Registered number: 07800337
POWER METAL RESOURCES PLC
Annual Report and Financial Statements
For the year ended 30 September 2023
POWER METAL RESOURCES PLC
CONTENTS
Company Information
Chief Executive Officer’s Review
Introduction
Exploration Activity
Corporate Activity
Financial Review
Events Subsequent to the Year End
Corporate Social Responsibility
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 2022
Consolidated Statement of Changes in Equity
- 30 September 2023
Consolidated Statement of Cash Flows
Company Statement of Financial Position
Company Statement of Changes in Equity
- 30 September 2022
Company Statement of Changes in Equity
- 30 September 2023
Company Statement of Cash Flows
Notes to the Financial Statements
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POWER METAL RESOURCES PLC
COMPANY INFORMATION
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Directors:
S Wade
S Richardson Brown
E Shaw
D W Brodie Good
Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Company secretary:
ONE Advisory Limited
Company number:
07800337
Registered office:
Independent Auditor:
Nominated Adviser and broker:
Joint brokers:
Solicitor:
201 Temple Chambers
3-7 Temple Avenue
London EC4Y 0DT
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London E14 4HD
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London W1S 2PP
SI Capital Limited
67 Grosvenor Street
London W1K 3JN
First Equity Limited
Salisbury House
London Wall
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 2023
Introduction
The cyclical downturn in the mineral resource exploration sector continued throughout the year under review,
with increasing signs however that this pressure may now be easing not least with the strong increases in the prices
of gold and uranium, two commodities of focus within the Company’s portfolio.
The year saw the Company continue to focus on its business model of advancing robust internal exploration
programmes to seek major metal discoveries and build underlying project value, whilst also looking in parallel
for significant value crystallisation through corporate activity to build the value of the Company.
Exploration Activity
Athabasca Uranium Exploration
Power Metal currently has a 100% interest in 18 uranium properties covering over 1000km2 in the Athabasca
Region of Saskatchewan, Canada. This is the largest ground footprint in the Athabasca Region held by a UK listed
company.
Power Metal's technical team selected the Athabasca footprint by painstaking review of historical exploration data
from work conducted and paid for by others, applying modern geological knowledge and techniques to identify
what we believe to be the best available ground. The ground was available either because other explorers had
relinquished their interests during the long-term uranium bear market or because the geological opportunities the
Company identified had, at that stage, not been noted by others.
2023 saw the largest Athabasca uranium exploration programme ever undertaken by the Company with significant
early findings announced recently.
Our 2023 exploration programme has covered approximately 10 properties and to date we have announced major
exploration results from across the portfolio, with further updates expected.
Africa Exploration
Tati Project
The 100% owned Tati Gold Project ("Tati") is centred on a historical gold mine, Cherished Hope, and extensions
of high-grade near surface gold mineralisation were confirmed during drilling campaigns carried out by Power
Metal in 2021 and 2022.
Next stage exploration focused on geochemical soil sampling at Tati is now complete. A total of 280 individual
samples were collected across two grids:
•
•
One high-resolution in-fill grid is focussed on an area approximately 2km northwest of the historical
Cherished Hope Gold Mine and is centred on one point anomaly which historically returned an
impressive soil sample of 2.15g/t Au. To date, this anomaly has never been further investigated to
determine the provenance of this gold mineralisation; and
The second grid covers the immediate southwestern extension of Cherished Hope where individual
point anomalies returned a soil sample as high as 0.84g/t Au.
The soil samples have been sent to Intertek Genalysis in Perth, Western Australia for assay and final results are
awaited.
Site rehabilitation of the fines dumps covering Tati have been completed in preparation for the next phase of
exploration and development. This rehabilitation work included removal of the fines dump and clearing the site
of material considered by Power Metal to be suitable for processing at a local facility.
The Company has received inbound interest regarding the potential for small-scale mining at its Cherished Hope
Gold Mine area where near-surface drilling results in 2022 returned bonanza gold up to 47.1g/t Au over 1m (from
6m downhole).
Page 2
POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Molopo Farms Complex Project
During the year, Power Metal acquired an additional 58.7% interest in Kalahari Key Mineral Exploration Pty Ltd,
bringing its total interest to 87.71%. Kalahari Key Mineral Exploration Pty Ltd is a Botswana incorporated private
company, which holds a 100% interest in the Molopo Farms Complex Project.
Extensive exploration to date has confirmed the feeder zone geological model, together with the presence of nickel
sulphides and platinum group elements ("PGEs") through drilling as announced on 27 April 2023 which includes
2.3m @ 0.56g/t Pt+Pd+Au & 0.17% Ni from DDH1-6B, and by aggregating and analysing the extensive database
of historical work has now identified the highest profile conductor drill target to date.
Power Metal sees the potential for a district-scale nickel and PGE discovery at Molopo and will undertake the
next diamond drill programme with this objective in focus.
North American Exploration
North Wind
The 100% Power Metal owned North Wind Lithium Project ("North Wind") is considered by the Company to be
prospective for the discovery of pegmatite hosted lithium mineralisation. Lithium (Li)-caesium (Cs)-tantalum (Ta)
bearing pegmatite ("LCT-pegmatite") accounts for approximately a quarter of the world's lithium production.
The exploration work programme first announced on 10 August 2023 is now complete and a total of 389 soil
geochemical samples were taken. Significantly, several pegmatites were identified across North Wind, with five
pegmatite samples collected - which was a key ground exploration objective. The mineralisation present within
the identified pegmatites will be determined during the assay testing process and based on interpretation of this
data further exploration steps will be determined.
Corporate Activity
Athabasca Uranium Corporate Activity
Power Metal announced the conditional disposal of the Reitenbach and E-12 properties into Teathers Financial
Plc (soon to be renamed Uranium Energy Exploration ("UEE")). Plans for an IPO of UEE are advancing.
The Company has also received third party interest across our uranium portfolio and further commercial
transactions are anticipated however shareholders should note that there can be no certainty of any such
transactions being concluded.
Africa Corporate Activity
Third parties have expressed interest in both Tati and Molopo Farms Complex projects and the Company is
engaged in discussions to explore complementary, joint venture and other project level partnerships.
Power Metal continues to liaise with our partner Katoro Gold plc to seek a new pathway for advancement of the
Haneti Project in Tanzania where the Company holds a 35% interest.
North America Corporate Activity
Golden Metal Resources PLC (“GMET”) successfully listed on the London Stock Exchange in May 2023 with
Power Metal holding an interest following their IPO financing of 61.03%, worth c.£7.1 million as at the date of
this report. Power Metal also holds 1,749,378 warrants to acquire new GMET ordinary shares at an exercise price
of 10.75p per share and with an expiry date of 10 May 2024 and a further 1,749,378 warrants at an exercise price
of 17.5p per share and with an expiry date of 10 May 2025.
Power Metal's 100% owned ION Battery Resources Limited ("ION") holds 100% of the North Wind project
(transfer completed in May 2023), where lithium focused exploration is currently underway, together with 100%
of the Doerksen Bay graphite project and an option to earn-in to the Authier North/Duval East lithium project.
The next corporate steps for ION are to be determined following a review of assay results from the North Wind
summer exploration programme.
Page 3
POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The Company's 30% interest in the Silver Peak project remains as previously stated and we are working with our
partners on the next commercial steps for this important asset.
Australia Corporate Activity
Through its Australian operating subsidiary, Red Rock Australasia Pty Ltd, NBGC has a substantial licence
footprint within the Victoria Goldfields, Australia, which is comprised of 17 granted exploration licences covering
1,867km2 and 5 licence applications covering 493km2. Power Metal is working with its joint venture partner Red
Rock Resources plc to expedite the commercial success of this strategic Australian opportunity.
First Development Resources PLC ("FDR") holds strategic exploration projects in Western Australia and the
Northern Territory and is prepared for an IPO listing which, subject to a return to normalised market conditions
and final regulatory approvals, can be undertaken at short notice. In Western Australia FDR holds the Wallal
Project which includes the company's primary target - the Eastern Anomaly, a magnetic bullseye target with a
geophysical signature similar to Greatland Gold's Havieron discovery in the Paterson Region.
FDR has secured a c.£110k co-funding grant from the Western Australian government as part of the Exploration
Incentive Scheme to be set against the costs of Wallal drilling and has received all the necessary local approvals
for the drilling to be undertaken. FDR has also agreed a contract with DDH1 Drilling Ltd to undertake the Phase
I diamond drilling drill programme and has prepared the access and the drill pad location in readiness for drilling.
Recognising this progress, the early commencement of drilling is being considered alongside the work being
undertaken to progress the IPO.
Finally, Power Metal holds a 20% interest in New Horizon Metals Pty Ltd, which holds projects in Queensland
and South Australia, and is working towards a listing in the Australian capital markets.
Financial Review
Total comprehensive loss for the year to 30 September 2023 of £1.3 million (2022: loss of £137k). The increase
in loss from September 2022 is in part due to the capital contribution balance recognised during the prior 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 £13.6 million at the year-end (2022: £11.7 million).
Raised £3.6 million (before issue costs) in new equity financing during the financial year, from a combination of
new and existing shareholders, including the Directors.
An additional £43.8k of cash received by the Company during the year from exercises of Power Metal share
warrants and £Nil cash received by the Company during the year from exercises of Power Metal share options.
£1.1 million of shares were issued in relation to acquisitions in various investments and projects.
The Company ended the financial year with a cash balance of £1.10 million (2022: £1.56 million).
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.
Events subsequent to the year end
For information regarding events after the reporting date, see note 26 to the financial statements.
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.
Page 4
POWER METAL RESOURCES PLC
CHIEF EXECUTIVE OFFICER’S REVIEW (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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.
Board Changes
In March 2023, Sean Wade was appointed to the Board as Chief Executive Officer and Executive Director,
replacing Paul Johnson.
In May 2023, Bill Brodie Good was appointed to the Board as Non-Executive Director.
Also disclosed in Note 26, in January 2024, Owain Morton resigned from the Board as Non-Executive Director.
Outlook
Power Metal continues to execute on its robust business model of exploration/development project generation and
advancement and value crystallisation.
In addition to the multiple potential district scale exploration and development projects currently within the
portfolio, the Company continues to seek new opportunities for shareholder value creation.
A number of such opportunities are currently in the pipeline and the Board remains confident that with ongoing
operations and also as junior resource and commodity market conditions normalise, the Company is in an excellent
position to deliver value to shareholders.
Sean Wade, Chief Executive Officer
20 February 2024
Page 5
POWER METAL RESOURCES PLC
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The Directors present their strategic report on Power Metal Resources PLC (the “Company”) together with its
subsidiaries (the “Group”/“Power Metal”) for the year ended 30 September 2023.
Overview of the business
The financial year to 30 September 2023 resulted in a total comprehensive loss for the year of £1.3 million (2022:
loss of £137k).
Net assets at the year-end stood at £14.5 million (2022: £13.8 million). The Group’s cash position of £1.1 million
as at 30 September 2023 was supplemented post-year end following a placing of £1.3 million.
Business Strategy
The overriding strategic objective of the Group 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 Group to increase the likelihood of a large-scale metal discovery.
The Group 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 5.
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.
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.
Page 6
POWER METAL RESOURCES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Financing & liquidity risk (Continued)
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 Group has working knowledge of the countries in which it holds exploration licences
and has appointed experienced local operators to assist the Group 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 Group 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 has confidence that
financing of the Group can continue as and when required, albeit the Board of Directors (“The Board”)
is keen to avoid excessive dilution and will manage the financing process with that objective in mind.
Furthermore, the Group 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 Group 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.
Page 7
POWER METAL RESOURCES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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:
- 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.
Foster relationships with stakeholders;
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 the 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)
(b)
(c)
(d)
(e)
(f)
the likely consequences of any decision in the long term,
the interests of the Company’s employees,
the need to foster the Company's business relationships with suppliers, customers and others,
the impact of the Company's operations on the community and the environment
the desirability of the Company maintaining a reputation for high standards of business conduct, and
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 First Development Resources 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 8
POWER METAL RESOURCES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Stakeholder
Their interests
How we engage
Investors
Regulatory bodies
Business sustainability
High standards of governance
Comprehensive review of financial
performance of the business
Success of the business
Ethical behaviour
Interim and Annual Report
Investor Relations section on
Company website
RNS announcements
Trading updates
Shareholder circulars
the
Awareness of long-term strategy and
direction
Improving market perception of the
business
Delivering
term value
long
to
AGM results
Press releases
shareholders
Experience of Directors
Project prospectivity
Compliance with regulations
Worker pay and conditions
Health and safety
Brand reputation
Waste and environment
Insurance
Environmental protection
Media
articles
and
interviews,
including podcasts
The 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
Meetings
updates
at Board
Consistent risk review
Compliance with
regulatory
requirements and industry standard
principles
local
Environment
Sustainability
Energy usage
Recycling
Waste management
Community
Community outreach
Human Rights
Sustainability
Page 9
Appointment of nominated advisor in
accordance with AIM Rules
Oversight of corporate responsibility
plans
impact of
Reduce environmental
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 to
minimise any negative environmental
impact of exploration activities
key
community
Meeting with
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 landowners are paid promptly
Adhere to Government guidelines for
approaching landowner and native title
holder discussion
Rehabilitation of drill sites after work
has completed
local contractors
Employment of
where possible
Fair and prompt payment of all
contractors
Anti-bribery and anti-corruption policy
Whistleblowing policy is in place to
ensure rights are protected
Provide mandatory health and safety
training and creating a safe working
environment through strict procedures.
Contractors are sourced locally where
possible
Communication with contractors is
frequent
dedicated
through
exploration manager
a
POWER METAL RESOURCES PLC
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Contractors
Terms and conditions of contract
Health and safety
Human rights and modern slavery
Sean Wade, Chief Executive Officer
20 February 2024
Page 10
POWER METAL RESOURCES PLC
THE BOARD OF DIRECTORS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Sean Wade, Chief Executive Officer
Sean is an experienced corporate executive within the natural resource sector, having held senior roles in mining
companies including Berkeley Energia PLC, Pensana PLC and Asia Resource Minerals PLC. He has worked on
numerous transactions in the capital markets, including IPO’s, secondary capital raising and M&A in a wide
variety of different jurisdictions and exchanges. His extensive network covers numerous capital providers,
including institutional funds, family offices and private wealth.
Sean started his career at Cazenove & Co in 1993. In 2007 he was a founding shareholder in Liberum Capital.
Since 2012, he has worked in corporate business development and investor relations. He founded Scout Advisory
Limited in 2020 undertaking consultancy work with various listed and private companies in the resource
exploration mining sector.
Scott Richardson Brown, 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 Power Metal 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 (resigned in January 2024)
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.
Douglas William Brodie Good, Non-Executive Director
Bill has over 30 years’ experience in global exploration having cut his teeth in Australia followed by working
extensively in geological and project management in francophone west and central Africa, the Middle East, central
Asia and returning to Australia more recently. Bill has been an explorer combining hands-on execution of field
programmes as well as planning, budgeting and management in some cases multi-project operations. His recent
role with AIM listed Alien Metals Ltd as Technical Director and CEO has given him a broader insight into market
trends and demands and helped broaden his experience to hone his exploration background while making a
significant discovery of a DSO Iron Ore resource while there.
Bill’s experience has extensively involved the design, planning and implementation of new and grass roots
exploration programmes with an emphasis on in country logistics planning, government liaison, people
management and project delivery on time and in budget.
Bill has worked in both the private and consulting sector therefore has an overarching view from both corners to
enable more rounded planning and decision making to optimise projects performance, budgets and schedules.
Page 11
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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 58.59% owned subsidiary, First Development Resources PLC (“FDR”);
its 58.59% owned indirect subsidiary, First Development Resources Pty Ltd (“FDR Pty”);
its 58.59% owned indirect subsidiary, Pardoo Resources Pty Ltd (“Pardoo”);
its 58.59% owned indirect subsidiary, RH Resources Pty Ltd (“RH Pty”);
its 58.59% owned indirect subsidiary, URE Metals Pty Ltd (“URE”);
its 100% owned subsidiary, Power Arabia Ltd (“PA Ltd”), (formerly Power Capital Investments Ltd);
its 100% owned subsidiary, Tati Greenstone Resources Pty Ltd (“TGR”);
its 100% owned subsidiary, Power Metal Resources Botswana Pty Ltd (“PMRB”);
its 87.71% owned subsidiary, Kalahari Key Mineral Exploration Pty Ltd (“KKME”);
its 100% owned subsidiary, Power Metal Resources Canada Inc (“PMRC”);
its 100% owned indirect subsidiary, 102134984 Saskatchewan Ltd (“SASK”);
the 100% owned subsidiary, ION Battery Resources Ltd (“ION”);
its 100% owned indirect subsidiary, 102162331 Saskatchewan Ltd (“SASK2”);
its 100% owned subsidiary, African Battery Metals Ltd (“ABM").
During the year ended 30 September 2023, the Group’s 83.13% owned subsidiary Golden Metal Resources PLC
(“GMET”) successfully listed on the AIM market of the London Stock Exchange. Power Metal’s shareholding
was diluted and from Initial Public Offering (“IPO”) date (10 May 2023), GMET along with its 100% subsidiaries
Golden Metal Resources LLC (“GMR LLC”), Pilot Metals Inc. (“PMI”) and BFM Resources Inc. (“BFMR”),
(together the “GMET Group”) were derecognised as subsidiaries. The audited consolidated financial statements
of the Group include the GMET Group until this date. See note 11 for details.
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 £1.3 million (2022: loss of £137k).
Major events after the reporting date
For information regarding events after the reporting date, see note 26 to the financial statements.
Dividends
The Directors do not recommend the payment of a dividend for the year ended 30 September 2023 (2022: £Nil).
Financial risk management
The Group’s operations are exposed to a variety of financial risks, and these are detailed in note 22 to these
financial statements.
Political donations
There were no political donations during the year ended 30 September 2023 (2022: £Nil).
Bribery legislation
The Directors have adopted appropriate procedures to ensure compliance with the Bribery Act 2010.
Directors
The Directors of the Company who served during the year and since the reporting date are as follows:
S Wade, Chief Executive Officer (appointed 17 March 2023)
P Johnson, Chief Executive Officer (resigned 17 March 2023)
S Richardson Brown, Non-Executive Chairman
E Shaw, Non-Executive Director
O Morton, Non-Executive Director (appointed 10 October 2022, resigned 16 January 2024)
D W Brodie Good, Non-Executive Director (appointed 5 May 2023)
Page 12
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Directors’ interests
The beneficial interests of the Directors holding office at the end of 30 September 2023 in the issued share capital
of the Company as of 30 September 2023 were as follows:
S Wade
S Richardson Brown
E Shaw
O Morton
B Brodie Good
Number of ordinary
shares of 0.1p each
14,764,705
-
15,000,000
-
1,000,000
Percentage of issued
ordinary share capital
0.710
-
0.721
-
0.048
Details of share options and warrants granted to Directors are disclosed in note 20 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.
P Johnson*
S Wade**
S Richardson Brown
E Shaw
O Morton ***
D W Brodie Good ****
Total
Salary/fees
£’000
63
85
40
30
32
12
262
Bonus
£’000
16
56
15
11
11
7
116
Total 2023
£’000
79
142
55
41
43
19
379
Total 2022
£’000
166
-
54
40
-
-
260
* Resigned from the Board on 17 March 2023
** Appointed to the Board on 17 March 2023
*** Appointed to the Board on 10 October 2022, resigned from the Board on 16 January 2024
**** Appointed to the Board on 5 May 2023
There were 7 employees other than the Directors during the year ended 30 September 2023 (2022: 7).
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.
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 the applicable laws and regulations.
Page 13
POWER METAL RESOURCES PLC
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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:
there is no relevant audit information of which the Company’s auditor is unaware; and
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.
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.
By order of the Board
Sean Wade, Chief Executive Officer
20 February 2024
Page 14
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
As Chairman of the Board of Directors of Power Metal Resources PLC (the “Company”) together with its
subsidiaries (the “Group”/“Power Metal”), 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 the Executive Directors and Non-Executives Directors 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.
During the year under review, the following changes took place on the Company’s Board of Directors: the
appointment of Owain Morton as Non-Executive Director on 10 October 2022, who subsequently resigned on 16
January 2024, the appointment of Sean Wade as Chief Executive Officer (CEO) on 17 March 2023 and the
resignation of former CEO Paul Johnson on 17 March 2023, and the appointment of Douglas William Brodie
Good as a Non-Executive Director on 5 May 2023.
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 6, and the key challenges in
executing the Company’s strategy can be found on page 6 to 7.
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 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. All resolutions at the Company’s AGM in 2023 passed comfortably.
The Company is open to receiving feedback from key stakeholders and will take action where appropriate. The
key contact for shareholder liaison is the CEO, Sean Wade, who meets with shareholders as and when requested.
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.
Page 15
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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 6 to 10.
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.
5. Maintain the Board as a well-functioning, balanced team led by the Chair
The Board currently comprises one Executive Director, Sean Wade and three Non-Executive Directors, Scott
Richardson Brown, Ed Shaw, and Douglas William Brodie Good, following the resignation of Owain Morton on
16 January 2024. Scott Richardson Brown is Chairman of the Company.
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 Douglas William Brodie Good are considered to be Independent Non-Executive Directors. Scott Richardson
Brown holds an interest in 5,000,000 options. Owain Morton and Douglas William Brodie Good hold an interest
in 5,000,000 options respectively which were granted at the time of their appointments as Non-Executive
Directors to the Company. Neither the individual Directors or the Company believe that their interests are
significant in assessing their respective independence.
Page 16
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
During the year under review the Company appointed two additional independent Non-Executive Directors to the
Board. . With the resignation of Owain Morton, the Company is currently considering a number of candidates to
join the Board as an independent Non-Executive Director to appropriately align Board composition with the
Company's current size and stage of development. The Board believes that the Non-Executive Chairman and Non-
Executive Directors offer key expertise to the Executive Director through their skill-sets, in addition to supporting
and developing relationships with shareholders and key stakeholders. The Board will continue to review its
composition as the Company grows.
Sean Wade worked for 140 days per year and Paul Johnson worked for 120 days per year. Scott Richardson Brown
and Ed Shaw worked for not less than 21 days per year, Douglas William Brodie Good for not less than 7 and
Owain Morton worked for not less than 18.
During the financial year there were 3 routine Board Meetings and 20 non-routine Board Meetings, and the
attendance of each Director is outlined below:
Director
Paul Johnson*
Sean Wade**
Scott Richardson Brown
Ed Shaw
Douglas William Brodie Good***
Owain Morton ****
Routine Board Meetings
2
1
3
3
1
3
Non-Routine Board Meetings
10
9
19
18
6
15
* Resigned from the Board on 17 March 2023
** Appointed to the Board on 17 March 2023
*** Appointed to the Board on 5 May 2023
**** Appointed to the Board on 10 October 2022, resigned 16 January 2024
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Directors of the Board bring experience from a range of industries including the accounting and finance,
engineering 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 sessions, conferences and networking events.
Biographical details of the Directors can be found on page 11.
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 website disclosures.
The Company’s Nominated Adviser, SP Angel Corporate Finance LLP, is consulted on all matters. During the
year under review 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.
Page 17
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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 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.
The Company has implemented, inter alia, the following policies to help ensure the highest standards of personal
and professional ethical behaviour are adhered to:
an Anti-Bribery and Corruption Policy
a Whistleblowing Policy
a Social Media Policy
a Share Dealing Policy
an Inside Information Policy
The Strategic Report and s172(1) Statement provide further detail on the frameworks in place to promote and
support ethical behaviour and the Company’s values, and how these align with the Company’s objectives, strategy,
and business model.
9. Maintain governance structures and processes that are fit for purpose and support good decision-
making by the Board
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,
a qualified chartered accountant. 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 on three occasions during the year under review.
Page 18
POWER METAL RESOURCES PLC
CHAIRMAN’S CORPORATE GOVERNANCE STATEMENT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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.
The Chair and the Board continue to monitor and evolve the Company’s corporate governance structures and
processes, and maintains that these will evolve over time, in line with the Company’s growth and development.
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 (“AGM”), 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 2023
AGM 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, Non-Executive Chairman
20 February 2024
Page 19
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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 2023 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statement 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 2023 and of the group’s loss for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international
accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the 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 12 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.
The forecasts demonstrated that the group and parent company may require additional funding during
the going concern period to meet their liabilities as and when they fall due.
Page 20
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Stress testing the forecasted cash flows by stripping out sources of income that are not at the current
time guaranteed, as well as critically reviewing committed versus non committed expenditure, in order
to evaluate reasonably possible downside scenarios. We have discussed with the directors the strategies
that they are pursuing to secure further funding if and when required. We note that the group have
successfully raised funds from issuing equity in the past but at the date of this report there are no legally
binding agreements in place to cover a funding deficit in these scenarios.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the group’s or parent company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements were
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 £295,000 (2022: £242,000), based on 2% (2022:
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 £84,000 (2022: £136,000), 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% (2022: 70%) of overall materiality,
and the threshold for which we communicate errors to management has been set at 5% (2022: 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 for the parent entity has been set at £290,000 (2022: £213,000) based on 2% (2022: 2%), of gross
assets with a separate materiality for the statement of comprehensive income of £83,000 (2022: £103,000), based
on 5% (2022: 5%) of the loss for the year adjusted for non-recurring items.
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 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.
Page 21
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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 and Company hold 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
the
evaluation work undertaken,
availability of finance
the
exploration rights.
together with
to further evaluate
There is a risk that impairment indicators exist
which would result in an impairment of the year
end intangible assets balance. The majority of
exploration projects are early stage where no
independently prepared resources estimates are
available.
Classification and valuation of investments (in
subsidiaries, associates, joint ventures and other
financial assets) (Notes 11, 12, 13, 14 and 15)
Investments in subsidiaries (Company only), as
well as joint ventures, associates and equity
(Group &
investments as
Company), are the most significant balances in the
financial statements.
financial assets
There is a risk that the requirements of IAS 28,
IFRS 9, IFRS 10 and IFRS 11 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
the
underlying projects depending on the availability
of funding to meet minimum expenditure and
in advancing developments at
Our work in this area included:
Holding discussions 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;
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;
to,
Evaluating, and providing challenge
management’s impairment assessment; and
Reviewing the disclosures in the financial
statements,
to
estimates and judgements used, and evaluate
their completeness.
including
relating
those
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
or
ownership
correspondence. Considering
percentage, as well as any indications of
significant influence, control, or joint control;
documentation
Page 22
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
earn-in commitments, there is a risk that the
investment balances are not fully recoverable.
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
obtaining
corroboration for any key assumptions made;
and
challenge
and
Reviewing disclosures made in the financial
statements in accordance with IAS 28 and
IFRS 9 and ensuring these are complete and
in accordance with the applicable standard.
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
Page 23
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the
group and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate to
identify laws and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through discussions with management and our
experience of the resource exploration sector.
We determined the principal laws and regulations relevant to the 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 company with those laws and regulations. These procedures included, but were
not limited to:
o Enquires 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 carrying value of intangible assets and investment balances gave the greatest potential
for management bias.
As in all our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Page 24
POWER METAL RESOURCES PLC
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF POWER METAL RESOURCES PLC (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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
20 February 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
Page 25
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Revenue
Gross profit
Operating expenses
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
Note
6
14
12
9
2023
£’000
78
78
(2,777)
1,604
(1,095)
(219)
(1,314)
-
2022
£’000
37
37
(3,127)
309
(2,781)
(167)
(2,948)
-
Loss for the year from continuing operations
(1,314)
(2,948)
Other comprehensive (expense)/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
6
-
6
18
2,793
2,811
Total comprehensive loss for the year
(1,308)
(137)
Loss for the period attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive (loss)/income attributable to:
Owners of the parent
Non-controlling interests
Earnings per share from continuing operations attributable to
the ordinary equity holder of the parent:
Basic and diluted loss per share (pence)
(1,096)
(218)
(1,314)
(1,083)
(225)
(1,308)
(2,256)
(692)
(2,948)
82
(219)
(137)
19
(0.06)
(0.15)
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 26
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
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
Assets classified as held for sale
Current assets
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
Note
10
12
14
14
15
16
13
18
18
20
17
21
2023
£’000
4,947
290
1,161
8
6,406
7,188
481
1,098
191
8,958
2022
£’000
7,138
402
1,620
33
9,193
2,384
346
1,560
1,124
5,414
15,364
14,607
8,531
27,497
5
-
1,712
103
(24,276)
13,572
907
14,479
885
885
885
8,065
23,312
5
2,322
1,638
90
(23,740)
11,692
2,065
13,757
850
850
850
Total equity and liabilities
15,364
14,607
The financial statements of Power Metal Resources PLC, company number 07800337, were approved by the
Board of Directors and authorised for issue on 20 February 2024. They were signed on its behalf by:
Sean Wade
Chief Executive Officer
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 27
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Share
capital
£‘000
Share
premium
£‘000
Capital
Redemption
Reserve
£’000
Capital
contribution
reserve
£’000
Share
based
payment
Reserve
£’000
Exchange
reserve
£’000
Retained
deficit
£‘000
Non-
Controlling
Interests
£‘000
Total
£‘000
Total
Equity
£‘000
7,705
18,437
5
-
-
-
-
360
-
-
-
-
-
-
-
-
4,999
(124)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,322
2,322
-
-
-
-
-
1,541
72
(21,486)
6,274
(306)
5,968
-
-
-
-
-
-
101
(4)
-
-
18
-
18
-
-
-
-
-
(2,258)
(2,258)
(690)
(2,948)
-
-
18
2,322
-
471
18
2,793
(2,258)
82
(219)
(137)
-
-
-
4
-
5,359
(124)
101
-
-
-
-
-
-
5,359
(124)
101
-
2,590
2,590
Balance at 1
October 2021
Loss for the
period
Other
comprehensive
income
Capital
contribution
Total
comprehensive
income /
(expense) for
the period
Issue of ordinary
shares
Costs of share
issues
Share-based
payments
Warrant
exercises
Non-controlling
interest
adjustment on
step disposal of
subsidiaries
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 28
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Total
transactions
with owners
Balance at 30
September
2022
360
4,875
8,065
23,312
-
5
-
97
-
4
5,336
2,590
7,926
2,322
1,638
90
(23,740)
11,692
2,065
13,757
The following describes the nature and purpose of each reserve:
Share Capital: Amount subscribed for share capital at nominal value.
Share Premium: Amount subscribed for share capital in excess of nominal value.
Capital Redemption Reserve: Amounts relating to the purchase of Company’s own shares.
Share based payment reserve: Amounts recognised for the fair value of share options and warrants granted.
Exchange Reserve: Foreign exchange differences in re-translation.
Capital Contribution Reserve: relates to the assignment of receivables from subsidiary undertakings for which no consideration is expected to be paid.
Non-controlling interests: Cumulative net profits/(losses) and exchange differences in relation to non-controlling interests.
Retained deficit: Cumulative net profits/(losses) recognised in the financial statements.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 29
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Share
capital
£‘000
Share
premium
£‘000
Capital
Redemption
Reserve
Capital
contribution
reserve
Share based
payment
Reserve
£’000
£’000
£’000
Exchange
reserve
£’000
Retained
deficit
£‘000
Non-
Controlling
Interests
£‘000
Total
£‘000
Total Equity
£‘000
8,065
23,312
5
2,322
1,638
90
(23,740)
11,692
2,065
13,757
-
-
-
466
-
-
-
-
-
-
4,405
(220)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
74
-
-
13
(1,096)
(1,096)
(218)
(1,314)
-
13
(7)
6
13
(1,096)
(1,083)
(225)
(1,308)
-
-
-
-
-
-
-
-
4,871
(220)
74
-
-
-
-
99
4,871
(220)
74
99
Balance at 1
October 2022
Loss for the
period
Other
comprehensive
income
Total
comprehensive
income /
(expense) for the
period
Issue of ordinary
shares
Costs of share
issues
Share-based
payments
Non-controlling
interest
adjustment on
step acquisition of
subsidiaries
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 30
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Non-controlling
interest
adjustment on
step disposal of
subsidiaries
Non-controlling
interest
adjustment on
disposal of
subsidiaries
Total
transactions
with owners
Balance at 30
September
2023
-
-
-
-
466
4,185
8,531
27,497
-
-
-
5
-
(2,322)
-
-
(2,322)
74
-
-
-
22
22
(22)
-
538
(1,784)
(1,010)
(2,794)
560
2,963
(933)
2,030
-
1,712
103
(24,276)
13,572
907
14,479
The following describes the nature and purpose of each reserve:
Share Capital: Amount subscribed for share capital at nominal value.
Share Premium: Amount subscribed for share capital in excess of nominal value.
Capital Redemption Reserve: Amounts relating to the purchase of Company’s own shares.
Share based payment reserve: Amounts recognised for the fair value of share options and warrants granted.
Exchange Reserve: Foreign exchange differences in re-translation.
Capital Contribution Reserve: relates to the assignment of receivables from subsidiary undertakings for which no consideration is expected to be paid.
Non-controlling interests: Cumulative net profits/(losses) and exchange differences in relation to non-controlling interests.
Retained deficit: Cumulative net profits/(losses) recognised in the financial statements
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 31
POWER METAL RESOURCES PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
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
Expenses settled in shares
Disposals of financial assets
Depreciation
Foreign exchange differences
Share-based payment expense
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 financial assets at fair value through profit or loss
Investments in financial assets through P&L
Investment in joint ventures
Investments in associates
Investments in intangibles
Cash relating to deconsolidated subsidiary
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
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at 30 September
Significant non-cash transactions during the year
2023
£’000
(1,314)
(1,604)
219
129
(175)
5
(33)
30
(2,743)
(169)
797
(2,115)
-
(291)
-
(316)
(797)
(410)
(8)
(1,822)
3,616
79
(220)
3,475
(462)
1,560
1,098
2022
£’000
(2,948)
(309)
167
-
245
-
101
11
(2,733)
(250)
477
(2,506)
(426)
-
(188)
-
(1,530)
-
(32)
(2,176)
3,211
1,875
(125)
4,961
279
1,281
1,560
During the year, the Group acquired intangible assets, either directly or indirectly via subsidiary undertakings and
investments in subsidiaries, totalling £1,146k via the issue of ordinary shares.
Power Metal disposed of its investment in Kanye Resources Pty Ltd during the year, which was previously held
for sale. In consideration, the Company received shares and warrants in Kavango Resources PLC to the value of
£1,114k.
On 10 May 2023, Golden Metal Resources PLC (“GMET”) listed on the AIM market of the London Stock
Exchange, resulting in a dilution of POW’s shareholding leading to a disposal of the subsidiary investment during
the year. On the IPO date, Power Metal disposed of the subsidiary investment and recognised a financial asset,
including an uplift in fair value.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 32
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2023
Assets
Investments in subsidiaries
Investments in joint ventures
Investments in associates
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
Assets classified as held for sale
Current assets
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
Total equity and liabilities
Note
11
12
14
14
15
16
13
18
18
20
21
2023
£’000
2,371
811
-
1,157
1
4,340
7,188
2,994
1,058
-
11,240
15,580
8,531
27,497
5
1,712
(22,852)
14,893
687
687
687
2022
£’000
2,632
496
209
1,485
2
4,824
2,384
1,384
1,032
1,045
5,845
10,669
8,065
23,312
5
1,638
(22,868)
10,152
517
517
517
15,580
10,669
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 profit for the financial year dealt with in the financial
statements of the parent Company was £16,000 (2022: loss of £1,364,000).
The financial statements of Power Metal Resources PLC, company number 07800337, were approved by the
Board of Directors and authorised for issue on 20 February 2024. They were signed on its behalf by:
Sean Wade
Chief Executive Officer
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 33
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
Share Capital
£‘000
Share
premium
£‘000
Capital
Redemption
Reserve
£’000
Share based
payment
reserve
£‘000
Retained
deficit
£‘000
Total equity
£‘000
Balance at 1 October 2021
7,705
18,437
Loss for the period
Total comprehensive (expense) for the period
Issue of ordinary shares
Cost of share issues
Share-based payments
Warrants exercised
Total transactions with owners
-
-
360
-
-
-
360
-
-
4,999
(124)
-
-
4,875
Balance at 30 September 2022
8,065
23,312
5
-
-
-
-
-
-
-
5
1,541
(21,508)
-
-
-
-
101
(4)
97
(1,364)
(1,364)
-
-
-
4
4
6,180
(1,364)
(1,364)
5,359
(124)
101
-
5,336
1,638
(22,868)
10,152
The following describes the nature and purpose of each reserve:
Share Capital: Amount subscribed for share capital at nominal value.
Share Premium: Amount subscribed for share capital in excess of nominal value.
Capital Redemption Reserve: Amounts relating to the purchase of Company’s own shares.
Share based payment reserve: Amounts recognised for the fair value of share options and warrants granted.
Retained deficit: Cumulative net profits/(losses) recognised in the financial statements.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 34
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Share Capital
£‘000
Share
premium
£‘000
Capital
Redemption
Reserve
£’000
Share based
payment
reserve
£‘000
Retained
deficit
£‘000
Total equity
£‘000
Balance at 1 October 2022
8,065
23,312
Profit for the period
Total comprehensive income for the period
Issue of ordinary shares
Cost of share issues
Share-based payments
Total transactions with owners
-
-
466
-
-
466
-
-
4,405
(220)
-
4,185
Balance at 30 September 2023
8,531
27,497
5
-
-
-
-
-
-
5
1,638
(22,868)
10,152
-
-
-
-
74
74
16
16
-
-
-
-
16
16
4,871
(220)
74
4,725
1,712
(22,852)
14,893
The following describes the nature and purpose of each reserve:
Share Capital: Amount subscribed for share capital at nominal value.
Share Premium: Amount subscribed for share capital in excess of nominal value.
Capital Redemption Reserve: Amounts relating to the purchase of Company’s own shares.
Share based payment reserve: Amounts recognised for the fair value of share options and warrants granted.
Retained deficit: Cumulative net profits/(losses) recognised in the financial statements.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 35
POWER METAL RESOURCES PLC
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Cash flows from operating activities
Gain/(loss) for the year from continuing activities
Adjustments for:
Depreciation
Fair value adjustment
Expenses settled in shares
(Profit) / loss on disposal of subsidiary
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
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
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at 30 September
Significant non-cash transactions during the year
2023
£’000
16
1
(1,604)
109
(265)
39
98
(1,606)
(1,326)
170
(2,762)
(316)
-
-
(292)
(608)
3,616
(220)
3,396
26
1,032
1,058
2022
£’000
(1,364)
-
(309)
-
1,033
101
(756)
(1,295)
(1,192)
263
(2,224)
(188)
(209)
(484)
(200)
(1,081)
3,211
(125)
3,086
(219)
1,251
1,032
During the year, the Group acquired intangible assets, either directly or indirectly via subsidiary undertakings and
investments in subsidiaries, totalling £1,146k via the issue of ordinary shares.
Power Metal Resources PLC (the “Company) disposed of its investment in Kanye Resources Pty Ltd during the
year, which was previously held for sale. In consideration, the Company received shares and warrants in Kavango
Resources PLC to the value of £1,114k.
On 10 May 2023, Golden Metal Resources PLC (“GMET”) listed on the AIM market of the London Stock
Exchange, resulting in a dilution of the Company’s shareholding leading to a disposal of the subsidiary investment
during the year. On the IPO date, the Company purchased a number of GMET shares, the value of which netted
against the intercompany loan balance, included in the above.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 36
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1.
Reporting entity
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 Group as at and for the year ended 30
September 2023 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.
2.
Going concern
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 (Note 26), 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 whilst 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 also 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 (“IFRS”) 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 2022
There were no new standards, amendments or interpretations effective for the first time for periods beginning on
or after 1 October 2022 that had a material effect on the Group or Company financial statements.
(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 for the period beginning 1 January 2023 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 2024
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
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 37
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
3.
Basis of preparation (continued)
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transactions – applicable for annual periods beginning on or after 1 January 2023
Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback – effective date 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or
Noncurrent – Deferral of Effective Date – effective date 1 January 2024
Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and
Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture –
effective date optional.
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 Group’s functional
and presentation currency. All financial information presented has been rounded to the nearest thousand pounds,
except where otherwise indicated.
(d) Use of estimates and judgements
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)
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.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 38
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
3.
Basis of preparation (continued)
Non-current assets held for sale
As at 30 September 2023, the Group classified two intangible assets, E-12 and Reitenbach, as non-current assets
held for sale, following an announcement by the Company stating their conditional sale to Teathers Financial
PLC. The transaction is conditional on Teathers Financial PLC’s Admission on the London capital markets. Based
on these terms, the criteria within IFRS 5 (listed below) were considered to be met at 30 September 2023.
- Note 13
An active programme to locate a buyer is initiated,
The sale is highly probable, within 12 months of classification,
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 15
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.
Valuation of share-based payments
Accounting for some equity-settled share-based payment awards required the use of valuation models to estimate
the future share price performance of the Company. These models require the Directors to make assumptions
regarding the share price volatility, risk free rate and expected life of awards in order to determine the fair values
of the awards at grant date.
- Note 20
Acquisition of Kalahari Key Mineral Exploration Pty Ltd
In November 2022, the Company acquired a further 58.7% interest in Kalahari Key Mineral Exploration Pty Ltd
(“KKME”) detailed in note 10. The acquisition was not in scope of IFRS 3 Business Combination as the assets
acquired and liabilities assumed were not deemed to meet the definition of a ‘business’ as defined in the standard
and therefore the acquisition has been accounted for as an asset purchase. KKME has been included in the
consolidated financial statements from that date onwards by full consolidation.
– Note 11
4.
Significant accounting policies
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.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 39
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4. Significant accounting policies (continued)
Business combinations
On acquisition, the assets and liabilities of a subsidiary are measured at their fair value on 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 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 of 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.
Equity method of accounting
Under the equity method of accounting, interests in associates are initially recognised at cost. The Group’s share
of associates 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 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 is equal to 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.
(iii) Transactions eliminated on consolidation
Intra-group balances and transactions, and any income and expenses arising from intra-group transactions, are
eliminated in preparing the consolidated financial statements.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 40
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4. Significant accounting policies (continued)
(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;
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.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 41
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4. Significant accounting policies (continued)
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).
(d) Contingent liabilities
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.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 42
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4. Significant accounting policies (continued)
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.
-
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.
Taxation
(j)
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 37 to 68 are an integral part of these financial statements.
Page 43
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
4. Significant accounting policies (continued)
-
-
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.
Non-current assets held for sale and disposal groups
(l)
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.
-
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 statement of financial position. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the statement of financial position.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 44
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
5.
Operating segments
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.
2023
Intangible assets
Investments in
Joint Ventures
Financial Assets
at fair value
through profit or
loss
Property, plant &
Equipment
Total
2022
Intangible assets
Investments in
Joint Ventures
Investments in
Associates
Financial Assets
at fair value
through profit or
loss
Property, plant &
Equipment
Total
Australia Botswana
£’000
2,660
£’000
1,692
Canada Tanzania
£’000
-
£’000
595
-
-
UK
£’000
-
-
US
£’000
-
-
Total
£’000
4,947
290
290
283
2
-
-
5
471
234
109
64
1,161
2,267
2,665
1,066
-
-
234
Australia Botswana
£’000
359
£’000
1,624
Canada Tanzania
£’000
-
£’000
291
-
209
-
-
-
-
1
110
UK
£’000
-
-
-
-
64
US
£’000
4,864
-
-
8
6,406
Total
£’000
7,138
193
209
679
472
234
159
76
1,620
1,817
1,247
-
-
763
-
234
33
192
-
33
4,940
9,193
193
-
-
-
6.
Operating expenses
Operating expenses include:
Staff costs (note 7)
Foreign exchange loss
Share based payment expense
(Gain)/Loss on disposal
Auditor’s remuneration for audit of the Group and Company financial
statements
2023
£’000
957
62
31
(175)
36
2022
£’000
960
11
70
180
29
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 45
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
7.
Staff costs
Directors’ salary and fees (note 8)
Social security contributions
Staff salaries
Pensions
Share based payments
Total
Group
2023
£’000
378
93
447
8
31
957
Company
2023
£’000
378
92
419
8
31
928
Group
2022
£’000
260
89
535
6
70
960
Company
2022
£’000
260
86
460
6
70
882
The monthly average number of employees (including Directors) during the period was:
Group
2023
20
20
Company
2023
12
12
Group
2022
8
8
Company
2022
10
10
Directors and staff
Total
8.
Directors’ emoluments
2023
Wages and salaries
Social security contributions
Share-based payments
Total
2022
Wages and salaries
Social security contributions
Share-based payments
Total
Executive
£’000
214
35
10
259
Executive
£’000
166
14
-
180
Non-
executive
£‘000
164
21
11
196
Non-
executive
£‘000
94
7
2
103
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 21.5%
(2022: 19%)
Effects of:
Disallowable expenditure
Current losses with no recognisable deferred tax asset
2023
£’000
259
2023
£’000
(1,314)
(283)
233
50
-
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 46
Total
£‘000
378
56
21
455
Total
£‘000
260
21
2
283
2022
£‘000
166
2022
£’000
(2,948)
(560)
50
510
-
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
9.
Taxation (continued)
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 £6,578,021 (2022: £5,282,021). A deferred tax asset has not been recognised in respect of such
losses due to uncertainty of future profit streams.
From 1 April 2023 the UK Government increased the corporation tax rates to 25% on profits above £250,000.
Companies with profits of £50,000 or less will be taxed at 19% and companies with profits between £50,000 and
£250,000 will pay tax at 25% that is reduced by marginal relief on a sliding scale.
10.
Intangible assets
Group
Cost
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
As at 30 September 2022
Reclassification from financial assets
Reclassification to assets held for sale
Reclassification from associate
Additions
Disposal
Subsidiary sale of shares
Effect of foreign exchange
Balance at 30 September 2023
Impairment
As at 30 September 2021
Balance at 30 September 2022
As at 30 September 2022
Charge
Balance at 30 September 2023
Net book value
At 30 September 2022
At 30 September 2023
Prospecting and
exploration
rights
£’000
1,926
136
(993)
7,186
9
8,264
8,264
878
(60)
209
2,067
(5,035)
(79)
(171)
6,073
1,126
1,126
1,126
-
1,126
7,138
4,947
During the year, the Group’s direct interest in the Garfield, Stonewall, Golconda Summit & Pilot Mountain
Projects was disposed of, see note 11 for further details. The Group acquired additional intangible assets in Molopo
Farm and North Wind, see below:
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 47
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
10.
Intangible assets (continued)
Intangible assets
Athabasca Uranium Project
Authier North Project
Canadian Graphite Project
Tati Gold-Nickel Project
Garfield, Stonewall, Golconda Summit & Pilot Mountain Projects
Wallal, Braeside West, Selta & Ripon Hill Projects
Molopo Farm Project
North Wind Project
Total
2023
£’000
349
74
137
384
-
1,692
2,276
35
4,947
2022
£‘000
175
16
99
359
4,865
1,624
-
-
7,138
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 2023, the Group held 17 properties covering 1012km2 in the Athabasca Region of
Saskatchewan, Canada. This is the largest ground footprint in the Athabasca Region held by a UK listed company.
The conditional disposal of two properties held at the Athabasca project were announced previously; Reitenbach,
in August 2022 and E-12 in November 2022. Work is still 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 ("UEE"). The two properties were moved to assets held for sale in the statement of
financial position as at 30 September 2022. Since then, considerable progress has been made on the structure of
the transaction and the advancement of the assets, a key component of which has been the successful completion
of a pre-IPO financing which was announced on 13 December 2023.
Authier North Project
In July 2023, Power Metal announced the early completion of its earn-in to a 100% interest in Authier North. 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.
Canadian Graphite Project
In January 2023, Power Metal announced the acquisition of the 4,222-hectare Doerksen Bay Graphite Project
located in Saskatchewan, Canada. Power Metal transferred its interest into newly formed 100% subsidiary ION
Battery Resources Limited (“ION”). The project gives exposure to the exciting graphite space, a key component
in new age battery technology. The Project is centred around five Saskatchewan Mineral Deposit Index graphite
occurrences including the Ben, Ben North, Bear Bones, Brabant Lake and Doerksen Bay showings.
Tati Gold-Nickel Project
In 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. Further 2023 geochemical soil sampling assay results confirmed two significant gold-in-
soil geochemical anomalies and continuity within the 8km gold trend at Tati. Six unique additional target areas
have been identified for detailed soil sampling which is expected to include a total of c. 450 individual soil samples
for follow on accredited laboratory gold assay testing. Further sampling at this target area will be focussed on in-
fill as well as step-out sampling to better understand the size and orientation of this priority zone.
Garfield, Stonewall, Golconda Summit and Pilot Mountain Projects
On 10 May 2023, Golden Metal Resources PLC (“GMET”) listed on the AIM market of the London Stock
Exchange, relating in a dilution of POW’s shareholding leading to a disposal of the subsidiary investment during
the year. POW’s interests in the projects were therefore disposed of, and the investment in GMET was
subsequently recognised as a financial asset.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 48
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
10. Intangible assets (continued)
Wallal Project, Ripon Hills, Braeside Project and Selta Project
First Development Resources Pty Ltd (“FDR Pty”), an 100% subsidiary of First Development Resources PLC
(“FDR”), holding 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 a
number of 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.
Pardoo Resources Pty Ltd (“Pardoo”) and RH Resources Pty Ltd (“RH Pty”), both 100% subsidiaries of FDR,
hold the fully licenced Ripon Hills and Braeside West Projects which 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 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.
URE Metals Pty Ltd (“URE”) a 100% subsidiary of FDR PLC, holds the Selta Project. The Selta Project in the
Northern Territory is located in an area considered highly prospective for uranium and Rare Earth Element
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 Bore REE deposits.
Molopo Farms Complex Project
In November 2022, Power Metal acquired an additional 58.7% equity stake in private company Kalahari Key
Mineral Exploration Pty Limited (“KKME”), taking the Company’s holding to 87.71%. KKME is a Botswana
registered exploration company with a 100% interest in the 1,723km2 Molopo Farms Complex Project (“MFC”).
At the MFC, Power Metal is targeting a district-scale nickel and platinum group element. On 6 October 2023
the Company announced that its recently completed geophysical inversions led to the identification of the highest
priority conductor to date at the Project within target area T1-14. The Company has further advanced plans to
drill test the target at T1-14 with follow up analysis determining up to two areas to optimally test this conductor.
North Wind Project
The North Wind Lithium project was originally staked by Power Canada Inc. in November 2022, the project
transferred to ION, both companies are 100% subsidiaries of Power Metal. The project is targeting a significant
lithium discovery, the Group is currently awaiting assay results from 2023 field exploration.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 49
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11.
Investments in subsidiaries
Company
As at 30 September 2021
Additions
Balance at 30 September 2022
As at 30 September 2022
Additions
Disposals
Reclassification
Balance at 30 September 2023
Impairment
As at 30 September 2021
Balance at 30 September 2022
As at 30 September 2022
Charge
Balance at 30 September 2023
Net book value
At 30 September 2022
At 30 September 2023
Non-current investments
Investment in Golden Metal Resources PLC
Investment in First Development Resources PLC
Investment in Kalahari Key Mineral Exploration Company (Pty) Ltd
Total investment in subsidiaries
2023
£’000
-
899
1,472
2,371
Investment in
subsidiary
undertakings
£’000
4,813
2,632
7,445
7,445
923
(1,733)
549
7,184
4,813
4,813
4,813
-
4,813
2,632
2,371
2022
£‘000
1,733
899
-
2,632
On 10 May 2023, Golden Metal Resources PLC (“GMET”) successfully listed on the AIM market of the London
Stock Exchange (“Admission”). On this date, Power Metal derecognised GMET as a subsidiary and transferred
its interest in GMET to financial assets. On IPO, the Power Metal purchased a number of GMET shares, the value
of which netted against the intercompany loan balance, included in the above. GMET has been included within
the Group as a subsidiary from 1 October 2022 to 10 May 2023. All assets and liabilities of the entity, along with
the non-controlling interest, were derecognised on this date.
On 18 November 2022, Power Metal acquired a further 58.7% equity stake in Kalahari Key Mineral Exploration
Company (Pty) Ltd, Following completion and restructuring of Kalahari which took place in November 2022,
Power Metal holds 87.71% of Kalahari Key.
At the date of this report, all subsidiaries are still owned by the Company as per the ownership interests shown
below.
Directly
Activity
First
Development
Resources PLC
Mining and
exploration
Country of
incorporation
Ownership
interest
Registered office
United Kingdom
58.59%
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y 0D
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 50
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11.
Investments in subsidiaries (continued)
First
Development
Resources Pty
Ltd
Pardoo
Resources Pty
Ltd
Mining and
exploration
Australia
58.59%
indirectly
Mining and
exploration
Australia
58.59%
indirectly
RH Resources
Pty Ltd
Mining and
exploration
Australia
58.59%
indirectly
URE Metals Pty
Ltd
Mining and
exploration
Australia
58.59%
indirectly
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
United Kingdom
100%
Botswana
87.71%
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y 0DT
Plot 50788, Phakalane,
Botswana
African Battery
Metals Ltd
Mining and
exploration
Kalahari Key
Mineral
Exploration Pty
Ltd
Mining and
exploration
Power Arabia
Ltd
Mining and
exploration
Tati Greenstone
Resources Pty
Ltd
Mining and
exploration
United Kingdom
100%
Botswana
100%
Power Metal
Resources
Botswana Pty
Ltd
Mining and
exploration
Botswana
100%
ION Battery
Resources Ltd
Mining and
exploration
United Kingdom 100%
10216233
Saskatchewan
Ltd
Power Metal
Resources
Canada Inc
102134984
Saskatchewan
Ltd
Mining and
exploration
Mining and
exploration
Canada
100%
Canada
100%
Mining and
exploration
Canada
100%
indirectly
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y 0DT
Plot 337/338, Corner Khama
Street & Selous Avenue,
Francistown, Botswana
Plot 13130, East Gate
Building, Broadhurst Mail,
Broadhurst, Gaborone,
Botswana
201 Temple Chambers, 3-7
Temple Avenue, London,
United Kingdom, EC4Y 0DT
507 6th Avenue East
Vancouver, British Columbia
Canada, V5T 1K9
Suite 530, 355 Burand Street,
Vancouver, British
Columbia, V6C 2G8
1238 27th Avenue E,
Vancouver, British
Columbia, Canada, V5V 2L8
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 51
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11.
Investments in subsidiaries (continued)
For the year ended 30 September 2023, Power Metal Resources Canada Inc incurred a loss of £210,000 (2022:
£62,000), First Development Resources PLC incurred a loss of £559,000 (2022: £401,000), and Kalahari Key
Mineral Exploration Pty Ltd incurred a loss of £20,000. Golden Metal Resources PLC incurred a loss of £165,000
for the period 1 October 2022 to 10 May 2023 (2022: £783,000). There were no other material losses in the
subsidiaries.
12.
Investments in joint ventures
Group
Opening balance
Additions
Share of losses
Closing balance
Company
Opening balance
Additions
Closing balance
2023
£’000
193
316
(219)
290
2023
£’000
495
316
811
2022
£‘000
166
194
(167)
193
2022
£‘000
301
194
495
Red Rock Australasia Pty Ltd/New Ballarat Gold Corporation PLC
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. As part of a group reorganisation in December 2021, 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. No operational transactions are
currently recorded in this entity.
During the year, Power Metal contributed £316,000 (2022: £194,000) to costs incurred by RRAL in line with the
joint venture agreement. At the year ended 30 September 2023, RRAL had incurred a loss of approximately AUD
$815,000 (2022: AUD $600,000). Power Metal included its share of the loss in the financial statements for the
year ended 30 September 2023. This amounted to £219,000 (2022: £167,000). Summarised financial information
for RRAL is listed below.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 52
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
12.
Investments in joint ventures (continued)
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
Total Liabilities
13. Assets classified as held for sale
2023
£’000
2022
£’000
1
4
5
540
540
545
6
30
36
742
923
1,665
1,701
7
6
13
378
378
391
6
50
56
477
647
1,124
789
In November 2022, Power Metal disposed of its interest in Kanye Resources Pty Ltd. The Joint Operation was
transferred to assets held for sale at the year ended 30 September 2022 and a gain on disposal of £117k recognised
in the year ended 30 September 2023.
As noted above in Note 12, in August 2022, a property purchase agreement was signed with Teathers Financial
PLC (“Teathers”) and Power Metal. 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. 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. Both acquisitions are dependent on Teathers
successfully listing on the London capital markets.
In relation to the above properties, intangible assets totalling £144k, and expenses amounting to £104k relating to
the projects have been transferred to assets held for sale.
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:
Kanye
E-12
Reitenbach
Assets held for sale
Group
2023
£’000
-
13
178
191
Company
2023
£’000
-
-
-
-
Group
2023
£’000
1,045
6
73
1,124
Company
2022
£‘000
1,045
-
-
1,045
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 53
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
14. 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
Reclassification to investment in subsidiary
Disposals
Closing balance
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
Company
Non-current
Opening balance
Additions
Fair value adjustment – equity investment
Fair value adjustment – derivative assets
Reclassification to current financial assets
Reclassification (to) / from intangibles
Reclassification to trade and other receivables
Reclassification to investment in subsidiary
Disposals
Closing balance
Current
Opening balance
Additions
Fair value adjustment – equity investment
Fair value adjustment – derivative assets
Reclassification from non-current financial
Reclassification from assets held for sale
Disposals
Closing balance
Listed
£’000
383
319
3,042
(53)
(5,094)
-
1,603
-
-
(9)
191
Listed
£’000
2,230
1,131
(1,361)
(47)
5,094
-
(13)
7,034
Listed
£’000
383
319
3,042
(54)
(5,094)
1,733
-
-
(7)
322
Listed
£’000
2,230
1,131
(1,361)
(47)
5,094
-
(13)
7,034
Unlisted
£’000
1,237
481
-
-
-
-
(328)
-
(420)
-
970
Unlisted
£’000
154
-
-
-
-
-
-
154
Unlisted
£’000
1,102
481
-
-
-
(328)
-
(420)
-
835
Unlisted
£’000
154
-
-
-
-
-
-
154
2023
Total
£’000
1,620
800
3,042
(53)
(5,094)
-
1,275
-
(420)
(9)
1,161
2023
Total
£’000
2,384
1,131
(1,361)
(47)
5,094
-
(13)
7,188
2023
Total
£’000
1,485
800
3,042
(54)
(5,094)
1,405
-
(420)
(7)
1,157
2023
Total
£’000
2,384
1,131
(1,361)
(47)
5,094
-
(13)
7,188
2022
Total
£‘000
3,527
425
(618)
-
(1,161)
(209)
(75)
(61)
-
(208)
1,620
2022
Total
£‘000
179
-
1,147
(220)
1,162
153
(37)
2,384
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
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 54
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
15. Trade and other receivables
Group
Accounts receivable
Other receivables
Prepayments
Trade and other receivables
Company
Receivables due from group undertakings
Receivables due from joint venture partners
Accounts receivable
Other receivables
Prepayments
Trade and other receivables
16. Cash and cash equivalents
Group
Bank balances
Cash and cash equivalents
Company
Bank balances
Cash and cash equivalents
17. Non-controlling interest
2023
£’000
31
366
84
481
2023
£’000
2,757
78
-
75
84
2,994
2023
£’000
1,098
1,098
2023
£’000
1,058
1,058
2022
£‘000
123
149
74
346
2022
£‘000
1,202
2
69
37
74
1,384
2022
£‘000
1,560
1,560
2022
£‘000
1,032
1,032
At 30 September 2023, the Group has material non-controlling interests (“NCIs”) arising from its subsidiaries
First Development Resources PLC (“FDR”) and Kalahari Key Mineral Exploration Pty Ltd (“KKME”). These
NCIs can be summarised as follows;
Balance at 1 January
Total comprehensive loss allocated to NCI
Effect of disposal of GMET
Effect of step disposal of FDR
Effect of step acquisition of KKME (2022: GMET & FDR)
Total
Power Metal Resources SA
Golden Metal Resources PLC
First Development Resources PLC
Kalahari Key Mineral Exploration Company (Pty) Ltd
Total
2023
£’000
2,065
(225)
(1,010)
(22)
99
907
2023
£’000
(306)
-
1,116
97
907
2022
£’000
(306)
(219)
-
-
2,590
2,065
2022
£’000
(306)
1,011
1,360
-
2,065
Golden Metal Resources PLC (“GMET”) was an 83.13 per cent owned subsidiary of the Company that had
material NCI. As noted above in Note 11, during the year GMET was derecognised as a subsidiary and the NCI
was derecognised.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 55
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
17. Non-controlling interest (continued)
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 (0.00%/16.87%)
2023
£’000
(164)
(164)
(32)
-
(32)
6,396
(814)
5,582
-
2022
£’000
(3,191)
(3,191)
(538)
471
(67)
6,201
(207)
5,994
1,011
First Development Resources PLC is a 58.59 per cent owned subsidiary of the Company that has material 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 (41.50%/37.88%)
2023
£’000
(558)
(558)
(215)
(6)
(221)
3,611
(164)
3,447
1,116
2022
£’000
(401)
(401)
(152)
-
(152)
3,726
(136)
3,590
1,360
Kalahari Key Mineral Exploration Pty Ltd (“KKME”) is an 87.71 per cent owned subsidiary of the Company
that has a material NCI. In November 2022, Power Metal acquired an additional 58.7% equity stake in private
company KKME, taking the Company’s holding to 87.71%.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 56
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
17. Non-controlling interest (continued)
Summarised financial information reflecting 100 per cent of the KKME 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 (12.00%/0.00%)
18.
Share capital
Ordinary shares in issue at 1 October
Issued for cash
Issued in settlement for acquisitions
Issued in lieu of expenses
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
Share issues
Balance at 30 September
Balance at beginning of year
Share issues
Expenses relating to share issues
Balance at 30 September
2023
£’000
(19)
(19)
(2)
-
(2)
831
(25)
806
97
2022
£’000
-
-
-
-
-
-
-
-
-
Number of ordinary
shares
2023
1,614,654,921
383,673,949
60,093,043
21,684,343
2,080,106,256
2022
1,254,808,787
137,142,857
222,703,277
-
1,614,654,921
Number of deferred
shares
2023
3,628,594,957
3,628,594,957
2022
3,628,594,957
3,628,594,957
Ordinary
share capital
2023
£’000
8,065
466
8,531
Share Premium
2023
£’000
23,312
4,405
(220)
27,497
2022
£‘000
7,705
360
8,065
2022
£‘000
18,437
4,999
(124)
23,312
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 37 to 68 are an integral part of these financial statements.
Page 57
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
18.
Share capital (continued)
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 November 2022, the Company acquired an additional 58.7% interest in Kalahari Key Mineral Exploration Pty
Limited. The consideration of £807,348 was payable through the issue of 46,134,171 new ordinary shares of 0.1p
each in the Company at a price of 1.75p per new ordinary share and warrants over 46,134,171 new Ordinary
Shares at a 3.5p exercise price.
In January 2023, the Company acquired 100% of the Canadian Graphite Project for £37,500. Consideration was
payable through the issue of 2,500,000 Power Metal new ordinary shares of 0.1p each at an issue price of 1.5p per
share.
In January 2023, the Company raised £900,000 before expenses through the issue of 64,285,714 new ordinary
shares of 0.1p each ("Financing Shares") at an issue price of 1.4p per share. Each Financing Share has an attaching
warrant to subscribe for one new ordinary share of 0.1p each in the Company at an exercise price of 2.0p per share
with a 24-month term from 30 January 2023 creating 64,285,714 financing warrants.
In March 2023, the Company issued 11,458,872 ordinary shares at an issue price of 2.25p for settlement of the
drill contract with Mindea Exploration & Drilling Services (Pty) at the Molopo Farms Complex Project.
In May 2023, the Company raised £2.175m before expenses through the issue of 319,388,235 new ordinary shares
of 0.1p each ("Placing Shares") at an issue price of 0.85p per share. Each Placing Share has an attaching warrant
to subscribe for one new ordinary share of 0.1p each in the Company at an exercise price of 2.0p per share with a
5-year term expiring 9 May 2028.
In May 2023, the Company received notice to exercise warrants over 6,250,000 new ordinary shares of 0.1p each
at an exercise price of 0.7p per warrant share, raising an additional £43,750 for the Company.
In July 2023, the Company issued 9,208,951 ordinary shares at an issue price of 0.71p per share in lieu of fees
incurred with advisors. 3,541,904 shares were issued to SP Angel Corporate Finance LLP, the Company's
nominated adviser and joint broker, in lieu of fees to the value of £25,000. The remaining 5,667,047 shares were
issued to another corporate adviser in lieu of fees for a total value of £40,000.
In July 2023, the Company negotiated early completion of its Authier North Lithium Project Earn-In, acquiring
100% interest in the Project. Consideration of CAD$75,000 (£43,941) was settled through the issue of 6,225,392
new ordinary shares of 0.1p at an issue price of 0.71p.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 58
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
19. Earnings per share
Basic and diluted loss per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the year.
Group
Loss attributable to equity holders of the parent
Weighted average number of ordinary shares in issue
Basic and diluted loss per ordinary share (pence)
2023
(1,096,881)
1,842,111,876
(0.06)
2022
(2,257,872)
1,457,507,624
(0.15)
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.
20.
Share options and warrants
Reconciliation of outstanding share options:
2023
Outstanding at 1 October 2022
Granted during the year
Lapsed
Outstanding at 30 September 2023
Exercisable at 30 September 2023
Number of
options
104,211,429
36,000,000
(49,711,429)
90,500,000
85,500,000
Weighted
average
exercise price
(£’s)
0.03
0.03
0.03
0.03
0.03
The weighted average contractual life of the options outstanding at the reporting date is 164 days.
Exercise prices of all share options outstanding at the end of the 2023 financial year was £0.033:
2022
Outstanding at 1 October 2021
Granted during the year
Exercised
Outstanding at 30 September 2022
Exercisable at 30 September 2022
Directors Options
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
0.03
Included within the options issued in the year ended 30 September 2023 were 22,500,000 options issued to
Directors (2022: 10,000,000).
2023
Sean Wade
Owain Morton
Bill Brodie Good
Exercise
price
(£’s)
0.033
0.033
0.033
Number of
Options
12,500,000
5,000,000
5,000,000
22,500,000
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 59
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
20.
Share options and warrants (continued)
2022
Scott Richardson Brown
Ed Shaw
Exercise
price
(£’s)
0.033
0.033
Number of
Options
5,000,000
5,000,000
10,000,000
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
4.514%, 3.183%, 3.648% & 3.718%
70%
0%
Between 2 and 3 years
£0.0148, £0.0143, £0.0108 & £0.0083
The volatility measured at the standard deviation of continuously compounded share returns is based on
statistical analysis of daily share prices over the last year.
Reconciliation of outstanding warrants
2023
Outstanding at 1 October 2022
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding and exercisable at 30 September 2023
Weighted
average
exercise
price
(£’s)
0.19
0.02
0.01
0.02
0.03
Number of
warrants
212,884,342
541,722,268
(159,190,474)
(6,250,000)
589,166,136
The weighted average contractual life of the warrants outstanding is 2 years 358 days.
2022
Outstanding at 1 October 2021
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding and exercisable at 30 September 2022
Directors Warrants
Number of
warrants
205,053,812
128,064,701
(3,948,745)
(116,285,426)
212,884,342
Weighted
average
exercise price
(£’s)
0.01
0.04
0.01
0.03
0.19
No warrants were issued to Directors in the year ended 30 September 2023 (2022: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
4.514%, 3.648% & 3.718%
70%
0%
Between 2 and 3 years
£0.0148, £0.0108 & £0.0083
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 60
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
20.
Share options and warrants (continued)
£30,728 (2022: £70,119) 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 £43,867 (2022: £35,283) has been
included in non-current assets as it relates to the acquisition of certain financial assets.
21. Trade and other payables
Group
Trade payables
Other Payables
Other taxation and social security
Accrued expenses
Trade and other payables
Company
Trade payables
Other Payables
Other taxation and social security
Accrued expenses
Payable to group undertakings
Trade and other payables
2023
£’000
343
35
54
453
885
2023
£’000
236
35
56
360
-
687
2022
£‘000
686
-
-
164
850
2022
£‘000
329
-
-
164
24
517
The Group’s and Company’s exposure to currency and liquidity risk related to trade and other payables is
disclosed in note 22.
22. Financial instruments
Financial risk management
Overview
The Group has exposure to the following risks arising from financial instruments.
-
-
- market risk
-
credit risk
liquidity risk
currency 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.
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.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 61
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
22.
Financial instruments (continued)
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 14 Financial Assets at Fair Value
through Profit or Loss for further detail.
Group
2023
Financial Assets at fair value
through profit or loss
Financial assets (fair value through the
profit or loss)
Company
2023
Financial Assets at fair value through
profit or loss
Financial assets (fair value through the
profit or loss)
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
7,224
7,224
-
-
1,124
1,124
Level 1
£’000
Level 2
£’000
Level 3
£’000
7,355
7,355
-
-
989
989
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
8,348
8,348
Total
£’000
8,344
8,344
Total
£’000
4,004
4,004
Total
£’000
3,869
3,869
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 62
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
22. Financial instruments (continued)
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
2023
£’000
418
1,098
1,516
Carrying
amount
2023
£’000
2,910
1,058
3,968
2022
£‘000
272
1,560
1,832
2022
£‘000
1,310
1,032
2,342
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 2023
Non-derivative financial liabilities
Trade and other payables
30 September 2022
Non-derivative financial liabilities
Trade and other payables
Carrying
amount
£’000
2 months
or less
£’000
831
831
831
831
Carrying
amount
£’000
2 months
or less
£’000
757
757
757
757
2-12
months
£’000
-
-
2-12
months
£’000
-
-
More
than 1
year
£’000
-
-
More
than 1
year
£’000
-
-
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 63
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
22. Financial instruments (continued)
Company
30 September 2023
Non-derivative financial liabilities
Trade and other payables
30 September 2022
Non-derivative financial liabilities
Trade and other payables
Carrying
amount
£’000
2 months
or less
£’000
631
631
631
631
Carrying
amount
£’000
2 months
or less
£’000
440
440
440
440
2-12
months
£’000
-
-
2-12
months
£’000
-
-
More
than 1
year
£’000
-
-
More
than 1
year
£’000
-
-
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:
Net foreign currency financial
USD
CAD
AUD
BWP
Total net exposure
Group
Company
2023
£’000
(2)
34
174
46
252
2022
£’000
48
13
5
52
118
2023
£’000
(2)
34
3
1
36
2022
£’000
48
13
5
52
118
Sensitivity analysis
A 10 per cent strengthening of sterling against the respective currencies at 30 September 2023 would have
increased/(decreased) equity and profit or loss by the amounts shown below:
Group
USD
CAD
AUD
BWP
Total net exposure
Profit and loss
2023
£’000
-
(3)
(17)
(5)
(25)
2022
£’000
(5)
(1)
-
(5)
(11)
Equity
2023
£’000
-
(3)
(17)
(5)
(25)
2022
£’000
(5)
(1)
-
(5)
(11)
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 64
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
22. Financial instruments (continued)
Company
Profit and loss
Equity
USD
CAD
AUD
BWP
Total net exposure
2023
£’000
-
(3)
-
-
(3)
2022
£’000
(5)
(1)
-
(5)
(11)
2023
£’000
-
(3)
-
-
(3)
2022
£’000
(5)
(1)
-
(5)
(11)
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 2023 for the Group
totalled £14,479,000 (2022: £13,755,000) and for the Company totalled £14,893,000 (2022: £10,152,000).
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.
23. Contingent liabilities and assets
During the year, the Company issued a letter of support to First Development Resources PLC, its subsidiary,
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 2023.
It is noted in the letter that on successful IPO of First Development Resources PLC, support will cease. As at the
date of these financial statements, it is likely this support will be required, however, the Company is unable to
make a reliable estimate of the value of the liability.
As at 30 September 2023, the Group identified one contingent asset. This related to First Development Resources
PLC, who committed to paying the Company £87,000 for administrative support and executive management
services. The commitment only becomes payable to the Company in the event of First Development Resources
PLC achieving a corporate transaction, being a disposal of an asset or completion of its planned IPO and listing.
The contingent asset has not been recorded in the Consolidated Statement of Financial Position.
24. Related parties
In addition to matters reported in note 8, the following related party transactions took place during the year ended
30 September 2023:
Paul Johnson, who served as CEO of the Company until 17 March 2023, is also Director of Value Generation
Limited (“VGL”), a management consultancy business. The total fees invoiced to the Company by VGL for the
year ended 30 September 2023 were £1,616 (2022: £31,800) 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 VGL on behalf of
POW.
Douglas Brodie Good, who served as a Director of the Company during the year, is also a Director of KBG
Consultants Limited (“KBG”), a management consultancy business. The total fees invoiced to the Company by
KBG for the year ended 30 September 2023 were £40,000 (2022: £Nil) of which £17,000 was outstanding at year
end (2022: £Nil). All fees related to consultancy.
The notes on pages 37 to 68 are an integral part of these financial statements.
Page 65
POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
24. Related parties (continued)
In August 2021, an advance of £100,000 was made by Power Metal to Red Rock Resources PLC for joint venture
costs in respect of the set-up of New Ballarat Gold Corporation PLC and its planned listing. The loan is repayable
on demand and at 30 September 2023, £82,500 was outstanding (2022: £100,000).
During the year, the Company advanced funds to New Ballarat Gold Corporation PLC, totalling £30,000. The
loan is repayable on demand and at 30 September 2023, £30,000 was outstanding (2022: £Nil).
During the year, the Company wrote off the loan payable by CBH Resources of £35,000 (2022: £Nil). Therefore,
at 30 September 2023 £Nil was outstanding (2022: £35,000). Any cumulative expected credit losses were written
off during the year.
During the year, the Company wrote off the loan owed to Regent Resources Interests Corporation of £24,000
(2022: £Nil). Therefore, on 30 September 2023 £Nil was outstanding (2022: £24,000). Any cumulative expected
credit losses were written off during the year.
During the year, the Company received 2,374,319 ordinary shares in Golden Metal Resources PLC (“GMET”),
as part of its IPO. GMET was a subsidiary as at 30 September 2022. The total value of these shares amounted to
£202,000 and consideration was offset against the outstanding loan balance due to Power Metal. After the IPO,
Power Metal’s shareholding was diluted to c.61% and it is deemed that the Company no longer controlled Golden
Metal Resources PLC, due to a relationship agreement in place. The total amount due to Power Metal on 30
September 2023 was £5,000 (2022: £16,000). The amount is repayable on demand. A cumulative expected credit
loss of £420 was recognised at the year-end in respect of the receivable (2022: £1,200).
During the year, the Company advanced funds to Wilan Resources Pty Ltd (“Wilan”) (previously named Power
Metal Resources Australia Pty Ltd), totalling £7,500 (2022: £45,000). Wilan, previously a subsidiary, was sold to
NHM Holdings Pty Ltd during the year, a company in which Power Metal holds a small shareholding. It was
agreed the loan between Power Metal and Wilan would remain in place. The loan is repayable on demand and on
30 September 2023, £53,500 was outstanding (2022: £46,000).
During the year, the Company advanced funds to its subsidiary, Power Metal Resources Canada Inc, totalling
£387,000 (2022: £261,000). The loan is repayable on demand and on 30 September 2023, £703,000 was
outstanding (2022: £316,000). An expected credit loss of £38,000 was recognised at the year-end in respect of the
intercompany receivable (2022: £23,000).
During the year, the Company advanced funds to its subsidiary, Tati Greenstone Resources Pty Ltd, totalling
£74,000 (2022: £234,000). The loan is repayable on demand and on 30 September 2023, £422,000 was
outstanding (2022: £348,000). An expected credit loss of £6,000 was recognised at the year-end in respect of the
intercompany receivable (2022: £28,000).
During the year, the Company advanced funds to its subsidiary, Power Metal Resources Botswana Pty Ltd
totalling £24,000 (2022: £8,000). The loan is repayable on demand and on 30 September 2023, £32,000 was
outstanding (2022: £8,000). An expected credit loss of £2,000 was recognised at the year-end in respect of the
intercompany receivable (2022: £1,000).
During the year, the Company advanced funds to its subsidiary, First Development Resources PLC, totalling
£61,000 (2022: £201,000). The loan is repayable on demand and on 30 September 2023, £96,000 was outstanding
(2022: £36,000). The loan is repayable on demand, and an expected credit loss of £5,000 was recognised at the
year-end in respect of the intercompany receivable (2022: £2,000).
During the year, the Company advanced funds to its subsidiary, Power Arabia Limited (formally Power Capital
Investments Ltd), totalling £Nil (2022: £Nil). The loan is repayable on demand and on 30 September 2023, £5,000
was outstanding (2022: £5,000). An expected credit loss of £Nil was recognised at the year-end in respect of the
intercompany receivable (2022: £Nil).
The notes on pages 37 to 68 are an integral part of these financial statements.
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POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
24. Related parties (continued)
During the year, the Company advanced funds to its subsidiary, ION Battery Resources Limited, a company
incorporated in the year, totalling £122,000 (2022: £Nil). ION Battery Resources Limited also acquired an
exploration property with a total value of £115,000, via intragroup transfer from Power Metal Resources Canada,
a wholly owned subsidiary of the Company. The loan is repayable on demand and on 30 September 2023,
£238,000 was outstanding (2022: £Nil). An expected credit loss of £15,000 was recognised at the year-end in
respect of the intercompany receivable (2022: £Nil).
During the year the Company acquired control of Kalahari Key Mineral Exploration Pty Ltd, previously an
associate. £328,000 of costs incurred in excess of the earn in option were transferred to a loan with the subsidiary.
The Company also advanced £388,000 funds to the subsidiary after the acquisition. The loan is repayable on
demand and on 30 September 2023, £716,000 was outstanding (2022: £Nil). An expected credit loss of £57,000
was recognised at the year-end in respect of the intercompany receivable (2022: £Nil).
25. 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 required to remain in good standing which are funded directly by Power Metal or through
its subsidiaries.
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 attached,
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 attached. 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.
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.
26. Subsequent events
On 3 October 2023, the Company issued 1,293,103 new ordinary shares of 0.1 pence, at a price of 0.725 pence
per share ("Fee Shares") to SP Angel Corporate Finance LLP, the Company's nominated adviser and joint broker,
in lieu of fees incurred to the value of £9,375. A further 2,068,965 Fee Shares were issued to a professional
services provider in lieu of fees incurred to the value of £15,000.
On 6 November 2023, Power Metal announced the disposal of its entire holding of 69,500,000 shares of Kavango
Resources Plc (“Kavango”), at a price of 0.8p per share, raising cash of £556,000 for the Company. Power Metal
retained its 60,000,000 warrants to subscribe for new Kavango shares with 30,000,000 warrants at an exercise
price of 4.25p and 30,000,000 warrants at an exercise price of 5.5p, both with an expiry date of 8 January 2025.
In addition, Power Metal holds a 1% net smelter return royalty (“NSR”) in respect of the project licence footprint
in the Kalahari Copper Belt and Ditau Camp projects previously held in joint venture with Kavango.
On 16 January 2024, Owain Morton, Non-Executive Director, stepped down from the board with immediate
effect.
The notes on pages 37 to 68 are an integral part of these financial statements.
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POWER METAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
26. Subsequent events (continued)
On 31 January 2024, Power Metal announced the issuance of 130,000,000 new ordinary shares of 0.1 pence each
at an issue price of 1.0 pence per ordinary share, representing a premium of approximately 3.09 per cent. The
share issue resulted in a total raise of £1.3 million.
27. Ultimate controlling party
The Directors do not believe that there is an ultimate controlling party of the Group.
The notes on pages 37 to 68 are an integral part of these financial statements.
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