“MFC Project”) in
Botswana. Moving loop electromagnetic surveys conducted at the MFC Project in summer 2022
confirmed a major conductor at the T1-6 target where nickel and PGEs had previously been
identified in the 20/21 drill programme and led to the accelerated launch of a follow up diamond
drill programme at T1-6 and other targets in September 2022.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Reverse circulation drilling at the Tati Project (“Tati”) in Botswana identified near surface high-
grade gold and follow on work confirmed an 8km gold-in-soil anomaly at Tati, leading to the
staking of a further prospecting licence to cover the full anomaly footprint.
In Australia, October 2022 saw the completion of the acquisition of First Development Resources
Pty Ltd and its entire gold/copper focused Western Australian exploration interests. This was
followed up by the acquisition of the Selta Project then targeting uranium and rare earth elements
in the Northern Territory of Australia. The two acquisitions completed the portfolio of First
Development Resources PLC, a UK holding company which raised £1,125,000 in pre-IPO financing
and during the year undertook IPO preparatory work.
Finally in Australia, the Company submitted two licence applications in South Australia
comprising the Wilan Project then targeting Olympic Dam style mineralisation. During the year
one of the licence applications was granted, with a second licence granted post year end.
The Company closed the financial year with a focus on delivering advanced exploration
programmes across its to be retained exploration portfolio, and with acquisition restricted to
additional uranium and lithium focused opportunities.
Financial
Total comprehensive loss for the year to 30 September 2022 of £137k (2021: loss of £622k). The
reduction in loss from September 2021 is in part due to the capital contribution balance recognised
during the year. The capital contribution balance arose on the completion of the capital
reorganisation of the Golden Metal Resources Plc group;
Pre-non-controlling interest total equity of £11.7m at the year-end (2021: £6.3 million); and
Raised £2,070,000 (before issue costs) in new equity financing during the financial year, from a
combination of new and existing shareholders, including the Directors. An additional £1,055,978
of cash received by the Company during the year from exercises of Power Metal share warrants
and £25,000 of cash received by the Company during the year from exercises of Power Metal share
options. £2,148,307 of shares were issued in relation to acquisitions in various investments and
projects.
Post-year end
For information regarding events after the reporting date, see note 28 to the financial statements.
Introduction
The mineral resource exploration sector is highly cyclical and during the financial year has experienced
a typical cyclical downturn brought about by a variety of factors. These include the medium-term
impact of global policies to address the COVID-19 pandemic, the war in Ukraine and the uncertainty
caused by inflationary pressures and interest rate policies.
The overwhelming uncertainty and unstable conditions during the financial year provided exactly the
backdrop needed for a high-quality portfolio of exploration interests to be gathered at modest cost and
advanced, which is precisely what Power Metal has been able to achieve.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Our focus now turns to value generation through ongoing exploration of retained interests, and
through completion of those corporate activities in process, or planned. The next financial year we
intend to report mainly on that value generation, rather than undertaking further acquisitions and
therefore the business will move to a distinctly new phase in its life cycle.
Operations Review
Projects
Africa
Botswana
(Tati Project)
In October 2021 Power Metal commenced reverse circulation (“RC”) drilling at the Tati Gold Project,
with a 1,062m programme, results from which were released in April 2022 confirming near surface gold
mineralisation including up to 3m at 5.17g/t gold from 9m downhole.
The confirmation of geological formations, and evidence of a strong gold-in-soil anomaly inspired the
Company to apply for an additional licence to cover the full extent of the anomaly (licence granted
April 2022).
A further site visit and ground mapping in July 2022 confirmed extensive gold workings, more
extensive than previously thought and two fines’ dumps representing waste material from historical
mining activities at the Cherished Hope gold mine within the project boundaries.
A further RC drilling programme was commenced in August 2022 with 490m of drilling alongside
sampling of the fine’s dumps. The fines dumps sampling confirmed residual gold at an average of
0.94g/t, which is amenable to processing at a nearby processing facility, subject to contract and local
approvals.
(Molopo Farms Complex)
In November 2021, Kavango Resources PLC (LON:KAV) secured an option to acquire the shares in
Kalahari Key Mineral Exploration Pty Ltd (“KKME”), the holder of the Molopo Farms Complex Project
(“MFC Project”) in southwest Botswana (subject to Power Metal’s 40% interest by virtue of a previously
completed earn-in). This option was subsequently extended, but ultimately did not result in KAV
proceeding, as announced in March 2022.
Instead, in May 2022, Power Metal agreed a conditional acquisition of 56.7% of KKME shares from
KKME shareholders, for £807,348 consideration payable in new Power Metal ordinary shares of 0.1
pence each at a price of 1.75p and attaching warrants over 46,134,171 new ordinary shares at a 3.5p
exercise price with a 2-year life. The conditionality was principally the receipt of local regulatory
approvals which were received, and the transaction completed in November 2022. Following
completion and the reversal of Power Metal’s earn-in to a 40% interest into the MFC Project, the
Company held an 87.71% interest in KKME which wholly owns the MFC Project.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Moving loop electromagnetic surveys conducted in summer 2022 revealed a number of large magnetic
conductors across 4 targets, with the first announced in August 2022 leading to the launch of an
expedited 2,600m drill programme in September 2022.
(Kanye Resources Joint Venture (“JV”))
Exploration work continued across the Kanye Resources JV held 50% by Power Metal and 50% by JV
partner KAV with a diamond drill programme commencing at the Ditau project in January 2022 and
target identification work for planned drilling at the Kalahari Copper Belt project.
In July 2022, Power Metal announced a conditional agreement to dispose of its 50% interest in the Kanye
Resources JV to Kavango Resources in a transaction which completed in November 2022 following the
publication of a new market prospectus by Kavango Resources.
Consideration for the disposal included 60m KAV shares at a price of 0.02 pence per share, valued at
£1.08m on the date of completion, together with KAV warrants and a 1% net smelter return royalty
across the Kanye Resources properties.
Tanzania
In January 2022, the Company announced the commencement of diamond drilling at its 35% owned
Haneti Project in Tanzania with 65% JV partner Katoro Gold PLC (LON:KAT). The results from the
900m drill programme were announced in May 2022 confirming the intersection of significant
sequences of altered ultramafic and mafic rocks. The drilling demonstrated nickel, copper, gold, and
platinum group elements (“PGEs”) albeit not in economic quantities, however the information gathered
enabled the JV partners to plan for the next exploration steps at Haneti.
Concurrent with the drill programme, rock sampling undertaken at the Babayu lithium prospect
highlighted significant lithium and tantalum prospectivity leading to the development of a lithium
consolidation strategy, covering existing lithium applications and reviewing potential partnerships
with local licence holders.
Australia
First Development Resources
In October 2021, Power Metal announced the acquisition of a portfolio of precious and base metal
focused projects in Western Australia held by private Australian company First Development
Resources Pty Ltd (“FDR Australia”). FDR Australia was acquired outright by First Development
Resources PLC (“FDR UK”) for consideration including a deemed value of £686,667 in Power Metal
shares and with a plan to list FDR UK on the London capital markets.
Subsequently in November 2021, FDR UK also conditionally acquired the Selta Project in the Northern
Territory of Australia, through the 100% acquisition of URE Metals Pty Ltd, a private Australian
subsidiary, payable through the issue of £500,000 deemed equity value in FDR UK. The conditions for
acquisition were all satisfied in February 2022.
Further transactions undertaken during the year included the acquisition of the Ripon Hills project in
Western Australia and restructuring of the FDR group to simplify the listing process.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
During the course of the financial year various corporate work streams were undertaken including pre-
IPO preparations, notably the completion of a £1,125,000 pre-IPO financing announced in June 2022.
In addition, during the year various exploration work was undertaken. At the Wallal Project a desktop
study was finalised, and three magnetic bullseye anomalies were identified within the project area. The
Eastern anomaly will be targeted in the Phase I diamond drilling programme planned to commence
immediately post admission. To facilitate site works the pre-requisite Heritage Clearance Survey was
completed in Q3 2022.
The desktop studies for the Braeside West and Ripon Hills Projects were completed during 2022 which
identified multiple gold and base metal targets for further investigation.
At the Selta Project, a desktop study completed during 2022 identified multiple uranium and rare-earth
element targets and the geology at Selta is interpreted to be compositionally similar to that which
underpins the nearby Nolans Deposit currently being developed by ASX listed Arafura Resources.
Wilan Project
In October 2021, Power Metal announced its wholly owned Australian subsidiary, Power Metal
Resources Pty Ltd, had lodged two licence applications covering 1,994km2 in the Gawler Craton region
within South Australia.
The originally named Gawler Project, subsequently renamed the Wilan Project, saw the first 999km2
licence granted in September 2022 and the identification of an Iron Oxide Copper Gold (“IOCG”) target
within the granted exploration licence area.
New Ballarat Gold Corporation (NBGC)
Power Metal holds a 49.9% interest in NBGC with partner Red Rock Resources PLC (LON:RRR). NBGC
holds a 100% interest in Red Rock Australasia Pty Ltd (“RRAL”) which itself holds a portfolio of granted
exploration licences and licence applications in the Victoria Goldfields region in the State of Victoria,
Australia.
The original applications were submitted in early 2020, and during the financial year RRAL saw a
number of licence applications granted, such that by the financial year end 15 granted licences covered
a footprint of some 1,841km2 and 5 licence applications awaiting grant of 493km2.
An operating team based in Ballarat, Victoria, conducted various exploration work during the year
including an inaugural diamond drill programme in December 2021, with results demonstrating gold
bearing structures and evidence of gold mineralisation across the target areas.
In July 2022, the Company announced the conditional acquisition by RRAL of the licence including the
historic Berringa gold mine with conditions satisfied and the transaction completed in September 2022.
North America
Silver Peak
Power Metal has a 30% interest in the Silver Peak project in British Columbia, Canada, following
completion of an earn-in in the 2021 financial year.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
In August 2021 a total of 19 short core holes were completed targeting high-grade extensions of the
Victoria Vein. 10 out of the 19 holes drilled returned >1000g/t silver assays with significant copper (Cu),
zinc (Zn), lead (Pb) and antimony (Sb) credits. Following the initial announcement of results in
November 2021, overlimit assays were completed for Cu, Zn, Pb and Sb. Final silver equivalent assays
were received and reported in December 2021 which included a highlight interval of 0.76m 10,131g/t
silver equivalent.
In August 2022 the Company had its Exploration Manager conduct a one-day site visit to the project.
He was accompanied by Michael Nugent who represents the majority ownership group. Due to the
complex nature of the surrounding topography, the site visit was completed in order to gain a better
understanding of the opportunity, and challenges that Silver Peak faces during further exploration and
next stage exploration plans.
Further work was undertaken during the course of the year to review potential commercial options for
the project.
Authier North
In 2021 Power Metal signed an agreement to earn into a 100% interest in the Authier North project.
Following on from a ground exploration programme in March 2022 the Company engaged Dahrouge
Geological Consultant Ltd to complete an independent technical review of the project. This review
identified two target areas for further investigation and exploration plans have been developed for next
stage ground exploration.
The Company successfully satisfied the year one option terms and entered into year two of the
agreement on 12 July 2022.
Athabasca Basin
During the year the Company continued to build its portfolio of Athabasca Basin, Saskatchewan,
Canada, focused uranium properties. This portfolio was originally built in 2021 utilising internal
technical resources to identify prospective new opportunities for acquisition via direct low-cost mineral
claim staking.
The original portfolio of seven uranium focussed properties was expanded multiple times in 2022 with
the first being July 2022 following the acquisition of the Reindeer Lake, Porter Lake and Old Woman
Rapids from an established prospector.
Furthermore, via direct mineral staking, the Company acquired the Durrant Lake property located in
the eastern side of the Athabasca Basin in August 2022. Durrant Lake is bordered on three sides by
claims held by uranium focused companies including Orano SA, Denison Mines Corp and ISO Energy
Ltd. Shortly after, in September 2022, the company staked a further project located inside the basin
called the Badger Lake project bringing the portfolio’s total to 11 properties.
During summer 2022, Power Metal undertook ground exploration at three properties (Clearwater,
Thibault Lake and Tait Hill).
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
In August 2022, Power Metal announced the conditional disposal of the Reitenbach property to
Teathers Financial PLC for a disposal value of £360,000 and to form the listing asset for that vehicle.
Teathers Financial PLC will be renamed Uranium Energy Exploration PLC (“UEE”) and listed on a
preferred stock exchange in London. The conditions of the disposal included the successful listing of
UEE.
As at the year-end, Power Metal held 11 properties (including the conditionally disposed Reitenbach
and E-12 properties) covering approximately 780km2 in and surrounding the Athabasca Basin.
Schreiber-Hemlo / First Class Metals
The Company announced the completion of the sale of its 100% owned Schreiber-Hemlo interests to
First Class Metals PLC (LON:FCM) in October 2021 for £1m.
In July 2022, FCM successfully listed on the London stock exchange and Power Metal’s holding on
listing was valued at circa £1.8m.
Golden Metal Resources
In November 2021, the Company completed the acquisition of the Pilot Mountain tungsten Project. This
acquisition completed the four-project portfolio of Golden Metal Resources PLC (“GMT”) which is
focussed in Nevada, USA. The Pilot Mountain transaction was further bolstered by the subsequent
acquisition of the longer-term tail-benefit included in the original consideration from the vendor, fellow
AIM-listed Thor Mining PLC in January 2022.
Following the acquisition of Pilot Mountain and during the year, GMT undertook pre-IPO preparations
including the completion of a £750,000 pre-IPO financing which diluted the Company’s interest in GMT
to 83.13%.
In parallel with the pre-IPO work, GMT completed various exploration work programmes across its
Nevada portfolio which included a 3D induced polarisation (“IP”) geophysical survey over the Pilot
Mountain Project, a high-resolution soil geochemical survey over the Garfield project which includes a
total of 453 individual sample points. Further minor work streams at the Golconda Summit project were
completed including rock sampling as well as the completion of permitting for mechanised trenching.
Furthermore, GMT obtained access to a historical soil geochemical survey completed over Golconda
Summit which included 741 individual samples.
The results from both the IP geophysical survey and Garfield soil geochemical survey are pending. The
results, once received by GMT, will be compiled, analysed and released when ready.
New Opportunities
Power Metal Resources
During the financial year Power Metal continued to review new opportunities and completed a number
of acquisitions as outlined above and following the year end.
The focus of the Company post year end is acquisitions focused on uranium or lithium opportunities.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Corporate Social Responsibility (“CSR”)
The Company maintains a focus on CSR through internal policies and our approach to external
operational activities.
During the year and after the year end the Company developed its internal environmental, social and
governance (“ESG”) policies and procedures to codify many of the practices in place at the Company
and to introduce a number of new initiatives.
The Company will continue to prudently invest in the regions in which we have business activities, in
support of the communities where we operate. As an early-stage company, Power Metal is keen to
employ workers from the areas in which we operate, and to operate in a safe, responsible, and
reasonable manner.
As certain projects mature, we would expect our community engagement to become more extensive in
line with the level of operational activities.
Financial Review
The Group recorded an audited total comprehensive loss after tax for the year to 30 September 2022 of
£137k (2021: loss of £622k) with the increase reflecting the increased administration costs pertaining to
increased business activities and notably those in connection with the costs of planned spin-out IPO
listings. The loss per share from continuing activities was 0.15p (2021: 0.05p).
The Group’s exploration activities during the financial year under review were funded through the
issue of shares to raise cash. In aggregate, new ordinary shares were issued during the financial year,
raising a total of £2.07 million from fundraising, £1.06 million from the exercise of warrants, £0.03
million from the exercise of options and £2.15 million relating to the acquisitions of various investments
and projects.
We ended the financial year with a cash balance of £1.56 million (2021: £1.28 million), which was
enhanced post-financial year end by a financing in January 2023 raising an additional £900,000, before
expenses.
Cash balances held at the year-end are supplemented by listed company shares and warrants (cash
equivalents), which represent a further pool of accessible cash available on the sale of shares in listed
companies.
Targets for 2023
Our operational targets for the remainder of 2023 are:
To continue our proactive exploration work across retained priority exploration interests seeking
multiple large-scale metal discoveries.
To generate value from our existing portfolio through the continuation of spin-out listings and
outright disposals further enhancing the Company’s financial strength.
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POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Board Changes
In October 2022, Owain Morton was appointed to the Board as Non-executive Director.
Outlook
Power Metal has built its business through a creative acquisition and project generation approach with
a view to building a portfolio charged with the potential to deliver the metals needed by the world in
an era of metal criticality.
The portfolio is charged with strategic, and multiple potentially district scale exploration and
development interests, some for priority internal exploration and some for value generation through
spin-out listings or outright disposal.
As the world begins to recognise the importance of metal supply, and the need to support and invest
in sources of supply, the Company is uniquely well positioned. We look forward to the developments
in the business during 2023.
Paul Johnson, Chief Executive Officer
3 March 2023
Page 10
POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Overview of the business
The financial year to 30 September 2022 resulted in a total comprehensive loss for the year of £137k
(2021: loss of £622k).
Net assets at the year-end stood at £13.8 million (2021: £6.0 million). The Group’s cash position of £1.56
million as at 30 September 2022 was supplemented post-year end following a placing of £0.9 million.
Business Strategy
The overriding strategic objective of the Company is to make large scale metal discoveries. Power Metal
has been structured with a portfolio model with diversity of interests by commodity, jurisdiction and
geology which is considered by the Company to increase the likelihood of a large-scale metal discovery.
The Company seeks to minimise fixed financial or operational commitments providing underlying
operational flexibility. This enables the financial and managerial resources to be focused forward on
the projects with the greatest potential to deliver the discoveries targeted.
Further information on the Group’s operations is set out in the Chief Executive Officer’s Review on
page 2 to 10.
Principal risks
Exploration risk
The Group’s business is mineral exploration and evaluation, which are speculative activities. There is
no certainty that Power Metal will proceed to the development of any of its projects or otherwise realise
their full value. The Group aims to mitigate this risk when evaluating new business opportunities by
targeting areas of potential where there is at least some historical drilling or geological data available
and where leading exploration consultants believe there is strong evidence of high-class mineral
deposits.
Resource risk
All mineral projects have risk associated with defined grade and continuity. Mineral reserves and
resources will be calculated by the Group in accordance with accepted industry standards and codes
but are always subject to uncertainties in the underlying assumptions which include geological
projection and commodity price assumptions. At present Power Metal does not have projects with
quantified mineral reserves and resources.
Environmental risk
Exploration of a project can be adversely affected by environmental legislation and the unforeseen
results of environmental studies carried out during the evaluation stage. The Group’s environmental
risk extends to its corporate and exploration interests in Australia, Botswana, Canada, Tanzania and
the USA. Power Metal will ensure proper measures are taken to assess environmental risk including
appropriate technical submissions to reporting authorities prior to work commencing. Also, any
disturbance to the environment during any exploration on any of the licence areas will be rehabilitated
in accordance with the prevailing local regulations.
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POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Financing & liquidity risk
The Group has an ongoing requirement to fund its activities through the equity capital markets. There
is no certainty such funds will be available when needed. To date the Group has managed to raise the
required funds, primarily through equity placements, including placements undertaken during very
difficult market conditions of 2021/22 and monies from warrant exercises.
The Directors have prepared cash flow forecasts for at least the next 12 months from the date of this
report and are confident that the Company has sufficient financial resources to fund its operations.
From a wider perspective it is noted that the junior resource sector is cyclical, with peaks and troughs
in valuations of companies and generic sector confidence. The ease of financing follows this cyclicity
and that means the financing environment for junior companies can switch from challenging to
comfortable, and vice versa, quite quickly. The impact of cyclicity can be less significant for well-
respected companies with successful business models, and therefore the actual financing experience is
different for each company.
Power Metal holds listed securities, alongside its cash reserves, which may be sold (subject to any
applicable lock-in periods), further bolstering available capital.
Political risk
All countries carry political risk that can lead to interruption of activity. Politically stable countries can
have enhanced environmental and social risks, risks of strikes and changes to taxation, whereas less
developed countries can have, in addition, risks associated with changes to the legal framework, civil
unrest and government expropriation of assets. The Company has working knowledge of the countries
in which it holds exploration licences and has appointed experienced local operators to assist the
Company in its activities in order to help reduce possible political risk.
Internal controls & risk management
The Directors are responsible for the Group’s system of internal financial control. Although no system
of internal financial control can provide absolute assurance against material misstatement or loss, the
Group’s system is designed to provide reasonable assurance that problems are identified on a timely
basis and dealt with appropriately. In carrying out their responsibilities, the Directors have put in place
a framework of controls to ensure as far as possible that ongoing financial performance is monitored in
a timely manner, that corrective action is taken and that risk is identified as early as practically possible,
and they have reviewed the effectiveness of internal financial control.
Review of business and financial performance
The ongoing performance of the Company is managed and monitored using a number of key financial
and non-financial indicators (“KPIs”) on a monthly basis:
i. Cash position
Having sufficient cash for business operations is vital for an exploration company and cash
must be managed accordingly. The Directors review and manage the Group’s cash flow on a
monthly basis. The financial strategy is to ensure that, wherever possible, there are sufficient
funds to cover corporate overheads and exploration expenditure for as long a period as
possible. Power Metal Resources has confidence that financing of the Company can continue
as and when required, albeit the board is keen to avoid excessive dilution and will manage the
financing process with that objective in mind.
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POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Furthermore, the Company has ensured that where possible it has built operational flexibility
in its corporate and exploration portfolio enabling expenditure to be paused should the
financing environment prove difficult and cash preservation prove essential.
ii. Exploration expenditure by project
The Company controls its exploration spend by project versus budget and in relation to its
available cash resources. If the results of exploration do not meet expectations, then budgeted
activities are re-evaluated or even cancelled. Evaluation of early-stage projects is approached
in a cost-effective way. The Group determines whether there are any indicators of impairment
of its exploration assets on an annual basis.
iii. Share price
The Company monitors its share price monthly versus a peer group of explorers. Many factors
outside the Company’s control can affect the share price but the Company appreciates that this
KPI is important to shareholders and the market in general in assessing the Company’s
performance.
Directors’ indemnities
The Group maintains directors’ and officers’ liability insurance providing appropriate cover for any
legal action brought against its Directors.
Section 172 (1) Statement
The Board of Power Metal is aware that the decisions we make may affect the lives of many people.
The Board makes a conscious effort to try and understand the interests of our stakeholders, and to
reflect them in the choices we make in creating long-term sustainable success for the business.
The Board views engagement with our shareholders and wider stakeholder groups as essential work.
We are aware that we need to listen to each stakeholder group, so that we can understand specific
interests, and foster effective and mutually beneficial relationships. By understanding our stakeholders,
we can build their needs into the decisions we take.
Throughout this Annual Report, we provide examples of how we:
Foster relationships with stakeholders;
- Consider the likely consequences of long-term decisions;
-
- Understand our impact on our local community and the environment; and
- Demonstrate the importance of behaving responsibly.
This section serves as our s172 statement and should be read in conjunction with the Strategic Report
and the Company’s Corporate Governance Statement. S172 of the Companies Act 2006 (CA) requires
Directors to act in a way that they consider, in good faith, would most likely promote the success of the
Company for the benefit of its members as a whole, taking into account the following factors (among
others) listed in s172:
(a) the likely consequences of any decision in the long term,
(b) the interests of the company's employees,
(c) the need to foster the company's business relationships with suppliers, customers and others,
(d) the impact of the company's operations on the community and the environment,
Page 13
POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
(e) the desirability of the company maintaining a reputation for high standards of business conduct,
and
(f) the need to act fairly as between members of the company.
The Directors continue to have regard to the interests of the Company’s employees and other
stakeholders, including the impact of its activities on the community, the environment and
the Company’s reputation, when making decisions. Acting in good faith and fairly between members,
the Directors consider what is most likely to promote the success of the Company for its members in
the long term.
Active stakeholder engagement and open communication have become increasingly important in
decision making for the Board. Specific decisions taken during the year following consultations with
key stakeholders include:
-
- An intensification of investment community engagement through social media and through online
interaction with shareholders and investors and a return post Covid-19 to undertaking of live and
face to face investor events;
The work undertaken by the FDR PLC team to engage with heritage groups in Australia, in
preparation for planned exploration activities;
The use of local operators and advisers where possible to increase employment and consultancy
revenues within local operating environments;
The issue of shares and options to service providers and options to directors in order to create long
term incentives, align their interests with those of the members and conserve cash through the
period of uncertainty during the earlier part of the accounting period.
-
-
The Board regularly reviews our principal stakeholders and how we engage each group. The
stakeholder voice is brought into the boardroom throughout the annual corporate cycle through
information provided by management and also by direct engagement with stakeholders themselves,
including shareholder interviews and question and answer sessions with the Chief Executive Officer.
The relevance of each stakeholder group may increase or decrease depending on the matter or issue in
question, so the Board seeks to consider the needs and priorities of each stakeholder group during its
discussions and as part of its decision making.
The table below acts as our s172(1) statement by setting out the key stakeholder groups, their interests
and how Power Metal has engaged with them over the reporting period. However, given the
importance of stakeholder focus, long-term strategy and reputation, these themes are also discussed
throughout this Annual Report.
Page 14
POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Stakeholder
Their interests
How we engage
Investors
Business sustainability
High standards of governance
Comprehensive
review
financial performance of
business
Success of the business
Ethical behaviour
Awareness of long-term strategy
and direction
Improving market perception of
the business
Delivering long term value to
Regulatory bodies
shareholders
Experience of directors
Project prospectivity
Compliance with regulations
Worker pay and conditions
Health and Safety
Brand reputation
Waste and environment
Insurance
Environmental protection
Interim and Annual Report
Investor Relations section on the
Company website
RNS announcements
Trading updates
of
the
Shareholder circulars
AGM results
Press releases
Media articles and
including podcasts
interviews,
Board encourages open dialogue
with the Company’s investors
Use of social media
Company website
Stock exchange announcements
Annual Report
Direct contact with regulators
Compliance updates at Board
Meetings
Consistent risk review
Compliance with local regulatory
industry
and
requirements
standard principles
of
Appointment
nominated
advisor in accordance with AIM
Rules
Environment
Sustainability
Energy usage
Recycling
Waste Management
corporate
Oversight
of
responsibility plans
Reduce environmental impact of
exploration by producing detailed
field operation guidelines
Adhere to local guidelines
Obtain required permits from local
authorities
Removal of operational waste and
treatment at appropriate facilities
Detailed field operation guidelines
negative
of
to minimise
environmental
exploration activities
impact
any
Page 15
POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Community
Community outreach
Human Rights
Sustainability
Meeting with key community
representatives
Partnering with the communities in
which we operate – sharing
plans/ideas for discussion
Active communication with
landowners and communities
where field work is taking place
Local
promptly
landowners
paid
are
Adhere to Government guidelines
for approaching landowner and
native title holder discussion
Rehabilitation of drill sites after
work has completed
Employment of local contractors
where possible
Fair and prompt payment of all
contractors
Contractors
Terms and conditions of contract
Anti-bribery and anti-corruption
Health and safety
Human
slavery
rights and modern
Whistleblowing policy is in place to
policy
ensure rights are protected
Provide mandatory health and
safety training and creating a safe
working
through
environment
strict procedures.
Contractors are sourced
locally
where possible
Communication with contractors is
through a dedicated
frequent
exploration manager
Paul Johnson, Chief Executive Officer
3 March 2023
Page 16
POWER METAL RESOURCES PLC
BOARD OF DIRECTORS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Paul Johnson, Chief Executive Officer
Paul Johnson holds a degree in Management Science from the University of Manchester Institute of
Science and Technology and is a Chartered Accountant, Chartered Loss Adjuster and Associate of the
Chartered Insurance Institute. Paul is the Chief Executive Officer of Value Generation Limited, a family
investment and advisory company focused on the natural resource and related fintech sectors.
Paul Johnson is an experienced public company director and has previously been Chief Executive
Officer of Metal Tiger PLC (AIM), Metal NRG PLC (Standard Segment of the main London Stock
Exchange) and China Africa Resources PLC (AIM). He has been Chairman of ECR Minerals PLC (AIM)
and Non-Executive Director of Greatland Gold PLC (AIM), Papua Mining PLC (AIM), Thor Mining
PLC (AIM) and Armadale Capital (AIM).
Scott Richardson Brown, Interim Non-Executive Chairman
Scott is a Fellow of the Institute of Chartered Accountants in England and Wales. He began his career
at Coopers & Lybrand (later PricewaterhouseCoopers) in the banking and capital markets division, he
later became a partner in the corporate broking/finance division of Oriel Securities Limited covering a
range of sectors.
Since leaving Oriel Securities Limited, Scott has held a number of directorships of AIM-quoted
companies operating within the natural resources sector in both CEO, CFO and Non-Executive Director
roles and specialises in restructuring and turning around companies in difficulty.
Ed Shaw, Non-Executive Director
Ed started his career 25 years ago at Citibank having studied Chemistry at the University of Bristol. Ed
was one of the founding partners of Newpeak Capital LLP in 2007 and has a long history of trading
and more recently raising capital for companies in the mining sector including microcap resource
stocks, the area of the market in which POW is currently positioned.
Ed complements the existing team and helps strengthen the Board particularly by adding weight to the
Company’s financing strategy, a key element of business management for listed microcaps.
Owain Morton, Non-Executive Director
Owain holds a Masters and Bachelor in Mining Engineering along with Mineral Surveying & Resource
Management from Camborne School of Mines.
Owain is an experienced mining and minerals professional leading and managing teams in mining
operations, exploration, engineering, technology and innovation as well as evaluations and supporting
capital raising. He has worked at management level for some of the world’s largest mining and metals
companies, traders and engineering houses including; Barrick, ArcelorMittal, Glencore and TetraTech.
Owain has previously held board positions for ArcelorMittal subsidiaries in Bosnia, Algeria
and South Africa.
Page 17
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
The Directors present their report together with the audited consolidated financial statements of Power
Metal Resources PLC (the “Company”), together with its subsidiaries (the “Group”):
its 83.13% owned subsidiary, Golden Metal Resources PLC (“GMT”);
its 83.13% owned indirect subsidiary, Golden Metal Resources LLC (“GMR LLC”);
its 83.13% owned indirect subsidiary, Pilot Metals Inc. (“PMI”);
its 83.13% owned indirect subsidiary, BFM Resources Inc. (“BFMR”)
its 62.12% owned subsidiary, First Development Resources PLC (“FDR”);
its 62.12% owned indirect subsidiary, First Development Resources Pty Ltd (“FDR Pty”);
its 62.12% owned indirect subsidiary, Pardoo Resources Pty Ltd (“Pardoo”);
its 62.12% owned indirect subsidiary, RH Resources Pty Ltd (“RH Pty”);
its 62.12% owned indirect subsidiary, URE Metals Pty Ltd (“URE”);
its 100% owned subsidiary, Power Capital Investments Ltd (“PCI”);
its 100% owned subsidiary, Tati Greenstone Resources Pty Ltd (“TGR”);
its 100% owned subsidiary, Power Metal Resources Botswana Pty Ltd (“PMRB”);
its 100% owned subsidiary, Power Metal Resources Australia Pty Ltd (“PMRA”);
its 100% owned subsidiary, Power Metal Resources Canada Inc (“PMRC”);
its 100% owned indirect subsidiary, 102134984 Saskatchewan Ltd (“SASK”);
the 70% owned Power Metal Resources SA (formerly ABM Kobald SAS), (“PMRSA”);
its 100% owned subsidiary, Regent Resources Interests Corporation (“RRIC”);
its 100% owned subsidiary, Cobalt Blue Holdings Inc (“CBH”); and
its 100% owned subsidiary, African Battery Metals Ltd (“ABM").
The Group’s focus is metals exploration and development with a focus currently on precious metals
exploration in North America and Australia together with base and strategic metals exploration in
Africa.
Results
The Group reports a total comprehensive loss of £137k (2021: loss of £622k).
Major events after the reporting date
For information regarding events after the reporting date, see note 28 to the financial statements.
Dividends
The Directors do not recommend the payment of a dividend for the year ended 30 September 2022
(2021: £nil).
Financial risk management
The Group’s operations are exposed to a variety of financial risks, and these are detailed in note 24 to
these financial statements.
Political donations
There were no political donations during the year ended 30 September 2022 (2021: £nil).
Bribery legislation
The Directors have adopted appropriate procedures to ensure compliance with the Bribery Act 2010.
Page 18
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Directors
The Directors of the Company who served during the year and since the reporting date are as follows:
P Johnson, Chief Executive Officer
S Richardson Brown, Interim Non-executive Chairman
E Shaw, Non-executive Director
O Morton, Non-executive Director (appointed 10 October 2022)
Directors’ interests
The beneficial interests of the Directors holding office at the end of 30 September 2022 in the issued
share capital of the Company as of 30 September 2022 were as follows:
Percentage of issued
ordinary share
capital
4.71
P Johnson*
-
S Richardson Brown
E Shaw
0.87
* Includes 7,000,000 ordinary shares held by his wife, Michelle Johnson, and 59,500,000 held by Value Generation Ltd, a company
beneficially owned by Paul Johnson
Number of ordinary
shares of 0.1p each
76,000,000
-
14,000,000
Details of share options and warrants granted to Directors are disclosed in note 22 to the financial
statements.
Directors’ remuneration and service contracts
Details of Directors’ emoluments including share-based payments are disclosed in note 8 to the
financial statements.
A Bell
(Resigned 30.9.21)
P Johnson
S Richardson Brown
E Shaw
Total
Salary/fees
£’000
-
Bonus
£’000
-
Total 2022
£’000
-
Total 2021
£’000
78
105
33
25
163
61
21
15
97
166
54
40
260
166
31
31
306
There were 7 employees other than the Directors during the year ended 30 September 2022.
Directors’ indemnities
The Group maintains directors’ and officers’ liability insurance providing appropriate cover for any
legal action brought against its Directors.
Going concern
The financial statements are prepared on a going concern basis. In assessing whether the going concern
assumption is appropriate, the Directors have taken into account all relevant available information
about the current and future position of the Group, including current level of resources and the
required level of spending on exploration and corporate activities. As part of their assessment, the
Directors have also considered the potential for continuing warrant exercises and the ability to raise
new funding whist maintaining an acceptable level of cash flows for the Group to meet all
commitments.
Page 19
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
The Directors have stress tested the Group’s cash projections, which involves preserving cash flows
and adopting a policy of minimal cash spending for a period of at least 12 months from the date of
approval of these financial statements. The Directors believe the measures they have available will
result in sufficient working capital and cash flows to continue in operational existence. Taking these
matters in consideration, the Directors continue to adopt the going concern basis of accounting in the
preparation of the financial statements.
The financial statements do not include the adjustments that would be required should the going
concern basis of preparation no longer be appropriate.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, and the financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial period. Under
that law the Directors have elected to prepare the financial statements in accordance with UK-adopted
international accounting standards and, as regards the Company financial statements, as applied in
accordance with the requirements of the Companies Act 2006. The financial statements are required by
law to give a true and fair view of the state of affairs of the Company and the Group and of the Group’s
results for that period.
select suitable accounting policies and then apply them consistently;
In preparing these financial statements, the Directors are required to:
make judgements and estimates that are reasonable and prudent;
state whether the financial statements comply with UK-adopted international accounting
standards in conformity with the Companies Act 2006; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the Group and Company to enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Statement of disclosure to auditor
So far as the Directors are aware:
all the Directors have taken the steps that they ought to have taken to make themselves aware of
any relevant audit information and to establish that the auditor is aware of that information.
there is no relevant audit information of which the Company’s auditor is unaware; and
Auditor
PKF Littlejohn LLP have expressed their willingness to continue in office and a resolution will be
proposed at the annual general meeting to reappoint PKF Littlejohn LLP as auditor for the next financial
year.
Page 20
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
By order of the Board
Paul Johnson, Chief Executive Officer
3 March 2023
Page 21
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
As Chairman of the Board of Directors of Power Metal Resources PLC (Power Metal), (Company),
(Group), it is my responsibility to ensure that the Company has both sound corporate governance and
an effective Board. As Chairman of the Company, my responsibilities include leading the Board
effectively, overseeing the Company’s corporate governance model, and ensuring that good
information flows freely between Executives and Non-Executives in a timely manner. The Chairman’s
principal responsibility is to ensure that the Company and its Board are acting in the best interests of
shareholders.
This report follows the structure of the Quoted Companies Alliance Corporate Governance (“QCA
Code”) guidelines and explains how we have applied the guidance. The Board considers that the Group
complies with the QCA Code so far as it is practicable having regard to the size, nature and current
stage of development of the Company, and areas of non-compliance are disclosed in the text below.
Further details of the Company’s compliance with the QCA Code can be found on the Company’s
Corporate Governance page on the website (https://www.powermetalresources.com/corporate-
governance), and any areas of non-compliance will be disclosed in the text below.
The Board understands that application of the QCA Code supports the Company’s medium to long-
term success whilst simultaneously managing risks and providing an underlying framework of
commitment and transparent communications with stakeholders.
QCA Principles
1. Establish a strategy and business model which promotes long-term value for shareholders
A description of the Company’s business model and strategy can be found on page 11, and the key
challenges in executing the Company’s strategy can be found on page 11 to 12.
2. Seek to understand and meet shareholder needs and expectations
Power Metal places a great deal of importance on communication with its stakeholders and is
committed to establishing constructive relationships with investors and potential investors in order to
assist it in developing an understanding of the views of its shareholders. The Company seeks to provide
effective communication through Interim and Annual Reports, along with Regulatory News Service
announcements on the Company’s website, www.powermetalresources.com and active engagement
including CEO interviews and Q&A sessions with a range of social and investor-oriented media. The
Company also has a News Archive section on the website, enabling investors to easily access a range
of archived reports and previous updates, as well as a Shareholder Circulars page which includes key
business and corporate governance updates. For the year under review, in order to improve
shareholder communications, the Board has provided regular updates to shareholders on the progress
of the Company’s projects through RNS announcements and on its website.
Power Metal is committed to maintaining a healthy dialogue between the Board and all of its
shareholders to enable shareholders to come to informed decisions about the Company. This is
achieved through formal meetings such as the AGM, which typically provides an opportunity to meet,
listen and present to shareholders, and shareholders are encouraged to attend. The Company is open
to receiving feedback from key stakeholders and will take action where appropriate. The key contact
for shareholder liaison is Paul Johnson, who meets with shareholders as and when requested.
Page 22
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Information on the Investors section of the Company’s website is kept up to date and contains details
of relevant developments, interviews, presentations and key reports.
The Company also engages the services of external media service providers who assist with Power
Metal's public and investor relations, ensuring information is accessible to stakeholders and released
in a timely and informative manner. These advisers also seek to encourage and facilitate shareholder
engagement.
3. Take into account wider stakeholder and social responsibilities and their implications for long-
term success
The Board recognises that the long-term success of the Group is reliant upon the efforts of employees
of the Group and its contractors, suppliers, regulators, and other stakeholders. The Board has put in
place a range of processes and systems to ensure that there is close oversight and contact with its key
resources and relationships.
Power Metal seeks to be a socially responsible Company which has a positive impact on the
communities in which it operates. No discrimination is tolerated and the Company endeavours to give
all employees the opportunity to develop their capabilities. Everyone within the Group is a valued
member of the team and our aim is to help every individual achieve their full potential. We offer equal
opportunities regardless of race, gender, gender identity or assignment, age, disability, religion, and
sexual orientation. The Group has close ongoing relationships with a broad range of its stakeholders
and provides them with the opportunity to raise issues and provide feedback to the Group.
Further details on the Company’s take on stakeholder and social responsibilities and their implications
for long-term success can be found in the Section 172 Statement in the Strategic Report on pages 11 to
16.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has overall responsibility for the establishment and oversight of the Group’s risk
management framework. The Group’s risk management policies are established to identify and analyse
the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks in a timely
manner. The Board ensures that corrective action is taken and that risks are identified as early as
practically possible, as well as being responsible for reviewing the effectiveness of internal financial
controls. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities. Although no system of internal financial control can provide
absolute assurance against material misstatement or loss, the Group’s systems are designed to provide
reasonable assurance that problems are identified on a timely basis and dealt with appropriately. In
addition, members of the Board attend industry conferences and seminars to keep abreast of sector
risks and industry changes.
The Audit Committee (as well as the Board as a whole) reviews reports from the Company’s auditors
relating to the internal control systems in use throughout the Group in order to determine the adequacy
and efficiency of internal control and risk management systems. An internal audit function is not yet
considered necessary as day to day control is sufficiently exercised by the Company’s Executive
Directors. However, the Board will continue to monitor the need for an internal audit function.
Page 23
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board currently comprises one Executive Director, Paul Johnson and three Non-Executive
Directors, Scott Richardson Brown, Ed Shaw, and Owain Morton (appointed 10 October 2022). Scott
Richardson Brown is acting as interim Chairman.
Ed Shaw is employed by the Company’s joint broker, First Equity, and, as such, the Company does not
consider him to be an Independent Non Executive Director in accordance with the QCA code. Scott
Richardson Brown and Owain Morton are considered to be Independent Non Executive Directors. Scott
Richardson Brown has an interest in 11,000,000 options and Owain Morton has an interest in 5,000,000
options which were granted to him as part of his appointment as a Non Executive Director to the
Company. Neither Mr Richardson Brown, Mr Morton or the Company believe that their interests are
significant in assessing their respective independence.
The Board comprises the interim Independent Non-Executive Chairman, Scott Richardson Brown, the
CEO, Paul Johnson, Ed Shaw, the Non Executive Director and Owain Morton, the independent Non-
Executive Director. The Directors are satisfied that the Company's Board composition is appropriate
given the Company's size and stage of development. The Board will keep this matter under regular
review and to the extent, additional independence is felt to be required on the Board, it shall be sought.
The Board further believes that the skillsets of the interim Non Executive Chairman and Non-Executive
Director are appropriate and beneficial for all shareholders and stakeholders and that they offer key
expertise to the Executive Director that are advantageous for the Company as a whole. Furthermore,
the Board maintains that its composition will be frequently reviewed as the Company develops.
Mr Paul Johnson worked for 329 days per year. Mr Scott Richardson Brown and Mr Ed Shaw worked
for not less than 24 days per year.
During the financial year there were 7 routine Board Meetings and 17 non-routine Board Meetings, and
the attendance of each director is outlined below:
Director
Paul Johnson
Scott Richardson Brown
Ed Shaw
Routine Board Meetings
7
7
7
Non-Routine Board Meetings
17
17
17
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Company’s Board includes Directors from a range of industries including the accounting and
finance, and natural resources sectors. The Company believes that the current balance of skills in the
Board as a whole reflects a very broad range of personal, commercial, and professional capabilities,
providing the ability to deliver the Company’s strategy for the benefit of shareholders over the medium
and long-term. Directors are encouraged to maintain up-to-date skillsets by attending training,
conferences and networking events. Biographical details of the Directors can be found on page 17.
Page 24
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
ONE Advisory Limited has been contracted by the Company to act as Power Metal’s Company
Secretary and has been given the responsibility for ensuring that Board procedures are followed and
that the Company complies with all applicable rules, regulations and obligations governing its
operation, including assistance with Board and shareholder meetings and Market Abuse Regulations
(“MAR”) compliance. ONE Advisory Limited also supports the Board in its development of the
Company’s corporate governance responsibilities, assisting with the Company’s application of the
QCA Code and in relation to AIM Rule 26 disclosures.
The Company’s Nominated Adviser is consulted on all matters. The Company took advice on general
corporate PLC management, potential & actual acquisitions, changes to board composition and
business strategy.
All Directors have access to independent professional advice, if required.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous
improvement
The Directors consider that the Company and Board are not yet of a sufficient size for a full Board
evaluation to make commercial and practical sense. Therefore, the Board accepts that the Company
does not comply with this aspect of the QCA Code, although in frequent Board meetings/calls, the
Directors can discuss any areas where they feel a change would be beneficial for the Company, and the
Company Secretary remains on hand to provide impartial advice. As the Company grows, it intends to
expand the Board and, with expansion, re-consider the need for a formal Board evaluation.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of
the Company as a whole and that this will impact the performance of the Company. The Board is aware
that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole.
The corporate governance arrangements that the Board has adopted are designed to ensure that the
Company delivers long-term value to its shareholders, and that shareholders have the opportunity to
express their views and expectations for the Company in a manner that encourages open dialogue with
the Board. The Board also ensures that communities within the regions that the Company operates
within continue to be supported, being cognisant of the Company’s pledge to Corporate Social
Responsibility.
A large part of the Company’s activities is centred upon an open and respectful dialogue with
shareholders, contractors, regulators and other stakeholders. Therefore, the importance of sound
ethical values and behaviours is crucial to the ability of the Company to successfully achieve its
corporate objectives. The Board places great importance on this aspect of corporate life and seeks to
ensure that this flows through all that the Company does. The Directors consider that at present the
Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive
and constructive challenge.
9. Maintain governance structures and processes that are fit for purpose and support good
decision-making by the Board
Page 25
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
The Board delegates authority to two Committees to assist in meeting its business objectives whilst
ensuring a sound system of internal control and risk management. The Committees meet
independently of Board meetings.
Audit Committee
The Audit Committee comprises Scott Richardson Brown and Ed Shaw and is chaired by Scott
Richardson Brown. The Audit Committee is responsible for ensuring that the financial performance,
position, and prospects of the Group are properly monitored and reported on and for meeting with the
auditor and reviewing audit reports relating to the Company’s accounts. The Audit Committee is
required to report formally to the Board on its proceedings after each meeting on all matters for which
it has responsibility. The audit committee met once during the year under review.
Remuneration Committee
The Remuneration Committee comprises Scott Richardson Brown and Edmund Shaw, and is chaired
by Scott Richardson Brown, a qualified chartered accountant. The Committee is responsible for the
review and recommendation of the scale and structure of remuneration for senior management,
including any bonus arrangements or the award of share options with due regard to the interests of
shareholders and the performance of the Company.
The Board notes that additional information supplied by the Audit Committee and by the
Remuneration Committee has been disseminated across the whole of this Annual Report, rather than
included as separate Committee Reports.
Major events after the reporting date
For information regarding events after the reporting date, see note 28 to the financial statements.
10. Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board is committed to maintaining effective communication and having constructive dialogue with
its shareholders and other relevant stakeholders. The Company intends to have ongoing relationships
with both its private and institutional shareholders (through meetings and presentations), and for them
to have the opportunity to discuss issues and provide feedback at meetings with the Company.
In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting, where
possible. The Board discloses the result of general meetings by way of announcement and additionally
discloses the results of proxy votes during the meetings and subsequently on the website. The proxy
results of the 2022 Annual General Meeting can be found on the Company’s Corporate Governance
webpage. The Board maintains that, if there is a resolution passed at an AGM with 20% votes against,
the Company will seek to understand the reason for the result and, where appropriate, take suitable
action.
The latest Corporate Documents can be found on the Company’s website. Information on the Investors
section of the Group’s website is kept updated and contains details of relevant developments,
interviews, presentations, and other key information.
Scott Richardson Brown, Interim Non-Executive Chairman
3 March 2023
Page 26
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
Opinion
We have audited the financial statements of Power Metal Resources Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 30 September 2022 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Company Statements of Financial Position,
the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company
Statements of Cash Flows and notes to the financial statements, including significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable law
and UK-adopted international accounting standards and as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 September 2022 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards and as applied in accordance with the provisions
of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the group’s and parent company’s ability to continue to adopt the going
concern basis of accounting included:
Challenging the directors’ forecasts prepared to assess the group’s and parent company’s
ability to meet its financial obligations as they fall due for a period of at least twelve months
from the date of approval of the financial statements. We have reviewed the consistency of
committed cash flows against contractual arrangements and historic information and
compared general overheads to current run rates;
Page 27
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
Identifying and evaluating subsequent events which impact upon going concern, including
the recent equity fund raise, and evaluating the likelihood of occurrence of other forecast
future cash inflows; and
Stress testing the forecasted cash flows by eliminating sources of income that are not
currently guaranteed, as well as critically reviewing committed versus non committed
expenditure, in order to evaluate reasonably possible downside scenarios impacting the
headroom.
Based on the work we have performed, we have not identified any material uncertainties related to
events or conditions that, individually or collectively, may cast significant doubt on the group’s or
parent company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
Our application of materiality
We apply the concept of materiality in both planning and performing the audit, and in evaluating the
effect of misstatements. At the planning stage, materiality is used to determine the financial statements
areas that are included within the scope of the audit and the extent of the sample sizes during the audit.
The materiality applied to the group financial statements was £242,000 (2021: £127,000), based on 2% of
gross assets, as it is from these assets that the group seeks to deliver returns for shareholders, in
particular the value of exploration and development projects the group is interested in and the
recoverability of financial assets. A separate materiality was set for the group statement of
comprehensive income items to obtain sufficient coverage from testing of expenditure in the year. The
materiality applied was £136,000 (2021: £27,000), based on 5% of the loss for the year adjusted for non-
recurring items.
Materiality for the parent company has been set at £213,000 (2021: £126,500) based on 2% of gross assets,
with a separate materiality for the statement of comprehensive income of £103,000 (2021: £26,500),
based on 5% of the loss for the year adjusted for non-recurring items.
Performance materiality for the group and parent company has been set at 70% (2021: 70%) of overall
materiality, and the threshold for which we communicate errors to management has been set at 5% of
overall materiality. We also agreed to report any other audit misstatements below that threshold that
we believe warranted reporting on qualitative grounds. We set performance materiality based upon
the required coverage from testing key items and the absence of audit adjustments in prior periods.
Materiality has been reassessed at the closing stages of the audit, taking into consideration new
information which arose. No alterations were made to materiality either during or at the conclusion of
the audit.
Our approach to the audit
In designing our audit, we looked at areas which deemed to involve significant judgement and
estimation by the directors, such as the key audit matters surrounding the carrying value of intangible
assets, and the classification and valuation of investment and financial assets balances. The remaining
significant judgemental area surrounded the valuation of share-based payments. We also addressed
Page 28
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
the risk of management override of controls, including consideration of whether there was evidence of
bias that represented a risk of material misstatement due to fraud.
Work on all significant components of the group has been performed by us as group auditor.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
Key Audit Matter
How our scope addressed this matter
Carrying value of intangible exploration and
evaluation assets (Note 10)
The group holds material intangible assets
relating to capitalised costs in respect of
mineral exploration projects.
The directors consider each asset to assess
whether there are indicators of impairment by
considering the potential resources available
from exploration and evaluation work
undertaken, together with the availability of
finance to further evaluate the exploration
rights.
There is a risk that impairment indicators exist
which would result in an impairment of the
year end intangible assets balance.
Our work in this area included:
Holding discussions with management and
evaluating the development of the projects
during the year, and subsequent to the year
end, for evidence of impairment indicators
in accordance with IFRS 6 Exploration for
and Evaluation of Mineral Resources;
Obtaining and reviewing applicable
correspondence and license agreements to
ensure transactions are accounted for in
accordance with the terms therein;
Confirming good title to the projects exists
as at the year-end;
Performing substantive tests of detail on
intangible additions during the year and
confirming their eligibility for capitalisation;
Evaluating, and providing challenge to,
management’s impairment assessment; and
Reviewing the disclosures in the financial
statements, including those relating to
estimates and judgements used, and
evaluate their completeness.
Page 29
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
Classification and valuation of investments (in
subsidiaries, associates, joint ventures, and
other financial assets) (Notes 11, 12, 13, 14 and
15)
Investments in subsidiaries and receivables
from group undertakings (parent company
only), as well as joint ventures, associates and
equity investments as financial assets (group &
parent company), are the most significant
balances in the financial statements.
Instruments,
There is a risk that the requirements of IAS 28
Investments in Associates and Joint Ventures,
IFRS 9 Financial
IFRS 10
Consolidated Financial Statements and IFRS 11
Joint Arrangements have not been applied
correctly, and that investment balances have
been inappropriately classified and recorded in
the financial statements.
Given the early-stage exploration activities in
these entities, existence of losses and potential
delays in advancing developments at the
the
underlying projects depending on
availability of funding to meet minimum
expenditure and earn-in commitments, there is
a risk that the investment balances are not fully
recoverable.
In addition to the above, there are material
assets classified as held for sale at the year end.
There is a risk that the requirements of IFRS 5
Non-current Assets Held
for Sale and
Discontinued Operations have not been met in
terms
and
of
disclosure.
classification,
valuation
Our work in this area included:
Confirmation of ownership and good title of
all investments;
For financial assets, reviewing accounting
entries made during the year and at year
end in respect of fair value movements and
vouching to supporting documentation;
Considering the criteria within IAS 28
Investments in Associates and Joint
Ventures and determine if the accounting
treatment of the JV entities is in accordance
with the standard, including corroboration
to relevant supporting documentation or
correspondence. Considering ownership
percentage, as well as any indications of
significant influence, control, or joint
control;
Considering the classification criteria within
IFRS 5 Non-Current Assets Held for Sale
and Discontinued Operations and
concluding as to whether the accounting
treatment is appropriate at the year end,
based on conditions existing at the balance
sheet date;
Considering whether the assets classified as
held for sale are held at an appropriate
carrying value at year end in accordance
with IFRS 5, being the lower of fair value
less costs to sell and carrying amount;
Considering the recoverability of
investments and intercompany loans by
reference to underlying net asset values,
including the recoverability potential of the
underlying exploration projects by reference
to IFRS 6;
Obtaining and reviewing board impairment
papers in respect of investments, providing
appropriate challenge, and obtaining
corroboration for any key assumptions
made; and
Reviewing disclosures made in the financial
statements in accordance with IFRS 5, IAS
28 and IFRS 9 and ensuring these are
Page 30
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
complete and in accordance with the
applicable standards.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the group and parent company financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of directors’ responsibilities, the directors are responsible for
the preparation of the group and parent company financial statements and for being satisfied that they
Page 31
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
give a true and fair view, and for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the group and parent company financial statements, the directors are responsible for
assessing the group and the parent company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they
operate to identify laws and regulations that could reasonably be expected to have a direct
effect on the financial statements. We obtained our understanding in this regard through
discussions with management and our experience of the resource exploration sector.
We determined the principal laws and regulations relevant to the group and parent company
in this regard to be those arising from:
o Companies Act 2006;
o AIM Rules;
o Local tax and employment law; and
o Local environmental and mining regulations.
We designed our audit procedures to ensure the audit team considered whether there were
any indications of non-compliance by the group and parent company with those laws and
regulations. These procedures included, but were not limited to:
o Enquiries of management;
o Review of Board minutes;
o Review of legal expenses; and
o Review of RNS announcements.
We also identified the risks of material misstatement of the financial statements due to fraud.
We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that the estimates, judgements and assumptions applied by
management in the assessment of impairment of intangible assets and investment balances
gave the greatest potential for management bias.
Page 32
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
We addressed the risk of fraud arising from management override of controls by performing
audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud
rather than error, as fraud involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
David Thompson (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
3 March 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
Page 33
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Revenue
Gross profit
Operating expenses
Impairment
Fair value gains through profit or loss
Loss from operating activities
Share of post-tax losses of equity accounted joint ventures
Loss before tax
Taxation
Loss for the year from continuing operations
Other comprehensive income
Items that will or may be reclassified to profit or loss;
Exchange translation
Items that will not be reclassified to profit or loss
Capital contribution
Total other comprehensive (expense)/income
Note
6
10
15
12
9
20
2022
£’000
37
37
(3,127)
-
309
(2,781)
(167)
(2,948)
-
(2,948)
18
2,793
2,811
2021
£’000
37
37
(847)
(156)
445
(521)
(102)
(623)
-
(623)
1
-
1
Total comprehensive loss for the year
(137)
(622)
Loss for the period attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss attributable to:
Owners of the parent
Non-controlling interests
(2,256)
(692)
(2,948)
82
(219)
(137)
(592)
(31)
(623)
(591)
(31)
(622)
Earnings per share from continuing operations attributable to
the ordinary equity holder of the parent:
Basic and diluted loss per share (pence)
21
(0.15)
(0.05)
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 34
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
30 September
2022
£’000
30 September
2021
£’000
Note
Assets
Intangible assets
Investments in associates and joint ventures
Financial assets at fair value through
profit or loss
Property, plant and equipment
Non-current assets
Financial assets at fair value through
profit or loss
Trade and other receivables
Cash and cash equivalents
Current assets
Assets classified as held for sale
Total assets
Equity
Share capital
Share premium
Capital redemption reserve
Capital contribution reserve
Share based payment reserve
Exchange reserve
Accumulated losses
Total
Non-controlling interests
Total equity
Liabilities
Trade and other payables
Current liabilities
Total liabilities
10
12
15
15
16
17
14
19
19
20
22
18
23
7,138
402
1,620
33
9,193
2,384
346
1,560
4,290
1,124
14,607
8,065
23,312
5
2,322
1,638
90
(23,740)
11,692
2,065
13,757
850
850
850
800
166
3,527
2
4,495
179
175
1,281
1,635
153
6,283
7,705
18,437
5
-
1,541
72
(21,488)
6,272
(306)
5,966
317
317
317
Total equity and liabilities
14,607
6,283
The financial statements of Power Metal Resources PLC, company number 07800337, were approved
by the board of Directors and authorised for issue on 3 March 2023. They were signed on its behalf by:
Paul Johnson, Chief Executive Officer
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 35
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P
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 SEPTEMBER 2022
Cash flows used in operating activities
Loss for the year from continuing activities
Adjustments for:
Fair value adjustments
Share of post-tax losses of equity accounted joint
ventures
Impairment
Disposals of financial assets
Share-based payment expense
Foreign exchange differences
Changes in working capital:
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Purchase of intangibles
Purchase of financial assets at fair value through
profit or loss
Investment in joint ventures
Proceeds from investment disposals
Purchase of property, plant, and equipment
Net cash outflows from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Shares issued to non-controlling interests by
subsidiaries
Issue costs
Net cash inflows from financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at 30 September
2022
£’000
(2,948)
(309)
167
-
245
101
11
(2,733)
(250)
477
(2,506)
(1,530)
(426)
(188)
-
(32)
(2,176)
3,211
1,875
(125)
4,961
279
1,281
1,560
2021
£’000
(623)
(445)
102
156
-
270
1
(539)
(181)
156
(564)
(528)
(2,184)
(256)
261
(2)
(2,709)
3,679
-
(38)
3,641
368
913
1,281
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 40
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
AS AT 30 SEPTEMBER 2022
Significant non-cash transactions during the year
During the year ended 30 September 2022 a capital contribution and corresponding receivable balance
of £2,793k was recognised in respect of the value of loans from subsidiary undertakings as part of a
group reorganisation. See note 20 for further detail.
During the year, the Group acquired intangible assets, either directly or indirectly via subsidiary
undertakings and investments in subsidiaries, totalling £2,148k via the issue of ordinary shares.
Included in purchases of intangible assets, is £2,590k, relating to the issue of shares by Golden Metal
Resources Plc and First Development Resources Plc during the year, to non-controlling interests.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 41
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
Assets
Investments in subsidiaries
Investments in joint ventures
Investments in associates
Intangible assets
Financial assets at fair value through profit or loss
Property, plant and equipment
Non-current assets
Financial assets at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Current assets
Assets classified as held for sale
Total assets
Equity
Share capital
Share premium
Capital redemption reserve
Share based payment reserve
Accumulated losses
Total Equity
Liabilities
Trade and other payables
Current liabilities
Total liabilities
Note
11
12
12
10
15
15
16
17
14
19
19
22
23
2022
£’000
2,632
496
209
-
1,485
2
4,824
2,384
1,384
1,032
4,800
1,045
10,669
8,065
23,312
5
1,638
(22,868)
10,152
517
517
517
2021
£’000
-
301
-
428
3,334
2
4,065
179
780
1,251
2,210
153
6,428
7,705
18,438
5
1,541
(21,508)
6,181
247
247
247
Total equity and liabilities
10,669
6,428
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent Company
is not presented as part of these financial statements. The loss for the financial year dealt with in the
financial statements of the parent Company was £1,364,000 (2021: loss of £1,015,000).
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 42
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P
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Cash flows from operating activities
Loss for the year from continuing activities
Adjustments for:
Fair value adjustment
Impairment
Disposals and impairment
Share based payment expense
Expected credit losses
Changes in working capital:
Increase in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flows from investing activities
Investment in joint ventures
Investment in associates
Investment in subsidiaries
Investment in financial assets
Investment in intangible assets
Proceeds from investment disposals
Purchase of property, plant and equipment
Net cash outflows from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Issue costs
Net cash inflows from financing activities
(Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at 30 September
2022
£’000
(1,363)
(309)
-
1,033
101
(756)
(1,294)
(1,193)
263
(2,224)
(188)
(209)
(484)
(200)
-
-
-
(1,081)
3,211
(125)
3,086
(219)
1,251
1,032
2021
£’000
(1,015)
(445)
156
-
270
-
(1,034)
(181)
58
(1,157)
(257)
-
-
(1,991)
(156)
261
(2)
(2,145)
3,678
(38)
3,640
338
913
1,251
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 45
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Reporting entity
1.
Power Metal Resources PLC is a public company limited by shares which is incorporated and domiciled
in England and Wales. The address of the Company’s registered office is 201 Temple Chambers, 3-7
Temple Avenue, London EC4Y 0DT. The consolidated financial statements of the Company as at and
for the year ended 30 September 2022 include the Company and its subsidiaries. The Group is primarily
involved in the exploration and exploitation of mineral resources in Africa, Australia, Canada and the
US.
Going concern
2.
The financial statements are prepared on a going concern basis. In assessing whether the going concern
assumption is appropriate, the Directors have considered all relevant available information about the
current and future position of the Group, including current level of resources, additional funding raised
during the year and post-year-end, and the required level of spending on exploration and drilling
activities. As part of their assessment, the Directors have also taken into account the ability to raise new
funding whist maintaining an acceptable level of cash flows for the Group to meet all commitments.
The Directors have stress tested the Group’s cash projections, which involves preserving cash flows
and adopting a policy of minimal cash spending for a period of at least 12 months from the date of
approval of these financial statements. The Directors believe the measures they have put in place will
result in sufficient working capital and cash flows to continue in operational existence, assuming that
all exploration and drilling activities are managed carefully and curtailed if necessary. For the Group
to carry out the desired levels of exploration and drilling activities, the Directors believe that it needs
to secure further funding either from a strategic partner or subsequent equity raisings in the next
financial year, which the Group has succeeded in completing over recent years. The Group has the
ability to partially dispose of equity investments if required. Taking these matters in consideration, the
Directors continue to adopt the going concern basis of accounting in the preparation of the financial
statements.
The financial statements do not include the adjustments that would be required should the going
concern basis of preparation no longer be appropriate.
3.
Basis of preparation
Statement of compliance
(a)
The consolidated financial statements have been prepared in accordance with UK-adopted
international accounting standards and as regards the Company financial statements, as applied in
accordance with the requirements of the Companies Act 2006. The financial statements are prepared
on the historical cost basis or the fair value basis where the fair value of relevant assets or liabilities has
been applied, which applies to all listed investments held by the Group and company.
(b)
(i) New and amended standards, and interpretations issued and effective for the financial
year beginning 1 October 2021
There were no new standards, amendments or interpretations effective for the first time for periods
beginning on or after 1 October 2021 that had a material effect on the Group or Company financial
statements.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 46
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
(ii) New standards, amendments and interpretations in issue but not yet effective
At the date of approval of these financial statements, the following standards and interpretations which
have not been applied in these financial statements were in issue but not yet effective:
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as
Current or Non-current and Amendments to IAS 1: Classification of Liabilities as Current or
Non-current – Deferral of Effective Date – effective 1 January 2023*
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting Policies – effective 1 January 2023*
Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors –
Definition of Accounting Estimates – effective 1 January 2023*
Amendments to IAS 12 Deferred Tax Related to Assets and Liabilities arising from a Single
Transaction - effective 1 January 2023*
*Not yet endorsed in the UK
The Directors do not expect that the adoption of these standards will have a material impact on the
financial information of the group or company in future periods.
Functional and presentation currency
(c)
These consolidated financial statements are presented in Pounds Sterling, which is the Company’s
functional and presentation currency. All financial information presented has been rounded to the
nearest thousand pounds, except where otherwise indicated.
Use of estimates and judgements
(d)
The preparation of the consolidated financial statements in conformity with IFRS requires management
to make judgements, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the year in which the estimates are revised and in any future years affected.
The estimates and assumptions that have the most significant effect on the amounts recognised in the
consolidated financial statements and/or have a significant risk of resulting in a material adjustment
within the next financial year are as follows:
Group
Carrying value of intangible assets
In arriving at the carrying value of intangible assets, the Group determines the need for impairment
based on the level of geological knowledge and confidence of the mineral resources. Such decisions are
taken on the basis of the exploration and research work carried out in the period utilising expert reports.
– Notes 4(g)(ii)
Classification of investments
The Group determines the classification of investment in associates based on whether significant
influence is held in the entity. The existence of significant influence is evidenced in the following ways:
- Note 4 (a) (ii)
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 47
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Board of directors’ representation,
Management personnel swapping or sharing,
Material transactions with the investee,
Policy-making participation,
Technical information exchanges.
If there is no evidence of any of the above, the Group determines that investments held are classified
as financial assets.
Fair value measurement
All assets and liabilities for which fair value is measured and disclosed in the financial statements are
categorised within the fair value hierarchy (see note 4 (c) (ii).
- Note 4 (c)
For investments which are unlisted, the Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximising the use of
relevant observable inputs and minimising the use of unobservable inputs.
Classification of Joint Arrangements - Note 12
The Group determines whether it holds a joint arrangement if the parties to the joint arrangement are
bound by a contract and the contract gives two or more of those parties joint control of the
arrangement.
Once a joint arrangement has been identified, the Group class the arrangement as a joint operation if
the parties that have joint control of the arrangement have rights to the assets and obligations for the
liabilities relating to the arrangement.
The Group recognises the following in its financial statements in respect of a joint operation:
Its assets, including its share of jointly held assets,
Its liabilities, including its share of jointly incurred liabilities,
Its revenue from the sale of its share of output arising from the joint operation,
Its share of revenue from the sale of the output by the joint operation, and
Its expenses, including its share of any expenses incurred jointly.
A joint arrangement is classified as a joint venture if the arrangement is structured through a separate
vehicle. The Group accounts for its interest in a joint venture using the equity method.
Non-current assets held for sale - Note 14
As at 30 September 2022, the Group classified the assets and liabilities of its joint operation, Kanye
Resources Pty Ltd as a non-current asset held for sale, following an announcement by the Company
and its joint operation partner, Kavango Resources Plc (“Kavango”), stating an agreement had been
signed whereby Kavango would purchase Power’s shareholding following certain obligations, such as
the publication of a prospectus by Kavango by 31 October 2022. Based on these terms, the criteria within
IFRS 5 (listed below) were considered to be met at 30 September 2022.
The asset is available for immediate sale,
An active programme to locate a buyer is initiated,
The sale is highly probable, within 12 months of classification,
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 48
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
The asset is being actively marketed; and
Actions require to complete the plan indicate that it is unlikely the plan will be significantly
changed or withdrawn.
As required by IFRS 5, when the asset is initially classified as held for sale, the carrying amount of the
asset is measured at its fair value, to determine if any further write-downs are required, and is
recognised as a separate line on the statement of financial position. After classification, the asset is
measured at the lower of carrying amount and fair value less costs to sell. Impairment is considered
both at the time of classification and subsequent measurement by the directors. Management did not
consider an impairment adjustment was required at the year end.
Parent
Receivables from Group undertakings
The Parent Company in applying the expected credit loss (ECL) model under IFRS 9 must make
assumptions when implementing the forward-looking ECL model. This model is required to be used
to assess the intercompany loans receivable from subsidiaries for impairment.
– Note 16
Estimations were made regarding the credit risk of the counterparty and the underlying probability of
default in each of the credit loss scenarios. The scenarios identified by management included
Production, Divestment, Fire-sale and Failure. These scenarios considered technical data, necessary
licences to be awarded, the Company’s ability to raise finance, and ability to sell the project. The
directors make judgements on the expected likelihood and outcome of each of the above scenarios, and
these expected values are applied to the loan balances.
Significant accounting policies
4.
The accounting policies set out below have been applied consistently throughout the year presented in
these consolidated financial statements and have been applied consistently by Group entities.
Basis of consolidation
(a)
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company made up to 30 September each year.
Business combinations
On acquisition, the assets and liabilities of a subsidiary are measured at their fair value at the date of
acquisition. Any excess of the cost of the acquisition over the fair values of the identifiable net assets
acquired is recognised as goodwill. If the aggregate of the acquisition-date fair value of the
consideration transferred and the amount recognised for the non-controlling interest (and where the
business combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously
held equity interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent
liabilities and the fair value of any pre-existing interest held in the business acquired, the difference is
recognised in profit and loss.
Subsidiaries and acquisitions
(i)
Business combinations are accounted for using the acquisition method as at the acquisition date – i.e.,
when control is transferred to the Group. Control is when the investor has power over the investee,
exposure or rights, to variable returns from its involvements with the investee, and the ability to use its
power over the investee to affect the amount of the investor’s returns.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 49
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
The results of subsidiaries acquired or disposed of during the year are included in the statement of
comprehensive income from the effective date of acquisition, or up to the effective date of disposal, as
appropriate.
Non-controlling interests in subsidiaries are presented separately from the equity attributable to equity
owners of the parent Company. When changes in ownership in a subsidiary do not result in a loss of
control, the non-controlling shareholders’ interests are initially measured at the non-controlling
interests’ proportionate share of the subsidiaries net assets. Subsequent to this, the carrying amount of
non-controlling interests is the amount of those interests at initial recognition plus the non-controlling
interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-
controlling interests even if this results in the non-controlling interests having a deficit balance.
Equity accounted investees
(ii)
Associates
Associates are entities over which the Group has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but not the ability to
control or jointly control those policies. Investments in associates are accounted for using the equity
method of accounting.
Joint Arrangements
Joint arrangements are where parties are bound by a contractual arrangement and that arrangement
gives two or more of those parties joint control of the arrangement. Joint arrangements are accounted
for using the equity method of accounting.
The group classifies its interests in joint arrangements as either:
-
-
Joint ventures: where the group has rights to only the net assets of the joint arrangement
Joint operations: where the group has both the rights to assets and obligations for the liabilities
of the joint arrangement.
In assessing the classification of interests in joint arrangements, the Group considers:
- The structure of the joint arrangement
- The legal form of joint arrangements structured through a separate vehicle
- The contractual terms of the joint arrangement agreement
- Any other facts and circumstances (including any other contractual arrangements).
The Group accounts for its interests in joint operations by recognising its share of assets, liabilities,
revenues and expenses in accordance with its contractually conferred rights and obligations. In
accordance with IFRS 11 Joint Arrangements, the Group is required to apply all the principles of IFRS
3 Business Combinations when it acquires an interest in a joint operation that constitutes a business as
defined by IFRS 3.
Equity method of accounting
Under the equity method of accounting, interests in associates and joint arrangements are initially
recognised at cost. The Group’s share of associates and joint arrangements post-acquisition profit / loss
after tax and other comprehensive income/ loss are presented as the ‘Share of results of Equity
accounted investees’ in the Group income statement and Group Statement of other comprehensive
income respectively. The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment less any impairment in value. Where indicators of impairment arise, the
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 50
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
carrying amount of the associate is tested for impairment by comparing its recoverable amount against
its carrying value. Unrealised gains arising from transactions with associates are eliminated to the
extent of the Group’s interest in the entity. Unrealised losses are similarly eliminated to the extent that
they do not provide evidence of impairment of a transferred asset. When the Group’s share of losses in
an associate or joint arrangement equal or exceeds its interest in the associate, the Group does not
recognise further losses unless the Group has incurred obligations or made payments on behalf of the
entity. When the Group ceases to have or significant influence, any retained interest in the entity is re-
measured to its fair value at the date when or significant influence is lost with the change in carrying
amount recognised in the income statement. The Group also reclassifies any movements previously
recognised in other comprehensive income to the income statement.
Transactions eliminated on consolidation
(iii)
Intra-group balances and transactions, and any income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
(b)
Foreign currency
Foreign currency transactions
(i)
Transactions in foreign currencies are translated to the respective functional currencies of Group
entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated
in foreign currencies at the reporting date are retranslated to the functional currency at the exchange
rate at that date. The foreign currency gain or loss on monetary items is the difference between
amortised cost in the functional currency at the beginning of the period, adjusted for effective interest
and payments during the period, and the amortised cost in foreign currency translated at the exchange
rate at the end of the period.
Foreign currency differences arising on retranslation into an entity’s functional currency are recognised
in profit or loss.
Foreign operations
(ii)
The assets and liabilities of foreign operations are translated to pounds sterling at exchange rates at the
reporting date. The income and expenses of foreign operations are translated to pounds sterling at
exchange rates at the dates of the transactions, with differences recognised in other comprehensive
income.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither
planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items
are considered to form part of a net investment in the foreign operation and are recognised in other
comprehensive income and presented in the exchange reserve in equity.
(c)
Financial instruments
Financial assets
(i)
The Group classifies its financial assets into one of the categories discussed below, depending on the
purpose for which the asset was acquired. The Group’s accounting policy for each category is as
follows;
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 51
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Amortised cost
The Group's financial assets held at amortised cost comprise trade and other receivables and cash and
cash equivalents in the consolidated statement of financial position.
These assets are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. They arise principally through the provision of goods and services to
customers (e.g., trade receivables), but also incorporate other types of financial assets where the
objective is to hold their assets to collect contractual cash flows and the contractual cash flows are solely
payments of the principal and interest. They are initially recognised at fair value plus transaction costs
that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost
using the effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within
IFRS 9 using the lifetime ECLs. During this process the probability of the non-payment of the trade
receivables is assessed. This probability is then multiplied by the amount of the expected loss arising
from default to determine the lifetime ECL for the trade receivables. For trade receivables, which are
reported net, such provisions are recorded in a separate provision account with the loss being
recognised within administrative expenses in the consolidated statement of comprehensive income. On
confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is
written off against the associated provision.
Cash and cash equivalents comprise cash and cash at bank balances.
Fair value through profit or loss
Financial assets held at fair value through the profit or loss comprise equity investments held. These
are carried in the statement of financial position at fair value (refer to fair value hierarchy below).
Subsequent to initial recognition, changes in fair value are recognised in the statement of
comprehensive income.
Financial liabilities
(ii)
The Group’s financial liabilities include trade and other payables. All financial liabilities are recognised
initially at fair value, net of transaction costs incurred, and are subsequently stated at amortised cost,
using the effective interest method.
Unless otherwise indicated, the carrying values of the Group’s financial liabilities measured at
amortised cost represents a reasonable approximation of their fair values.
Fair value
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorised within the fair value hierarchy. The fair value hierarchy prioritises the inputs
to valuation techniques used to measure fair value. The Group uses the following hierarchy for
determining and disclosing the fair value of financial instruments and other assets and liabilities for
which the fair value was used:
-
-
-
level 1: quoted prices in active markets for identical assets or liabilities;
level 2: inputs other than quoted prices included in level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices); and
level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 52
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Contingent liabilities
(d)
Possible obligations depending on whether uncertain future events occur or present obligations where
payment is not probable and/or cannot be measured reliably, are not recognised in the financial
statements of the Group due to the uncertain nature of the instrument, instead, details of contingent
liabilities are disclosed in the notes to the financial statements.
Share capital
(e)
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax effects.
Capital contribution
(f)
Capital contribution relates to the assignment of receivables from subsidiary undertakings for which
no consideration is expected to be paid.
(g)
Intangible assets
Prospecting and exploration rights
(i)
Rights acquired with subsidiaries are recognised at fair value at the date of acquisition. Other rights
acquired and development expenditure are recognised at cost.
Exploration and evaluation costs arising following the application for the legal right, are capitalised on
a project-by-project basis, pending determination of the technical feasibility and commercial viability
of the project. When a project is deemed not feasible, related costs are expensed as incurred. Costs
incurred include any costs pertaining to technical and administrative overheads. Administration costs
that are not directly attributable to a specific exploration area are expensed as incurred, and
subsequently capitalised if it is reasonably certain that a resource will be defined.
Capitalised development expenditure will be measured at cost less accumulated amortisation and
impairment losses.
Impairment
(ii)
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be
recoverable an asset is reviewed for impairment. An asset’s carrying value is written down to its
estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if
that is less than the asset’s carrying amount.
Impairment reviews for deferred exploration and evaluation expenditure are carried out on a project-
by-project basis, with each project representing a potential single cash generating unit. An impairment
review is undertaken when indicators of impairment arise such as:
- unexpected geological occurrences that render the resource uneconomic;
-
-
-
title to the asset is compromised;
variations in mineral prices that render the project uneconomic;
substantive expenditure on further exploration and evaluation of mineral resources is neither
budgeted nor planned; and
the period for which the Group has the right to explore has expired and is not expected to be
renewed.
-
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 53
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Impairment losses are recognised in profit or loss. For all assets, an impairment loss is reversed only to
the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Employee benefits – share based payments
(h)
The grant date fair value of share-based payment awards granted to employees is recognised as an
employee expense, with a corresponding increase in equity, over the period that the employees become
unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market performance conditions are expected
to be met, such that the amount ultimately recognised as an expense is based on the number of awards
that meet the related service and non-market performance conditions at the vesting date. For share-
based payment awards with non-vesting conditions, the grant-date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for differences between expected
and actual outcomes.
Market vesting conditions are factored into the fair value of all options granted. If all other vesting
conditions are satisfied, a charge is made irrespective of whether market vesting conditions are
satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
Where terms and conditions of options are modified before they vest, the increase in the fair value of
the options, measured immediately before and after the modification, is also charged to the income
statement over the remaining vesting period.
Finance income and finance expense
(i)
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues
in profit or loss, using the effective interest method.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions
and impairment losses recognised on financial assets.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a
qualifying asset are recognised in profit or loss using the effective interest method.
(j) Taxation
Tax expense or credit comprises current and deferred tax. Current and deferred tax is recognised in
profit or loss except to the extent that it relates to a business combination, or items recognised directly
in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax
Deferred tax is recognised in respect of 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 notes on pages 46 to 89 are an integral part of these financial statements.
Page 54
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
-
-
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss; and
temporary differences related to investments in subsidiaries and jointly controlled entities to the
extent that it is probable that they will not reverse in the foreseeable future.
The measurement of deferred tax reflects the tax consequences that would follow the manner in which
the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when
they reverse, using tax rates enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity,
or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis, or
their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which
they 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.
Segmental information
(k)
An operating segment is defined as a component of an entity that engages in business activities from
which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the
entity’s chief operating decision maker and for which discrete financial information is available.
The Group disclose reportable segments which are regularly reviewed by the chief operating decision
maker, (the CEO) and revenues, expenses and non-current assets in relation to each reporting segment
are presented in note 5 to the financial statements.
(l) Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn;
- They are available for immediate sale;
- Management is committed to a plan to sell;
-
- An active programme to locate a buyer has been initiated;
- The asset or disposal group is being marketed at a reasonable price in relation to its fair value, and
- A sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:
- Their carrying amount immediately prior to being classified as held for sale in accordance with the
group's accounting policy; and
Fair value less costs of disposal.
-
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 55
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Following their classification as held for sale, non-current assets (including those in a disposal group)
are not depreciated. The results of operations disposed during the year are included in the consolidated
statement of comprehensive income up to the date of disposal.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal
group classified as held for sale are presented separately from other liabilities in the balance sheet.
Operating segments
5.
The Group has one single business segment which is the exploration of mineral resources and
exploration.
During the year, the Group’s exploration and development activities focussed on several geographical
areas, with support provided from the UK headquarters. The non-current assets held by each
geographical segment is detailed in the table below. None of the segments generated revenue during
the period.
2022
Intangible assets
Investments in Joint
Ventures
Investments in
Associates
Financial Assets at
fair value through
profit or loss
Non-current assets
held for sale
Property, plant &
Equipment
Total
2021
Intangible assets
Investments in Joint
Ventures
Financial Assets at
fair value through
profit or loss
Non-current assets
held for sale
Property, plant &
Equipment
Total
Australia
£’000
1,624
193
-
-
-
-
Botswana Canada Tanzania
£’000
-
£’000
359
£’000
291
UK
£’000
-
US
£’000
4,864
-
209
-
-
-
-
-
-
-
-
Total
£’000
7,138
193
209
679
472
234
159
76
1,620
-
-
-
-
-
-
1,124
33
-
-
1,124
33
1,817
1,247
763
234 1,316 4,940
10,317
Australia
£’000
-
Botswana Canada Tanzania
£’000
-
£’000
3
£’000
714
UK
£’000
-
US
£’000
83
Total
£’000
800
166
-
-
-
-
-
166
35
392
1,545
128
926
501
3,527
-
-
153
-
-
-
-
-
-
2
-
-
153
2
201
1,259
1,548
128
928
584
4,648
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 56
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
6.
Operating expenses
Operating expenses include:
Staff costs (note 7)
Foreign exchange loss
Share based payment expense
Loss on disposal
Auditor’s remuneration – audit services
2022
£’000
960
11
70
180
29
2021
£’000
686
14
249
770
27
Auditor’s remuneration in respect of the Company amounted to £29,000 (2021: £26,500).
7.
Staff costs
Social security contributions
Directors’ salary and fees (note 8)
Staff salaries
Share based payments
Pensions
Total
Group
2022
£’000
89
260
535
70
6
960
Company
2022
£’000
86
260
460
70
6
882
Group
2021
£’000
49
327
59
250
1
686
Company
2021
£’000
49
327
59
250
1
686
The monthly average number of employees (including Directors) during the period was:
Directors and staff
Total
8.
Directors’ emoluments
2022
Wages and salaries
Share-based payments
Total
2021
Wages and salaries
Total
Group
2022
8
8
Company
2022
10
10
Group
2021
5
5
Company
2021
5
5
Executive
£’000
166
-
166
Non-
executive
£‘000
94
2
96
Executive
£’000
265
Non-
executive
£‘000
62
265
62
Total
£‘000
260
2
262
Total
£‘000
327
327
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 57
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Emoluments disclosed above include the following amounts paid to the highest Director:
Emoluments for qualifying services
9.
Taxation
Reconciliation of tax (credit)/expense
Losses from operations
Tax using the Company’s effective domestic tax rate of 19% (2021:
19%)
Effects of:
Disallowable expenditure
Current losses with no recognisable deferred tax asset
2022
£’000
166
2021
£‘000
166
2022
£’000
(2,948)
2021
£’000
(623)
(560)
(118)
50
510
-
38
80
-
Factors that may affect future tax charges
At the year end, the UK Company had unused tax losses available for offset against suitable future
profits of approximately £5,282,021 (2021: £3,819,246). A deferred tax asset has not been recognised in
respect of such losses due to uncertainty of future profit streams. The main rate of UK corporation tax
during the year ended 30 September 2022 was 19.00 per cent (2021: 19.00 per cent).
10.
Intangible assets
Group
Cost
As at 30 September 2020
Reclassification from Investment in Joint Venture
Additions
Balance at 30 September 2021
As at 30 September 2021
Reclassification from financial assets
Reclassification to assets held for sale
Additions
Effect of foreign exchange
Balance at 30 September 2022
Prospecting and
exploration rights
£’000
1,126
273
527
1,926
1,926
136
(993)
7,186
9
8,264
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 58
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Impairment
As at 30 September 2020
Charge
Balance at 30 September 2021
As at 30 September 2021
Balance at 30 September 2022
Net book value
At 30 September 2021
At 30 September 2022
970
156
1,126
1,126
1,126
800
7,138
During the year, the Ditau Camp/South Ghanzi Projects, and two properties held within the Athabasca
project were transferred to held for sale and the Group acquired interests in several other projects, see
below:
Intangible assets
Athabasca Uranium Project
Authier North Project
Tati Gold-Nickel Project
Garfield, Stonewall, Golconda Summit & Pilot Mountain Projects
Ditau Camp/South Ghanzi Projects
Wallal, Braeside West, Selta & Ripon Hill Projects
Total
2022
£’000
175
115
359
4,865
-
1,624
7,138
2021
£‘000
3
-
186
83
528
-
800
The Directors regularly assess the carrying value of the Group’s assets, including its prospecting and
exploitation rights, and write off any exploration expenditure that they believe to be irrecoverable.
Athabasca Uranium Project
As at 30 September 2022, the Group held 11 properties covering 780km2 within and surrounding the
prolific Athabasca Basin, including several new property acquisitions and additional staked ground,
secured in the last quarter.
The conditional disposal of two properties held at the Athabasca project were announced during the
year; Reitenbach, in August 2022 and E-12 in November 2022. Work is in process to complete the
transaction through a listing on the London capital markets for the proposed holding vehicle, Teathers
Financial Plc, to be renamed Uranium Energy Exploration PLC. The two properties have been moved
to assets held for sale in the statement of financial position, totalling £28k.
A detailed update was announced in September 2022 covering a recently completed exploration
programme covering Tait Hill, Thibault Lake and Clearwater and the launch of hyperspectral remote
sensing review work at Cook Lake and E-12 properties. The update also included the expansion of the
Tait Hill property and the staking of a new property Badger Lake, which followed on from the newly
staked strategic Durrant Lake property.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 59
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Authier North Project
In July 2022, Power Metal decided to proceed into year 2 of the earn-in to a 100% interest in Authier
North following completion and review of a Property Evaluation Report by Canada-based lithium
geologist. The Authier North Property consists of 15 mineral claims covering an area of approximately
560 hectares and is prospective for lithium pegmatites and base metal mineralisation.
It is expected that the ground exploration programme will be undertaken in Spring 2023 and in the
interim, the Company is considering the commercial options for the project.
Tati Gold-Nickel Project
In August 2022 the Company announced the commencement of RC drilling at the Tati Gold Project,
designed to test the along strike and down dip extension of quartz reefs associated with the historical
Cherished Hope gold mine. In early September 2022, the Company announced the completion of 490m
of RC drilling over 9 holes and the successful intersection of quartz reef in all holes drilled, with
multiple holes intersecting multiple sub-parallel quartz reef structures.
Molopo Farms Complex Project
In 2019 Power Metal acquired an equity stake in private company Kalahari Key Mineral Exploration
Pty Limited (KKME), a Botswana registered exploration company with a 100% interest in the
1,723km2 Molopo Farms Complex Project (MFC) and in the previous financial year completed an
earn-in to a 40% direct project interest.
The company secured a conditional agreement to acquire an additional 58.7% of shares in project
partner KKME as announced on 18 May 2022. This acquisition, conditional on receipt of in-country
regulatory approval, would see Power Metal holding 87.71% of KKME which will hold 100% of the
Molopo Farms Complex Project ("Molopo Farms") after an appropriate restructuring, also part of the
large-scale nickel-copper-PGE
acquisition. At Molopo Farms, Power Metal
mineralisation.
targeting
is
Overall, the planned drill programme included 5 or 6 holes for a total of circa 2,600m of diamond
drilling, and included two drillholes into target T1-6, located approximately 530m and 830m south of
original hole K1-6, both designed to intersect the core of a geophysical conductor target.
Garfield, Stonewall, Golconda Summit and Pilot Mountain Projects
The Garfield and Stonewall exploration properties in Nevada were acquired in June 2021, through the
Company’s wholly owned operational subsidiary, Golden Metal Resources PLC (“Golden Metal”). A
high-resolution soil geochemical survey was carried out at the Garfield property during the year with
results pending at year end. The soil survey assay results will help Golden Metal in targeting additional
copper-gold-silver mineralisation.
During the year, a detailed desktop study was undertaken for the Stonewall project which identified
multiple targets for follow up exploration programmes.
Golden Metal acquired 100% of the Pilot Mountain project during the year and has commissioned three-
dimensional modelling of the high-resolution induced polarisation geophysics survey data collected,
with results awaited. This is Golden Metal’s flagship project.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 60
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Golden Metal is also the operator of the Golconda Summit Project which is held under an earn-in right
from the mineral claim owner under an option agreement. Recently obtained historical dataset from a
high-resolution geochemical soil survey covering the entirety of the Golconda Summit Project has
highlighted three zones of strongly anomalous arsenic and gold mineralisation for further
investigation. In addition. rock sample assay results from a geological mapping and sampling
programme over Golconda Summit, undertaken by Golden Metal's in-country senior geological
consultant, have confirmed strong arsenic (pathfinder for Carlin-type gold mineralisation) and gold
anomalism.
Ditau Camp/South Ghanzi Projects
In September 2020, the Company acquired 50% of four prospecting licences in Botswana, from Kavango
Resources PLC (“Kavango”), held in a joint operation arrangement in the prior year ended 30
September 2021.
During the year ended 30 September 2022, an agreement was put in place whereby Kavango would
repurchase the 50% held by the Company on completion of a Prospectus, to be announced by Kavango
in Q4 2022. As such, the investment was reclassified as held for sale as at 30 September 2022, the total
of which was £965k. The disposal took place following the year end, see subsequent events note for
further details.
Wallal Project, Ripon Hills, Braeside Project and Selta Project
In October 2021, First Development Resources Pty Ltd (“FDR Pty”), an 100% subsidiary of First
Development Resources PLC (“FDR PLC”), acquired the Wallal licences, located in the Paterson
Province of Western Australia. The Wallal project covers an area of 572km2 and is the Group’s primary
focus in the region. It is of particular interest due to several geophysical anomalies which have been
identified following the completion of an in-depth study which included the reprocessing of historic
seismic data along with the analysis of historic magnetic and gravity geophysical surveys.
FDR PLC also acquired the Ripon Hills and Braeside West Projects cover a combined area of
approximately 300km2. The tenements are located approximately 250 km southeast of Port Hedland
on the western edge of the Paterson Province in Western Australia. The projects are located on the
western and eastern limbs of the Oakover Syncline. The area is primarily prospective for manganese,
similar to the nearby Woodie manganese mine, as well as base-metal and gold mineralisation associated
with deep seated north to north-westerly trending fault structures. These fault structures have the
potential to be conduits for various styles of hydrothermal mineralisation as evidenced by recent
exploration conducted by ASX listed Rumble Resources Limited on land adjacent to the Braeside West
tenement.
In February 2022, FDR PLC acquired URE Metals Pty Ltd (“URE”) which holds the Selta Project. The
Selta project is located in the Northern Territory in an area considered highly prospective for uranium
and Rare Earth Element (“REE”) mineralisation along with base and precious metal mineralisation.
Numerous companies are actively exploring within the region. The Selta project is comprised of three
granted exploration licences and covers a total land area of almost 1,600km2 . The project borders ASX
listed Prodigy Gold and Canadian listed Megawatt Lithium and Battery Metals Corporation; and is less
than 70km northwest of Arafura’s Resources high-grade, world-class Nolans REE deposit.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 61
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Company
As at 30 September 2021, the Company held intangible assets of £428k relating to the portion of the
projects held within the Kanye Resources Pty Ltd joint operation; Ditau Camp and South Ghanzi.
During the year, these assets were transferred to held for sale as detailed above.
11.
Investments in subsidiaries
Investment in subsidiary undertakings
£’000
4,813
-
4,813
Company
As at 30 September 2020
Additions/Disposals
Balance at 30 September 2021
As at 30 September 2021
Additions
Balance at 30 September 2022
Impairment
As at 30 September 2020
Charge
Balance at 30 September 2021
As at 30 September 2021
Balance at 30 September 2022
Net book value
At 30 September 2021
At 30 September 2022
Non-current investments
Investment in Golden Metal Resources PLC
Investment in First Development Resources PLC
Total investment in subsidiaries
2022
£’000
1,733
899
2,632
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 62
4,813
2,632
7,445
4,657
156
4,813
4,813
4,813
-
2,632
2021
£‘000
-
-
-
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
At the date of this report, all subsidiaries are still owned by the Company as per the ownership interests
shown below.
Directly
Activity
Country of
incorporation
Ownership
interest
Registered office
Golden Metal
Resources PLC
Mining and
exploration
United Kingdom
83.13%
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y
0DT
Golden Metal
Resources LLC
Intermediary
Holding
Company
Pilot Metals
Inc.
Mining and
exploration
BFM Resources
Inc.
Mining and
exploration
First
Development
Resources PLC
Mining and
exploration
USA
USA
USA
83.13%
indirectly
3800 Howard Hughes
Parkway STE 1000, Las
Vegas, NV 89169, USA
83.13%
indirectly
241 Ridge Street STE 210.
Reno, NV 89501, USA
83.13%
indirectly
241 Ridge Street STE 210.
Reno, NV 89501, USA
United Kingdom
62.12%
First
Development
Resources Pty
Ltd
Pardoo
Resources Pty
Ltd
Mining and
exploration
Australia
62.12%
indirectly
Mining and
exploration
Australia
62.12%
indirectly
RH Resources
Pty Ltd
Mining and
exploration
Australia
62.12%
indirectly
URE Metals Pty
Ltd
Mining and
exploration
Australia
62.12%
indirectly
Power Capital
Investments
Ltd
Mining and
exploration
United Kingdom
100%
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y
0DT
First Floor, 160 Stirling
Highway
Nedlands WA 6009
First Floor, 160 Stirling
Highway
Nedlands WA 6009
First Floor, 160 Stirling
Highway
Nedlands WA 6009
First Floor, 160 Stirling
Highway
Nedlands WA 6009
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y
0DT
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 63
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Tati
Greenstone
Resources Pty
Ltd
Power Metal
Resources
Botswana Pty
Ltd
Power Metal
Resources
Australia Pty
Ltd
Power Metal
Resources
Canada Inc
102134984
Saskatchewan
Ltd
Regent
Resources
Interests
Corporation
Mining and
exploration
Botswana
100%
Mining and
exploration
Botswana
100%
Mining and
exploration
Australia
100%
Mining and
exploration
Canada
100%
Mining and
exploration
Canada
100%
indirectly
Mining and
exploration
British Virgin
Islands
100%
Cobalt Blue
Holdings Inc
Mining and
exploration
British Virgin
Islands
100%
Plot 337/338, Corner
Khama Street & Selous
Avenue, Francistown,
Botswana
Plot 13130, East Gate
Building, Broadhurst Mail,
Broadhurst, Gaborone,
Botswana
First Floor 160 Stirling
Highway, NEDLANDS,
Western Australia, 6009.
Suite 530, 355 Burand
Street, Vancouver, British
Columbia, V6C 2G8
1238 27th Avenue E,
Vancouver, British
Columbia, Canada, V5V
2L8
P.O. Box 2283, ABM
Chambers, Columbus
Centre, Road Town,
Tortola, British Virgin
Islands
Intershore Chambers, Road
Town, Tortola, British
Virgin Islands
For the year ended 30 September 2022, the subsidiary Golden Metal Resources PLC incurred a loss of
£783,000 (2021: £21,000). Power Metal Resources Canada Inc Ltd incurred a loss of £62,000 (2021: £1,000)
and the subsidiary First Development Resources PLC incurred a loss of £400,000 (2021: £2,000). There
were no other material losses in the subsidiaries.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 64
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
12.
Investments in joint ventures
Group
Opening balance
Additions
Share of losses
Reclassification
Closing balance
Company
Opening balance
Additions
Reclassification
Closing balance
2022
Total
£’000
166
194
(167)
-
193
2022
Total
£’000
301
194
-
495
2021
Total
£‘000
284
257
(102)
(273)
166
2021
Total
£‘000
317
257
(273)
301
Red Rock Australasia Pty Ltd
In April 2020, the company acquired 49.9% of Red Rock Australasia Pty Ltd (RRAL), with Red Rock
Resources PLC holding 50.1%. The joint venture was set up to build a strategic gold exploration
portfolio in Australia. During the year, New Ballarat Gold Corporation PLC (“NBGC”) acquired 100%
of RRAL, and 50% of the shares of NBGC were transferred to the Company and 50% to Red Rock
Resources PLC, such that NBGC became the holding company of RRAL, although no operational
transactions are currently recorded in this entity.
During the year, Power Metal Resources PLC contributed £194,000 (2021: £257,000) to costs incurred by
RRAL in line with the joint venture agreement. At the year ended 30 September 2022, RRAL had
incurred a loss of approximately AUD $600,000 (2021: AUD $373,000). Power Metal Resources PLC
included its share of the loss in the financial statements for the year ended 30 September 2022. This
amounted to £167,000 (2021: £102,000). Summarised financial information for RRAL is listed below.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 65
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Current Assets
Cash and Cash Equivalents
Other Receivables
Total Current Assets
Non-Current Assets
Mineral Tenements
Total Non-Current Assets
Total Assets
Current Liabilities
Payroll taxes
Other creditors
Total Current Liabilities
Non-Current Liabilities
Loan – Power Metal Resources PLC
Loan – Red Rock Resources PLC
Total Non-Current Liabilities
Net Liabilities
2022
Total
£’000
7
6
13
378
378
391
6
50
56
477
647
1,124
789
Total loss for the year ended 30 September 2022 in relation to RRAL was £334,000 (AUD$600,000).
13.
Joint Operations
Power Metal is party to a contractual arrangement whereby it holds joint control of the Ditau and South
Ghanzi Projects in Botswana, with Kavango Resources PLC. In the year ended 30 September 2021, the
arrangement was reclassified to a joint operation, at this point the investment carrying value was
£428,000 as although the Projects were transferred into a separate vehicle, Kanye Resources (Pty) Ltd,
Power Metal does not hold the rights to the net assets of the arrangement, but only the assets, liabilities,
revenues and expenses relating to the Company’s involvement and these items were recognised on a
line by line basis in the consolidated financial statements of Power Metal.
On 8 July 2022, Power Metals and Kavango signed a sale and purchase agreement (“SPA”) whereby it
was agreed Kavango would acquire Power Metal’s entire interest in the joint operation and thus
become its sole owner. The sale was contingent of the publication of Kavango’s prospectus on the LSE.
Kavango published its Prospectus on 18 November 2022. As such, at 30 September 2022, the joint
operation was reclassified as held for sale. See details below in note 14.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 66
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
14.
Assets classified as held for sale
In August 2022 a property purchase agreement was signed with Teathers Financial PLC (“Teathers”)
who are to be renamed Uranium Energy Exploration PLC. Teathers conditionally acquired 100%
ownership of the Reitenbach Uranium Property located east of the Athabasca Basin in Northern
Saskatchewan, Canada, subject to a 2% net smelter return royalty in exchange for cash and shares. The
consideration payable is £360,000, to be settled by the issue of Teathers new ordinary shares of 0.1p and
a cash payment of £10,000.
In November 2022 an additional property purchase agreement was signed with Teathers, for Teathers
to conditionally acquire 100% ownership of the E-12 Uranium Property by the 31 December 2022. The
E-12 Uranium property is located south of the Athabasca Basin in Northern Saskatchewan, Canada.
The consideration payable is £250,000, to be settled by the issue of Teathers new ordinary shares of 0.1p
at an issue price of 1.24114 pence per Ordinary Share and the retention of a 2% Net Smelter return
royalty over the property.
In relation to the above properties, intangible assets totalling £28k, and expenses amounting to £52k
relating to the projects have been transferred to assets held for sale.
As detailed above, in note 13, on 8 July 2022, Power Metals and Kavango signed a sale and purchase
agreement (“SPA”) whereby it was agreed Kavango would acquire Power Metal’s entire interest in the
Joint Operation and thus become its sole owner. Intangible assets of £993k and an intercompany loan
of £80k were transferred to assets held for sale at the year end.
There was no profit or loss for the period associated with the assets held for sale. The following assets
and liabilities were reclassified as held for sale:
Kalahari key
Kanye
E-12
Reitenbach
Assets held for sale
Group
2022
£’000
-
1,045
6
73
1,124
Company
2022
£’000
-
1,045
-
-
1,045
Group
2021
£’000
153
-
-
-
153
Company
2021
£‘000
153
-
-
-
153
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 67
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
15.
Financial assets at fair value through profit or loss
Group
Non-current
Opening balance
Additions
Fair value adjustment – equity
investment
Fair value adjustment – derivative assets
Reclassification to current financial assets
Reclassification to investment in associate
Reclassification to intangible assets
Reclassification to receivables
Disposals
Closing balance
Listed
£’000
Unlisted
£’000
1,099
34
(618)
-
(132)
-
-
-
-
383
2,428
391
-
-
(1,029)
(209)
(75)
(61)
(208)
1,237
Listed
£’000
Unlisted
£’000
Current
Opening balance
Additions
Fair value adjustment – equity
investment
Fair value adjustment – derivative assets
Reclassification from current financial
assets
Reclassification from assets held for sale
Disposals
Closing balance
179
-
1,147
(220)
1,161
-
(37)
2,230
-
-
-
-
-
153
-
153
2022
Total
£’000
3,527
425
(618)
-
(1,161)
(209)
(75)
(61)
(208)
1,620
2022
Total
£’000
179
-
1,147
(220)
1,161
153
(37)
2,383
2021
Total
£‘000
1,209
2,398
271
159
(249)
-
-
-
(261)
3,527
2021
Total
£‘000
-
164
-
15
-
-
-
179
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 68
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Company
Non-current
Opening balance
Additions
Fair value adjustment – equity investment
Fair value adjustment – derivative assets
Reclassification to current financial assets
Reclassification to trade and other
receivables
Disposals
Closing balance
Listed
£’000
Unlisted
£’000
1,099
34
(618)
-
(132)
-
-
383
2,234
166
-
-
(1,028)
(61)
(208)
1,103
Listed
£’000
Unlisted
£’000
Current
Opening balance
Additions
Fair value adjustment – equity
investment
Fair value adjustment – derivative assets
Reclassification from non-current
financial assets
Reclassification from assets held for sale
Disposals
Closing balance
179
-
1,147
(220)
1,162
-
(37)
2,231
-
-
-
-
-
153
-
153
16.
Trade and other receivables
Group
Accounts receivable
Other receivables
Prepayments
Trade and other receivables
2022
Total
£’000
3,333
200
(618)
-
(1,161)
(61)
(208)
1,485
2022
Total
£’000
179
-
1,147
(220)
1,162
153
(37)
2,384
2022
£’000
123
149
74
346
2021
Total
£‘000
1,208
2,206
271
159
(249)
-
(261)
3,334
2021
Total
£‘000
-
164
-
15
-
-
-
179
2021
£‘000
104
19
52
175
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 69
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Company
Receivables due from group undertakings
Receivables due from joint venture partners
Accounts receivable
Other receivables
Prepayments
Trade and other receivables
17.
Cash and cash equivalents
Group
Bank balances
Cash and cash equivalents
Company
Bank balances
Cash and cash equivalents
18.
Non-controlling interest
2022
£’000
1,202
2
69
37
74
1,384
2022
£’000
1,560
1,560
2022
£’000
1,032
1,032
2021
£‘000
605
-
104
19
52
780
2021
£‘000
1,281
1,281
2021
£‘000
1,251
1,251
The Group has material non-controlling interests arising from its subsidiaries Golden Metal Resources
PLC and First Development Resources PLC. These non-controlling interests can be summarised as
follows;
Balance at 1 January
Total comprehensive loss allocated to NCI
Effect of step disposal
Total
Power Metal Resources SA
Golden Metal Resources PLC
First Development Resources PLC
Total
2022
£’000
(306)
(219)
2,590
2,065
2022
£’000
(306)
1,011
1,360
2,065
2021
£’000
(275)
(31)
-
(306)
2021
£’000
(306)
-
-
(306)
Golden Metal Resources PLC is a 83.13 per cent owned subsidiary of the Company that has material
non-controlling interests (“NCI”).
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 70
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Summarised financial information reflecting 100 per cent of the Golden Metal Resources PLC relevant
figures is set out below:
Administrative expenses
Loss after tax
Loss allocated to NCI
Other comprehensive income allocated to NCI
Total comprehensive loss allocated to NCI
Current assets
Current liabilities
Net assets
Non-controlling interest
2022
£’000
(3,191)
(3,191)
(538)
471
(67)
6,201
(207)
5,994
1,011
2021
£’000
-
-
-
-
-
-
-
-
-
First Development Resources PLC is a 62.12 per cent owned subsidiary of the Company that has
material non-controlling interests (“NCI”).
Summarised financial information reflecting 100 per cent of the First Development Resources PLC
relevant figures is set out below:
Administrative expenses
(Loss) after tax
(Loss) allocated to NCI
Other comprehensive income allocated to NCI
Total comprehensive (loss) allocated to NCI
Current assets
Current liabilities
Net assets
Non-controlling interest
2022
£’000
(401)
(401)
(152)
-
(152)
3,726
(136)
3,590
1,359
2021
£’000
-
-
-
-
-
-
-
-
-
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 71
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
19.
Share capital
Ordinary shares in issue at 1 October
Issued for cash
Issued in settlement for acquisitions
In issue at 30 September – fully paid (par value 0.1p)
Deferred shares in issue at 1 October
In issue at 30 September
Balance at beginning of year
Prior Year Adjustment
Share issues
Balance at 30 September
Balance at beginning of year
Prior year adjustment
Share issues
Expenses relating to share issues
Balance at 30 September
Number of ordinary shares
2022
1,254,808,787
137,142,857
222,703,277
1,614,654,921
2021
818,316,542
422,890,840
13,601,405
1,254,808,787
Number of deferred
shares
2022
3,628,594,957
3,628,594,957
2021
3,628,594,957
3,628,594,957
Ordinary
share capital
2022
£’000
7,705
-
360
8,065
Share Premium
2022
£’000
18,437
-
4,999
(124)
23,312
2021
£‘000
7,286
(19)
438
7,705
2021
£‘000
14,910
19
3,546
(38)
18,437
The prior year adjustment in 2021 relates to a previous misallocation between share capital and share
premium, relating to a share issue in the year ended 30 September 2017. £19,011 was incorrectly
allocated to share capital and has been rectified in the year ended 30 September 2021.
All ordinary shares rank equally with regard to the Company’s residual assets.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 72
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Both classes of deferred shares (Deferred and Deferred A), do not entitle the holders thereof to receive
notice of or attend and vote at any general meeting of the Company or to receive dividends or other
distributions or to participate in any return on capital on a winding up unless the assets of the Company
are in excess of £1,000,000,000,000. The Company retains the right to purchase the deferred shares from
any shareholder for a consideration of one penny in aggregate for all that shareholder's deferred
shares. As such, the deferred shares effectively have no value. Share certificates will not be issued in
respect of the deferred shares.
Issue of ordinary shares
In October 2021, the Company received notices to exercise warrants over 15,578,947 new ordinary
shares of 0.1 pence each in the Company raising an additional £139,842 for the Company. The warrant
shares were issued pursuant to the exercise of 10,000,000 warrants at an exercise price of 1.0 pence per
ordinary share, 1,578,947 warrants at an exercise price of 0.75 pence per ordinary share and 4,000,000
warrants at an exercise price of 0.70 pence per ordinary share.
In November 2021, Golden Metal acquired a 100% interest in the Pilot Mountain project, the
consideration for which was paid by Power Metal, including the issue of 48,118,920 new ordinary
shares of 0.1p each at an issue price of 2.5p, equating to £1.2m.
In November 2021 the Company acquired 100% of FDR Australia and the Wallal Main licence currently
held within FDR Australia through the issue of 13,333,333 Power Metal new ordinary shares of 0.1p
each at an issue price of 2.75p and 13,333,333 warrants to acquire new Ordinary Shares at an exercise
price of 4.5p. Additional Consideration for the 100% acquisition of all other FDR Australia interests
(granted licences and a licence application currently held by third parties to be transferred into FDR
Australia under the Agreement) of 10,000,000 Power Metal shares at an issue price of 3.2p and
10,000,000 warrants to acquire new Ordinary Shares at an exercise price of 5.0p.
In November 2021, the Company raised £1,050,000 through the issue of 60,000,000 new ordinary shares
of 0.1p each ("Placing Shares") at an issue price of 1.75p, the closing mid-market price on 12 November
2021. Each Placing Share has an attaching warrant to subscribe for a further new ordinary share of 0.1p
each at an exercise price of 3.5p each with a two-year term from the admission of the Placing Shares
creating 60,000,000 placing warrants.
In November 2021, the Company received notice to exercise warrants over 1,500,000 new ordinary
shares of 0.1 pence each in the Company, at an exercise price of 0.7 pence per ordinary share, raising
an additional £10,500.
In December 2021, the Company received notice to exercise warrants over 38,500,000 new ordinary
shares of 0.1 pence each raising an additional £269,500 for the Company. The Warrant Shares were
issued pursuant to the exercise of 38,500,000 warrants at an exercise price of 0.7 pence per ordinary
share of 0.1 pence each in the Company.
In January 2022 the Company agreed terms to secure the early clearance of a Tail Benefit through the
payment of £50,000 cash and issue to Thor Mining of 4,000,000 new ordinary shares of 0.1p each in the
Company at an issue price of 2.5p per share.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 73
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
In January 2022 the Company announced that the two Prospecting Licences comprising the Tati Project
were successfully transferred into Tati Greenstone Resources Pty Ltd, a wholly owned private
Botswana-based subsidiary of Power Metal. The Company issued 833,333 new ordinary Shares of 0.1p
each at an issue price of 3.0 pence per New Ordinary Share. The Company also elected to proceed with
the year 3 exploration spend programme (for the year ending 30 September 2022) and paid a further
consideration of £50,000, to the Vendors through the issue of 833,333 New Ordinary Shares at an issue
price of 3.0p each for each licence, resulting in 1,666,666 New Ordinary Shares to be issued.
In February 2022, the Company received a notice to exercise options over 13,613,929 new ordinary
shares of 0.1 pence each at an exercise price of 1.0 pence per new ordinary share raising an additional
£136,139 for the Company.
In February 2022, the Company received a notice to exercise warrants over 5,000,000 new ordinary
shares of 0.1 pence each at an exercise price of 0.75p per Warrant Share and raising an additional £37,500
for the Company.
In April 2022, the Company received a notice to exercise warrants over 2,315,789 new ordinary shares
of 0.1 pence each at an exercise price of 0.75p per Warrant Share, raising an additional £17,368 for the
Company.
In May 2022, the Company received a notice to exercise warrants over 6,710,526 new ordinary shares
of 0.1 pence each at an exercise price of 0.75p per Warrant Share, raising an additional £50,329 for the
Company.
In May 2022 the Company signed an Agreement for the 100% acquisition of Pardoo Resources Pty
Limited by First Development Resources PLC. The Company issued 398,036 Ordinary Shares at an
issue price of 2.75p and 398,036 Power Metal warrants at an exercise price of 4.5p.
In June 2022, the Company received a notice to exercise warrants over 657,895 new ordinary shares of
0.1 pence each at an exercise price of 0.75p per Warrant Share, raising an additional £4,934 for the
Company.
In July 2022 the Company received a notice to exercise warrants over 54,772,304 new ordinary shares,
raising an additional £414,865 for the Company. The warrant shares were issued pursuant to the
exercise of 51,022,319 warrants at an exercise price of 0.75 pence per ordinary share and 3,749,985
warrants at an exercise price of 0.90 pence per ordinary share.
In July 2022 the Company announced an acquisition of additional uranium properties surrounding the
Athabasca Basin in northern Saskatchewan, Canada. The cost of the Acquisition was £88,872 payable
as £16,158 cash and £72,714 through the issue of 5,703,599 new ordinary shares of 0.1p in the Company
at an issue price of 1.275p.
In September 2022 the Company raised £800,000 before expenses through the issue of 57,142,857 new
ordinary shares of 0.1p each at an issue price of 1.4p per share, the closing market price on 2 September
2022. Each share has an attaching warrant to subscribe for one new ordinary share of 0.1p each at an
exercise price of 2.0p with a 12-month term from 19 September 2022 creating 57,142,857 warrants.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 74
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
In September 2022, the Company raised an additional £280,000 before expenses through the issue of
20,000,000 new ordinary shares of 0.1p each at an issue price of 1.4p per share, the closing market bid
price on 2 September 2022. As above, each share has an attaching warrant to subscribe for one new
ordinary share of 0.1p each at an exercise price of 2.0p with a 12-month term from 19 September 2022.
20.
Capital contribution
A capital contribution has been recognised in respect of assets received from the shareholder. During
the year, the Company's subsidiary Golden Metal Resources Plc took part in a group reorganisation
whereby £2,793k was recognised as a capital contribution, with a corresponding receivable from the
shareholder. The Company contributed to the acquisition of the intangible assets by issuing shares in
consideration to the vendor. This amount is eliminated within intercompany, leaving the full intangible
asset value the Group financial statements. As such, the Company and the Group both treated this as a
capital contribution by the shareholder and recognised the £2,793k directly in equity.
21.
Earnings per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on the loss attributable to ordinary
shareholders of £2,257,872 (2021: £591,938), and a weighted average number of ordinary shares in issue
of 1,457,507,624 (2021: 1,079,317,932). The basic and diluted earnings per share are the same given the
loss for the year, making the outstanding share options and warrants anti-dilutive.
22.
Share options and warrants
Reconciliation of outstanding share options:
2022
Outstanding at 1 October 2021
Granted during the year
Exercised
Outstanding at 30 September 2022
Exercisable at 30 September 2022
Number of
options
99,325,358
18,500,000
(13,613,929)
104,211,429
9,961,429
Weighted
average
exercise
price
(£’s)
0.03
0.03
0.02
0.04
0.029
The weighted average contractual life of the options outstanding at the reporting date is 1 year 62 days.
Exercise prices of share options outstanding at the end of the 2022 period:
£6.000
97,500
1,000,000 £0.050
£0.010
28,613,929
£0.020
20,000,000
£0.033
54,500,000
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 75
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
2021
Outstanding at 1 October 2020
Granted during the year
Exercised
Outstanding at 30 September 2021
Exercisable at 30 September 2021
Directors Options
Weighted
average
exercise
price
(£’s)
0.03
0.03
-
0.06
0.023
Number
of options
63,325,358
36,000,000
-
99,325,358
83,325,358
Included within the options issued in the year ended 30 September 2022 were 10,000,000 options issued
to directors (2021: 12,500,000).
2022
Scott Richardson Brown
Ed Shaw
2021
Andrew Bell
Paul Johnson
Exercise price
(£’s)
0.033
0.033
Exercise price
(£’s)
0.033
0.033
Number of
Options
5,000,000
5,000,000
10,000,000
Number of
Options
7,500,000
12,500,000
20,000,000
The fair values of the options granted during the year were calculated using the Black Scholes Model
with the following assumptions:
Risk free interest rate
Expected volatility
Expected dividend yield
Life of the option
Share price at measurement date
1.382%, 0.736% & 0.601%
53.9%, 64.3% & 61.8%
0.00%
3 years
£0.0132 & £0.0180
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 76
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Reconciliation of outstanding warrants
2022
Outstanding at 1 October 2021
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at 30 September 2022
Exercisable at 30 September 2022
Number of warrants
205,053,812
128,064,701
(3,948,745)
(116,285,426)
212,884,342
212,884,342
The weighted average contractual life of the warrants outstanding is 1 year 19 days.
2021
Outstanding at 1 October 2020
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding and exercisable at 30 September 2021
Directors Warrants
Number of warrants
618,185,061
19,819,641
(7,810,000)
(425,140,890)
205,053,812
Weighted
average
exercise
price
(£’s)
0.01
0.04
0.01
0.03
0.19
0.19
Weighted
average
exercise
price
(£’s)
0.01
0.02
0.01
0.01
0.01
No warrants were issued to directors in the year ended 30 September 2022 (2021:Nil).
The fair values of the warrants granted during the year were calculated using the Black Scholes
Model with the following assumptions:
Risk free interest rate
Expected volatility
Expected dividend yield
Life of the option
Share price at measurement date
0.645%, 0671% & 1.325%
63.4%, 63.3%, 62.9% and 50.6%
0.00%
Between 1 and 3 years
£0.0170, £0.0172 & £0.143
£70,119 (2021: £249,717) has been recognised as a share-based payment expense in the Statement of
Comprehensive Income related to the issue of share options and warrants and £35,283 (2021: £20,079)
has been included in non-current assets as it relates to the acquisition of certain financial assets.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 77
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
23.
Trade and other payables
Group
Trade payables
Accrued expenses
Trade and other payables
Company
Trade payables
Accrued expenses
Payable to group undertakings
Trade and other payables
2022
£’000
686
164
850
2022
£’000
329
164
24
517
2021
£‘000
250
67
317
2021
£‘000
146
74
27
247
The Group’s and Company’s exposure to currency and liquidity risk related to trade and other payables
is disclosed in note 23.
24.
Financial instruments
Financial risk management
Overview
The Group has exposure to the following risks arising from financial instruments.
credit risk
liquidity risk
-
-
- market risk
This note presents information about the Group’s exposure to each of the above risks, the Group’s
objectives, policies and processes for measuring and managing risk, and the Group’s management of
capital.
Risk management framework
The Company’s board of Directors has overall responsibility for the establishment and oversight of the
Group’s risk management framework.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and
the Group’s activities. The Group, through its training, management standards and procedures, aims
to develop a disciplined and constructive control environment in which all employees understand their
roles and obligations.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 78
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Cost may be an appropriate estimation of fair value at the measurement date only in limited
circumstances, such as for a pre-revenue entity when there is no catalyst for change in fair value, or if
the transaction date is relatively close to the measurement date. Other indicators include insufficient
recent information, a wide range of possible fair values and cost represents the best estimate.
Financial instruments measured at fair value
The fair value hierarchy of financial instruments measured at fair value is provided below. The different
levels have been defined as follows:
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1),
Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly or indirectly (level 2),
Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).
There have been no transfers between levels during the period. Additions to level 3 during the period
are valued based on cost of investment, for both the Group and the Company. See note 15 Financial
Assets at Fair Value through Profit or Loss for further detail.
Group
2022
Financial Assets at fair value
through profit or loss
Financial assets (fair value through
the profit or loss)
Company
2022
Financial Assets at fair value
through profit or loss
Financial assets (fair value through
the profit or loss)
Level 1
£’000
Level 2
£’000
Level 3
£’000
2,614
2,614
-
-
1,390
1,390
Level 1
£’000
Level 2
£’000
Level 3
£’000
2,614
2,614
-
-
1,255
1,255
Total
£’000
4,004
4,004
Total
£’000
3,869
3,869
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 79
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Group
2021
Financial Assets at fair value
through profit or loss
Financial assets (fair value through
the profit or loss)
Company
2021
Financial Assets at fair value
through profit or loss
Financial assets (fair value through
the profit or loss)
Level 1
£’000
Level 2
£’000
Level 3
£’000
1,279
1,279
-
-
2,479
2,479
Level 1
£’000
Level 2
£’000
Level 3
£’000
1,279
1,279
-
-
2,234
2,334
Total
£’000
3,706
3,706
Total
£’000
3,513
3,513
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial
instrument fails to meet its contractual obligations.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at the reporting date was as follows:
Group
Trade and other receivables
Cash and cash equivalents
Company
Trade and other receivables
Cash and cash equivalents
Carrying
amount
2022
£’000
272
1,560
1,832
Carrying
amount
2022
£’000
1,310
1,032
2,342
2021
£‘000
175
1,281
1,456
2021
£‘000
780
1,251
2,031
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 80
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements.
Group
30 September 2022
Non-derivative financial
liabilities
Trade and other payables
30 September 2021
Non-derivative financial
liabilities
Trade and other payables
Company
30 September 2022
Non-derivative financial
liabilities
Trade and other payables
Carrying
amount
£’000
2 months
or less
£’000
2-12 months
£’000
More
than 1
year
£’000
757
757
757
757
-
-
-
-
Carrying
amount
£’000
2 months
or less
£’000
2-12 months
£’000
More
than 1
year
£’000
317
317
317
317
-
-
-
-
Carrying
amount
£’000
2 months
or less
£’000
2-12 months
£’000
More
than 1
year
£’000
440
440
440
440
-
-
-
-
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 81
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
30 September 2021
Non-derivative financial
liabilities
Trade and other payables
Carrying
amount
£’000
2 months
or less
£’000
2-12 months
£’000
More than 1
year
£’000
247
247
247
247
-
-
-
-
The Group reviews its facilities regularly to ensure that it has adequate funds for operations and
expansion plans.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return. Due to the nature of the Group’s operations, it will be mainly
exposed to fluctuations in the price of iron and gold. The Group, where able, will look to hedge its
foreign currency exposure.
Currency risk
The Group operates internationally and is exposed to foreign currency risk arising on cash and cash
equivalents and receivables denominated in a currency other than the respective functional currencies
of Group entities. The currencies in which these transactions primarily are denominated are US Dollar
(USD), Canadian Dollar (CAD), Australian Dollar (AUD) and Botswana Pula (BWP). The following
balances were held in foreign currency at the reporting date are:
Group
Company
Net foreign currency financial
(liabilities)/assets
USD
CAD
AUD
BWP
Total net exposure
2022
£’000
48
13
5
52
118
2021
£’000
185
37
14
11
247
2022
£’000
48
13
5
52
118
2021
£’000
183
37
14
11
245
Sensitivity analysis
A 10 per cent strengthening of sterling against the respective currencies at 30 September 2022 would
have increased/(decreased) equity and profit or loss by the amounts shown below:
Group
Profit and loss
USD
CAD
AUD
BWP
Total net exposure
2022
£’000
(5)
(1)
(0)
(5)
(11)
2021
£’000
(19)
(4)
(1)
(1)
(25)
Equity
2022
£’000
(5)
(1)
(0)
(5)
(11)
2021
£’000
(19)
(4)
(1)
(1)
(25)
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 82
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Company
Profit and loss
USD
CAD
AUD
BWP
Total net exposure
2022
£’000
(5)
(1)
(0)
(5)
(11)
2021
£’000
(18)
(4)
(1)
(1)
(24)
Equity
2022
£’000
(5)
(1)
(0)
-
(6)
2021
£’000
(18)
(4)
(1)
(1)
(24)
A 10 per cent weakening of the sterling against the respective currencies would have an equal but
opposite effect.
Capital management
The Group’s policy is to maintain a strong capital base to maintain investor, creditor and market
confidence and to sustain future development of the business. Capital consists of equity which at 30
September 2022 for the Group totalled £13,755,000 (2021: £5,966,000) and for the Company totalled
£10,152,000 (2021: £6,181,000).
Accounting classifications and fair values
Fair values and carrying amounts
The carrying values of financial assets and liabilities are all approximate to their fair values per the
statement of financial position.
25.
Contingent liabilities
During the year, the Company issued letters of support to its subsidiaries; First Development Resources
Plc and Golden Metal Resources Plc, stating that the Company is willing to provide sufficient financial
support to each entity for at least 12 months from the date of the approval of each entity's financial
statements for the accounting period ended 30 June 2022. Additionally, it is noted in the letters that on
successful IPO of both First Development Resources Plc and Golden Metal Resources Plc, support will
cease. As at the date of these financial statements, it is unlikely this support will be required, and the
Company is unable to make a reliable estimate of the value of the liability, if any.
26.
Related parties
In addition to matters reported in note 8, the following related party transactions took place during the
year ended 30 September 2022:
Andrew Bell, a previous Director of the Company, who provided consultancy services during the year
is also director of Red Rock Resources PLC. Further details on the joint venture arrangement with Red
Rock Resources PLC is disclosed in the Chairman’s Statement and note 12 to the financial statements.
The total fees invoiced to the Company by Red Rock Resources PLC for the year ended 30 September
2022 was £nil (2021: £37,700) of which £nil (2021:nil) remained outstanding at the year end. All related
to repayment of costs incurred by Red Rock Resources PLC on behalf of POW.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 83
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
An advance of £100,000 previously made by Power Metal to Red Rock Resources PLC in August 2021
for joint venture costs in respect of set up of New Ballarat Gold Corporation PLC and its planned listing
became repayable during the year, of which £100,000 remained outstanding at the year end.
Paul Johnson, CEO of the Company, who served during the year is also director of Value Generation
Limited, a management consultancy business. The total fees invoiced to the Company for the year
ended 30 September 2022 were £31,800 (2021: £20,900) of which nil was outstanding at the year end and
all of which related to office support provided to the Company or repayment of costs incurred by Value
Generation Limited on behalf of POW, and then repaid.
During the year, the Company advanced funds to Power Metal Resources SA, totalling £Nil (2021:
£101,000). At 30 September 2022, £Nil was outstanding (2021: £788,000). An expected credit loss of £Nil
was recognised at the year-end in respect of the intercompany receivable (2021: £788,000), as the
decision was taken by the directors to write off the balance in full.
During the year, the Company advanced funds to its subsidiary, Cobalt Blue Holdings, totalling £1,000
(2021: £3,000). The loan is repayable on demand and on 30 September 2022, £35,000 was outstanding
(2021: £34,000). A cumulative expected credit loss of £10,000 was recognised at the year-end in respect
of the intercompany receivable (2021: £10,000).
During the year, the Company received funds from its subsidiary, Regent Resources Interests
Corporation, totalling £3,000. (2021: £3,000). The loan is repayable to the subsidiary and as at 30
September 2022, £24,000 was owed (2021: £27,000).
During the year, the Company advanced funds and was recharged expenditure from its subsidiary
Golden Metal Resources PLC, totalling £70,000 (2021: £233,000). In additional, Golden Metal acquired
intangible assets during the year, which were settled in Power Metal ordinary shares, warrants and
cash, totalling £1,296,000. GMR PLC settled £75,000 in cash and £1,508,000 through the issue of ordinary
shares. The loan is repayable on demand and on 30 September 2022, £16,000 was outstanding (2021:
£233,000). An expected credit loss of £1,000 was recognised at the year-end in respect of the
intercompany receivable (2021: £17,000).
During the year, the Company advanced funds to its subsidiary, Power Metal Resources Australia Pty
Ltd, totalling £45,000 (2021: £1,000). The loan is repayable on demand and on 30 September 2022,
£46,000 was outstanding (2021: £1,000). An expected credit loss of £4,000 was recognised at the year-
end in respect of the intercompany receivable (2021: £100).
During the year, the Company advanced funds to its subsidiary, Power Metal Resources Canada Inc,
totalling £261,000 (2021: £55,000). The loan is repayable on demand and on 30 September 2022, £316,000
was outstanding (2021: £55,000). An expected credit loss of £23,000 was recognised at the year-end in
respect of the intercompany receivable (2021: £4,000).
During the year, the Company advanced funds to its subsidiary, Tati Greenstone Resources Pty Ltd,
totalling £234,000 (2021: £114,000). The loan is repayable on demand and on 30 September 2022,
£348,000 was outstanding (2021: £114,000). An expected credit loss of £28,000 was recognised at the
year-end in respect of the intercompany receivable (2021: £9,000).
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 84
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
During the year, the Company advanced funds and was recharged expenditure from its subsidiary,
First Development Resources PLC, totalling £201,000 (2021: £32,000). In addition, FDR acquired
intangible assets during the year, which was settled by the issue of Power Metal ordinary shares,
warrants and cash, totalling £733,000. FDR PLC settled £75,000 in cash and £855,000 through the issue
of ordinary shares and on 30 September 2022, £36,000 was outstanding (2021: £32,000). The loan is
repayable on demand, and an expected credit loss of £2,000 was recognised at the year-end in respect
of the intercompany receivable (2021: £3,000).
During the year, the Company advanced funds to its subsidiary, Power Capital Investments Ltd,
totalling £Nil (2021: £5,000). The loan is repayable on demand and on 30 September 2022, £5,000 was
outstanding (2021: £5,000). An expected credit loss of £400 was recognised at the year-end in respect of
the intercompany receivable (2021: £400).
27.
Capital commitments
As an exploration and development company Power Metal has a portfolio of exploration projects held
through holding companies relevant to the local operations of the business. All of the Company’s
business interests carry financial commitments to remain in good standing which are funded directly
by Power Metal Resources PLC, or through its subsidiaries.
All the holding companies require timely submission of regulatory filings, financial accounts and tax
submissions. Most exploration projects hold contractual or local regulatory authority agreed minimum
expenditures on projects, which the Company intends to satisfy and commonly exceeds with enhanced
activities dependent on available funding. In addition, a number of projects have certain production
royalties and milestone payments attaching, with material payments dependent largely on projects
entering production and generating revenues, which is not expected to occur for a number of years.
Furthermore, projects are all held under exploration licences, prospecting licences and exploration
claims, against which during the year a number of renewals are expected to be processed with
associated renewal fees attaching. Finally, there are various specific costs relating to the continuance of
business activities including staffing and consultancy costs, office costs and various sundry items
including warehousing commitments for equipment and core storage.
Golden Metal Resources PLC has 100 per cent ownership of the Pilot Mountain, Garfield and Stonewall
Projects and an earn-in option for up to 100 per cent of the Golconda Summit Project.
On 21 May 2021, Golden Metal Resources PLC became the operator of the Golconda Summit Project
when it entered into an Assignment and Assumption Agreement with GR Silver Mining and Golden
Metal Resources PLC was also assigned the Golconda Option Agreement to earn-in up to 100 per cent.
GR Silver Mining historically entered into the Golconda Option Agreement to acquire 100 per cent title
and interest with Eureka Resources, a private Nevada based company. Under the terms of the
Assignment and Assumption Agreement, Golden Metal Resources PLC assumed the obligation to pay
the remaining liability of US$275,000 due under the Golconda Option Agreement to Eureka Resources.
Eureka Resources holds a 1 per cent net smelter royalty over the Golconda Summit Project which can
be bought back at any time by Golden Metal Resources PLC within one year after commencement of
production for US$1,000,000. Annual payments of US$50,000 are payable by Golden Metal Resources
PLC on or before 11 August of each of 2023, 2024, 2025, 2026 and 2027 and Golden Metal Resources
PLC holds an option to purchase the leased claims for US$335,000, less the amount of annual payments
made.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 85
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
On 17 June 2021, Golden Metal Resources LLC acquired the Garfield and Stonewall Projects from the
Sunrise Resources Group. Under the terms of the Acquisition Agreements, the Sunrise Resources
Group retain a 2 per cent royalty over the Garfield and Stonewall Projects. 1 per cent of each Project
royalty may be repurchased by the Company for US$1,000,000 at any time.
On 1 November 2021, Golden Metal Resources PLC acquired Black Fire Industrial Minerals Pty Ltd
from Thor Mining Plc in order to acquire the Pilot Mountain Project. Certain Mining Claims within the
Pilot Mountain Project are subject to a two per cent royalty held by Nevada Select Royalty and based
on actual proceeds from the sale of minerals. In addition, Nevada Select Royalty is entitled to receive
non-refundable prepayments in respect of the Pilot Metals Royalty at a current rate of US$40,000 per
annum.
No provision has been made in the financial statements for these amounts as the expenditure items are
expected to be incurred in the normal course of business operations. Furthermore, whilst maintaining
the current portfolio of exploration interests is the intent of the Company, should activities be ceased
in any project, save for modest exit costs, the costs of that project would cease.
28.
Subsequent events
In October 2022, the Company acquired Badger Lake Uranium Property (“Badger Lake”) through
claim staking. Badger Lake covers an area of 16.71km2 within the prolific Athabasca Basin. Badger Lake
is surrounded by claims held by uranium focussed companies including Orano SA, Hathor Exploration
and NexGen Energy Ltd.
In October 2022 the exploration programme over the 100%-owned Thibault Lake, Clearwater and Tait
Hill properties completed successfully, resulting in multiple locations of anomalous radioactivity noted
across all three properties with rock sample assay results currently awaited. As a result, the Tait Hill
property was expanded by 32.42km2 to 110.56km2, based on work results and to include the full extent
of the Mullis Lake Target as well as an anomalous lake sediment result.
As part of Owain Morton’s appointment as Non-executive Director on 10 October 2022, Mr Morton
was issued with 5 million options to subscribe for new Power Metal Ordinary Shares of 0.1p each at an
exercise price of 3.25 pence with a life to expiry of 3 years. The Director Options are subject to a
minimum service period of 6 months and may not be exercised until the volume weighted average
price of Power Metal shares trades at 5.0 pence for ten consecutive days.
On 12 October 2022 the Company created an Advisor Warrant Pool comprised of 25m warrants over
new ordinary shares of 0.1 pence, this was to reflect the growth of the network of advisors and to ensure
that those providing valuable support to the Company can share in the exposure to equity upside. The
exercise terms of the new warrants are the same as those created for those awarded to team members
of the Company in 2022, principally, to acquire new Ordinary Shares at an exercise price of 3.25p per
share.
The Adviser Pool Warrants have a life to expiry ending 12 October 2025, save that should the volume
weighted average share price ("VWAP") of the Company exceed 10.0p for five consecutive trading days,
Power Metal shall have the right to serve a ten-business day notice on the Adviser Pool warrant holders
to exercise and pay for their allocation, or they may be cancelled by the Company. The Advisor Pool
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 86
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Warrants are subject to a share price performance condition and cannot be exercised until the VWAP
of the Company has exceeded 5.0p per Ordinary Share for ten consecutive trading days.
In October 2022 the Company confirmed extension of insider Warrants held by Paul Johnson and Ed
Shaw, of 20,000,000 and 7,500,000 respectively, and the Company has extended the expiry date on the
Insider Warrants to 21 April 2023 to reflect the limitations on exercise.
On 18 November 2022, the Group concluded the 58.7% share capital purchase of Kalahari Key Mineral
Exploration Pty Limited (‘KKME’) for total consideration of £807,348 consisting of 46,134,171 new
ordinary shares in the Company at a share price of 1.75 pence, and warrants with a total fair value of
£35,300.
Additionally, in the event, within 2 years, that Kalahari Key or the MFC Project is sold for US$10million
or greater, or a joint venture agreement is signed where the potential project spend is US$10million or
greater, Power Metal will issue further warrants over 46,134,171 new Ordinary Shares at an exercise
price of 5.0p with a 2 year life to expiry. As at 30 September 2022 the above conditions were deemed
unlikely to occur and therefore no contingent consideration recognised.
KKME holds a 100% interest in the Molopo Farms Complex Project, where a large scale nickel platinum-
group metal discovery is being targeted in southwestern Botswana.
The acquisition meets the definition of a business combination and will be accounted for using the
acquisition accounting method in accordance with the Group’s accounting policies.
Details of the fair value of identifiable assets and liabilities acquired purchase consideration and
goodwill are as follows:
Exploration and evaluation of assets
Property, plant and equipment
Cash and cash equivalents
Trade and other payables
Total fair value
NCI (12.29%)
Consideration
Goodwill
There were no associated transaction costs.
Fair value
£’000’s
1,252
8
64
(363)
961
118
843
-
In November 2022 the Company disposed of its 50% interest in Kanye Resources JV. Kavango PLC
acquired all Power Metal interests in the Kanye JV through the issue to Power Metal of 60 million
Kavango shares and 60 million warrants to subscribe for new Kavango ordinary shares with a 30-month
life to expiry from the 8 July 2022 transaction date (30 million at an exercise price of 4.25p and 30 million
at an exercise price of 5.5p). Also, Power Metal 15 million variable price warrants with a six-month life
to expiry, with a minimum exercise price of 3p and an actual exercise price at a 15% discount to the
volume weighted average share price on the date of exercise. On completion of this transaction Power
Metal held 69.5million Kavango shares, representing 9.85% of Kavango’s issued share capital.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 87
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
In November 2022 the Company acquired the North Wind Lithium Project by staking. The staking was
completed through Power Metal’s wholly-owned Canadian subsidiary, Power Metal Resources
Canada Inc. Following a detailed review of several publicly available provincial government geological
databases and reports, Power Metal have staked a total of 5,788.5-hectares over a 16km long trend of
highly anomalous lithium-in-lake sediment results. The North Wind Lithium Project was considered
by the Company to be prospective for lithium (Li), caesium (Cs), and tantalum (Ta) ("LCT") bearing
pegmatite occurrences.
In December 2022 the Company announced a merger of its Wilan Project ("Wilan" or the "Project"),
located in South Australia, with a number of other Australian exploration interests (the "Merger"). The
Merger will create a new Australian exploration company and provide Power Metal with exposure to
the world class Mount Isa copper belt located within Queensland, Australia. The Wilan Project is
comprised of two exploration licences ("ELs") which cover a total area of 1,994km2, held within Power
Metal Resources Australia Pty Ltd ("POW Australia"), which is a wholly-owned subsidiary of Power
Metal Resources PLC.
A heads-of-terms agreement (the "Agreement") was signed to combine POW Australia (100% owner of
the Wilan Project) with two companies holding a 100% interest in a portfolio of two granted exploration
licences and four licence applications covering 1,507km2 in the Mount Isa copper belt of Queensland,
Australia (the "Queensland Projects"). The Queensland Projects are held by two private Australian
companies, RAB Resources Pty Ltd ("RAB Resources" or "RAB") and New Horizon Metals Pty Ltd
("New Horizon" or "NHM"). A new company ("NewCo") will acquire outright the shares in POW
Australia, RAB Resources and New Horizon (the "Merger Parties"). Following the Merger Power Metal
Resources PLC will hold a 20% interest in NewCo.
On 15 February 2019 Paul Johnson, Chief Executive Officer of the Company was awarded 13,613,929
options to subscribe for new ordinary shares of 0.1 pence each in the Company at an exercise price of
1.0p ("Director Options"). The Director Options had an original expiry date of 15 February 2022, which
was subsequently extended to 15 May 2022 and then to 31 December 2022. Paul Johnson is unable to
exercise the Director Options due to activities underway within the Company which preclude exercise
at this time.
In addition, in the December 2019 financing undertaken by the Company participants received
warrants to subscribe for new ordinary shares of 0.1p in Power Metal at an exercise price of 0.7p per
share with an expiry date of 17 December 2021 (“December 2021 Warrants”), which warrant exercise
period was subsequently extended to 17 March 22, then 17 June 2022 and lastly to 31 December 2022
(see announcement 17 June 2022). Paul Johnson, Chief Executive Office, and Ed Shaw, Non Executive
Director held 6,250,000 and 5,000,000 December 2021 warrants respectively (the “Insider Warrants”).
It is the Directors' intention to exercise the Insider Warrants and the Director Options as soon as they
are able to do so, and the Directors expect to be in a position to exercise in the foreseeable future.
Reflecting this the Company granted a final extension to the Insider Warrants and Director Options to
30 June 2023 and should they be unexercised by or on that date, they will lapse (the "Final Extension").
In January 2023 the Company announced the acquisition of the 4,222-hectare Doerksen Bay graphite
Project ("Doerksen Bay" or the "Project") located in mining friendly Saskatchewan, Canada. Power
Metal also announced the formation of ION Battery Resources Limited, a new UK private battery
metals and minerals focused vehicle.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 88
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
As consideration for the 100% acquisition of the Project, Power Metal paid the Vendors a total of £37,500
(the "Consideration"). The Consideration is payable through the issue of 2,500,000 Power Metal new
ordinary shares of 0.1p each ("Consideration Shares") at an issue price of 1.5p per share. The
Consideration Shares will be subject to a 4-month lock-in.
In January 2023 Power Metal announced and completed a financing raising £900,000 for the Company,
for general working capital purposes, and to support the planned exploration activities at the Tati gold
project in Botswana and the Athabasca Basin region uranium properties in Saskatchewan, Canada.
In January Power Metal announced the recommencement of diamond drilling at the Berringa gold mine
licence in Victoria, Australia and in February 2023 the renewal of the licence for a further 5 years, and
a drilling update confirming the presence of visible gold in the first three holes completed.
In February 2023 Power Metal announced the acquisition of four additional uranium properties in the
Athabasca Basin region of Saskatchewan, Canada, taking the total licence footprint to 965.73km2 over
16 properties (including Reitenbach and E-12 properties that are the subject of conditional disposal
agreements).
Scott Richardson Brown and Ed Shaw previously received 5,000,000 options each to acquire new
ordinary shares in the Company of 0.1p at an exercise price of 1.0p ("Director Options"). The Director
Options had an original expiry date of 19 February 2023, however in February 2023 the company
granted a six-month extension to a new exercise date of 19 August 2023.
The notes on pages 46 to 89 are an integral part of these financial statements.
Page 89
Perivan 265320
Power Metal Resources plc
201 Temple Chambers, 3-7 Temple Avenue, London, England, EC4Y 0DT
www.powermetalresources.com
Power Metal Resources plc
Registered number: 07800337
A N N U A L R E P O R T
For the year ended 30 September 2022