Registration Number: 05225394
Red Rock Resources Plc
Annual Report and Accounts 2021
Red Rock Resources Plc
Annual Report and Accounts 2021
1
STRATEGIC REPORT .................................................................................................................................................................... 3
COMPANY INFORMATION ..................................................................................................................................................................... 3
CHAIRMAN’S STATEMENT ..................................................................................................................................................................... 4
STRATEGIC REVIEW .............................................................................................................................................................................. 7
GOVERNANCE ........................................................................................................................................................................... 10
BOARD OF DIRECTORS ........................................................................................................................................................................ 10
DIRECTORS’ REPORT .......................................................................................................................................................................... 11
STATEMENT OF DIRECTORS’ RESPONSIBILITIES ........................................................................................................................................ 15
CORPORATE GOVERNANCE STATEMENT ................................................................................................................................................. 16
FINANCIAL STATEMENTS .......................................................................................................................................................... 19
INDEPENDENT AUDITOR’S REPORT........................................................................................................................................................ 19
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................................................................... 24
CONSOLIDATED INCOME STATEMENT .................................................................................................................................................... 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY................................................................................................................................ 26
CONSOLIDATED STATEMENT OF CASH FLOWS ......................................................................................................................................... 28
COMPANY STATEMENT OF FINANCIAL POSITION ...................................................................................................................................... 29
COMPANY STATEMENT OF CHANGES IN EQUITY ...................................................................................................................................... 30
COMPANY STATEMENT OF CASH FLOWS ................................................................................................................................................ 32
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................................................. 33
Red Rock Resources Plc
Annual Report and Accounts 2021
2
Strategic Report
Company Information
Directors
Andrew Bell
Scott Kaintz
Alex Borrelli
Sam Quinn
Executive Chairman and CEO
Director and CFO
Independent Non-Executive Director
Non-Executive Director
all of:
Red Rock Resources Plc
71-91 Aldwych House
London
WC2B 4HN
Tel: 020 7747 9990
Company Secretary
Stephen Ronaldson
Company Number
05225394
Website
www.rrrplc.com
Registered Address
Salisbury House
London Wall
London
EC2M 5PS
Company’s Solicitors
Druces LLP
Salisbury House
London Wall
London
EC2M 5PS
Nominated Adviser
Beaumont Cornish Limited
Building 3
566 Chiswick High Road
London
W4 5YA
Broker
First Equity Limited
Salisbury House
London Wall
London
EC2M 5QQ
Auditors
PKF Littlejohn LLP
15 Westferry Circus
London
E14 4HD
Accountants
Silvertree Partners LLP
3rd Floor, 14 Hanover Street
London
W1S 1YH
Tax Advisers
Cameron & Associates Ltd
35-37 Lowlands Road
Harrow-on-the-Hill
Middlesex
HA1 3AW
Registrars
Share Registrars Limited
Molex House, Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7DR
Bankers
Coutts & Co
440 Strand
London
WC2R 0QS
Red Rock Resources Plc
Annual Report and Accounts 2021
3
Chairman’s Statement
Dear Shareholders,
The year from July 2020 to June 2021 we expected to be one of activity across the board for us, and so it was. We progressed
exploration in every principal country of operation, and had it not been for the continuance of the travel and work restrictions imposed
by various countries in response to the Covid-19 pandemic of early 2020, those advances would have been greater and faster.
This has culminated in three important drill programmes that have kept us constantly busy since the end of June 2021. We were
drilling first for copper and cobalt in Congo, then also for gold in Kenya. Just as the first phase of drilling in Kenya ended in December
2021, diamond drilling for gold began in Australia. We expect positive results from all three programmes, which will come over the
next few weeks.
If we divide the Company’s exploration activities into those conducted on Legacy Exploration Assets and activities on New Exploration
Assets, the progress over the last eighteen months and our success in creating a project pipeline is more easily explained. Progress
on the Legacy Exploration Assets was slowed in various ways by Covid-19 factors, though not critically. The New Exploration Assets
were the direct product of opportunities that arose as a result of Covid-19, so in this respect the virus worked in our favour, but the
impact is lagged and will be felt more fully during the course of 2022.
ACTIVITY ON LEGACY EXPLORATION ASSETS
During the year we conducted extensive geophysics over key licenses in the Congo and Kenya, in the latter country with our own
trained crew and equipment, and were then able to start drill programmes in both countries as well as to plan future work. These
programmes have only recently concluded, and we end the calendar year awaiting final laboratory results from Congo and from the
first half of the samples sent from Kenya.
Kenya
In Kenya, following the restoration of our licenses in August 2020, we repaired the camp and vehicles, recruited a new team in Migori
and in London, and with them and with consultants CSA Global Ltd, shared and discussed data on numerous Zoom calls as we
prepared to announce in February 2021 a new Estimated Mineral Resource under the JORC 2012 Code of 723,000 oz of Gold at
1.49 grams per ton.
The detailed work done in revisiting our data on the Kenya licenses, then 3.18 terabytes and now 3.65 terabytes, fed into the targeting
for the 2,000 metre initial reverse circulation drill programme which we began shortly after the June year end after completing an
Environmental Impact Assessment. This programme has just finished and a new EIA is already being carried out for the next phases
of exploration planned for 2022.
Congo
In the Democratic Republic of Congo, we followed a similar path, completing geophysics and then starting just before the end of the
Financial Year what became a 2,300 metre reverse circulation drill programme. In this case the targets were copper and cobalt.
ACTIVITY ON NEW EXPLORATION ASSETS
Australia
The initial period of lockdown in 2020 initially froze much of our activity, but by eliminating travel time and regular hours it provided
us with the leisure to engage in strategic thinking. We studied opportunities including an intensive analysis of the Victoria Goldfields
in Victoria, Australia, produced a white paper, and concluded that a rising gold price and an increase in exploration interest would
lead to new discoveries in underexplored and historically rich gold terrain that could benefit from the application of new techniques.
We applied for substantial acreage centred on the key historic mining district of Ballarat; our applications sometimes beating other
applications only by a day or two, and were just in time to take a strategic position that only a few weeks later would have already
become impossible. There is no doubt that the restrictions on travel in Australia slowed the competition, and provided us with a
window of which we were able to take full advantage.
Because of the initial perceived risk in this step into a new area, we teamed up with Power Metal Resources Plc in a joint venture.
By September 2020 we had an independent geological report prepared, but due to the extremely rigorous lockdowns, and home
working by officials, in Victoria, the process of license grant was not as rapid as we hoped, and as gold drifted off the July 2020 high
of $2115 per ounce to just under $1800, the pandemic excitement surrounding gold stocks dissipated. Our first grants came in
February 2021, totalling 215 square kilometres, and only in the last few days has an updated geological report been completed and
the total acreage of granted licenses gone above 1,000 sq km to 1,501 sq km.
An excellent local team of geologists has been assembled by Dave Holden, an experienced geologist and manager living on the
license, and previously known to us, and the detailed exploration work they have been doing has enabled us already to identify
promising drill-ready targets.
A 2,000 metre drilling campaign began on 13 December 2021 on the first of three initial targets, and progress continues towards a
listing for New Ballarat Gold Corporation Plc, the new holding company for our joint venture assets in Australia, in the New Year.
Red Rock Resources Plc
Annual Report and Accounts 2021
4
Côte d’Ivoire and Burkina Faso
At a time when both Kenya and the DRC were on the UK’s Red List for travel, meaning that a ten-day sojourn in a Government-run
hotel would be required on return to London, we decided at the end of one trip on the alternative of revisiting Abidjan to see if it might
be an opportune moment to breathe new life into our former gold ventures there. Considerably assisted by the fact that our recently
recruited database manager and geologist in London, of Burkinabe extraction, had been born and worked in the Côte d’Ivoire, we
made contact with experienced geologists in both countries, and from among them found suitable hard working and conscientious
local partners and managers. After writing on our return a white paper, we concluded that the West African Gold belts were still
immature gold plays that presented a very great opportunity if one were working with experienced partners. We established new local
subsidiaries, and having reviewed and analysed a long list of opportunities, we whittled them down to short lists, and made
applications for those licenses we believe to be most prospective for commercial discoveries. We expect early grant of some of these.
OTHER ASSETS
Our strategic investments included listed holdings in manganese producer Jupiter Mines Ltd (ASX:JMS), diversified explorer Power
Metal Resources PLC (AIM:POW), and iron ore developer Juno Mines Ltd (ASX:JNO), as well as royalty interests in Mt Ida (iron
project, Australia), various gold projects, and the El Limon gold mine in Colombia. An unlisted holding whose value started to become
apparent was Elephant Oil Corporation, formerly Elephant Oil Ltd, which holds onshore oil acreage in Benin and Namibia, and which
has just filed its Form S1 with NASDAQ as part of the final preparation for an expected listing.
In the Congo, we are acting with despatch to assert our rights over valuable properties forming part of a joint venture, with a freezing
order now in place as we move towards the judgement phase of proceedings. We may have other causes of action in various
jurisdictions, and look to various possible forms of compensation and damages.
At the end of calendar 2020, we provided some assistance to the Australian Administrator of Vector Mines Ltd (In Administration) in
order to provide time and space to mediate a solution in relation to a significant but disputed Congolese gold asset. Knowing all the
main parties involved, and the potential of the asset, we believe that an outcome is possible in which we would play a part and that
would be beneficial to the parties in dispute.
PERSONNEL, ESG, AND ADMINISTRATION
We embrace the new emphasis worldwide on companies showing environmental and social neighbourliness, and ensuring they offer
a career open to the talents that offers training where it is needed, widens experience where it is lacking, and gives responsibility to
the capable without consideration of cultural background. We embrace it because we have always tried to behave in these ways, for
business as well as ethical reasons. Among our first hires both in Australia and in Kenya have been environmental and community
relations officers, in Kenya now supplemented by an expert adviser on the Mining Law and Governmental relations. We know how
key it is now for what is sometimes termed a social license to operate, that we are not only doing the right things but are doing them
in a quite visible way.
The key to our operations is local management. In Australia we are Australian, with a local and very competent and well-regarded
team built by the New Ballarat Gold Corporation CEO. In Kenya our management is headed by our able Kenyan Project Manager
who has built the local team, trained our geophysics team, and works with our Kenyan Camp Manager and Kenyan geologists, so
that we appear Kenyan while doing things in an international manner and to international standards. On 17 December 2021 two of
our geological team were awarded their MSc degrees, a source of pride to us all. We were also proud to be told recently by a very
senior and respected mining official that he held us out frequently as an example of how a company should conduct itself in carrying
out systematic and professional exploration in Kenya.
In Congo we have not yet fully built out the team, but the nucleus now, after some earlier challenges, consists of extremely capable
and reliable professionals.
In Côte d’Ivoire and Burkina Faso the local managers and our partners are chosen for their integrity, diligence, and long experience.
They are working with us because they know that they and our Burkinabe manager in London will remain in key management and
directorial positions as we move towards a listing on these properties.
We have worked hard with all these people in the last year, and not just on geology and community relations. We have together been
setting up companies and offices and bank accounts, building a small camp in Congo, renewing and expanding the camp in Kenya,
and establishing an administrative structure in Australia. We thank them all, for we know how much we owe them in what have not
always been easy circumstances, and all of them have been willing to go the extra mile when required.
Year Under Review – Financial Results
In the year to 30 June 2021, reported group loss for the year was £1.699 million after a reported profit of £5.156 million in the previous
year. This reflected primarily an increase in administrative and expensed project development costs during the period, after the one-
off 2020 write-back of the Company’s interest in the Kenyan gold assets in the previous year. Dividend income received during the
year dropped from £0.419 million to £0.125 million, reflecting a lower payout and ongoing reductions in Jupiter Mines Ltd holding.
Group payroll and related costs increased reflecting the additional activity in Australia, Kenya, London and Congo.
We ended the June 2021 financial year with our cash supplemented by £1,581,000 in marketable investments and a holding in
Elephant Oil, where we expect a listing in the New Year, held at a value of £173,846 but likely to be traded at a much higher valuation
once listed.
Red Rock Resources Plc
Annual Report and Accounts 2021
5
Outlook
After a successful year in which the Company took the many challenges associated with the COVID-19 pandemic, and turned them
into operational advantages, we look forward to continued nurturing of the seeds planted during the period in the year ahead. Our
key Kenyan asset will remain a particular focus, as we believe we have the potential to build a large gold resource here, comparable
to the better-known mines in Tanzania to the south. Red Rock remains intent on creating value for all stakeholders through
development of its projects and investments, including through listings of Elephant Oil and New Ballarat Gold Corporation, and
through possible sales and joint ventures as well as exploration, and we expect investors to be materially rewarded for their support
over the course of 2022.
Andrew Bell
Chairman and CEO
28 December 2021
Red Rock Resources Plc
Annual Report and Accounts 2021
6
Strategic Review
Overview of the Business
The Company is listed on London’s AIM market (AIM:RRR) and manages a diverse portfolio of producing and exploration stage
natural resources assets, located around the world.
Business Strategy
The Company’s strategy involves seeking out, assessing and investing in natural resource projects, where it can actively add value
through exploration, technical development and corporate transactions.
Principal Risks and Risk Management
Exploration and development is an inherently high-risk business, and outlined here are some of the primary risks identified:
Exploration Risk
The Group’s business is mineral exploration and evaluation, which are speculative activities. There is no certainty that Red Rock 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 are 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. This may include variations in the style of
mineralisation encountered as well as the failure to achieve economic deposits.
Environmental Risk
Exploration of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies
carried out during evaluation of a project. Any disturbance to the environment during exploration, on any of the licence areas, will be
rehabilitated in accordance with the prevailing local regulations.
Financing & Liquidity Risk
The Group has from time to time a 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, despite difficult markets that currently exist for raising funding in the junior mining industry. The cost of available capital
may fluctuate significantly, and can include high interest rates and the requirement to offer new equity at a discount to current prices.
The Company can be affected by international markets and risk appetite, and low projections of future world GDP growth may depress
commodity prices and perceived future levels of demand. Supply and demand of individual commodities may also impact valuations
of current and future resources and projects in the Group portfolio.
Corporate finance planning and analysis considers multiple avenues to acquire and deploy capital, including from internal sources of
cash flow. Expansion of capital reserves and ongoing cost reduction efforts provide the Company with additional resilience during
sector downturns.
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 can raise additional funds through asset sales or equity funding if required. Nevertheless, in the event that the Group
is unable to secure further financial resources, it may have a detrimental impact on the Group’s exploration activities and viability of
its exploration licences and ability to monetise and realize value from them.
Political Risk
All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental
and social risks, risks of strikes and changes to taxation, whereas less developed countries can have, in addition, risks associated
with changes to the legal framework, civil unrest and government expropriation of assets. The Company has working knowledge of
the countries in which it holds exploration licences and has appointed experienced local operators to assist the Company in its
activities in order to help reduce possible political risk.
COVID-19
The Company recognises the uncertainty, volatility, and risks caused by the ongoing COVID-19 pandemic. The health and safety of
our staff and associates is of major concern and we have taken steps to mitigate this risk utilising where appropriate alternatives to
face to face meetings including through the greater adoption of video-conferencing services.. This year’s AGM format will reflect the
current business environment and ongoing risks associated with the COVID-19 pandemic.
Red Rock Resources Plc
Annual Report and Accounts 2021
7
Operationally, COVID-19 has not caused significant disruptions to the Company’s projects during the year, however, the inability to
travel to some project sites and the associated slowdown in government processing of licenses will have delayed progress in some
instances.
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 controls.
Key Performance Indicators (KPIs)
At this stage in the Company’s development, the Directors regularly monitor key performance indicators, associated with liquidity,
primary cash flows and bank balances, general administrative expenses as well as share price performance and appreciation.
Corporate Responsibility
The Company takes its responsibilities as a corporate citizen seriously and has in place a Corporate Social Responsibility (“CSR”)
policy. The Board’s primary goal is to create shareholder value but in a responsible way, which serves all stakeholders. The Company
recognises that as a junior exploration and development business, the Company has a responsibility to local communities in which it
works, ensuring that the projects it operates are associated with responsible behaviours. The Company’s framework for CSR places
emphasis on stakeholder engagement and information dissemination, ensuring that the local communities are aware of plans and
activities being conducted. Where appropriate, the Company also undertakes sustainable development projects, including capacity
building, scholarships and related ventures.
Governance
The Board considers sound governance as a critical component of the Company’s success and the highest priority. The Company
has an effective and engaged Board, with a strong non-executive presence drawn from diverse backgrounds and with well-functioning
governance committees. Through the Company’s compensation policies and variable components of employee remuneration, the
Remuneration Committee of the Board seeks to ensure that the Company’s values are reinforced in employee behaviour and that
effective risk management is promoted.
Analysis by Gender
Category
Directors
Other Employees
Male
4
1
Female
0
1
Employees and Their Development
The Company is dependent upon the qualities and skills of its employees and their commitment plays a major role in the Company’s
business success. Employees’ performance is aligned to the Company’s goals through an annual performance review process and
via incentive programmes. The Company provides employees with information about its activities through regular briefings and other
media. The Company operates a Share Option Scheme, operated at the discretion of the Remuneration Committee and an employee
Share Incentive Plan operated by the Share Incentive Plan Trustees.
Diversity and Inclusion
The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-disability,
sexual orientation or marital status. The Company gives due consideration to all applications and provides training and the opportunity
for career development wherever possible. The Board does not support discrimination of any form, positive or negative, and all
appointments are based solely on merit.
Health and Safety
The Company includes Health and Safety (“H&S”) procedures and frameworks in all of its planning and field activities, with emphasis
on top-down as well as bottom-up ownership and responsibility, quality training of all personnel and risk assessments that go beyond
regulatory compliance. Comprehensive Risk Assessments of Health and Safety Systems have been developed to identify existing
risks, to implement relevant mitigation measures and to identify potential risks before they may be directly applicable to our operations.
Red Rock’s H&S strategy includes project and location specific training as well as H&S inductions, Emergency Response Plans and
field team reporting procedures.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders and other matters
in their decision making. The Directors continue to have regard to the interests of the Company’s employees and other stakeholders,
the impact of its activities on the community, the environment and the Company’s reputation for good business conduct, when making
decisions. In this context, acting in good faith and fairly, the Directors consider what is most likely to promote the success of the
Company for its members in the long term. We explain in this annual report, and referenced herein, how the Board engages with
stakeholders.
Red Rock Resources Plc
Annual Report and Accounts 2021
8
Signed by order of the Board.
Andrew Bell
Chairman and CEO
28 December 2021
Red Rock Resources Plc
Annual Report and Accounts 2021
9
Governance
Board of Directors
The Board of Directors makes decisions on shareholders’ behalf. Red Rock has one Executive Director, one Director and two Non-
Executive Directors.
Andrew Bell, MA, LLB
Chairman and CEO
Andrew Bell began his career as a natural resources analyst at the leading Merchant Bank Morgan Grenfell & Co. in the 1970s. His
business experience encompasses periods in fund management and advisory work at leading financial institutions, international
corporate finance work and private equity. Andrew Bell is also a former director of various listed resource sector companies: Chairman
and Director of Power Metal Resources Plc (AIM), Non-Executive Director of Jupiter Mines Ltd (ASX), Chairman of Star Striker Ltd
(now Intiger Group Ltd) (ASX) and Non-Executive Chairman of Greatland Gold Plc (AIM). Andrew Bell has considerable sector
experience and his skills also include financial, business and legal analysis as well as experience of public markets. Andrew Bell is
a French speaker.
Scott Kaintz, BS, MBA
Director
Scott Kaintz has over 10 years of experience managing and operating natural resource development companies. He has a degree
in Russian Language and Russian Area Studies from Georgetown University and MBA degrees from London Business School and
Columbia Business School. He started his career as a US Air Force Officer and analyst working across Europe, the Middle East and
Central Asia. Scott has held operational and managerial roles in the defense industry and worked in corporate finance and investment
funds in London, focusing primarily on capital raising efforts and debt and equity investments in small-cap companies. He joined Red
Rock Resources Plc in 2011, and he is also an Executive Director of Corcel Plc and Curzon Energy Plc.
Michael Alexander Borrelli, FCA
Independent Non-Executive Director
Michael Alexander Borrelli initially studied medicine and then qualified as a chartered accountant with Deloitte, Haskins & Sells,
London in 1982. He then worked in corporate finance at Guinness Mahon, Samuel Montagu and as a corporate finance and main
board director at Charterhouse. His subsequent investment banking business included nine years as a Head of Corporate Finance
and AIM Nomad qualified executive at a specialist investment bank. He has acted on a wide variety of corporate transactions in a
senior role for over 20 years, including flotations, takeovers, mergers and acquisitions for private and quoted companies. For the last
15 years, he has been acting as chairman and director of various listed companies, including AIM-listed Greatland Gold Plc, Xpediator
Plc, Tiger Royalties and Investments Plc and most recently Bradda Head Lithium Limited.
Sam Quinn
Non-Executive Director
Sam Quinn has a Bachelor of Laws and Bachelor of Arts degrees and is a qualified lawyer in Western Australia and in England &
Wales. He has served as Legal Counsel for and as part of the executive management team of several listed and non-listed gold,
silver, copper, iron-ore and diamond exploration and development companies with operations in various jurisdictions. Mr Quinn is an
Executive Director of Tectonic Gold Plc, listed on Aquis, and is a Non-Executive Director of Blencowe Resources Plc, listed on the
LSE. Sam Quinn has strong legal expertise as well as significant experience in public markets, the resources sector and
in corporate finance. Sam Quinn is the former legal counsel to the Dragon Group, a mining finance boutique and a partner of
Corporate Service Providers Silvertree Partners.
Responsibilities of the Board
•
•
•
•
Focus on governance over management;
Formulate, review and approve the Company strategy;
Oversee financial activities and operational performance; and
Approval of annual budget and periodic fiscal reviews.
Focus Areas for 2022
•
•
Continued exploration and development of Kenyan gold assets;
IPO or transaction involving the New Ballarat Gold Corporation Plc joint venture (formerly Red Rock Australasia Ltd joint
venture) and the Australian gold licenses;
IPO or transaction involving Company’s Côte d’Ivoire and Burkina Faso assets;
Settlement of the Company’s claims in the DRC; and
Bolstering Company’s financial resources and balance sheet.
•
•
•
Red Rock Resources Plc
Annual Report and Accounts 2021
10
Red Rock Resources Plc - Company Number: 05225394
Directors’ Report
for the year ended 30 June 2021
The Directors present their annual report on the affairs of the Group and Parent Company, together with the Group Financial
Statements for the year ended 30 June 2021.
Results and Dividends
The Group’s results are set out in the Consolidated Income Statement on page 25. The audited Financial Statements for the year
ended 30 June 2021 are set out on pages 24 to 65.
The Group made a post-tax loss of £1.699 million (2020: profit of £5.156 million).
The Directors do not recommend the payment of a dividend (2020: nil).
Business Review and Future Developments
The business review and future developments are dealt with in the Chairman’s Statement and in the Strategic Review on pages 4
to 9.
Fundraising and Share Capital
During the year, the Company raised £2,000,000 in new equity (2020: nil); further details are given in note 20.
Directors
The Directors who served at any time during the period and to date are as follows:
Andrew R M Bell
Michael C Nott (Resigned 12 February 2021)
Scott Kaintz
Sam Quinn
Alex Borrelli (Joined after the period end on 26 July 2021)
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2021 were as follows:
Andrew R M Bell
Scott Kaintz
Sam Quinn
Ordinary shares
Direct
31,238,520
2,517,807
2,206,766
Beneficial
15,396,487
15,396,487
13,421,944
As percentage
of issued
share capital
Total
46,635,007
17,914,294
15,628,710
Options
Warrants
3.83% 28,760,000
1.47% 20,180,000
3,900,000
1.28%
—
—
—
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2020 were as follows:
Andrew R M Bell
Michael C Nott
Scott Kaintz
Sam Quinn
Ordinary shares
Direct
31,238,520
1,471,807
2,517,807
2,206,766
Beneficial
11,552,617
11,235,652
11,552,617
9,605,944
As percentage
of issued
share capital
Total
42,791,137
12,707,459
14,070,424
11,812,710
Options
Warrants
6.14% 17,760,000
900,000
1.82%
2.02% 15,680,000
3,900,000
1.70%
3,125,000
—
—
—
Events After the Reporting Period
The events after the reporting period are set out in note 27 to the Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
11
Directors’ Report (continued)
Substantial Shareholdings
On 30 June 2021 and 1 December 2021, the following were registered as being interested in 3% or more of the Company’s
Ordinary share capital:
30 June 2021
Ordinary
shares of
£0.0001 each
Percentage
of issued
share capital
HSBC Global Custody Nominee (UK) Limited – Designation 941346
Interactive Investor Services Nominees Limited – Designation SMKTNOMS
Interactive Investor Services Nominees Limited – Designation SMKTISAS
Barclays Direct Investing Nominees Limited – Designation CLIENT1
Red Rock Resources Plc Share Incentive Plan
Hargreaves Lansdown (Nominees) Limited – Designation 15942
Hargreaves Lansdown (Nominees) Limited – Designation VRA
JIM Nominees Limited – Designation JARVIS
Nomura PB Nominees Limited – Designation PBNOMS
Mr John Geoffrey Bolitho
Hargreaves Lansdown (Nominees) Limited – Designation HLNOM
Nomura Custody Nominees Limited – Designation CUSTNOMS
Total number of shares in issue
287,111,760 23.60%
9.76%
118,797,053
6.94%
84,478,889
5.42%
65,977,332
5.14%
62,580,977
4.57%
55,616,126
3.63%
44,140,766
3.43%
41,785,232
3.26%
39,702,381
3.15%
38,357,187
3.13%
38,137,282
-
-
1,216,708,801
1 December 2021
Ordinary
shares of
£0.0001 each
287,227,494
88,486,067
88,486,067
55,383,244
62,680,977
53,740,240
49,905,477
29,480,482
-
38,357,187
40,810,859
39,702,381
1,216,708,801
Percentage
of issued
share capital
23.44%
8.70%
7.27%
4.55%
5.14%
4.42%
4.10%
2.42%
-
3.15%
3.35%
3.26%
Management Incentives
In the year to 30 June 2021, the Company has granted 21,000,000 options over its Ordinary shares (2020: nil). As at 30 June 2021,
63,320,000 options were outstanding (2020: 42,320,000).
In January 2012, the Company implemented a tax efficient Share Incentive Plan, a government approved scheme, the terms of which
provide for an equal reward to every employee, including Directors, who had served for three months or more at the time of issue.
The terms of the plan provide for:
•
•
•
•
Each employee to be given the right to subscribe any amount up to £150 per month with Trustees, who invest the monies in the
Company’s shares (“Partnership Shares”);
The Company to match the employee’s investment by contributing an amount equal to double the employee’s investment
(“Matching Shares”);
The Company to award free shares to a maximum of £3,600 per employee per annum (“Free Shares”); and
All shares awarded under the Plan are held by the Share Incentive Plan Trustees and such shares cannot be released to
participants until five years after the date of award, except in specific circumstances.
The subscriptions remain free of taxation and national insurance if held for five years.
In January 2016, the Directors approved an EMI (enterprise management incentive) Scheme, and all options granted by the Company
in the year to 30 June 2021 to Directors and full-time employees have been granted under the EMI Scheme.
Further details on share options and the Share Incentive Plan are set out in note 22 to the Financial Statements.
Directors’ Remuneration Report
The remuneration of the Executive Directors, paid during the year, was fixed on the recommendation of the Remuneration Committee.
The remuneration of the Non-Executive Directors, paid during the year, was fixed on the recommendation of the Executive Directors.
This has been achieved, acknowledging the need to maximise the effectiveness of the Company’s limited resources during the year.
When conducting annual reviews of Executive and Non-Executive remuneration, the Company’s strategy of natural resource
development and investment, as well as KPIs such as Company liquidity and share price performance and overall project
development are taken into consideration and directly affect ongoing remuneration levels. The Remuneration Committee may set
annual targets based on these KPIs to provide additional and more specific goals by which to assess annual Executive performance.
A fee was paid to each Director for the year ended 30 June 2021. In addition, certain fees and expenses were paid to businesses
with which the Directors are associated as set out in note 9 to the Financial Statements.
Each Director is entitled to participate in the Share Incentive Plan.
Red Rock Resources Plc
Annual Report and Accounts 2021
12
Directors’ Report (continued)
The Company also has a Group Personal Pension Scheme for all eligible employees, including the Directors. The Scheme is an
insured, defined contribution arrangement with all members entitled to an employer pension contribution equivalent to 8% of basic
salary, subject to the individual making contribution to the Scheme (subject to statutory and regulatory conditions). The Scheme is
available on a salary sacrifice basis, with 100% of the employer’s national insurance saving passed on to the member by way of an
enhanced employer contribution to the Scheme of an equivalent amount.
The Company is closely associated with Power Metal Resources Plc. The Company had a 2.18% interest in Power Metal Resources
Plc as at 30 June 2021 (2020: 4.52%) and was jointly invested in the Red Rock Australasia (now New Ballarat Gold Corporation)
joint venture with Power Metal Resources Plc. One Director, Andrew Bell, was also a Director of, and was paid by, Power Metal
Resources Plc as of 30 June 2021. The amount of Andrew Bell’s remuneration is not required to be disclosed in the Company
Financial Statements, but is fully disclosed in the Financial Statements of Power Metal Resources Plc.
Corporate Governance Statement
A corporate governance statement follows on pages 16 to 18.
Control Procedures
The Board has approved financial budgets and cash forecasts. In addition, it has implemented procedures to ensure compliance with
accounting standards and effective reporting.
Environmental Responsibility
The Company is aware of the potential impact that its subsidiary companies may have on the environment. The Company policy is
to follow the best international practice in mitigating and minimising impacts through exploration and mining activities. The Company
ensures that it and its subsidiaries comply with the local regulatory requirements and industry standards for environmental and social
risk management.
Employment Policies
The Group is committed to promoting policies, which ensure that high calibre employees are attracted, retained and motivated, to
ensure the ongoing success of the business. Employees, and those who seek to work within the Group, are treated equally regardless
of sex, marital status, creed, colour, race or ethnic origin.
Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace safety. In order to achieve this objective, the Group provides
training and support to employees and sets demanding standards for workplace safety.
Suppliers, Customers and Regulatory Authorities
The Board acknowledges that a strong business relationship with suppliers and customers is a vital part of the growth. Whilst day to
day business operations are delegated to the executive management, the Board sets directions with regard to new business ventures.
The Board upholds ethical behaviour across all sectors of the business and encourages management to seek comparable business
practices from all suppliers and customers doing business with the Company. We value the feedback we receive from our
stakeholders, and we take every opportunity to ensure that, where possible, their wishes are duly considered.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2021, the
Group had cash and cash equivalents of £0.457 million and £0.969 million of borrowings and, as at the date of signing these Financial
Statements, the cash balance was £0.062 million. The Directors anticipate having to raise additional funding over the course of the
financial year.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors reducing or
foregoing their salaries if required, the progress in activities post year-end, including the anticipated asset sales of £0.953 million, the
Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial
Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial
Statements.
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the
assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current.
The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the
Group was unable to continue as a going concern.
Red Rock Resources Plc
Annual Report and Accounts 2021
13
Directors’ Report (continued)
Provision of Information to Auditor
The Directors confirm that:
•
•
So far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
The Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any
relevant audit information and to establish that the auditor is aware of that information.
Auditor
A resolution, proposing the re-appointment of PKF Littlejohn LLP as auditor, is contained in the Notice of Annual General Meeting
and will be put to shareholders at the Annual General Meeting.
By order of the Board.
Signed by:
Andrew Bell
Chairman and CEO
28 December 2021
Red Rock Resources Plc
Annual Report and Accounts 2021
14
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and Company Financial Statements for each financial year. Under that law,
the Directors have elected to prepare the Group and Company Financial Statements in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006. Under company law, the Directors must not approve the
Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company
and of the profit or loss of the Group for that period.
In preparing the Group and the Company Financial Statements, the Directors are required to:
Select suitable accounting policies and then apply them consistently;
•
• Make judgements and accounting estimates that are reasonable and prudent;
•
State whether applicable international accounting standards in conformity with the requirements of the Companies Act 2006
have been followed, subject to any material departures disclosed and explained in the Financial Statements; and
Prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
•
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that
the Financial Statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Red Rock
Resources Plc website. Legislation in the United Kingdom, governing the preparation and dissemination of Financial Statements,
may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company’s website.
The Directors have confirmed that they have complied with the above requirements in preparing the Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
15
Corporate Governance Statement
“Good corporate governance provides a sound framework through which we can successfully deliver our strategy and return value
to our stakeholders.”
Dear Shareholders
The Board is committed to maintaining high standards of corporate governance and in this it is guided by the Quoted Companies
Alliance’s Corporate Governance Code (the “QCA Code”). The QCA Code sets out 10 principles that define Red Rock’s own
governance policies, several of which, are expanded on below.
Strategy and Risks
Business Model and Strategy for Promotion of Long-Term Value
The Board considers that the highest medium and long-term value can be delivered to its shareholders by creating a diverse portfolio
of holdings with exposure to commodities across multiple stages of the natural resource cycle, from exploration to production, and
with a degree of geographical and commodity diversity. The Company’s objective focusses on opportunities to add and realise value
in reasonably short timeframes, and considers the generation of multiple sustainable income streams to be its prime task as this can
underpin value and underwrite the higher risk parts of its project pipeline such as mineral exploration. Cash flows from dividends and
buy-backs, royalties and operations are supplemented by the conversion of its unlisted asset interests, once they have reached a
stage of maturity, where this is possible, to more liquid and more fungible forms.
Role of the Board
The Board has a responsibility to govern the Company rather than to manage it and in doing so act in the best interests of the
Company as a whole. Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as
a Director. Non-Executive Directors receive formal letters of appointment, setting out the key terms, conditions and expectations of
their appointment.
Responsibilities of the Board
The Board is responsible for formulating, reviewing and approving the Company’s strategy, financial activities and operating
performance. Day-to-day management is devolved to the Executive Directors, who are charged with consulting the Board on all
significant financial and operational matters. The Board approves the annual budget and amendments to it, issues of shares or other
securities and all significant acquisitions and disposals.
Board of Directors
The Board of Directors comprises four Directors, one of whom is Chairman and CEO as of the year end. In addition, there is Scott
Kaintz, who also serves as CFO, an Independent Non-Executive Director, Alexander Borrelli and a Non-Executive Directors, Sam
Quinn.
The Directors are of the opinion that the Board comprises a suitable balance of resource sector, technical, financial, accounting, legal
and public markets skills as well as experience of the Board as a whole and that the recommendations of the QCA Corporate
Governance Code have been implemented to an appropriate level. The Board shall review annually and when required the
appropriateness of its mix of skills and experience, to ensure that it meets the changing business needs.
The Board recognises that it has limited ethnic diversity and will give this factor due consideration if the Board concludes that
replacement or additional directors are required. It notes that it is only in the last year that operational teams have been able to be
rebuilt and that managers and senior staff recruited during the year at Group level reflect a wide and diverse mix of nationalities and
ethnicities and that local boards and operations are representative of their communities.
The Board, through the Chairman and Non-Executive Directors, maintains regular contact with its advisers and public relations
consultants in order to ensure that the Board develops an understanding of the views of major shareholders about the Company.
All Directors have access to the advice of the Company’s solicitors and the Company Secretary, necessary information is supplied
to the Directors on a timely basis to enable them to discharge their duties effectively, and all Directors have access to independent
professional advice, at the Company’s expense, as and when required.
Executive Chairman
The Board acknowledges that, in having a Chairman, who is also the Chief Executive Officer, best practice, as stated in the listing
rules of the Financial Services Authority applicable to the main market, is not being followed. However, it is the opinion of the Board
as a whole that the current arrangements are appropriate to the Company and Group in its present form and at the current stage of
development.
Board Meetings
The Board meets regularly throughout the year. During the year ended 30 June 2021, the Board had 6 scheduled meetings
together with additional ad hoc meetings as and when the business required.
Red Rock Resources Plc
Annual Report and Accounts 2021
16
Corporate Governance Statement (continued)
Board Meeting Attendance
The Director’s attendance at scheduled and ad hoc Board meetings and Board Committees during the year ended 30 June 2021 is
detailed in the table below:
Director
Andrew Bell, Chairman and CEO
Scott Kaintz, Director and CFO
Michael Nott, Non-Executive Director**
Sam Quinn, Non-Executive Director
Total Meetings
Board Scheduled
Meetings (6)
6
6
4
6
6
Board Ad Hoc
Meetings (16)*
16
16
8
16
16
Audit
Committee (1)
1
1
1
1
1
Remuneration
Committee (2)
-
1
1
2
2
* Ad hoc meetings: Meetings called for a specific matter generally of a more administrative or transactional nature often not requiring full Board attendance.
**On 12 February 2021, Michael Nott retired from his role as a Non-Executive Director of Red Rock Resources Plc.
Board Committees
The Board has established the following committees, each of which has its own terms of reference:
Audit Committee
The Audit Committee considers the Group’s financial reporting, including accounting policies, and internal financial controls. It is
responsible for ensuring that the financial performance of the Group is properly monitored and reported on. The Audit Committee
meets as required, at least once with the auditor, and is comprised of Alexander Borrelli, Independent Non-Executive Director, as
Chairman and Sam Quinn, Non-Executive Director. The Chairman and senior personnel attend the Committee as requested by the
Committee.
It is the responsibility of the Committee to review the annual and half-yearly Financial Statements, to ensure that they adequately
comply with appropriate accounting policies, practices and legal requirements, to recommend to the Board their adoption, and to
consider the independence of and to oversee the management’s appointment of the external auditor.
Remuneration Committee
The Remuneration Committee is responsible for making recommendations to the Board on Executive Directors’ remuneration. It
comprises two suitably qualified Non-executive Directors: Sam Quinn as Chairman and Alexander Borrelli. The Chairman and other
senior personnel attend meetings as requested by the Committee, which meets as required during the year.
Nominations Committee
The Board has not established a Nominations Committee. The Board considers that a separately established committee is not
warranted at this stage of the Group’s development and that the functions of such a committee are being adequately discharged by
the Board as a whole.
Board Evaluation
The internal evaluation of the Board, the Committees and individual Directors, including any succession planning, is undertaken on
an annual basis to determine the effectiveness of their performance and suitability to the changing business requirements. The
assessment criteria are based on the need to promote the Company’s Business Model, industry practices and the need for balance,
the Company’s immediate aspirations as well as the specific skills, knowledge and capabilities that are required to perform certain
roles. The results and recommendations that come out of the appraisals of the Directors and members of the Committees, identify
the required changes and actions for the Board and the Committees as units as well as individually for the Directors and members
of the Committees.
Ethical Decision Making
Confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and all staff have agreed to maintain confidentiality of
non-public information, except where disclosure is authorised or legally mandated.
Bribery
In accordance with the provisions of the Bribery Act, all Directors and staff have been informed and have acknowledged that it is an
offence under the act to engage in any form of bribery. The Company has an Anti-Bribery and Whistleblowing Policy in force. The
strong law-based culture of the Company is reflected in a willingness occasionally to litigate to protect its interests rather than to
negotiate.
Red Rock Resources Plc
Annual Report and Accounts 2021
17
Corporate Governance Statement (continued)
Internal Controls
The Directors acknowledge their responsibility for the Group’s systems of internal controls and for reviewing their effectiveness.
These internal controls are designed to safeguard the assets of the Group and to ensure the reliability of financial information for both
internal use and external publication. Whilst they are aware that no system can provide absolute assurance against material
misstatement or loss, in the light of increased activity and further development of the Group, continuing reviews of internal controls
will be undertaken to ensure that they are adequate and effective.
Insurance
The Group maintains insurance in respect of its Directors and Officers against liabilities in relation to the Company.
Treasury Policy
The Group finances its operations through equity, loans and sales of investments. The Group holds its cash as a liquid resource to
fund the obligations of the Group. Decisions, regarding the management of these assets, are approved by the Board.
Securities Trading and Share Dealing
In accordance with the AIM Rules and MAR, the Board has adopted the Share Dealing Code that applies to Directors, senior
management and any employee, who is in possession of “inside information”. All such persons are prohibited from trading in the
Company’s securities if they are in possession of “inside information”. Subject to this condition and trading prohibitions applying to
“close periods” (30 days prior to the publication of the interim and final audited accounts), trading can occur provided the relevant
individual has received the appropriate prescribed clearance. All Directors and staff are required to advise the Executive Chairman,
or other designated person, of their intention to undertake a transaction in the Company’s shares. Such a transaction will be prohibited
if the Director or employee is considered to be in possession of non-public material information.
Culture
The Company aims to deliver long-term value to its shareholders through a diverse portfolio of revenue generating mineral exploration
projects and investments, corporate transactions, JVs and partnerships. Therefore, the Company aims to ensure an open and
respectful dialogue with shareholders and other interested parties for them to have the opportunity to express their views and
expectations for the Company. In this dialogue, the importance of sound ethical values and behaviour is emphasised, both because
it is important if the Company is to successfully achieve its corporate objectives that this culture is transmitted through the whole
organization, and also to set a benchmark and send a signal of what it will and will not do in some of the jurisdictions in which the
Company operates.
Relations with Shareholders
The Board recognises that it is accountable to shareholders for the performance and activities of the Company and Group and to this
end is committed to providing effective communication with the shareholders of the Company.
Significant developments are disseminated through stock exchange announcements and regular updates of the Company website
where descriptions of the Group projects are available and updated regularly. In addition, copies of press comments, broker notes,
video updates and presentations are available. On the website, shareholders may sign up to receive news releases directly by e-
mail. The Board views the Annual General Meeting as an important forum for communication between the Company and its
shareholders and encourages shareholders to express their views on the Group’s business activities and performance.
Red Rock Resources Plc
Annual Report and Accounts 2021
18
Financial Statements
Independent Auditor’s Report
to the Members of Red Rock Resources Plc
Opinion
We have audited the Financial Statements of Red Rock Resources Plc (the “Company” or the “Parent Company”) and its subsidiaries
(the “Group”) for the year ended 30 June 2021, which comprise the Consolidated Statement of Financial Position, the Consolidated
Income Statement and Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the
Consolidated Statement of Cash Flows, the Parent Company Statement of Financial Position, the Parent Company Statement of
Changes in Equity, the Parent Company Statement of Cash Flows and notes to the Financial Statements, including significant
accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and international
accounting standards in conformity with the requirements of the Companies Act 2006 and as regards the Parent Company Financial
Statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
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 June
2021 and of the Group’s loss for the year then ended;
The Group Financial Statements have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006;
The Parent Company Financial Statements have been properly prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act 2006 and prepared in accordance with the requirements of the
Companies Act 2006 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.
Material Uncertainty Related to Going Concern
We draw attention to note 1.2 in the Financial Statements, which indicates that the Group is required to raise funds within the going
concern period. As stated in note 1.2, these events or conditions, along with the other matters as set forth in note 1.2, indicate that a
material uncertainty exists that may cast significant doubt on the Group’s and Parent Company’s ability to continue as a going
concern. Our opinion is not modified in respect of this matter.
In auditing the Financial Statements, we have concluded that the Director’s 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 Company’s
ability to continue to adopt the going concern basis of accounting included:
•
•
Challenging the forecasts prepared by the directors in their assessment of the Group's and Parent Company’s ability to meet
their financial obligations as they fall due for a period of at least 12 months from the date of approval of the financial statements.
The forecasts demonstrated that the Group and Parent Company will require additional funding, or will need to dispose of
investments, to meet their liabilities as and when they fall due.
The forecasts also indicated that the current funding will not be sufficient to meet the planned additional investments and
exploration activities.
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
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These,
together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing extent of our audit
procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both
individually and on the financial statements as a whole.
Based on our professional judgement, we consider gross assets to be most significant determinant of the group’s financial
performance and most relevant to investors and shareholders for an exploration group with a number of investments and early-stage
projects. Materiality of the parent company was based upon the loss before tax in order to achieve sufficient coverage of expenditure
in our testing.
Red Rock Resources Plc
Annual Report and Accounts 2021
19
Independent Auditor’s Report to the Members of Red Rock Resources Plc
(continued)
We also determine a level of performance materiality which we use to assess the extent of testing needed to reduce to an
appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole. In determining our overall audit strategy, we assessed the level of uncorrected misstatements that
would be material for the financial statements as a whole.
We determined the group and parent company materiality for the financial statements as a whole to be £209,000 and £106,000
(2020: £114,000 and £102,600) respectively. Performance materiality was set at 60% of overall materiality for the group and parent
company at £125,400 and £63,600 (2020: £68,400 and £61,560) respectively, whilst the threshold for reporting unadjusted
differences to those charged with governance was set at £10,450 for the group and £5,300 (2020: £5,700 and £5,130) for the parent
company. We also agreed to report differences below that threshold that, in our view, warranted reporting on qualitative grounds.
The component materiality was set at group performance materiality of £125,400.
Our Approach to the Audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the Financial Statements. In
particular, we looked at areas involving significant accounting estimates and judgement by the Directors and considered future events
that are inherently uncertain. We also addressed the risk of management override of internal controls, including among other matters
consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The accounting records of the Parent Company and all subsidiary undertakings are centrally located and audited by us based upon
materiality or risk. The key audit matters, and how these were addressed, are outlined below.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Financial
Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit
and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Financial
Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition
to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below
to be the key audit matters to be communicated in our report.
Key Audit Matter
How Our Scope Addressed This Matter
Recoverability of exploration assets (see notes 1.5 and
13)
Exploration assets have a carrying value in the Financial
Statements of £13,515,000 at 30 June 2021 (2020:
£11,858,000).
We identified an audit risk that exploration assets are
incorrectly valued because an impairment exists that has not
been recognised, and additions expenditure had been
capitalised which do not meet the eligibility criteria under IFRS
6.
This was assessed to be a key audit matter because
exploration assets represent 70% of the Group’s total assets
and management are required to use their judgement in
assessing their recoverability.
Our work in this area included the following:
• Obtaining and challenging management’s impairment
review, together with evaluating announcements and
progress on the license areas, including exploration
results and updated mineral resource estimates;
• Obtaining copies of the exploration licenses to ensure
good title and check, where applicable, that any specific
terms or conditions therein have been adequately met;
• Performed an independent assessment for indicators of
impairment in accordance with the requirements of IFRS
6;
• Assessing the appropriateness of the disclosures made
in respect of management’s judgement on whether
impairment indicators exist; and
Testing additions in the period to ensure they meet the
eligibility criteria under IFRS 6.
•
Red Rock Resources Plc
Annual Report and Accounts 2021
20
Independent Auditor’s Report to the Members of Red Rock Resources Plc
(continued)
Recoverability of non-current assets (see notes 1.5 and
17)
Non-current assets has a carrying value in the Financial
Statements of £1,344,000 at 30 June 2021 (2020:
£1,432,000).
Non-current assets represent amounts expected to be
receivable through a net smelter royalty, following the sale of
MFP in a previous accounting period. The asset is measured
at fair value based on the net present value of future cash
flows expected to be received in respect of the royalty
proceeds.
We identified an audit risk that these assets are not
recoverable and, therefore, are incorrectly valued in the
Financial Statements.
This was assessed to be a key audit matter because non-
current assets are financially significant and management are
required to use their judgement and estimation in preparing
the net present value of future cash flows from the royalty
stream.
Our work in this area included the following:
• Obtaining management’s working for the valuation of the
MFP sales proceeds and ensuring arithmetical accuracy
of the workings;
• Evaluating publicly available information on production
activities at the mine;
• Reviewing all model inputs and assumptions and
ensuring they are reasonable and appropriate;
• Considering whether management have included all
possible factors which could impact the valuation; and
• Considering whether there are indications of impairment
in the valuation or whether there are indications that the
balance is not recoverable.
Key Observations
In reviewing the calculations prepared by management, we noted the following assumptions as key:
•
•
•
Estimate production rate;
Discount rate; and
Gold price.
Commissioning and initial production at the mine commenced during 2021 with production expected to ramp up to commercial
levels during the forthcoming year. Management anticipate significant growth rates in production from 2022 onwards.
We draw to the users attention the disclosure in note 1.5, which lists the key assumptions in the calculation of fair value of non-
current assets. The Financial Statements do not include the adjustments that would be required if the assumptions used are not
accurate.
Other Information
The other information comprises the information included in the annual report, other than the Financial Statements and our auditor’s
report thereon. The Directors are responsible for the other information, contained within the annual report. Our opinion on the
Financial Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the course of the
audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine, whether this gives rise to a material misstatement in the Financial Statements themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
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.
Red Rock Resources Plc
Annual Report and Accounts 2021
21
Independent Auditor’s Report to the Members of Red Rock Resources Plc
(continued)
Matters on Which We are Required to Report by Exception
In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been
received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the preparation of the group
and parent company financial statements and for being satisfied that they 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’s and 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 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 cumulative audit knowledge and experience of the
sector.
• We determined the principal laws and regulations relevant to the Group and Parent Company in this regard to be those arising
from international accounting standards, the Companies Act 2006 and the local laws and regulations in the jurisdictions in which
the Group operates.
• We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance
by the Group and Parent Company with those laws and regulations. These procedures included, but were not limited to,
enquiries of management, review of Board minutes and a review of legal or regulatory correspondence.
• 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 risk of fraud related to the
estimates, judgements and assumptions applied by management in their assessment of impairment of intangible assets, the
valuation of unlisted investments and the recoverability of non-current receivables. Refer to the Key Audit Matters section above
on how our audit scope addressed these matters.
• 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.
Red Rock Resources Plc
Annual Report and Accounts 2021
22
Independent Auditor’s Report to the Members of Red Rock Resources Plc
(continued)
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
28 December 2021
15 Westferry Circus
Canary Wharf
London E14 4HD
Red Rock Resources Plc
Annual Report and Accounts 2021
23
Consolidated Statement of Financial Position
as at 30 June 2021
ASSETS
Non-current assets
Investments in associates and joint ventures
Exploration assets
Mineral tenements
Financial instruments - fair value through other comprehensive income (FVTOCI)
Non-current receivables
Total non-current assets
Current assets
Cash and cash equivalents
Loans and receivables
Financial instruments with fair value through profit and loss (FVTPL)
Other receivables
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital
Share premium account
Other reserves
Retained earnings
Total equity attributable to owners of the Parent
Non-controlling interest
Total equity
LIABILITIES
Non-current liabilities
Trade and other payables
Borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Short-term borrowings
Total current liabilities
TOTAL EQUITY AND LIABILITIES
Notes
12
13
14
17
16
15
18
20
19
19
19
19
30 June
2021
£’000
1,585
13,515
124
1,755
1,344
18,323
457
161
—
399
1,017
19,340
2,835
30,924
1,627
(18,741)
16,645
(199)
16,446
119
731
850
1,075
969
2,044
19,340
30 June
2020
£’000
1,584
11,858
31
2,755
1,432
17,660
53
—
3
544
600
18,260
2,783
26,909
1,460
(17,187)
13,965
(135)
13,830
7
—
7
3,345
1,078
4,423
18,260
These Financial Statements on pages 24 to 65 were approved by the Board of Directors and authorised for issue on 28 December
2021 and are signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
24
Consolidated Income Statement
for the year ended 30 June 2021
Continuing operations
Administrative expenses
Exploration expenses
Project development
Other project costs
Share based payments
Impairment of financial assets carried at amortised cost
Reversal of previously impaired financial assets
Loss on revaluation of FVTPL financial assets
Currency gains
Share of profits/(losses) of associates
Other gains
Dividend income
Finance income, net
Profit/(loss) for the year before taxation
Tax
Profit/(loss) for the year
Profit/(loss) for the year attributable to:
Equity holders of the Parent
Non-controlling interest
Earnings per share attributable to owners of the Parent:
Basic earnings per share, pence
Diluted earnings per share, pence
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2021
Profit/(loss) for the year
Other comprehensive income
Items that will not be reclassified to profit or loss
(Deficit) / surplus on revaluation of FVTOCI financial assets
Losses and transfer of FVTOCI financial assets on disposal
Items that may be reclassified subsequently to profit or loss
Unrealised foreign currency (loss) / gain arising upon retranslation of foreign
operations
Total other comprehensive income net of tax for the year
Total comprehensive income, net of tax for the year
Total comprehensive income net of tax attributable to:
Owners of the Parent
Non-controlling interest
The accompanying notes form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
Year to
30 June
2021
£’000
Year to
30 June
2020
£;000
Notes
4
6
6
1.5
1.5
15
12
5
5
5
7
10
10
Notes
14
(699)
(105)
(559)
(305)
(350)
—
—
—
34
—
290
126
(131)
(1,699)
—
(1,699)
(1,625)
(74)
(1,699)
(0.18)
(0.18)
(597)
(10)
(42)
(319)
—
(250)
5,280
(53)
32
—
143
419
553
5,156
—
5,156
5,164
(8)
5,156
0.76
0.64
30 June
2021
£’000
(1,699)
30 June
2020
£’000
5,156
(330)
(330)
19
(641)
(2,340)
(2,266)
(74)
(2,340)
(806)
(82)
(4)
(892)
4,264
4,378
(114)
4,264
25
Consolidated Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the period were as follows:
As at 1 July 2019
Changes in equity for 2020
Profit for the year
Partial disposal of a subsidiary
Other comprehensive income for the
year
Transfer of FVTOCI reserve relating to
disposals
Transfer of FVTOCI reserve relating to
impaired FVTOCI financial assets
Losses on sale of FVTOCI taken
directly to reserves
Unrealised foreign currency (loss) /
gain arising upon retranslation of
foreign operations
Total comprehensive income for the
year
Transactions with owners
Issue of shares
Share issue in relation to SIP
Total transactions with owners
As at 30 June 2020
Changes in equity for 2021
Loss for the year
Other comprehensive income for the
year
Transfer of FVTOCI reserve relating to
disposals
Transfer of FVTOCI reserve relating to
impaired FVTOCI financial assets
Unrealised foreign currency (loss) /
gain arising upon retranslation of
foreign operations
Losses on sale of FVTOCI taken
directly to reserves
Total comprehensive income for the
year
Transactions with owners
Issue of shares
Share issue costs
Share based payments
Issue of warrants
Total transactions with owners
Share
capital
£’000
2,781
Share
premium
account
£’000
Retained
earnings
£’000
26,853
(22,668)
Other
reserves
£’000
2,563
Total
attributable
to owners of
the Parent
£’000
Non-controlling
interest
£’000
Total
equity
£’000
9,529
(21)
11,215
—
—
—
—
—
—
—
1
1
2
—
—
—
—
—
—
—
35
21
56
5,164
106
—
—
5,164
106
(8)
(106)
5,156
—
—
—
(293)
(293)
(806)
(806)
211
—
211
—
(4)
(4)
—
—
—
—
(293)
(806)
211
(4)
5,481
(1,103)
4,378
(114)
4,264
—
—
—
—
—
—
36
22
58
—
—
—
36
22
58
2,783
26,909
(17,187)
1,460
13,965
(135)
13,830
—
—
(1,625)
—
(1,625)
(74)
(1,699)
—
—
—
—
—
52
—
—
—
52
—
—
—
—
—
4,163
(110)
—
(38)
4,015
—
—
—
71
(401)
(401)
(330)
(330)
19
—
19
71
—
—
—
—
(401)
(330)
19
71
(1,554)
(712)
(2,266)
(74)
(2,340)
—
—
—
—
—
—
—
66
813
879
4,215
(110)
66
775
4,946
16,645
—
—
—
—
—
(199)
4,215
(110)
66
775
4,946
16,446
As at 30 June 2021
2,835
30,924
(18,741)
1,627
Red Rock Resources Plc
Annual Report and Accounts 2021
26
Consolidated Statement of Changes in Equity Continued
for the year ended 30 June 2021
As at 1 July 2019
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals
Transfer of FVTOCI reserve relating to impaired FVTOCI
financial assets
Unrealised foreign currency gains on translation of foreign
operations
Total comprehensive income / (expense) for the year
As at 30 June 2020
Changes in equity for 2021
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals
Transfer of FVTOCI reserve relating to impaired FVTOCI
financial assets
Unrealised foreign currency gains on translation of foreign
operations
Share based payments
Warrants issued in the year
Total comprehensive income / (expense) for the year
As at 30 June 2021
FVTOCI financial
instruments
revaluation
reserve
£’000
Foreign
currency
translation
reserve
£’000
Share-based
payment
reserve
£’000
2,256
143
164
Warrant
reserve
£’000
—
(293)
(806)
—
(1,099)
1,157
(401)
(330)
—
—
—
(731)
426
—
—
(4)
(4)
139
—
—
19
—
—
19
—
—
—
—
164
—
—
—
66
—
66
158
230
—
—
—
—
—
—
—
—
—
813
813
813
Total
other
reserves
£’000
2,563
(293)
(806)
(4)
(1,103)
1,460
(401)
(330)
19
66
813
148
1,627
See note 21 for a description of each reserve included above.
Red Rock Resources Plc
Annual Report and Accounts 2021
27
Consolidated Statement of Cash Flows
for the year ended 30 June 2021
Cash flows from operating activities
Profit/(loss) before tax
Increase in receivables
Increase in payables
Share of (profit)/losses in associates
Interest receivable and finance income, including income from MFP
Dividend income
Interest expense
Share-based payments
Foreign exchange gain/loss
Change in value in FVTPL financial assets
Reversal of previously impaired exploration asset
Impairment of loans and other receivables
Write back of trade creditors
Net cash outflow from operations
Corporation tax reclaimed/(paid)
Net cash used in operations
Cash flows from investing activities
Proceeds from sale of FVTOCI financial assets
Dividends received
Payments to acquire exploration asset
Payments to increase interest in associate
Payments for tenements
Payments to set up new joint ventures
Net cash (outflow) / inflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Interest paid
Proceeds from new borrowings
Repayments of borrowings
Net cash inflow / (outflow) from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Exchange (losses)/gains on cash and cash equivalents
Cash and cash equivalents at end of period
Major non-cash transactions are disclosed in note 24.
Year to
30 June
2021
£’000
(1,699)
(281)
143
—
(152)
(126)
128
350
(50)
3
—
—
—
(1,684)
—
(1,684)
403
126
(215)
(370)
(93)
—
(149)
1,957
(110)
(101)
545
(50)
2,241
408
53
(4)
457
Notes
12
5
5
5
22
1.5
1.5
3
14
24
24
24
16
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
Year to
30 June
2020
£’000
5,156
(24)
322
—
(330)
(419)
196
—
(32)
53
(5,280)
250
(552)
(660)
—
(660)
504
419
(43)
—
(31)
(4)
845
—
—
(130)
103
(175)
(202)
(17)
64
6
53
28
Company Statement of Financial Position
as at 30 June 2021
ASSETS
Non-current assets
Investments in subsidiaries
Investments in associates and joint ventures
Financial instruments - fair value through other comprehensive income (FVTOCI)
Exploration property
Exploration assets
Non-current receivables
Total non-current assets
Current assets
Cash and cash equivalents
Financial assets (FVTPL)
Loans and other receivables
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Called up share capital
Share premium account
Other reserves
Retained earnings
Total equity
LIABILITIES
Current liabilities
Trade and other payables
Intra-group borrowings
Short-term external borrowings
Total current liabilities
TOTAL EQUITY AND LIABILITIES
Notes
30 June
2020
£’000
30 June
2020
£’000
11
12
14
13
13
17
16
15
18
20
19
19
19
39
1,666
778
12,948
567
1,950
17,948
366
—
365
731
19
1,665
1,771
11,507
351
1,429
16,742
32
3
715
750
18,679
17,492
2,835
30,924
1,043
(19,003)
15,799
2,783
26,909
645
(17,362)
12,975
1,043
1,079
758
2,880
3,316
276
925
4,517
18,679
17,492
Company Statement of Comprehensive Income
As permitted by Section 408 Companies Act 2006, the Company has not presented its own Income Statement or Statement of
Comprehensive Income. The Company’s (loss)/profit for the financial year was (£1.578 million) (2020: profit of £5.080 million). The
Company’s total comprehensive income for the financial year was (£2.122 million) (2020: income of £4.232 million).
These Financial Statements on pages 24 to 65 were approved by the Board of Directors and authorised for issue on 28 December
2021 and are signed on its behalf by:
Andrew Bell
Chairman and CEO
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2021
29
Company Statement of Changes in Equity
for the year ended 30 June 2021
The movements in equity during the period were as follows:
As at 1 July 2019
Changes in equity for 2020
Profit for the year
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals
Transfer of FVTOCI reserve relating to impaired FVTOCI
financial assets
Losses on sale of FVTOCI taken directly to reserves
Total comprehensive income for the year
Transactions with owners
Issue of shares
Share issues in relation to SIP
Total transactions with owners
As at 30 June 2020
Changes in equity for 2021
Loss for the year
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to impaired FVTOCI
financial assets
Transfer of FVTOCI reserve relating to disposals
Losses on sale of FVTOCI taken directly to reserves
Total comprehensive income for the year
Transactions with owners
Issue of shares
Share issuance costs
Share based payments
Issue of warrants
Total transactions with owners
As at 30 June 2021
Share
capital
£’000
2,781
Share
premium
account
£’000
26,853
Retained
earnings
£’000
(22,590)
Other
reserves
£’000
1,641
Total
equity
£’000
8,685
—
—
—
—
—
1
1
2
—
—
—
—
—
35
21
56
5,080
—
5,080
—
(312)
(312)
—
148
5,228
—
—
—
(684)
—
(996)
—
—
—
645
(684)
148
4,232
36
22
58
12,975
2,783
26,909
(17,362)
—
—
—
—
—
52
—
—
—
52
2,835
—
(1,578)
—
(1,578)
—
—
—
—
4,163
(110)
—
(38)
4,015
30,924
—
—
(63)
(1,641)
—
—
—
—
—
(631)
150
—
(481)
—
—
66
813
879
(19,003)
1,043
(631)
150
(63)
(2,122)
4,215
(110)
66
775
4,946
15,799
Red Rock Resources Plc
Annual Report and Accounts 2021
30
Company Statement of Changes in Equity
for the year ended 30 June 2021
As at 1 July 2019
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets
Total Other comprehensive income
As at 30 June 2020
Changes in equity for 2020
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to impaired FVTOCI financial assets
Transfer of FVTOCI reserve relating to disposals
Share based payments
Issue of warrants
Total Other comprehensive income
As at 30 June 2021
See note 21 for a description of each reserve included above.
FVTOCI financial
assets revaluation
reserve
£’000
Share-based
payment
reserve
£’000
1,477
164
Warrant
reserve
£’000
—
Total
other
reserves
£’000
1,641
(312)
(684)
(996)
481
(631)
150
—
—
(481)
—
—
—
—
164
—
—
66
—
66
230
—
—
—
—
—
—
—
813
813
813
(312)
(684)
(996)
645
(631)
150
66
813
398
1,043
Red Rock Resources Plc
Annual Report and Accounts 2021
31
Company Statement of Cash Flows
for the year ended 30 June 2021
Cash flows from operating activities
Profit/(loss) before taxation
Increase in receivables
(Decrease) / Increase in payables
Dividend income
Interest income and other finance income
Interest expense
Share-based payments
Reversal of previously impaired exploration asset
Income from forgiven creditors
Impairment of loans and receivables
Change in value in FVTPL financial assets
Foreign exchange loss / (gain)
Net cash outflow from operations
Corporation tax
Net cash used in operations
Cash flows from investing activities
Dividends received
Proceeds from sale of FVTOCI financial assets
Payments to acquire exploration asset
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs of issue of shares
Interest paid
Proceeds from new borrowings
Re-payments of borrowings
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at end of period
The accompanying notes and accounting policies form an integral part of these Financial Statements.
30 June
2020
£’000
(1,578)
(239)
(440)
(125)
(185)
128
350
—
—
—
3
118
(1,968)
—
(1,968)
126
150
(215)
61
1,957
(110)
(101)
545
(50)
2,241
334
32
366
30 June
2020
£’000
5,080
(55)
308
(310)
(330)
196
—
(5,280)
(552)
250
53
(39)
(679)
—
(679)
310
501
(43)
768
—
—
(130)
205
(175)
(100)
(11)
43
32
Red Rock Resources Plc
Annual Report and Accounts 2021
32
Notes to the Financial Statements
1. Principal Accounting Policies
1.1 Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group Financial Statements of Red Rock Resources Plc, for the year ended 30 June 2021, were authorised for issue by the
Board on 28 December 2021 and the Statement of Financial Position signed on the Board’s behalf by Andrew Bell. Red Rock
Resources Plc is a public limited company incorporated and domiciled in England and Wales. The Company’s ordinary shares are
traded on AIM.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006. The Financial Statements have been prepared on the cost basis, except for certain financial
instruments, which are carried as described in the respective sections in the policies below. The principal accounting policies adopted
are set out below.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2021, the Group
had cash and cash equivalents of £0.457 million and £0.969 million of borrowings and, as at the date of signing these Financial
Statements, the cash balance was £0.062 million. The Directors anticipate having to raise additional funding over the course of the
going concern period.
Having considered the prepared cashflow forecasts and the Group budgets, which includes the possibility of Directors reducing or
foregoing their salaries if required, the progress in activities post year-end, including the anticipated asset sales of £0.953 million, the
Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial
Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial
Statements.
Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the
assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current.
The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the
Group was unable to continue as a going concern.
Amendments to Published Standards Effective for the year Ended 30 June 2021
New Standards, Amendments and Interpretations
The Group and the Parent Company have adopted all of the new and amended standards and interpretations, issued by the
International Accounting Standards Board that are relevant to its operations and effective for accounting periods commencing on or
after 1 July 2020.
The following new IFRS standards and/or amendments to IFRS standards were adopted for the first time during the year, none of
which had a material impact on the Financial Statements:
•
•
•
Amendments to IFRS 3: Business Combinations (effective 1 January 2020);
Amendments to IAS 1 and IAS 8: Definition of Material (effective 1 January 2020); and
Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform (effective 1 January 2020).
No standards or interpretations, that came into effect for the first time for the financial year beginning 1 July 2020, have had an impact
on the Group or the Company.
New Standards, Amendments and Interpretations Not Yet Adopted
At the date of approval of these Financial Statements, the following standards and interpretations, which have not been applied in
these Financial Statements were in issue but not yet effective:
•
•
•
•
Amendments to IAS 1: Presentation of Financial Statements – Classification of Liabilities as Current or Noncurrent (effective
date not yet confirmed);
Amendments to IFRS 3: Business Combinations – Reference to Conceptual Framework (effective 1 January 2022);
Amendments to IAS 16: Property, Plant and Equipment (effective 1 January 2022);
Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1 January 2022);
Red Rock Resources Plc
Annual Report and Accounts 2021
33
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.2 Basis of Preparation (continued)
•
•
•
Annual Improvements to IFRS Standards 20182020 Cycle (effective 1 January 2022);
Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective date not yet confirmed);
and
Amendments to IAS 12: Income Taxes – Deferred Tax arising from a Single Transaction (effective date not yet confirmed).
The effect of these new and amended standards and interpretations, which are in issue but not yet mandatorily effective, is not
expected to be material.
Standards Adopted Early by the Group
The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.
1.3 Basis of Consolidation
The Consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and subsidiaries controlled
by the Company made up to 30 June each year.
Subsidiaries
Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic
benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, up until
the date that control ceases.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition
is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or
assumed at the date of exchange. Costs, directly attributable to the acquisition, are expensed as incurred. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.
Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date, about
facts or circumstances, existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.
Non-controlling interests in subsidiaries are measured at the proportionate share of the fair value of their identifiable net assets.
Intra-group transactions, balances and unrealised gains and losses on transactions between the Group companies are eliminated on
consolidation, except to the extent that intra-group losses indicate an impairment.
At 30 June 2021, the Consolidated Financial Statements combine those of the Company with those of its subsidiaries, Red Rock
Australasia Pty Ltd, RRR Coal Ltd, Red Rock Resources Congo S.A.U., RedRock Kenya Ltd and Red Rock Resources (HK) Ltd.
The Group’s dormant subsidiary Intrepid Resources Ltd, Red Rock Resources Inc., RRR Kenya Ltd., Ivory Coast, Red Rock Cote
D’Ivoire SARL and Basse Terre SARL, have been excluded from consolidation on the basis of the exemption provided by Section
405(2) of the Companies Act 2006 that their inclusion is not material for the purpose of giving a true and fair view.
Non-Controlling Interests
Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests,
even if this results in the non-controlling interest having a deficit balance.
Transactions with non-controlling interests, that do not result in loss of control, are accounted for as equity transactions. Any
differences between the adjustment for the non-controlling interest and the fair value of consideration paid or received are recognised
in equity.
1.4 Summary of Significant Accounting Policies
1.4.1 Mineral Tenements and Exploration Property
Exploration licence and property acquisition costs are capitalised in intangible assets. Licence costs, paid in connection with a right
to explore in an existing exploration area, are capitalised and amortised over the term of the permit. Licence and property acquisition
costs are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable
amount. If no future activity is planned or the licence has been relinquished or has expired, the carrying value of the licence and
property acquisition costs are written off through the statement of profit or loss and other comprehensive income.
1.4.2
Investment in Associates
An associate is an entity over which the Group has the power to exercise significant influence, but not controlled or jointly controlled
by the Group, through participation in the financial and operating policy decisions of the investee.
Red Rock Resources Plc
Annual Report and Accounts 2021
34
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
Investments in associates are recognised in the Consolidated Financial Statements, using the equity method of accounting. The
Group’s share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other
comprehensive income is recognised directly in other comprehensive income.
The carrying value of the investment, including goodwill, is tested for impairment, when there is objective evidence of impairment.
Losses in excess of the Group’s interest in those associates are not recognised, unless the Group has incurred obligations or made
payments on behalf of the associate.
Where the Group transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group’s interest in
the relevant associate. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset
transferred, in which case appropriate provision is made for impairment.
In the Company Financial Statements, investments in associates are recognised and held at cost. The carrying value of the
investment is tested for impairment, when there is objective evidence of impairment.
1.4.3
Interests in Joint Ventures
The Group recognises its interest in the jointly controlled entity’s assets and liabilities, using the equity method of accounting. Under
the equity method, the interest in the joint venture is carried in the Statement of Financial Position at cost plus post-acquisition
changes in the Group‘s share of its net assets, less distributions received and less any impairment in value of individual investments.
The Group Income Statement reflects the share of the jointly controlled entity‘s results after tax.
Any goodwill, arising on the acquisition of a jointly controlled entity, is included in the carrying amount of the jointly controlled entity
and is not amortised. To the extent that the net fair value of the entity‘s identifiable assets, liabilities and contingent liabilities is greater
than the cost of the investment, a gain is recognised and added to the Group‘s share of the entity‘s profit or loss in the period in which
the investment is acquired.
Where necessary, adjustments are made to bring the accounting policies in line with those of the Group’s and to reflect impairment
losses where appropriate. Adjustments are also made in the Group‘s Financial Statements to eliminate the Group‘s share of
unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity
method on the date from which it no longer has joint control over, or significant influence in, the joint venture.
1.4.4
Taxation
Corporation tax is provided on taxable profits or losses at the current rate. The tax expense/credit represents the sum of the current
tax expense/credit and deferred tax.
The tax currently payable/receivable is based on taxable profit or loss for the year. Taxable profit or loss differs from accounting profit
or loss as reported in the Statement of Comprehensive Income, because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is
measured using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in
the Financial Statements and the corresponding tax bases used in the computation of taxable profit or loss and is accounted for using
the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against, which deductible, temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction, which affects neither
the taxable profit or loss nor the accounting profit or loss.
Deferred tax liabilities are recognised for taxable temporary differences, arising on investments in subsidiaries and associates, and
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the period, when the asset is realised or the liability is settled,
based upon tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which
case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case
the deferred tax is also recognised in other comprehensive income.
Red Rock Resources Plc
Annual Report and Accounts 2021
35
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
Deferred tax assets and liabilities are offset, where there is a legally enforceable right to offset current tax assets and liabilities, and
the deferred tax relates to income tax levied by the same tax authorities on either:
The same taxable entity; or
•
• Different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise and settle them
simultaneously in each future period, when the significant deferred tax assets and liabilities are expected to be realised or
settled.
1.4.5 Foreign Currencies
Both the functional and presentational currency of Red Rock Resources Plc is Sterling (“£”). Each Group entity determines its own
functional currency and items, included in the Financial Statements of each entity, are measured, using that functional currency.
The functional currency of the foreign subsidiaries are Australian Dollars (“AUD”), the Congolese Franc, and Kenyan Shillings.
Transactions in currencies other than the functional currency of the relevant entity are initially recorded at the exchange rate, prevailing
on the dates of the transaction. At each reporting date, monetary assets and liabilities, that are denominated in foreign currencies,
are translated at the exchange rate, prevailing at the reporting date. Non-monetary assets and liabilities, carried at fair value that are
denominated in foreign currencies, are translated at the rates, prevailing at the date when the fair value was determined. Gains and
losses, arising on translation, are included in profit or loss for the period, except for exchange differences on non-monetary assets
and liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are recognised directly
in other comprehensive income.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated into the Group’s presentational currency
at exchange rates, prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the
period, unless exchange rates have fluctuated significantly during the year, in which case the exchange rate at the date of the
transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to
the Group’s foreign currency translation reserve.
1.4.6 Share-Based Payments
Share Options
The Group operates an equity-settled share-based payment arrangement, whereby the fair value of services provided is determined
indirectly by reference to the fair value of the instrument granted.
The fair value of options, granted to Directors and others in respect of services provided, is recognised as an expense in the Income
Statement, with a corresponding increase in equity reserves – the share-based payment reserve, until the award has been settled
and then make a transfer to share capital.
On exercise or lapse of share options, the proportion of the share-based payment reserve, relevant to those options, is transferred to
retained earnings. On exercise, equity is also increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the vesting period, during which the option becomes unconditional.
The fair value of options is calculated using the Black-Scholes model, taking into account the terms and conditions upon which the
options were granted. The exercise price is fixed at the date of grant.
Non-market conditions are performance conditions that are not related to the market price of the entity’s equity instruments. They are
not considered, when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market
performance condition, the Group recognises the goods and services it has acquired during the vesting period, based on the best
available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based
on factors such as a shortened vesting period, and the cumulative expense is “trued up” for both the change in the number expected
to vest and any change in the expected vesting period.
Market conditions are performance conditions that relate to the market price of the entity’s equity instruments. These conditions are
included in the estimate of the fair value of a share-based payment. They are not taken into account for the purpose of estimating the
number of equity instruments that will vest. Where the vesting period is linked to a market performance condition, the Group estimates
the expected vesting period. If the actual vesting period is shorter than estimated, the charge is accelerated in the period that the
entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over
the originally estimated vesting period.
Red Rock Resources Plc
Annual Report and Accounts 2021
36
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
For other equity instruments, granted during the year (i.e. other than share options), fair value is measured on the basis of an
observable market price.
Warrants or options, issued to parties other than employees, are valued based on the value of the service provided.
Share Incentive Plan
Where shares are granted to employees under the Share Incentive Plan, the fair value of services provided is determined indirectly
by reference to the fair value of the free, partnership and matching shares, granted on the grant date. Fair value of shares is measured
on the basis of an observable market price, i.e. share price as at grant date, and is recognised as an expense in the Income Statement
on the date of the grant. For the partnership shares, the charge is calculated as the excess of the mid-market price on the date of
grant over the employee’s contribution.
1.4.7 Pension
The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund.
Contributions to the defined contribution scheme are charged to profit or loss as they become payable.
1.4.8 Exploration Assets
Exploration assets comprise exploration and development costs incurred on prospects at an exploratory stage. These costs include
the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and
administrative overheads directly associated with those projects. These costs are carried forward in the Statement of Financial
Position as non-current intangible assets less provision for identified impairments.
Recoverability of exploration and development costs is dependent upon successful development and commercial exploitation of each
area of interest and will be amortised over the expected commercial life of each area once production commences. The Group and
the Company currently have no exploration assets, where production has commenced.
The Group adopts the “area of interest” method of accounting, whereby all exploration and development costs, relating to an area of
interest, are capitalised and carried forward until abandoned. In the event that an area of interest is abandoned, or if the Directors
consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is
made. All expenditure incurred prior to approval of an application is expensed with the exception of refundable rent, which is raised
as a receivable.
Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within
non-current assets is recognised in the Income Statement.
1.4.9
Impairment of Non-Financial Assets
The carrying values of assets, other than those to which IAS 36 “Impairment of Assets” does not apply, are reviewed at the end of
each reporting period for impairment, when there is an indication that the assets might be impaired. Impairment is measured by
comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of
the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.
When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount
of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset
that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is
recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
1.4.10 Finance Income/Expense
Finance income and expense is recognised as interest accrues, using the effective interest method. This is a method of calculating
the amortised cost of a financial asset and allocating the interest income over the relevant period, using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts or re-payments through the expected life of the financial asset
or liability to the net carrying amount of the financial asset or liability.
1.4.11 Financial Instruments
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:
Red Rock Resources Plc
Annual Report and Accounts 2021
37
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
Fair Value through Profit or Loss (FVTPL)
This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets the negative intrinsic
value. They are carried in the Statement of Financial Position at fair value, with changes in fair value recognised in the Consolidated
Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are
not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any
financial assets as being at fair value through profit or loss.
Amortised Cost
These assets comprise the types of financial assets, where the objective is to hold these assets in order to collect contractual cash
flows and the contractual cash flows are solely payments of 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 current and non-current trade receivables.
are recognised, based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected
credit losses.
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 expected credit loss for the trade receivables. For the
receivables, which are reported net, such provisions are recorded in a separate provision account, with the loss being recognised in
the Consolidated Statement of Comprehensive Income. On confirmation that the receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to related parties, are recognised, based on a forward-looking
expected credit loss model. The methodology, used to determine the amount of the provision, is based on whether there has been a
significant increase in credit risk since initial recognition of the financial asset, based on analysis of internal or external information.
For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected
credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime
expected credit losses, along with the gross interest income, are recognised. For those that are determined to be credit impaired,
lifetime expected credit losses, along with interest income on a net basis, are recognised.
The Group considers a financial asset in default, when contractual payments are 180 days past due. However, in certain cases, the
Group may also consider a financial asset to be in default, when internal or external information indicates that the Group is unlikely
to receive the outstanding contractual amounts in full, before taking into account any credit enhancements held by the Group. A
financial asset is written off, when there is no reasonable expectation of recovering the contractual cash flows.
The Group's financial assets, measured at amortised cost, comprise trade and other receivables and cash and cash equivalents in
the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits held at call with banks,
other short term highly liquid investments with original maturities of three months or less, and, for the purpose of the Statement of
Cash Flows, bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the Consolidated
Statement of Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group has a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries,
associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments
at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be
the most representative of the business model for these assets. They are carried at fair value, with changes in fair value recognised
in other comprehensive income, and accumulated in the fair value through other comprehensive income reserve. Upon disposal, any
balance, within fair value through other comprehensive income reserve, is reclassified directly to retained earnings and is not
reclassified to profit or loss.
Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in
which case, the full or partial amount of the dividend is recorded against the associated investments carrying amount.
Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement
date with any change in fair value between trade date and settlement date, being recognised in the fair value through other
comprehensive income reserve.
Red Rock Resources Plc
Annual Report and Accounts 2021
38
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
•
•
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured, using the assumptions that market participants would use when pricing the asset
or liability, assuming that market participants act in their economic best interest.
A fair value measurement, of a non-financial asset, takes into account a market participant's ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and
best use.
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.
All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair
value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
•
•
•
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable; and
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines, whether transfers
have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:
Fair Value through Profit or Loss (FVTPL)
This category comprises out-of-the-money derivatives, where the time value does not offset the negative intrinsic value or any
liabilities held for trading. They are carried in the consolidated statement of financial position at fair value with changes in fair value
recognised in the Consolidated Statement of Comprehensive Income. The Group did not hold any such liabilities at the date of IFRS
9 adoption or at the end of the reporting year.
Other Financial Liabilities
Other financial liabilities include:
•
•
•
Borrowings, which are initially recognised at fair value net of any transaction costs directly attributable to the issue of the
instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate
method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability
carried in the Consolidated Statement of Financial Position. For the purposes of each financial liability, interest expense includes
initial transaction costs and any premium payable on redemption as well as any interest or coupon payable while the liability is
outstanding;
Liability components of convertible loan notes are measured as described further below; and
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at
amortised cost, using the effective interest method.
Red Rock Resources Plc
Annual Report and Accounts 2021
39
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.4 Summary of Significant Accounting Policies (continued)
1.4.12
Investments
Investments in subsidiaries are classified as non-current assets and included in the Statement of Financial Position of the Company
at cost at the date of acquisition less any identified impairments.
For acquisitions of subsidiaries or associates achieved in stages, the Company re-measures its previously held equity interests in the
acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses,
previously recognised in other comprehensive income, are transferred to profit and loss.
Investments in associates and joint ventures are classified as non-current assets and included in the Statement of Financial Position
of the Company at cost at the date of acquisition less any identified impairment.
1.4.13 Dividend Income
Dividends, received from strategic investments, are recognised, when they become legally receivable. In case of interim dividends,
this is when declared. In case of final dividends, this is when approved by the shareholders at the Annual General Meeting.
1.4.14 Share Capital
Financial instruments, issued by the Group, are classified as equity only to the extent that they do not meet the definition of a financial
liability or financial asset. The Group’s ordinary shares are classified as equity instruments.
1.4.15 Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount
initially attributed to the debt component equals the discounted cash flows, using a market rate of interest that would be payable on
a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial
liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is
allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income
tax effects.
1.4.16 Warrants
Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity’s
own equity instruments, are classified as equity instruments. When warrants are issued, attached to specific loan notes, the Company
estimates the fair value of the issued warrants, using the Black-Scholes pricing model, taking into account the terms and conditions
upon which the warrants were issued, value of such warrants is deducted from the balance of loan notes, a directly attributable
transaction cost. Warrants, relating to equity finance and issued together with ordinary shares placement, are valued by residual
method and treated as directly attributable transaction costs and recorded as a reduction of share premium account based on the fair
value of the warrants. Warrants, classified as equity instruments, are not subsequently re-measured.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group’s Consolidated Financial Statements, requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However,
uncertainty, about these assumptions and estimates, could result in outcomes that require a material adjustment to the carrying
amount of the asset or liability affected in future periods.
Significant Judgements in Applying the Accounting Policies
In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most
significant effect on the amounts, recognised in the Consolidated Financial Statements:
Recognition of Holdings Less Than 20% as an Associate
The Company owns 15% of the issued share capital of Mid Migori Mining Company Ltd (“MMM”). Andrew Bell is a member of the
board of MMM. In accordance with IAS 28, the Directors of the Company consider that, the agreements whereby the Company owns
the beneficial interest in the Kenyan assets, and the input of resource by the Company in respect of drilling and analytical activities,
to provide the Group with significant influence as defined by the standard. As such, MMM has been recognised as an associate for
the years ended 30 June 2021, 30 June 2020 and 30 June 2019.
The effect of recognising MMM as an FVTOCI financial asset would be to decrease the profit by £25 (2020: decrease the profit by
£25).
Red Rock Resources Plc
Annual Report and Accounts 2021
40
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.5 Significant Accounting Judgements, Estimates and Assumptions (continued)
Significant Accounting Estimates and Assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events.
The key estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of certain
assets and liabilities within the next annual reporting period, include the impairment determinations, the useful lives of property, plant
and equipment, the bad debt provision and the fair values of our financial assets and liabilities.
Fair value of Mineras Four Points Sales Proceeds Receivable
In estimating the fair value of the Company’s future gold royalties from Colombia, the Directors have made assumptions about the
future cash flows, which include the following key assumptions:
•
•
•
Gold price (US$/oz) – US$1,750 (2020: US$1,800);
Discount rate – 10% (2020: 10%); and
Annual production rate – 10,000oz (2020: 10,530oz)
The fair value is directly sensitive to any changes in the key assumptions.
Share-Based Payment Transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value of share options is determined using the Black-Scholes model. The model has
its strengths and weaknesses and requires six inputs as a minimum: 1) the share price; 2) the exercise price; 3) the risk-free rate of
return; 4) the expected dividends or dividend yield; 5) the life of the option; and 6) the volatility of the expected return. The first three
inputs are normally, but not always, straightforward. The last three involve greater judgement and have the greatest impact on the
fair value.
Impairment of Financial Assets
A financial asset, or a group of financial assets, is deemed to be impaired if, and only if, there is objective evidence of impairment as
a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event
has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration
and extent to which fair value of an investment is less than its cost.
In the case of equity investments, classified as financial instruments with fair value movements through other comprehensive income
(FVTOCI), objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost.
“Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has
been below its original cost. Mining share prices typically have more volatility than most other shares and this is taken into account
by management, when considering if a significant decline in the fair value of its mining investments has occurred. Management would
consider that there is a prolonged decline in the fair value of an equity investment, when the period of decline in fair value has
extended to beyond the expectation management have for the equity investment. This expectation will be influenced particularly by
the Company development cycle of the investment.
Impairment of Non-financial Assets
The Group follows the guidance of IAS 36 to determine, when a non-financial asset is impaired. The Group assesses, at each
reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of
an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups
of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs
to sell, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is
used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available
fair value indicators.
The Group bases its impairment calculation on detailed projections, which are prepared separately for each of the Group’s CGUs to
which the individual assets are allocated. These projections generally cover a period of five years with a terminal value or salvage
value applied.
Red Rock Resources Plc
Annual Report and Accounts 2021
41
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
1. Principal Accounting Policies (continued)
1.5 Significant Accounting Judgements, Estimates and Assumptions (continued)
Impairment losses of continuing operations are recognised in the Income Statement in expense categories, consistent with the
function of the impaired asset.
For investments in associates and joint ventures, the Group assesses impairment after the application of the equity method.
2. Segmental Analysis
The Group consider its mining and exploration activities as separate segments. These are in addition to the investment activities,
which continue to form a significant segment of the business.
The Group has made a strategic decision to concentrate on several commodities, ranging from gold to manganese and copper/cobalt,
and as such further segmental analysis by commodity has not been considered useful or been presented. Transfer prices, between
operating segments, are on an arm’s length basis in a manner similar to transactions with third parties.
Net profit/(loss) before tax from continuing
operations
(147)
(143)
(563)
(129)
(131)
(970)
(1,699)
Year to 30 June 2021
Exploration expenses
Administration expenses
Project development
Other project costs
Share based payments
Currency gain
Other income
Dividend income
Finance income, net
Year to 30 June 2020
Exploration expenses
Administration expenses
Project development
Other project costs
Currency gain
Previous impairment reversal in relation to Kenyan
licences
Other income
Impairment of loans and other receivables
Gain/(Loss) on sales of FVTPL investments
Finance income, net
Net profit/(loss) before tax from continuing
operations
Red Rock Resources Plc
Annual Report and Accounts 2021
Gold
Exploration
Australia
£’000
Gold
Exploration
Kenya
£’000
Copper
Exploration
DRC
£’000
Corporate
and
unallocated
£’000
Investments
£’000
—
—
—
(138)
—
(9)
—
—
—
(98)
(5)
—
(40)
—
—
—
—
—
—
(4)
(559)
—
—
—
—
—
—
—
—
—
—
—
—
—
126
(2)
124
Gold
Exploration
Australia
£’000
Gold
Exploration
Kenya
£’000
Copper
Exploration
DRC
£’000
Corporate
and
unallocated
£’000
Investments
£’000
—
(2)
—
—
—
—
—
—
—
—
(10)
(6)
—
(158)
—
5,280
—
—
—
—
—
—
(32)
—
—
—
—
—
—
—
(2)
5,106
(32)
—
—
—
—
—
—
—
—
—
419
419
Total
£’000
(105)
(699)
(559)
(305)
(350)
34
290
126
Total
£’000
(10)
(597)
(42)
(319)
32
5,280
562
(250)
(53)
553
(7)
(690)
—
(127)
(350)
43
290
—
—
(589)
(10)
(161)
32
—
562
(250)
(53)
134
(335)
5,156
42
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
2. Segmental Analysis (continued)
Information by Geographical Area
Presented below is certain information by the geographical area of the Group’s activities. Revenue, from investment sales and the
sale of exploration assets, is allocated to the location of the asset sold.
Year ended 30 June 2021
Non-current assets
Investments in associates and joint ventures
Mineral tenements
Exploration properties
Exploration assets
FVTOCI financial assets
Non-current receivables
Total segment non-current assets
Year ended 30 June 2020
Non-current assets
Investments in associates and joint ventures
Mineral tenements
Exploration properties
Exploration assets
FVTOCI financial assets
Non-current receivables
Total segment non-current assets
UK
£’000
—
—
—
—
736
1,341
2,077
UK
£’000
—
—
—
—
166
1,429
1,595
Africa
£’000
Australia
£’000
1,585
—
12,948
567
1,019
—
16,119
—
124
—
—
—
3
127
Africa
£’000
Australia
£’000
1,584
—
11,507
351
2,589
—
16,031
—
31
—
—
—
3
34
Total
£’000
1,585
124
12,948
567
1,755
1,344
18,323
Total
£’000
1,584
31
11,507
351
2,755
1,432
17,660
3. (Loss)/Profit for the Year Before Taxation
(Loss)/profit for the year before taxation is stated after charging:
Auditor’s remuneration:
- fees payable to the Company’s auditor for the audit of consolidated and Company Financial Statements
Directors’ emoluments (note 9)
- Share Incentive plan – Directors
- Share Incentive plan – staff
Other gains
- Write back of trade creditors more than 7 years old
- Government support grant (COVID-19)
2021
£’000
2020
£’000
25
312
11
7
—
—
24
257
14
—
552
10
Red Rock Resources Plc
Annual Report and Accounts 2021
43
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
4. Administrative Expenses
Staff costs
Payroll
Pension
Consultants
HMRC / PAYE
Professional services
Accounting and Audit
Legal
Marketing
Other
Regulatory compliance
Travel
Office and Admin
General
IT costs
Rent
Insurance
Total administrative expenses
5. Finance Income/(Costs), Net
Group
Interest income (other than MFP finance income)
Dividend income
Interest expense
Total finance income (other than MFP finance income)
MFP finance expense / (income)
Total finance income
Group
2021
£’000
Group
2020
£’000
Company
2021
£’000
Company
2020
£’000
307
20
15
28
42
15
64
—
105
24
22
8
35
13
699
234
18
15
19
73
11
35
1
85
27
19
5
48
7
597
307
20
15
28
40
14
64
—
105
24
17
8
35
13
690
2021
£’000
290
126
(131)
285
—
285
234
18
15
19
67
11
35
1
85
27
10
5
48
7
582
2020
£’000
311
419
(196)
534
19
553
Interest income (other than Mineras Four Points (“MFP”) finance income) comes from non-current receivables from an associate.
Please refer to note 17 and note 18 respectively. Dividend income represents the money received from the Group’s 0.53% holding
in Jupiter Mines Limited (2020: holding in Jupiter Mines Limited of 0.81%).
6. Project Development and Other Project Expenses
Project development expenses include costs, incurred during the assessment and due diligence phases of a project, when material
uncertainties exist regarding, whether the project meets the Company’s investment and development criteria and, whether as a result,
the project will be advanced further. Other Project Expenses include costs associated with current and previous projects and include
remediation and administration expenses.
Project development expenses
VUP (Congo)
Zlata Bana
Galaxy (Congo)
Kilbowe (Congo)
Luanshimba (Congo)
Kinsevere
Power project (Zambia)
Total project development expenses
Red Rock Resources Plc
Annual Report and Accounts 2021
Group and Company
2021
£’000
2020
£’000
392
42
14
—
19
92
—
559
—
—
—
32
—
—
10
42
44
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
6. Project Development and Other Project Expenses (continued)
Other project costs
Mid Migori Mines (Kenya)
Greenland
Other
Total other project expenses
7. Taxation
Current period taxation on the Group
UK corporation tax at 19.00% (2020: 19.00%) on profit/(loss) for the period
Deferred tax
Origination and reversal of temporary differences
Deferred tax assets not recognised
Tax credit
Factors affecting the tax charge/(credit) for the year
Profit/(loss) on ordinary activities before taxation
Profit/(loss) on ordinary activities at the average UK standard rate of 19.00% (2020: 19.00%)
Income not taxable
Effect of expenditure not deductible
Losses brought forward utilised in the current period
Tax losses carried forward
Tax charge
40
126
139
305
158
158
3
319
2021
£’000
2020
£’000
—
—
—
—
—
(1,699)
(323)
—
67
—
256
—
—
—
—
—
—
5,156
980
(1,115)
58
71
6
—
No deferred tax asset, relating to the Group’s investments, was recognised in the Statement of Comprehensive Income (2020: £nil).
No deferred tax charge has been made due to the availability of trading losses. Unutilised tax losses, arising in the UK, amount to
£4.1 million (2020: £3.9 million).
8. Staff Costs
The aggregate employment costs of staff (including Directors) for the year in respect of the Group was:
Wages and salaries
Pension
Social security costs
Employee share-based payment charge
Total staff costs
The average number of Group employees (including Directors) during the year was:
Executives
Administration
Exploration
2021
£’000
322
20
28
66
436
2021
Number
4
1
1
6
2020
£’000
219
18
19
14
270
2020
Number
4
1
—
5
The key management personnel are the Directors and their remuneration is disclosed within note 9.
360,000 free shares were issued to five employees (2020: nil), including Directors. 4,589,418 partnership and 9,178,836 matching
shares, making the total of 15,568,254, were issued in the year ended 30 June 2021 (2020: 4,905,930 partnership, 9,811,860
matching, 14,717,790 total).
Red Rock Resources Plc
Annual Report and Accounts 2021
45
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
9. Directors’ Emoluments
2021
Executive Directors
A R M Bell
Other Directors
S Kaintz
M C Nott
S Quinn
2020
Executive Directors
A R M Bell
Other Directors
S Kaintz
M C Nott
S Quinn
Directors’
fees
£’000
Directors' fees -
discretionary
bonus
£’000
Consultancy
fees
£’000
Share
Incentive Plan
£’000
Pension
contributions
£’000
Social
security costs
£’000
88
65
15
19
187
17
15
7
7
46
15
—
—
—
15
7
7
7
7
28
7
6
1
2
16
10
7
1
2
20
Directors’
fees
£’000
Directors' fees -
discretionary
bonus,
£’000
Consultancy
fees
£’000
Share
Incentive
Plan
£’000
Pension
contributions
£’000
Social
security costs
£’000
82
65
18
18
183
3
3
1
1
8
15
—
—
—
15
4
4
3
3
14
7
6
2
1
16
10
7
1
2
20
Total
£’000
144
100
31
37
312
Total
£’000
121
85
25
26
257
The number of Directors, who exercised share options in the year was nil (2020: nil). During the year, the Company contributed to a
Share Incentive Plan more fully described in the Directors’ Report on page 13.
10. Earnings Per Share
The basic earnings/(loss) per share is derived by dividing the loss for the year, attributable to ordinary shareholders of the Parent by
the weighted average number of shares in issue. Diluted earnings/(loss) per share is derived by dividing the loss for the year,
attributable to ordinary shareholders of the Parent by the weighted average number of shares in issue plus the weighted average
number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
2021
2020
(Loss)/profit attributable to equity holders of the parent
company, £
(1,698,983)
5,163,595
Adjusted for interest accrued on the convertible notes
—
102,435
Adjusted (loss) / profit attributable to equity holders of the
parent company used for diluted EPS calculation
(1,698,983)
5,266,030
Weighted average number of ordinary shares of £0.0001 in
939,293,986
679,826,248
issue, used for basic EPS
from potential ordinary shares that would have to be issued, if all
loan notes, convertible at the discretion of the noteholder, converted
at the beginning of the period or at the inception of the instrument,
whichever is later
Weighted average number of ordinary shares of £0.0001 in
issue, including potential ordinary shares, used for diluted
EPS
—
144,640,518
939,293,986
824,466,766
Red Rock Resources Plc
Annual Report and Accounts 2021
46
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
10. Earnings Per Share (continued)
2021
2020
(Loss)/earnings per share – basic
(0.18 pence)
0.76 pence
(Loss)/earnings per share – fully diluted
(0.18 pence)
0.64 pence
At 30 June 2021, the effect of all the instruments (fully vested and in the money) is anti-dilutive as it would lead to a further
reduction of loss per share, therefore, they were not included into the diluted loss per share calculation.
Options and warrants, that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS
for the periods presented:
2021
2020
Share options granted to employees – either not vested and/or out of
63,320,000
48,320,000
the money
Number of warrants given to shareholders as a part of placing equity
380,197,618
101,740,195
instruments – out of the money
Total number of contingently issuable shares, that could
potentially dilute basic earnings per share in future, and anti-
dilutive potential ordinary shares, that were not included into the
fully diluted EPS calculation
443,517,618
150,060,195
There were no ordinary share transactions such as share capitalisation, share split or bonus issue after 30 June 2021, that could
have changed the EPS calculations significantly, if those transactions had occurred before the end of the reporting period.
Red Rock Resources Plc
Annual Report and Accounts 2021
47
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
11.
Investments in Subsidiaries
Company
Cost
At 1 July
Investment in subsidiaries
At 30 June
Impairment
At 1 July
Charge in the year
At 30 June
Net book value
As at 30 June 2021 and 30 June 2020, the Company held interests in the following subsidiary companies:
2021
£
2020
£
20
20
40
(1)
—
(1)
39
20
—
20
(1)
—
(1)
19
Company
Red Rock Australasia Pty Ltd
RedRock Kenya Ltd
RRR Kenya Ltd
Red Rock Resources Inc*
Red Rock Resources (HK) Ltd
Red Rock Resources Congo S.A.U.
RRR Coal Ltd
Jimano Ltd
Red Rock Galaxy SA
Country of
registration
Australia
Kenya
Kenya
USA
Hong Kong
DRC
UK
Cyprus
DRC
Proportion
Held
At 30 June 2021
50,1%
87%
100%
100%
100%
100%
100%
100%
80%
Class
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Proportion
Held
At 30 June 2020
Nature of business
100% Mineral exploration
87% Mineral exploration
Mineral exploration
Natural resources
Holding company
Holding company
Holding company
Royalty Holdings
Holding company
100%
100%
100%
100%
100%
—
—
* Red Rock Resources Inc incorporated on 12 November 2015 and dissolved on 10 March 2020.
Red Rock Australasia Pty Ltd registered office is c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910, Australia.
RedRock Kenya Ltd registered office is PO Box 9306 – 003000, Nairobi, Kenya.
RRR Kenya Ltd registered office is PO Box 9306 – 00300, Nairobi, Kenya.
Red Rock Resources Inc registered office is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801, United States of America.
Red Rock Resources (HK) Ltd registered office is Suites 1601-1603, Kinwick Centre, 32 Hollywood Road, Central, Hong Kong.
Red Rock Resources Congo S.A.U. registered office is Boulevard Du 30 Juin et Avenue Batetela, Immeuble Crown Tower, 5 Eme
Niveau, Local 504, Gombe, Kinshasa.
RRR Coal Ltd registered office is Salisbury House, London Wall, London EC2M 5PS.
Jimano Ltd registered office Strovolou, 77 Strovolos Center, 4th Floor Office 401, Nicosia, Cyprus
Red Rock Galaxy SA office is 1320 Av Meteo 2 Q/Meteo C/Lumbumbashi, DRC
Red Rock Resources Plc
Annual Report and Accounts 2021
48
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
12.
Investments in Associates and Joint Ventures
Cost
At 1 July
Additions during the year
At 30 June
Impairment
At 1 July
Profit/(loss) during the year
At 30 June
Group
2021
£’000
Company
2020
£’000
2021
£’000
2020
£’000
1,805
1
1,806
(221)
—
(221)
1,805
—
1,805
(221)
—
(221)
1,668
1,668
1
—
1,669
1,668
(3)
—
(3)
(3)
—
(3)
Net book amount at 30 June
1,585
1,584
1,666
1,665
The Company, at 30 June 2021 and at 30 June 2020, had significant influence by virtue other than shareholding over 20% over Mid
Migori Mining Company Ltd.
Company
Mid Migori Mining Company Limited
Country of
incorporation
Kenya
Class of
shares held
Ordinary
Percentage of
issued capital
15.00%
Accounting year ended
30 September 2020
Summarised financial information for the Company’s associates and joint ventures, where available, is given below:
For the year as at 30 June 2021:
Company
Mid Migori Mining Company Limited
For the year as at 30 June 2020:
Company
Mid Migori Mining Company Limited
Revenue
£’000
—
Revenue
£’000
—
Loss
£’000
—
Profit
£’000
—
Assets
£’000
2,559
Liabilities
£’000
(2,623)
Assets
£’000
2,559
Liabilities
£’000
(2,623)
Mid Migori Mining Company Ltd
The Company owns 15% of the issued share capital of Mid Migori Mining Company Ltd (“MMM”), incorporated in Kenya. The
Company has entered into agreements under which it manages MMM’s development projects and has representation on the MMM
board. In accordance with IAS 28, the involvement with MMM meets the definition of significant influence and, therefore, has been
accounted for as an associate (note 1.5).
VUP Musonoi Mining SA
On 2 March 2019, Vumilia Pendeza S.A. ("VUP") and Bring Minerals S.A.U. ("B.Min"), the joint venture partners, Red Rock Resources
Congo S.A.U. ("RRRC"), a wholly owned local subsidiary of the Company, signed the "Statutes of VUP Musonoi Mining SA" ("VMM
S.A."), the joint venture company (incorporated in the Democratic Republic of Congo) through which the JV Project will be pursued.
RRRC owns 50.1% of VMM S.A, however, the entity is operated jointly and managed by the board of Musonoi Mining S.A. with no
party classified as having formal control. The Company announced on 16 November 2021 that it had served an Ordonnance de
Saisie Conservatoire (precautionary attachment) order on VUP and taken other measures locally to protect its interests as relates to
this joint venture.
Red Rock Resources Plc
Annual Report and Accounts 2021
49
Notes to the financial statements (continued)
for the year ended 30 June 2021
12.
Investments in Associates and Joint Ventures (continued)
Cost
At 1 July 2020
Additions during the year
At 30 June 2021
Impairment and losses during the year
At 1 July 2020
The Group’s share of profit/(loss) during the year
At 30 June 2021
Carrying amount
At 30 June 2021 and 30 June 2020
13. Exploration Assets
Group and Company
At 1 July
Additions
Amounts payable under earn-in agreement
Reclassification from non-current financial assets
At 30 June
Exploration assets were capitalised:
Mid Migori
Mining Company
Limited
£’000
VUP Musonoi
Mining SA
£’000
1,082
1
1,083
(81)
—
(81)
583
—
583
—
—
—
Total
£’000
1,665
1
1,666
(81)
—
(81)
1,002
583
1,585
2021
£’000
11,858
1,657
—
—
13,515
2020
£’000
235
116
2,028
9,479
11,858
•
•
For the Galaxy (DRC) project since 17 October 2018, when exploration commenced at the project license in the DRC; and
For the VUP (DRC) project since 22 November 2018, when the joint venture agreement was finalised.
Under a 2018 agreement with MMM partner Kansai Mining Corporation Ltd, in the event of a renewal or reissue of licenses, covering
the relevant assets, the Company was within three months to make further payment of US$2.5 million (£2.028 million) to Kansai
Mining Corporation Ltd. For further details of the payments see note 25.
Management have considered the recoverability of this asset and have considered the recent announcement regarding the restoration
of the Kenyan gold licenses as well as the potential to complete a transaction, involving these assets and considers the likely proceeds
from such a transaction would exceed the value of the exploration property.
Red Rock Resources Plc
Annual Report and Accounts 2021
50
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
14. Financial Instruments with Fair Value Through Other Comprehensive Income (FVTOCI)
Opening balance
Additions
Disposals
Change in fair value
At 30 June
Group
2021
£’000
2,755
143
(401)
(742)
1,755
Market Value of Investments
The market value as at 30 June of the listed and unlisted investments was as follows:
Quoted on London AIM
Quoted on other foreign stock exchanges
Unquoted investments at fair value
Group
2021
£’000
562
1,019
174
1,755
2020
£’000
4,210
146
(795)
(806)
2,755
2020
£’000
146
2,471
138
2,755
Company
2021
£’000
2020
£’000
1,711
143
(697)
(379)
778
3,163
146
(853)
(685)
1,771
Company
2021
£’000
2020
£’000
146
1,487
138
1,771
562
42
174
778
Jupiter Mines Limited
During the reporting year, Jupiter Mines Limited has made distributions recognised as dividends and included into the Dividend line
in the Consolidated Income Statement in the amount of £0.126 million (2020: £0.419 million).
At 30 June 2021, Red Rock retains a 0.53% stake in the share capital of Jupiter Mines Limited (2020:0.81%).
Elephant Oil Ltd
Following discussions with the management team of Elephant Oil Ltd and internal analysis, conducted on the Company’s projects
and prospects for onshore oil exploration activities in Benin, the fair value of the investment held is £173,866 (2020: £137,500).
Corcel Plc
During the reporting year, the Company sold 3,383,633 shares in Corcel Plc to maintain the Company’s working capital. Gain
on sale of these shares recognised in the Statement of Other Comprehensive Income amounted to £65,606.
Juno Minerals Limited
At 30 June 2021, Red Rock retains a 0.29% stake in the share capital of Juno Minerals Limited (2020:nil).
Details of the fair value measurement hierarchy are included in Note 23.
Red Rock Resources Plc
Annual Report and Accounts 2021
51
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
15. Financial Instruments with Fair Value Through Profit and Loss
Group and Company
Warrants in Soma Gold Corp. ordinary shares
30 June
2021
£’000
—
—
30 June
2020
£’000
3
3
At 30 June 2021, the Company was holding no warrants in Soma Gold Corp. (formerly Para Resources Inc.) (2020: 232,500). The
warrants held in Soma Gold Corp expired on 4 June 2021.
Warrant exercise price
CAD
0.30
Number of
warrants
232,500
Grant date
4 June 2018
Expiry date
4 June 2021
Fair value of
individual warrant
CAD
0.024
The following information is relevant, in the determination of the fair value of the warrants, granted during the year:
Valuation model
Warrant exercise price, CAD$
Weighted average share price at valuation date, CAD$
Weighted average contractual life, years
Expected volatility, %
Expected dividend growth rate, %
Risk-free interest rate (Canadian Government three-year bond), %
Black-Scholes model
0.30
0.25
0.93
160%
0
0.158
Calculation of volatility involves significant judgement by the Directors and it is based on the Para Resources Inc trading data, directly
preceding the grant date.
16. Cash and Cash Equivalents
Group
Cash in hand and at bank
30 June
2021
£’000
457
457
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank and in hand.
Company
Cash in hand and at bank
Credit Risk
30 June
2021
£’000
366
366
30 June
2020
£’000
53
53
30 June
2020
£’000
32
32
The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from notes and other receivables. The
Directors manage the Group’s exposure to credit risk by the application of monitoring procedures on an ongoing basis. For other
financial assets (including cash and bank balances), the Directors minimise credit risk by dealing exclusively with high credit rating
counterparties. The Company defines default through a framework of qualitative “unlikeliness to pay” with a more objective 90 days
past due timeline. The qualitative criteria allows the Company to identify exposure early on in the process, with the 90 day past due
limit providing a clear final metric.
Red Rock Resources Plc
Annual Report and Accounts 2021
52
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
16. Cash and Cash Equivalents (continued)
Credit Risk Concentration Profile
The Group’s receivables do not have significant credit risk exposure to any single counterparty or any group of counterparties, having
similar characteristics. The Directors define major credit risk as exposure to a concentration exceeding 10% of a total class of such
asset.
The Company maintains its cash reserves in Coutts & Co, which maintains an A-1 credit rating from Standard & Poor’s.
17. Non-Current Receivables
MFP sale proceeds
Group
2021
£’000
1,344
1,344
Group
2020
£’000
1,432
1,432
Company
2021
£’000
Company
2020
£’000
1,341
1,341
1,429
1,429
The Mineras Four Points (“MFP”) sale proceeds represent the fair value of the non-current portion of the deferred consideration
receivable for the sale of MFP. The fair value was estimated based on the consideration offered by the buyer adjusted to its present
value based on the timing for which the consideration is expected to be received. The most significant inputs are the offer price per
tranches, discount rate and estimated royalty stream. The estimated royalty stream takes into account current production levels,
estimates of future production levels and gold price forecasts.
18. Other Receivables
Current trade and other receivables
Prepayments
Related party receivables:
– due from subsidiaries
Short-term loan to related party:
– due from a Director of a JV partner
Other receivables
Total
Group
2021
£’000
2020
£’000
Company
2021
£’000
2020
£’000
42
—
85
272
399
17
—
37
490
544
42
162
85
76
365
17
327
37
334
715
Red Rock Resources Plc
Annual Report and Accounts 2021
53
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
19. Trade and Other Payables
Non-current liabilities
Trade and other payables
Short term borrowings
Total non-current liabilities
Current liabilities
Trade payables
Accruals
Due to Partners in associate (note 26)
Due to key management
Total trade and other payables
Intra-group borrowings
Short-term borrowings
Total current liabilities
Group
2021
£’000
2020
£’000
Company
2021
£’000
2020
£’000
119
731
850
835
240
—
—
1,075
—
969
2,044
7
—
7
1,042
273
2,029
1
3,345
—
1,078
4,423
—
731
731
803
240
—
—
1,043
1,079
27
2,149
—
—
—
1,013
273
2,029
1
3,316
276
925
4,517
During the year, on 6 November 2020, the Company’s 100% owned subsidiary, RRR Coal Ltd, refinanced its existing loan facility
with Riverfort Global Opportunities PCC Limited and YA II PN Ltd, increasing the total amount available for draw-down to USD 2.0
million, and drawing down an initial gross amount of USD 1.0 million with additional tranches available at the lenders’ absolute
discretion. The notes are secured on 6,302,000 shares in Jupiter Mines Limited as well as 20,000,000 shares in Power Metal
Resources Plc, which were transferred from the Company to an escrow account for the duration of the loan as well as by a corporate
guarantee, executed by Red Rock Resources Plc. The notes carry an interest rate of 10% and come with a 7.5% implementation
fee and are repayable over a six-month period, starting in June 2021.
20. Share Capital of the Company
The share capital of the Group and the Company is as follows:
Authorized, Issued and fully paid
1,216,708,801 (2020: 696,767,452) ordinary shares of £0.0001 each
2,371,116,172 deferred shares of £0.0009 each
6,033,861,125 A deferred shares of £0.000096 each
As at 30 June
2021
£’000
122
2,134
579
2,835
2020
£’000
70
2,134
579
2,783
Red Rock Resources Plc
Annual Report and Accounts 2021
54
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
20. Share Capital of the Company (continued)
Movement in ordinary shares
As at 30 June 2019 – ordinary shares of £0.0001 each
Issued 10 March 2020 at 0.6 pence per share (non-cash, settlement for DRC interests)
Issued 13 May 2020 at 0.145 pence per share (non-cash, SIP)
As at 30 June 2020 – ordinary shares of £0.0001 each
Issued 28 Sep 2020 at 0.8 pence per share (cash)
Issued 18 Nov 2020 at 0.7 pence per share (non-cash, Kansai settlement for MMM)
Issued 14 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note conversion)
Issued 18 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note conversion)
Issued 22 Dec 2020 at 0.6 pence per share (non-cash, convertible loan note conversion)
Issued on 12 Feb 2021 at 1.05 pence per share (cash)
Issued on 22 Mar 2021 at 1.05 pence per share (non-cash, Kansai settlement)
Issued on 9 Apr 2021 at 0.75 pence per share (cash, exercise of warrants)
Issued on 12 Apr 2021 at 1 pence per share (non-cash, SIP)
Issued on 12 Apr 2021 at 0.155 pence per share (non-cash, SIP)
Issued on 15 Apr 2021 at 0.75 pence per share (cash, exercise of warrants)
Issued on 19 Apr 2021 at 0.75 pence per share (cash, exercise of warrants)
Issued on 20 Apr 2021 at 0.75 pence per share (cash, exercise of warrants)
Issued on 4 Jun 2021 at 0.75 pence per share (cash, exercise of warrants)
Number
676,049,662
6,000,000
14,717,790
696,767,452
125,000,000
3,571,429
42,493,333
34,313,378
70,466,665
95,238,095
101,550,000
980,392
1,800,000
13,768,254
1,838,235
980,392
980,392
26,960,784
Nominal
£’000
68
1
1
70
13
—
4
3
7
10
10
—
—
1
—
—
—
3
As at 30 June 2021 – ordinary shares of £0.0001 each
1,216,708,801
122
Ordinary shares represent the Company's basic voting rights and reflect the equity ownership of the Company. Ordinary shares carry
one vote per share and each share gives equal right to dividends. These shares also give right to the distribution of the Company's
assets in the event of winding-up or sale.
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the Company, or bought back for £1
and then cancelled. The deferred shares are not quoted and carry no rights whatsoever.
Warrants
At 30 June 2021, the Company had 380,197,618 warrants in issue (2020: 101,740,195) with a weighted average exercise price of
£0.0015 (2020: £0.0087). Weighted average remaining life of the warrants, at 30 June 2021, was 582 days (2020: 631 days). All the
warrants were issued by the Group to its shareholders in the capacity of shareholders and, therefore, are outside of IFRS 2 scope.
Group and Company
Outstanding at the beginning of the year
Granted during the period
Exercised during the period
Cancelled during the period
Lapsed during the period
Outstanding at the end of the year
2021
number of
warrants
101,740,195
323,322,618
(44,865,195)
2020
number of
warrants
109,552,695
57,500,000
-
—
(57,500,000)
—
380,197,618
(7,812,500)
101,740,195
Red Rock Resources Plc
Annual Report and Accounts 2021
55
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
20. Share Capital of the Company Continued
During the year ended 30 June 2021, the Company had the following warrants to subscribe for shares in issue:
Grant date
10 Dec 2019
28 Sep 2020
6 Nov 2020
6 Nov 2020
18 Nov 2020
12 Feb 2021
1 Mar 2021
Total warrants in issue at 30 June 2021
Expiry date
Warrant exercise price, £
Number of warrants
19 Dec 2022
27 Mar 2023
6 Nov 2023
6 Nov 2023
17 Nov 2023
12 Feb 2023
18 Mar 2023
0.009
0.012
0.016
0.024
0.007
0.020
0.020
56,875,000
137,500,000
8,000,000
8,000,000
71,428,571
47,619,047
50,775,000
380,197,618
The aggregate fair value, related to the share warrants granted during the reporting period, was £1,195,797 (2020: £nil).
Capital Management
Management controls the capital of the Group in order to control risks, provide the shareholders with adequate returns and ensure
that the Group can fund its operations and continue as a going concern. The Group’s debt and capital includes ordinary share capital
and financial liabilities, supported by financial assets (note 23). There are no externally imposed capital requirements. Management
effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to
changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and
share issues. There have been no changes in the strategy, adopted by management to control the capital of the Group since the
prior year.
21. Reserves
Share Premium
The share premium account represents the excess of consideration, received for shares issued above their nominal value net of
transaction costs.
Foreign Currency Translation Reserve
The translation reserve represents the exchange gains and losses that have arisen from the retranslation of overseas operations.
Retained Earnings
Retained earnings represent the cumulative profit and loss net of distributions to owners.
Fair Value Through Other Comprehensive Income Financial Assets Revaluation Reserve
The available for sale trade investments reserve represents the cumulative revaluation gains and losses in respect of available for
sale trade investments.
Share-Based Payment Reserve
The share-based payment reserve represents the cumulative charge for options granted, still outstanding and not exercised.
Warrant Reserve
The warrant reserve represents the cumulative charge for warrants granted, still outstanding and not exercised.
22. Share-Based Payments
Employee Share Options
In prior years, the Company established employee share option plans to enable the issue of options as part of the remuneration of
key management personnel and Directors to enable them to purchase ordinary shares in the Company. Under IFRS 2 “Share-based
Payments”, the Company determines the fair value of the options issued to Directors and employees as remuneration and recognises
the amount as an expense in the statement of income with a corresponding increase in equity.
At 30 June 2021, the Company had outstanding options to subscribe for ordinary shares as follows:
Red Rock Resources Plc
Annual Report and Accounts 2021
56
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
22. Share-Based Payments (continued)
Options issued
14 June 2016
exercisable at
0.45 pence per
share expiring
29 January 2022
Number
5,760,000
4,680,000
900,000
1,080,000
12,420,000
Options issued
13 January 2017
exercisable at 0.8p per
share, expiring on
13 January 2023
Options issued on
24 August 2020 at 0.2p
per share, expiring on
19 August 2025
Options issued on
24 August 2020 at 0.25p
per share, expiring on
19 August 2025
Total
Number
12,000,000
11,000,000
3,000,000
3,000,000
29,000,000
Number
5,500,000
2,250,000
—
1,250,000
10,500,000
Number
5,500,000
2,250,000
—
1,250,000
10,500,000
Number
17,760,000
15,680,000
3,900,000
4,080,000
63,320,000
A R M Bell
S Kaintz
S Quinn
Employees
Total
Outstanding at the beginning and the end of the year
Options issued in the year
Options lapsed in the year
Of them vested and exercisable
Company and Group
2021
2020
Number of
options
48,320,000
21,000,000
(6,000,000)
63,320,000
Weighted
average
exercise
price
pence
0.70
0.225
0.80
0.46
Weighted
average
exercise
price
pence
0.70
-
Number of
options
48,320,000
—
—
24,160,000
0.70
21,000,000 share options were granted by the Company in the reporting year (2020: none). The weighted average fair value of each
option granted during the year was £0.002 (2020: nil). The exercise price of options, outstanding at 30 June 2021, ranged between
£0.0020 and £0.0045 (2020: £0.0045 and £0.008). Their weighted average contractual life was 2.41 years (2020: 2.28 years).
Share-based remuneration expense, related to the share options grant, is included in the administration expenses line in the
Consolidated Income Statement in the amount of £42,000 (2020: nil).
Share Incentive Plan
In January 2012, the Company implemented a tax efficient Share Incentive Plan, a government approved scheme, the terms of which
provide for an equal reward to every employee, including Directors, who have served for three months or more at the time of issue.
The terms of the plan provide for:
•
•
•
Each employee to be given the right to subscribe any amount up to £150 per month with Trustees, who invest the monies in the
Company’s shares (“Partnership Shares”);
The Company to match the employee’s investment by contributing an amount equal to double the employee’s investment
(“Matching Shares”); and
The Company to award free shares to a maximum of £3,600 per employee per annum (“Free Shares”).
The subscriptions remain free of taxation and national insurance if held for five years.
All such shares are held by Share Incentive Plan Trustees and the ordinary shares cannot be released to participants until five years
after the date of the award.
During the financial year, a total of 13,768,254 Partnership and Matching Shares were awarded and 1,800,000 Free Shares (2020:
14,717,790 Free, Partnership and Matching Shares were awarded) with a fair value of £0.00155 for the Partnership and the Matching
Shares and £0.01 for the Free Shares (2020: £0.00145), resulting in a share-based payment charge of £39,341 (2020: £14,227),
included in the administration expenses line in the Income Statement.
Red Rock Resources Plc
Annual Report and Accounts 2021
57
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
23. Financial Instruments
23.1 Categories of Financial Instruments
The Group and the Company hold a number of financial instruments, including bank deposits, short-term investments, loans and
receivables, borrowings and trade payables. The carrying amounts for each category of financial instrument are as follows:
30 June
Financial assets
Available for sale financial assets at fair value through OCI
Unquoted equity shares
Quoted equity shares
Total available for sale financial assets at fair value through OCI
Financial assets FVTPL (Para warrants)
Total financial assets carried at fair value through profit and loss
Cash and cash equivalents
Loans and receivables
Non-current receivables
Other receivables – current
Total loans and receivables carried at amortised cost
Total financial assets
Total current financial assets
Total non-current financial assets
Financial liabilities
Short-term borrowings, including intra-group
Long-term borrowings
Trade and other payables, excluding accruals
Total current financial liabilities
Group
2021
£’000
Group
2020
£’000
Company
2021
£’000
Company
2020
£’000
174
1,581
1,755
—
—
457
1,344
560
1,904
138
2,617
2,755
3
3
53
1,432
544
1,976
174
604
778
—
—
366
1,950
365
2,315
4,116
4,787
3,459
1,067
3,099
601
4,186
731
2,728
969
731
954
2,654
1,078
—
3,346
4,424
1,106
731
803
2,640
138
1,633
1,771
3
3
32
1,429
715
2,144
3,950
750
3,200
1,201
—
3,317
4,518
Other Receivables and Trade Payables
Management assessed that fair values of other receivables and trade and other payables approximate their carrying amounts largely
due to the short-term maturities of these instruments.
Non-Current Receivables
Long-term fixed-rate receivables are evaluated by the Group, based on parameters such as interest rates, recoverability and risk
characteristics of the financed project. Based on this evaluation, allowances are taken into account for any expected losses on these
receivables.
Loans and Borrowings
The carrying value of interest-bearing loans and borrowings is determined by calculating present values at the reporting date, using
the issuer’s borrowing rate.
The carrying value of current financial liabilities in the Company is not materially different from that of the Group.
23.2 Fair Values
Financial assets and financial liabilities, measured at fair value in the Statement of Financial Position, are grouped into three levels
of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement as follows:
•
•
•
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: Valuation techniques for which the lowest level input, that is significant to the fair value measurement, is directly or
indirectly observable; and
Level 3: Valuation techniques for which the lowest level input, that is significant to the fair value measurement, is unobservable.
Red Rock Resources Plc
Annual Report and Accounts 2021
58
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
23. Financial Instruments (continued)
23.2 Fair Values (continued)
The carrying amount of the Company’s financial assets and liabilities is not materially different to their fair value. The fair value of
financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale. Where a quoted price in an active market is available, the fair value is based
on the quoted price at the end of the reporting period. In the absence of a quoted price in an active market, 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 following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.
Group
30 June 2021
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
—
1,581
—
Level 1
£’000
Level 2
£’000
—
—
—
Level 3
£’000
174
—
—
Company
30 June 2021
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
23.2 Fair Values continued
Group
30 June 2020
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
Company
30 June 2020
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
Level 1
£’000
Level 2
£’000
Level 3
£’000
—
604
—
Level 1
£’000
—
2,617
—
Level 1
£’000
—
1,633
—
—
—
—
174
—
—
Level 2
£’000
Level 3
£’000
—
—
—
138
—
3
Level 2
£’000
Level 3
£’000
—
—
—
138
—
3
Total
£’000
174
1,581
—
Total
£’000
174
604
—
Total
£’000
138
2,617
3
Total
£’000
138
1,633
3
23.3 Financial Risk Management Policies
The Directors monitor the Group’s financial risk management policies and exposures and approve financial transactions.
The Directors’ overall risk management strategy seeks to assist the consolidated Group in meeting its financial targets, while
minimising potential adverse effects on financial performance. Its functions include the review of credit risk policies and future cash
flow requirements.
Specific Financial Risk Exposures and Management
The main risks, the Group are exposed to through its financial instruments, are credit risk and market risk, consisting of interest rate
risk, liquidity risk, equity price risk and foreign exchange risk.
Credit Risk
Exposure to credit risk, relating to financial assets, arises from the potential non-performance by counterparties of contract obligations
that could lead to a financial loss for the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval,
granting and renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial liability of
significant customers and counterparties), ensuring, to the extent possible, that customers and counterparties to transactions are of
sound creditworthiness. Such monitoring is used in assessing receivables for impairment.
Red Rock Resources Plc
Annual Report and Accounts 2021
59
Notes to the Financial Statements (continued)
for the year ended 30 June 2021
23. Financial Instruments (continued)
23.3 Financial Risk Management Policies (continued)
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in entities that the
Directors have otherwise cleared as being financially sound.
Other receivables, which are neither past due nor impaired, are considered to be of high credit quality.
The consolidated Group does have a material credit risk exposure with Mid Migori Mining Company Ltd, an associate of the Company.
See note 1.5, “Significant accounting judgements, estimates and assumptions” for further details.
Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations
related to financial liabilities. The Group manages this risk through the following mechanisms:
• Monitoring undrawn credit facilities;
•
• Maintaining a reputable credit profile.
Obtaining funding from a variety of sources; and
The Directors are confident that adequate resources exist to finance operations for commercial exploration and development and
that controls over expenditure are carefully managed.
Management intend to meet obligations as they become due through ongoing revenue streams, the sale of assets, the issuance of
new shares, the collection of debts owed to the Company and the drawing of additional credit facilities.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk.
Equity Price Risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices largely due to demand and supply factors for commodities, but also include political, economic, social, technical, environmental
and regulatory factors.
Foreign Currency Risk
The Group’s transactions are carried out in a variety of currencies, including Sterling, Australian Dollar, US Dollar, Kenyan and
Shilling.
To mitigate the Group’s exposure to foreign currency risk, non-Sterling cash flows are monitored. The Group does not enter into
forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in specific currencies are
expected to largely offset one another and the currencies most widely traded in are relatively stable.
The Directors consider the balances, most susceptible to foreign currency movements, to be financial assets with FVTOCI.
These assets are denominated in the following currencies:
Group
30 June 2021
GBP
£
AUD
£
USD
£
CAD
£
Other
£
Total
£
Cash and cash equivalents
Amortised cost financial assets - Other receivables
FVTOCI financial assets
Amortised costs financial assets - Non-current receivables
Trade and other payables, excluding accruals
Short-term borrowings
387
254
604
—
57
969
29
1
977
3
26
—
7
144
174
1341
699
—
—
—
—
—
—
—
34
161
—
—
53
—
Red Rock Resources Plc
Annual Report and Accounts 2021
457
560
1,755
1,344
835
969
60
Notes to the financial statements (continued)
for the year ended 30 June 2021
23. Financial Instruments (continued)
23.2 Financial Risk Management Policies (continued)
Group
30 June 2020
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Total
£’000
Cash and cash equivalents
Amortised cost financial assets - Other receivables
FVTOCI financial assets
FVTPL financial assets - warrants
Amortised costs financial assets - Non-current receivables
Trade and other payables, excluding accruals
Short-term borrowings
29
243
147
—
—
37
925
5
1
2,470
—
3
26
—
19
144
138
—
1,429
2,106
153
—
—
—
3
—
866
—
—
156
—
—
—
39
—
Company
30 June 2021
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Cash and cash equivalents
Amortised cost financial assets - Other receivables
FVTOCI financial assets
Amortised costs financial assets - Non-current receivables
Trade and other payables, excluding accruals
Short-term borrowings, including intra-group
361
204
604
—
57
27
5
—
—
—
—
—
—
161
174
1,341
693
—
—
—
—
—
—
—
—
—
—
—
53
—
Company
30 June 2020
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Cash and cash equivalents
Amortised cost financial assets - Other receivables
FVTOCI financial assets
FVTPL financial assets - warrants
Amortised costs financial assets - Non-current receivables
Trade and other payables, excluding accruals
Short-term borrowings, including intra-group
27
572
147
—
—
37
925
5
—
1,487
—
—
—
—
—
144
138
—
1,429
2,106
276
—
—
—
3
—
866
—
—
—
—
—
—
36
—
53
544
2,755
3
1,432
3,074
1,078
Total
£’000
366
365
778
1,341
803
27
Total
£’000
32
716
1,772
3
1,429
3,045
1,201
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas transactions.
24. Reconciliation of Liabilities Arising from Financing Activities and Major Non-Cash Transactions
30 June
2020
Cash flow
loans
received
Cash flow
principal
re-
payment
Cash flow
Interest
paid
Non-cash
flow Forex
movement
Non-cash
flow -
Conversion
Non-cash
flow Interest
and
arrangement
fee accreted
Non-cash
flow
Introducers
fee accrued
30 June
2021
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
153
925
1,078
878
—
878
(27)
(50)
(77)
(61)
(24)
(85)
(35)
—
(35)
—
(884)
(884)
34
33
67
—
—
—
942
—
942
Group
Loan from
institutional
investors
Convertible
notes
Total
Red Rock Resources Plc
Annual Report and Accounts 2021
61
Company
Loan from
subsidiary
RRR Coal
Convertible
notes
Notes to the financial statements (continued)
for the year ended 30 June 2021
24. Reconciliation of Liabilities Arising from Financing Activities and Major Non-Cash Transactions (continued)
30 June
2020
Cash flow
loans
received
Cash flow
loans re-
payment
Cash flow
Interest
paid
Non-cash
flow Forex
movement
Non-cash
flow –
Conversion
Non-cash
flow Interest
and
arrangement
fee accreted
Non-cash
flow
Repayment
with Jupiter
shares
30 June
2021
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
276
925
1,327
(149)
—
(50)
(19)
(24)
(43)
35
—
35
—
(884)
(884)
75
33
108
(466)
1,079
—
—
(466)
1,079
Total
1,201
1,327
(199)
Significant non-cash transactions from financing activities, in relation to raising new capital, are disclosed in note 20.
Significant non-cash transactions from operating activities were as follows:
•
•
•
Impairment of other receivables in the amount of £nil (2020: £0.249 million);
Income recognised from the reversal of previous impairment in the amount of £nil (2020: £5.28 million); and
Income recognised from forgiven creditors in the amount of £nil (2020: £0.551 million).
25. Significant Agreements and Transactions
The following are the significant agreements and transactions recently undertaken having an impact in the year under review. For
the sake of completeness and of clarity, some events after the reporting year may be included here and in note 27.
Kenya Licensing
On 17 August 2020, the anticipated renewals of Prospecting Licenses PL/2018/0202 and PL/2018/0203 (formerly SPLs 122 and 202)
had been received for a period of three years from 2 August 2020.
Performance Option Award
On 24 August 2020, the Company announced the grant of 21,000,000 performance options to Directors and key staff, representing
in aggregate 3.01% of the existing share capital of the Company, split between two pools of 10,500,00 performance options at a price
of £0.002 per share and £0.0025 per share A pool of 6,000,000 options has been created for distribution at the Board’s discretion to
key consultants and advisors.
Option over Slovak Gold Assets
On 7 September 2020, the Company announced that it had entered into an option over former gold and silver mining and exploration
assets at Zlata Bana, Slovakia. A EUR 10,000 payment was made for a due diligence period to 21 September 2020. Red Rock then
made a payment EUR 23,000 in order to acquire a 50% interest in the Zlata Bana License, covering an area of approximately 12 sq
km. Upon exercise of the option, Red Rock would acquire a 50% interest in the other assets, including interests in land and buildings,
vehicles and mining equipment, a permit over a mineral stockpile and mining information and data. The consideration, for exercise
of the option, would be the issue upon the execution of documentation to transfer the interest in the assets ("Transfer") of EUR
250,000 of new Red Rock shares at an issue price equal to the prior 5 day average VWAP. A further issue of EUR 100,000 of new
Red Rock shares would occur upon completion of the process of Transfer, at an issue price per share equal to the 5 day prior average
VWAP. A Joint Venture will be established between Red Rock and Mr Lubomir Konkol. Red Rock would be responsible for certain
expenditures ("Committed Expenditure") of the Joint Venture in the period after execution of the option, which was expected to
amount to not less that EUR 100,000 in 2020. Following due diligence, the option was not exercised.
Update on Jupiter Mines Limited Dividend and Iron Ore Spin Off
On 7 September 2020, the Company announced that the Board of Jupiter Mines Limited had approved the execution of the IPO of
its Central Yilgarn Iron Ore Assets. Jupiter Mines Limited also announced that the Board of Tshipi e Ntle had declared a dividend to
its shareholders of ZAR 330 million for the first half of FY2021. Jupiter Mines Limited will received ZAR156 million and ZAR25 million
in marketing profits.
Financing to Raise £1,000,000
On 28 September 2020, the Company announced that it had raised £1,000,000 by way of a placing of 125,000,000 new ordinary
shares of £0.0001 each at a price of £0.008 per share with 1 for 1 warrants exercisable at a price of £0.012 per share for thirty
months. 12,500,000 warrants were issued to First Equity Ltd in part payment for its services as placing agent.
Red Rock Resources Plc
Annual Report and Accounts 2021
62
Notes to the financial statements (continued)
for the year ended 30 June 2021
25. Significant Agreements and Transactions (continued)
Jupiter Mines Limited – Dividend
On 28 October, Jupiter Mines Limited announced an interim unfranked dividend for the half year period to 31 August 2020 of AUD
0.01 per ordinary share.
Issue of Shares and Warrants – Kenya Update
On 18 November 2020, the Company announced an update regarding a transaction, whereby Red Rock acquired the remaining
beneficial interest in the project from a subsidiary of Kansai Mining Corporation Limited. The renewal of the license triggered a
payment of £25,000 to Kansai by the issue of 3,571,429 Red Rock Shares at a price of £0.007 per share. Issuance of a USD
1,000,000 promissory note, payable in 15 months to Kansai. Grant to Kansai of £500,000 of warrants, exercisable for 30 months into
shares at £0.007 a share. In addition, Red Rock announced that it had issued to Riverfort Global Opportunities PCC Limited and YA
II PN Ltd a total of 16,000,000 thirty-six month warrants, half exercisable at £0.016 and half at £0.024 per share in consideration of
the extension of existing facilities and grant of a six month repayment holiday on drawn amounts.
Issue of Shares upon Exercise of Convertible Loan Notes
On 14 December 2020, the Company announced that it had received notice of conversion of £254,960 of convertible loan notes into
42,493,333 shares at a price of £0.006 per share.
Issue of Shares upon Exercise of Convertible Loan Notes
On 18 December 2020, the Company announced that it had received notice of conversion of £205,880 of convertible loan notes into
34,313,378 shares at a price of £0.006 per share.
Right to Acquire Loans – Funding of Arbitration
On 21 December 2020, the Company announced that it had entered into a funding deed and a deed of agreement to create conditions
in which the Company was able to fund arbitration proceedings and to give Red Rock the right for two years to acquire the loans of
the secured creditors of Vector Resources Limited, for a consideration equal to their net book cost as the time acquisition, with half
of the consideration to be paid in Red Rock shares at the then current price. These loans are secured on Vector’s primary asset, a
majority holding in the Adidi-Kanga gold project in the Democratic Republic of Congo. The obligation to date, on Red Rock, was USD
90,000.
Issue of Shares upon Exercise of Convertible Loan Notes
On 22 December 2020, the Company announced that it had received notice of conversion of £422,800 of convertible loan notes into
70,466,665 shares at a price of £0.006 per share.
IPO of Juno Minerals Limited
On 21 January 2021, the Company announced that in relation to its investment in Jupiter Mines Limited, Jupiter Mines Limited had
made an announcement on the ASX, detailing the demerger and initial public offering of its Central Yilgam Iron Ore Assets, through
a newly created company, Juno Minerals Limited. Jupiter Mines Limited and Juno Minerals Limited had lodged a notice of meeting
and a prospectus respectively.
Financing to Raise £1,000,000
On 12 February 2021, the Company announced that it had raised £1,000,000 by way of a placing of 95,238,095 new ordinary shares
of £0.0001 each in the Company at a price of £0.0105 per share. The placing was carried out through Monecor (London) Limited,
trading as ETX Capital. The placing was conditional on admission of shares to trading on AIM. The Company indicated that it would
seek approval at a General Meeting for the issue of non-transferable warrants with a life of two years and an exercise price of £0.02
to be issued to subscribers to the placing on the basis of one warrant for each two placing shares.
Announcement by Jupiter Mines Limited
On 18 February 2021, the Company announced that in relation to its investment in Jupiter Mines Limited, Jupiter Mines Limited had
announced that the Board of Tshipi é Ntle Manganese Mining Proprietary Limited has declared a final dividend to its shareholders of
ZAR 1.1 billion for FY2021. Jupiter will receive ZAR 521.5 million (approximately AUD 46.1 million; net of withholding tax). Jupiter
Mines Limited will also receive ZAR 30.6 million (approximately AUD 2.7 million) in marketing profits.
Australian JV – Start of IPO Process and Update
On 1 March 2021, the Company announced that it had begun the Canadian IPO process for its 50.1% owned subsidiary Red Rock
Australasia Pty Ltd with the appointment of legal counsel in Canada. Following the grant of the first three licenses, announced on 2
February 2021, a further seven applications are at an advanced stage of processing. The Company further noted that a new
application was made for a 227 sq km EL 45/5859 in Western Australia, which will be subject to a ballot between Red Rock Australasia
Pty Ltd and Rumble Resources Limited.
Red Rock Resources Plc
Annual Report and Accounts 2021
63
Notes to the financial statements (continued)
for the year ended 30 June 2021
25. Significant Agreements and Transactions (continued)
Completion of Purchase – Conditional Issue of Shares and Warrants
On 1 March 2021, the Company announced, that further to its announcement of 18 November 2020, 17 August 2020 and 31
December 2020, the terms of the fulfilment of its remaining obligations to Kansai Mining Corporation Ltd under the transaction,
announced on 15 June 2018, whereby Red Rock was to acquire the remaining beneficial interest in the Mikei gold project in Kenya
from a subsidiary of Kansai, following the renewal of the project licenses.
The Company has paid USD 1,000,000 of the USD 2,500,000 payment obligation by paying USD 1,000,000 in cash and Kansai has
elected to receive the balance of the USD 1,500,000 in the form of an issue of 101,550,000 new ordinary shares of £0.0001 in the
Company at a price of £0.0105 per share to Kansai. The issue of shares was conditional on the approval of Red Rock shareholders.
At the same time, Kansai has agreed to sell 52,437,048 shares to be issued to it to a number of substantial private investors in a
transaction arranged by Bespoke Capital Solutions Limited. The Company will seek approval at a General Meeting for the issue of
the shares, required under the transaction and for the issue of non-tradeable warrants with a life of two years and an exercise price
of £0.02 to be issued to Kansai or its nominees on the basis of one warrant for each two shares issued in the transaction.
Completion of Purchase
On 22 March 2021, the Company announced that following fulfilment of the shareholder approval condition the Company has now
issued the 101,550,000 new ordinary shares of £0.0001 in the Company at a price of £0.0105 per share due to Kansai Mining
Corporation Ltd or its nominees in settlement of the acquisition of Kansai’s remaining beneficial interest in the Mikei gold project in
Kenya. Non-tradeable warrants, with a life of two years and an exercise price of £0.02, will also now be issued to the places, in the
share placing, announced on 11 February 2021, and to Kansai or its nominees, on the basis of one warrant for every two shares
issued under the placing, and one warrant for every two shares issued under the purchase of the project.
Exercise of Warrants
On 9 April 2021, the Company announced that it had received notice to exercise warrants over 980,392 warrants into shares at an
exercise price of £0.0075 per share.
On 15 April 2021, the Company announced that it had received notice to exercise warrants over 1,838,235 warrants into shares at
an exercise price of £0.0075 per share.
On 19 April 2021, the Company announced that it had received notice to exercise warrants over 980,392 warrants into shares at an
exercise price of £0.0075 per share.
On 20 April 2021, the Company announced that it had received notice to exercise warrants over 980,392 warrants into shares at an
exercise price of £0.0075 per share.
On 3 June 2021, the Company announced that it had received notice to exercise warrants over 26,960,784 warrants into shares at
an exercise price of £0.0075 per share.
26. Related Party Transactions
•
The costs incurred on behalf of the Company by Corcel Plc were deemed as a related party for the 30 June 2020 year end. In
the current year Corcel Plc is no longer deemed a related party. Amounts are invoiced at each month end and settled on a
quarterly basis. By agreement, the Company pays interest at the rate of 0.5% per month on all balances outstanding at each
month end until they are settled. The total charge for the year was £nil (2020: £21,589). Of this, £nil was outstanding at 30 June
2021 (2020: £16,549).
•
•
•
•
•
The costs incurred by the Company, on behalf of Corcel Plc, were £nil (2020: £25,562) in relation to shared services during the
year. Of this, £nil was outstanding at 30 June 2021 (2020: £7,962).
Power Metal Resources Plc are the Company's partner and holder of 49.9% in the Company's 50.1% owned subsidiary Red
Rock Australasia Pty Ltd (“RRAL”). The costs incurred by the Company on behalf of Power Metal Resources Plc were £76,422
(2020: £9,918) in relation to shared costs paid on behalf of RRAL during the year. Of this, £6,000 was outstanding at 30 June
2021 (2020: £nil).
Related party receivables and payables are disclosed in notes 18 and 19.
The Company held 25,000,000 shares (2.18%) in Power Metal Resources Plc as at 30 June 2021 (2020: 25,000,000 (6.89%)).
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2021 and at 30 June 2020 are
shown in the Director’s Report.
Red Rock Resources Plc
Annual Report and Accounts 2021
64
Notes to the financial statements (continued)
for the year ended 30 June 2021
•
The key management personnel are the Directors and their remuneration is disclosed within note 9.
27. Significant Events After the Reporting Period
On 26 July 2021, the Company announced the appointment to the Board of Alex Borrelli as an independent Non-Executive Director
with immediate effect.
On 29 September 2021, the Company announced that it had disposed of a substantial part of its remaining holding in Jupiter Mines
Limited through market sales at an average price of AUD 0.304 per share for proceeds of AUD 2,327,052.70 (approximately
£1,239,489.34). The Company retains 5,870,693 Jupiter Mines Limited shares, with the current share price of Jupiter Mines Limited
at AUD 0.225, which is 26% below the average price of Red Rock’s recent sales.
On 18 October 2021, the Company announced that it had made applications for five exploration permits through a wholly owned
Cote d’Ivoire subsidiary LacGold Resources SARL. The five licenses area totalling 1,907.07 square km were selected, based on a
detailed and comprehensive screening and ranking of possible target areas.
On 7 December 2021 the Company announced that it had exchanged its shares in Red Rock Australasia for 50.1% of the newly
formed New Ballarat Gold Corporation Plc, a UK public company which now owned 100% of RRAL and which would be the vehicle
for a possible public listing in London.
28. Commitments
As at 30 June 2021, the Company had entered into the following commitments:
• Exploration commitments: On-going exploration expenditure is required to maintain title to the Group mineral exploration permits.
No provision has been made in the Financial Statements for these amounts as the expenditure is expected to be fulfilled in the
normal course of the operations of the Group.
• On 26 June 2015, the Company announced an agreement with Kansai Mining Corporation Ltd, pursuant to which Red Rock’s
farm in agreement was replaced by agreements, under which any interest in the Migori Gold Project or the other assets of Mid
Migori Mines, that may be retained or granted to Mid Migori Mines or Red Rock, would be shared 75% to Red Rock and 25% to
Kansai. Kansai’s interest was to be carried up the point of an Indicated Mineral Resource of 2m oz of gold. Red Rock was to
have full management rights of the operations and of the conduct of legal proceedings on behalf of both Mid Migori Mines and
itself. On 15 June 2018, Red Rock announced a revision to this agreement. The effect of the revision is that Kansai exchanged
its 25% carried interest under the 2015 agreement for a USD 50,000 payment, leaving Red Rock with a 100% interest. In the
event of a renewal or reissue of licenses, covering the relevant assets, the Company will within three months make further
payments, subject to such renewal or reissue not being on unduly onerous terms, as follows: (1) USD 2.5 million payable in
cash; (2) a USD 1 million promissory note, payable 15 months after issue; and (3) £0.500 million of warrants into Red Rock
shares at a price 20% above their average closing price on the three trading days prior to issue. This agreement was further
amended on 21 December 2020 through agreement with Kansai to pay USD 1 million, of which USD 0.5 million has been paid
on 24 December 2020, and to defer payment of USD 1.5 million until 29 January 2021, at which time the balance could be paid
in cash or shares at Kansai’s discretion, with any shares to be issued at the closing price of the Company’s shares on the 21 of
December 20201.
• On 1 March 2021, the Company has paid USD 1,000,000 of the USD 2,500,000 payment obligation by paying USD 1,000,000 in
cash and Kansai has elected to receive the balance of USD 1,500,000 in the form of an issue of 101,550,000 new ordinary
shares of £0.0001 in the Company ("Shares" and "Share Payment") at a price of £0.0105 per Share to Kansai. The Issue of
Shares for the Share Payment is conditional on the approval of Red Rock shareholders and was subsequently approved.
• On 23 November 2021, the Company entered into a new lease agreement for office space with WeWork Aldwych House. The
initial lease runs from 1 January 2022 through 30 June 2022 and is non-cancellable during this period. Thereafter, the lease can
be terminated by giving one full calendar month notice.
29. Control
There is considered to be no controlling party.
Red Rock Resources Plc
Annual Report and Accounts 2021
65