Registration Number: 05225394
Red Rock Resources Plc
Annual Report and Accounts 2023
Contents
PAGES
STRATEGIC REPORT ................................................................................................................................. 2
COMPANY INFORMATION .............................................................................................................................. 2
CHAIRMAN’S STATEMENT ............................................................................................................................. 3
STRATEGIC REVIEW .................................................................................................................................... 6
GOVERNANCE ............................................................................................................................................ 9
BOARD OF DIRECTORS ................................................................................................................................ 9
DIRECTORS’ REPORT ................................................................................................................................ 10
STATEMENT OF DIRECTORS’ RESPONSIBILITIES ............................................................................................ 14
CORPORATE GOVERNANCE STATEMENT ..................................................................................................... 15
FINANCIAL STATEMENTS ........................................................................................................................ 19
INDEPENDENT AUDITOR’S REPORT ............................................................................................................. 19
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................... 25
CONSOLIDATED INCOME STATEMENT .......................................................................................................... 26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................... 27
CONSOLIDATED STATEMENT OF CASH FLOWS.............................................................................................. 29
COMPANY STATEMENT OF FINANCIAL POSITION ........................................................................................... 30
COMPANY STATEMENT OF CHANGES IN EQUITY ........................................................................................... 31
COMPANY STATEMENT OF CASH FLOWS ..................................................................................................... 33
NOTES TO THE FINANCIAL STATEMENTS ...................................................................................................... 34
Red Rock Resources Plc
Annual Report and Accounts 2023
1
Strategic Report
Company Information
Directors
Andrew Bell
Scott Kaintz
Alex Borrelli
Sam Quinn
Executive Chairman and CEO
Financial Director
Independent Non-Executive Director
Non-Executive Director
Broker
Clear Capital Corporate Broking
12th Floor, Broadgate Tower
Office 1213, 20 Primrose Street
London, EC2A 2EW
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
Auditors
PKF Littlejohn LLP
Statutory Auditor
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
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Bankers
Coutts & Co
440 Strand
London
WC2R 0QS
Red Rock Resources Plc
Annual Report and Accounts 2023
2
Chairman’s Statement
Dear Shareholders,
We present the Report and Accounts of Red Rock Resources Plc for the year ending 30th June 2023. This report also
gives us an opportunity to present a broader review of progress up to the date of publication, and to give an assessment
of the year ahead.
Activity During the Year
We conducted two successful drill programmes on a number of our gold prospects during the course of the year. The first
was at the old Berringa Mine in the Australian state of Victoria, which we acquired in the course of the year, and the second
was at the recently acquired Bilbale license in Burkina Faso.
At Berringa, a six-hole diamond drill programme tested for down dip and along strike extensions of the known
mineralisation. This was a well-designed programme, with all six holes encountering visible gold, and hole two intersecting
a 5.2m interval with 2.38 g/t gold, including 0.2m at 34.76 g/t. Hole six encountered 3.5m at 5.43 g/t at 133m (including
0.7m at 23.9 g/t), 4.9m at 1.09 g/t at 140m, and 3.9m at 1.62 g/t at 153.6m (including 0.7m at 7.49 g/t), with the hole
ending in mineralisation. The team’s understanding of structure was confirmed, and we developed new sampling protocols
appropriate for the type of mineralisation. We now understand that in this environment any result over 0.1 g/t shows we
are in the mineralised area, and accordingly should be followed up.
At Bilbale, a seven-hole reverse circulation drill programme across two locations in this target-rich license achieved very
promising results from the four holes at Djikologo with mineralisation also encountered in two of the three holes drilled at
the Bilbale Artisanal Area. At Djikologo, the third drill hole encountered 20m at 3.19 g/t from 22m depth (including 3m at
8.17 g/t) as well as 8m at 2.28 g/tat 62m, and 2m at 1.25 g/t from 118m depth to end of hole. This was the first drill campaign
carried out on this property and we now assess the requirement for further geochemistry and mapping prior to the next drill
programme.
Aside from this and other exploration work, we obtained the grant of some of our remaining license applications in Victoria,
Australia, as well as our first license in Ivory Coast, and we applied for a new large copper/base metal license in South
Australia.
Environmental Impact Assessments were carried out on Lithium licenses in Zimbabwe, as part of the mining license
process, and in Kenya as part of the license renewal process.
DRC Arbitration
We looked forward, a year ago, to obtaining an arbitration award in the Democratic Republic of Congo, in respect of a
50.1% interest in a copper-cobalt project sold without our knowledge and consent. $5m had been paid by the purported
buyer, and for our share of this, plus costs and damages, we had sued our minority partner, and obtained a $2.5m court
judgment in our favour.
Another $15m had not yet been paid by the purported buyer, and for our share of this we went to arbitration. We expect a
favourable arbitration award, but have awaited the arbitration result for nearly 18 months, a period which has not been
without incident.
This was much longer than expected, but justice is not always swift.
The assets were sold on to a final buyer by the purported buyer at the same time as it acquired them, and for amounts
larger by an order of magnitude. We were thus deprived of a very great value that we believe should have been ours. We
have been patient and methodical in pursuing the amounts already awarded, and if we have not sought publicity for our
case, it was because in our judgment quiet persistence was the approach that would best serve the interest of shareholders
at this stage.
It is right that at this point I pay tribute to our colleagues in the DRC: three men and one woman of great integrity who
showed great loyalty to us, variously their partner or client, and steadiness under pressure. The Government has also
showed at times a concern that investors’ interests should not be overridden, and the Embassy has indicated its concern,
met us, and kept a watching brief.
Red Rock Resources Plc
Annual Report and Accounts 2023
3
Chairman’s Statement
continued
We continue to remain confident of an early favourable result. An earlier draft of this report was written on the assumption
this had already happened, but with the Presidential Election now only days away, everything has been put on hold until
after polling day on 20th December and after the preliminary results are announced most likely 31st December, and then
final results are released, which we assume to be early January.
Elephant Oil Listing
We also looked forward last year to the listing of Elephant Oil, in which we have a small but longstanding shareholding, on
the NASDAQ market in the U.S. It has always been part of our strategy that we retain some of the listed shares we obtain
in the process of divestment or sale of assets as a liquidity reserve. In general, the listed assets have been ones we know
well and have been involved with for some time. We still expect Elephant Oil to be listed after updating its quarterly results
with the SEC early in 2024 at a listing price of between US$4.15 and US$5.15 per share, indicating our holding of 397,874
shares may be valued at US$1.85 million, although subject to a six-month hold period post IPO after which we would be
in a position to realise all or part of this holding.
Current and Future Developments
We have secured a lithium mining license and have a stockpile of material in Zimbabwe, and made our first exports during
Q4 2023. Sales of initial exports will occur upon arrival in the destination port, and further announcements will be made
as these occur. Additional license areas have also been granted. The lithium price has declined substantially in the last
year and exports from Zimbabwe have become strictly controlled and difficult for most producers and this provides a good
environment for us to tidy up some other licenses and conclude the grant or transfer processes in those cases and look at
other ways to optimise our long-term position.
Until the rainy season ends in the Spring in Zimbabwe, our plan is to continue to export from stockpile and avoid extensive
civil works in muddy and rainy conditions. We are currently funding our product pipeline from mine to bonded warehouse
in the destination port. The working capital requirement of funding a 2-3 month pipeline before getting paid for product
means that we are starting on a modest scale, with 200 tonnes of ore. Once we have established that the pipeline is
working efficiently, and that customers trust our product, we shall aim to sell product before arrival at port and so shorten
our payment cycle and reduce our working capital requirements.
Potentially significant volumes can be exported and sold by us, but by the second quarter we will have a better idea of how
this business is likely to develop, with continuing developments in Government thinking likely to require a flexible and
creative approach, but also possibly offering new opportunities for the nimble. After careful analysis, we will not be putting
up a flotation plant at this time.
In Burkina Faso we are starting to map and sample key areas on a grid, and on a larger grid which will cover the whole
license. We will later auger drill the alluvial/colluvial areas, at the same time as continuing hard rock exploration. We intend
to start trial mining of gold soon, and then to accelerate work to get semi-mechanised alluvial mining permitted.
We, therefore, have a clear strategy for sales of lithium and gold from these two countries through 2024. In Kenya, any
scaled up activity awaits gold license renewal, after which we are likely to seek partners to accelerate the project’s
development. A similar approach may be adopted for at least one of our gold licences in Ivory Coast.
Exploration at our 50.1% subsidiary, Red Rock Australasia Pty Ltd is focussed on getting to the Indicated Resource stage
at Berringa, after which we can be on a 12-18 month environmental and licensing pathway to mining. Now that we have
opened an old adit at Berringa, and taken samples which will go off for testing, we will investigate the safety of accessing
level 2 of the old mine via the adit. A positive answer would probably result in an Indicated Resource being obtainable at
very low cost; otherwise some drilling from surface will be required. Ajax, our other key project/old mine, is now permitted
but a decision on drill plans will be made later in the year, depending on availability of internal or external finance and other
priorities.
In Australia as in Africa, our focus is now on the fastest pathway to positive cash flow for each project. With a gold Indicated
Resource in Australia we could process a mining application and an environmental study in parallel, with a plan to process
material through a nearby facility eliminating much of the construction phase.
We continue to expect an early and positive resolution in the DRC, where our arbitration claim is for $7.5m, and we have
a court judgment against our former partner for $2.5m. The former of these we could expect to be paid soon after award.
If Elephant Oil can achieve a Q1 listing, this could progressively release funds to us over the course of the year although
we expect the bulk of the holding to be subject to a six month hold period after listing.
Red Rock Resources Plc
Annual Report and Accounts 2023
4
We expect on renewal of Kenya licenses to be able to negotiate agreements for joint venture, farm in, sale or development
as seems most appropriate for each exploration area. The aim will be to bring forward as far as possible the date on which
we obtain value, first, for our receivables, and second, put ourselves in a position to gain from future production, whether
by royalty or by shareholding.
The Company’s policy is to retain royalties on all assets passing through its hands. Royalties are held on iron ore in
Australia, gold in Colombia, multiple gold and metal licences in Australia, lithium licences in Zimbabwe, gold licences in
Kenya, and gold licences in Burkina Faso and Ivory Coast.
During 2024, we expect a resumption of royalty payments from the Colombia gold royalty, as Soma Gold, the operator of
our historic El Limon plant and mine, has completed the upgrade of the plant to 275 tons per day, and is projecting
production through this facility of 8,000 oz of gold over the course of the year.
Financial Results
The nature of Red Rock’s business currently, as a company not generating revenue from operations, means that profit and
loss is a metric of less utility than in many other businesses. Pre-tax loss for the year ended 30 June 2023 was £2,953m
(2022: loss of £2,800m). This increased loss reflected impairment charges at our smaller exploration assets in the DRC as
well as higher finance costs and insurance and administrative expenses over the course of the year. An amount of £1.1m
is included in debtors in respect of amounts recoverable from our DRC arbitration being a reclassification of amounts
previously capitalised in respect of expenditure on the VUP joint venture project.
Conclusion
We expect to generate cash from sales of assets and from court and arbitration awards over the next few months.
However, we are now in a position to start selling product, initially from Zimbabwe lithium, and a key task is to ensure that
this item increases during the current year of account to the point where our sales and profits expectations provide tangible
support for our value.
If proceeds are not received from the DRC arbitration early in the New Year then the Company will implement some
combination of cost reduction, joint venture or farm ins, asset disposals, and financing, in order to focus on those activities
that can lead to early cash flow.
Andrew Bell
Chairman and CEO
18 December 2023
Red Rock Resources Plc
Annual Report and Accounts 2023
5
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 world
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 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 funding markets across the junior mining industry. The Company’s 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, debt funding 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 activities. 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 frameworks, civil unrest and government expropriation of assets. The
Company and its executives have a knowledge of, and history in, the countries in which it holds licenses and has appointed
experienced local operators to assist the Company in its activities in order to help reduce possible political risks. The
Company operates in some countries with a history of coups, such as Burkina Faso, or occasional civil strife, such as DRC
and Côte d’Ivoire, or other forms of instability, such as Zimbabwe. The expertise of the Company in working in such
environments cannot provide full protection, and events of force majeure may occur.
Red Rock Resources Plc
Annual Report and Accounts 2023
6
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
7
Strategic Review
continued
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.
Signed by order of the Board.
Andrew Bell
Chairman and CEO
18 December 2023
Red Rock Resources Plc
Annual Report and Accounts 2023
8
Governance
Board of Directors
The Board of Directors makes decisions on shareholders’ behalf. Red Rock has one Executive Chairman, one Financial
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 in public markets. Andrew Bell is a French speaker.
Scott Kaintz, BS, MBA
Financial 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 a Director of Curzon
Energy Plc.
Alexander Borrelli, FCA
Independent Non-Executive Director
Alex 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, LLB, BA
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,
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.
the LSE. Sam Quinn has strong
listed on
Responsibilities of the Board
•
•
•
•
Focus on governance over management;
Formulate, review and approve the Company’s strategy;
Oversee financial activities and operational performance; and
Approval of annual budget and periodic fiscal reviews.
Focus Areas for 2023-24
•
•
•
•
•
•
First lithium revenues received from Zimbabwe – increased production over the course of the year;
License renewal as well as continued exploration and development of Kenyan gold assets;
Possibility of IPO or transaction involving the New Ballarat Gold Corporation Plc joint venture;
Further development of the 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 2023
9
Red Rock Resources Plc - Company Number: 05225394
Directors’ Report
for the year ended 30 June 2023
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 2023.
Results and Dividends
The Group’s results are set out in the Consolidated Income Statement on page 26. The audited Financial Statements for
the year ended 30 June 2023 are set out on pages 25 to 71.
The Group made a post-tax loss of £2.8 million (2022: loss of £2.8 million).
The Directors do not recommend the payment of a dividend (2022: 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 3 to 8.
Fundraising and Share Capital
During the year, the Company raised £1.418m in new equity (2022: nil); further details are given in note 19.
Directors
The Directors who served at any time during the period and to date are as follows:
Andrew R M Bell
Scott Kaintz
Sam Quinn
Alex Borrelli
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2023 were as follows:
Andrew R M Bell
Alexander Borrelli
Scott Kaintz
Sam Quinn
Ordinary shares
Direct
34,316,883
-
3,072,093
2,656,766
Beneficial
22,031,503
5,364,429
22,031,503
20,026,225
Total
56,348,386
5,364,429
25,103,596
22,682,991
As percentage
of issued
share capital
Options
Warrants
2.27% 13,880,000
0.22%
0
6,840,000
1.01%
0
0.91%
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2022 were as follows:
Andrew R M Bell
Alexander Borrelli
Scott Kaintz
Sam Quinn
Ordinary shares
Direct
34,316,883
-
3,072,093
2,656,766
Beneficial
17,514,132
847,058
17,514,132
15,529,425
Total
51,831,015
847,058
20,586,225
18,186,191
As percentage
of issued
share capital
Options
Warrants
4.13% 23,000,000
0.07%
0
1.64% 15,500,000
3,000,000
1.45%
-
-
-
-
-
-
-
-
Events After the Reporting Period
The events after the reporting period are set out in note 26 to the Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2023
10
Substantial Shareholdings
On 30 June 2023 and 1 December 2023, the following were registered as being interested in 3% or more of the Company’s
Ordinary share capital:
HSBC Global Custody Nominee (UK) Limited – Designation 941346
Interactive Investor Services Nominees Limited – Designation SMKTISAS
Interactive Investor Services Nominees Limited – Designation SMKTNOMS
JIM Nominees Limited – Designation JARVIS
Hargreaves Lansdown (Nominees) Limited – Designation VRA
Hargreaves Lansdown (Nominees) Limited – Designation 15942
Vidacos Nominees Limited – Designation IGUKCLT
Barclays Direct Investing Nominees Limited – CLIENT1
Nortrust Nominees Limited – Designation GSYA
HSDL Nominees Limited
Red Rock Resources Plc
US Bank National Association
Interactive Investor Services Nominees Limited – Designation TDWHSIPP
Hargreaves Lansdown (Nominees) Limited – Designation HLNOM
30 June 2023
1 December 2023
Percentage
of issued
share
capital
Ordinary
shares of
£0.0001 each
285,042,115 11.49%
253,985,754 10.24%
7.37%
182,837,522
5.59%
138,622,565
5.49%
136,111,634
5.16%
127,997,897
4.76%
118,072,604
4.34%
107,749,580
4.19%
104,000,000
3.65%
90,566,187
3.26%
80,895,807
3.08%
76,500,000
2.78%
69,068,700
2.56%
63,579,570
Ordinary
shares of
£0.0001 each
324,809,518
288,977,394
205,875,334
98,723,547
128,456,327
120,563,623
76,901,053
82,559,803
147,000,000
45,833,660
80,895,807
0
106,870,203
89,541,085
Percentage
of issued
share capital
12.64%
11.24%
8.01%
3.84%
5.00%
4.69%
2.99%
3.21%
5.72%
1.78%
3.15%
0.00%
4.16%
3.48%
Total number of shares in issue
2,480,597,791
2,570,097,791
Management Incentives
In the year to 30 June 2023, the Company has granted nil options over its Ordinary shares (2022: Nil). As at 30 June 2023,
21,000,000 options were outstanding (2022: 50,000,000).
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 2023 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 21 to the Financial Statements.
Directors’ Remuneration Report
The remuneration of the Executive Director, 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
11
Red Rock Resources Plc - Company Number: 05225394
Directors’ Report
for the year ended 30 June 2023, continued
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 2023. 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.
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.
Corporate Governance Statement
A corporate governance statement follows on pages 15 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 what it has always been, which 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. The Company aims to go beyond
standard practice in giving particular emphasis to early, regular, and consistent engagement through designated staff with
local communities.
CO2 Emissions
Given the early developmental stage of the projects in the Group portfolio, the Board does not consider it a practical
possibility to reliably assess the carbon emissions of the Group’s operations and so has not included disclosure of
emissions estimates in this annual report. The Board will continue to assess the possibility of measuring these levels as
the Company’s continues to grow and develop. Notwithstanding the above, the Board is confident that the Group’s
operations have consumed less than 40,000 kwh of energy in the year.
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
12
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2023,
the Group had cash and cash equivalents of £0.155 million and £2.418 million of borrowings and, as at 13 December 2023,
the cash balance was c£11,000. The Directors anticipate having to raise additional funding over the course of the current
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 £1.5 million over the course of the year and estimated settlement of DRC litigation of up to £6.77 million (gross and
before deductions and expenses and subject to repatriation to the UK), 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.
However, as the amounts and timings of these sources of funding are currently uncertain, a material uncertainty exists
which may result in the need to raise additional equity or debt funding based on conditions in existence at the appropriate
time. In particular, if proceeds are not received from the DRC arbitration early in the New Year then, then in the absence
of adequate assets sales, another fundraising would likely be required.
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.
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
18 December 2023
Red Rock Resources Plc
Annual Report and Accounts 2023
13
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Directors’ Report and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and Company Financial Statements for each financial year. The
Directors are required by the AIM Rules of the London Stock Exchange to prepare Group Financial Statements in
accordance with UK adopted International Accounting Standards (“UK IAS”) and have elected under company law to
prepare the Company Financial Statements in accordance with IAS.
Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group and Company
for that period.
In preparing the Group and 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 IAS 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 Group’s
and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
the Company and enable them to ensure that the Financial Statements comply with the 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
14
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, 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 Director, who is 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 Financial Director, an Independent Non-Executive Director, Alexander Borrelli and a
Non-Executive Director, 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 the Group level reflects 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
15
Corporate Governance Statement
continued
Executive Chairman
The Board acknowledges that, in having a Chairman, who is also the Chief Executive Officer, best practice 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 2023, the Board had 3 scheduled
meetings together with additional 20 ad hoc meetings as and when the business required.
Board Meeting Attendance
The Director’s attendance at scheduled and ad hoc Board meetings and Board Committees during the year ended 30 June
2023 is detailed in the table below:
Director
Andrew Bell, Chairman and CEO
Scott Kaintz, Director and CFO
Alexander Borrelli, Non-Executive Director
Sam Quinn, Non-Executive Director
Total Meetings
Board
Scheduled
Meetings (3)
3
3
3
3
3
Board Ad Hoc
Meetings (20)*
20
20
20
20
20
Audit
Committee (1)
-
1
1
1
1
Remuneration
Committee (1)
-
1
1
1
1
* Ad hoc meetings: Meetings called for a specific matter generally of a more administrative or transactional nature often not requiring full Board
attendance.
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
16
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.
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, Joint ventures 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
17
Corporate Governance Statement
continued
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 2023
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’) and its subsidiaries (the ‘group’) for
the year ended 30 June 2023 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 Company Statement of Financial Position, the Company Statement of Changes
in Equity, the 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 UK-adopted
international accounting standards and as regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
In our opinion, the financial statements:
•
•
•
•
give a true and fair view of the state of the Group’s and of the Company’s affairs as at 30 June 2023 and of the
Group’s loss for the year then ended;
have been properly prepared in accordance with UK-adopted international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and 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 Directors anticipate having to raise
funds within the going concern period, being 12 months from the date of approval of these financial statements, in order to
meet its liabilities as they fall due, including repayment of loans due within 12 months from the year end. As stated in note
1.2, these events or conditions, along with the other matters as set forth in that note, indicate that a material uncertainty
exists that may cast significant doubt on the Group’s and 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:
•
•
•
•
reviewing the cash flow forecasts for the ensuing twelve months from the date of approval of these financial
statements and critically challenging the key inputs and assumptions used. The forecasts demonstrated that, after
the removal of expected cash inflows (including asset sales, estimated settlement amounts in respect of DRC
litigation, and anticipated placings), the timing and amounts of which are uncertain, the Group and Company will
require additional funding in order to meet their liabilities as and when they fall due, and to fund planned exploration
activities;
reviewing management’s going concern memorandum and holding discussions with management regarding future
plans and availability of funding;
reviewing the adequacy and completeness of disclosures in the group financial statements; and
reviewing post balance sheet events as they relate to the group’s ability to raise funds and restructure debt.
Our responsibilities and the responsibilities of the Directors, with respect to going concern, are described in the relevant
sections of this report.
Red Rock Resources Plc
Annual Report and Accounts 2023
19
Independent Auditor’s Report
to the Members of Red Rock Resources Plc, continued
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. We have therefore set Group materiality at 1.5% of gross assets (2022: 1% of gross assets).
Materiality of the Company was based upon 3% of net assets, capped below group materiality (2022: 1% of gross assets).
We considered this an appropriate benchmark as the Company has significant assets and liabilities on its statement of
financial position.
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 Company materiality for the financial statements as a whole to be £287,000 and £285,000
(2022: £187,000 and £168,300), respectively. Performance materiality was set at 60% of overall materiality for the Group
and Company at £172,200 and £171,000 (2021: £112,200 and £100,980), respectively, whilst the threshold for reporting
unadjusted differences to those charged with governance was set at £14,350 for the Group and £14,250 (2021: £9,350
and £8,415) for the Company. We also agreed to report differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
Materiality for other significant components of the group ranged from £8,100 to £8,700 calculated as a percentage of gross
assets.
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, including the
recoverability of exploration assets and non-current receivables, 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 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
20
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 £13,611,000 at 30 June 2023
(2022: £13,265,000).
There is a risk that this amount is impaired and that
the capitalised amounts do not meet the recognition
criteria as adopted by the Group, or as specified
within IFRS 6.
The capitalisation of the costs and determination of
the recoverability of these assets are subject to a high
degree of management estimation and judgement and
therefore there is a risk this balance is materially
misstated.
Due to the level of judgement required to be exercised
by management, and the magnitude of the balance, we
have considered this matter to be a key audit matter.
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 during the year and
post-year end, including exploration results and
mineral resource estimates;
• Holding discussions with management surrounding
progress at the various projects and future plans,
including rationale for any impairments recorded;
• Obtaining copies of the exploration licenses to ensure
good title and ensure, where applicable, that any
specific terms or conditions therein have been
adequately met;
• Performing an independent assessment for indicators
of impairment in accordance with the requirements of
IFRS 6;
• Substantive testing of a sample of additions in the
period to ensure they meet the eligibility criteria under
IFRS 6 and are capitalised in accordance with the
Group’s accounting policy; and
• Assessing the appropriateness of the disclosures
made in respect of intangible assets, including any
judgements and sources of estimation.
On the basis of work performed, we are satisfied that,
following the impairments recorded by management as at
30 June 2023, exploration assets are not materially
misstated.
We note that the licenses PL 2018-0202 and PL 2018-
0203 held by Mid Migori Mining Company Ltd in respect of
the Migori gold project, with capitalised exploration assets
of £12.9m as at 30 June 2023, expired post-year end in
August 2023. Relevant renewals have been submitted and
this process remains ongoing. The Directors have
confirmed they do not have any reason to believe the
renewals will not be forthcoming. If the licenses are not
renewed, this may result in an impairment to these assets.
Red Rock Resources Plc
Annual Report and Accounts 2023
21
Independent Auditor’s Report
to the Members of Red Rock Resources Plc, continued
Recoverability of non-current receivables for MFP
sales proceeds (see notes 1.5 and 16)
Non-current receivables for MFP sales proceeds have
a carrying value in the Financial Statements of
£1,410,000 as at 30 June 2023 (2022: £1,224,000).
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 workings supporting 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 key inputs and assumptions used within
the net present value model and ensuring they are
reasonable and appropriate;
• Considering whether management have included all
possible factors which could impact the valuation; and
indications of
impairment in the valuation to suggest the balance is
not recoverable.
• Considering whether
there are
Key Observations
In reviewing the calculations prepared by management, we noted the following assumptions as key:
• Estimated 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. We note that there have been delays to the previously
anticipated production schedule due to priority being given to the expansion of production and resource at
another site. Management anticipate significant growth rates in production from Q1 2024 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 recoverability of the balance is dependent on the ability of MFP to fully
realise the potential of the site through achieving a minimum level of production which in turn will enable a
potential return through the net smelter royalty agreement.
Other Information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our
opinion on the Group and Company financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is
to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Red Rock Resources Plc
Annual Report and Accounts 2023
22
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on Which We Are Required to Report by Exception
In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the
course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been
received from branches not visited by us; or
the 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 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 Company financial statements, the directors are responsible for assessing the Group and the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or the 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 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 Company in this regard to be those
arising from UK-adopted 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 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
23
Independent Auditor’s Report
to the Members of Red Rock Resources Plc, continued
• 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 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.
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.
Imogen Massey (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
18 December 2023
15 Westferry Circus
Canary Wharf
London E14 4HD
Red Rock Resources Plc
Annual Report and Accounts 2023
24
Consolidated Statement of Financial Position
as at 30 June 2023
ASSETS
Non-current assets
Investments in associates and joint ventures
Exploration assets
Mineral tenements
Financial instruments - fair value through other comprehensive income (FVTOCI)
PPE
Non-current receivables
Total non-current assets
Current assets
Cash and cash equivalents
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
30 June
2023
£’000
30 June
2022
£’000
12
13
13
14
16
15
17
19
20
18
18
18
18
1,030
13,358
698
736
18
2,506
18,346
155
670
825
19,171
2,960
32,785
1,751
(22,477)
15,019
(687)
14,332
684
756
1,440
1,737
1,662
3,399
19,171
1,030
13,265
511
736
-
2,320
17,862
66
824
890
18,752
2,839
31,077
1,434
(19,812)
15,538
(420)
15,118
415
822
1,237
1,355
1,042
2,397
18,752
These Financial Statements on pages 25 to 71 were approved by the Board of Directors and authorised for issue on 18
December 2023 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 2023
25
Consolidated Income Statement
for the year ended 30 June 2023
Continuing operations
Administrative expenses
Exploration expenses
Project development
Other project costs
Impairment of E&E assets
Share based payments
Currency gains
Other gains
Dividend income
Finance costs
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 loss per share, pence
Diluted loss per share, pence
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2022
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.
Year to
30 June
2023
£’000
Year to
30 June
2022
£’000
Notes
4
6
6
13
5
5
5
7
10
10
(1,380)
(318)
(250)
(159)
(259)
(213)
11
228
-
(613)
(2,953)
-
(2,953)
(2,665)
(288)
(2,953)
(0.19)
(0.19)
(1,225)
(256)
(676)
(211)
-
(16)
(183)
52
-
(285)
(2,800)
-
(2,800)
(2,615)
(185)
(2,800)
(0.23)
(0.23)
30 June
2023
£’000
(2,953)
30 June
2022
£’000
(2,800)
-
-
165
165
418
(442)
(177)
(201)
(2,788)
(3,001)
(2,521)
(267)
(2,788)
(2,816)
(185)
(3,001)
Red Rock Resources Plc
Annual Report and Accounts 2023
26
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
The movements in equity during the period were as follows:
As at 1 July 2021
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
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
Issue of warrants
Total transactions with owners
As at 30 June 2022
Changes in equity for 2023
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
Issue of warrants
Total transactions with owners
Share
premium
account
£’000
Retained
earnings
£’000
Other
reserves
£’000
Total
attributable
to owners of
the Parent
£’000
Non-
controlling
interest
£’000
Total
equity
£’000
30,924
(18,741)
1,627
16,645
(199)
16,446
Share
capital
£’000
2,835
-
-
-
-
-
-
4
-
4
-
(2,615)
-
(2,615)
(185)
(2,800)
-
-
-
-
-
-
-
(442)
(442)
418
418
1,544
-
1,544
-
-
-
(442)
418
1,544
-
(177)
(177)
(36)
(213)
(1,071)
(201)
(1,272)
(221)
(1,493)
153
-
153
-
-
-
-
8
8
157
8
165
-
-
-
157
8
165
2,839
31,077
(19,812)
1,434
15,538
(420)
15,118
-
-
-
-
-
-
(2,665)
-
(2,665)
(288)
(2,953)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
144
144
21
165
-
(2,665)
144
(2,521)
(267)
(2,788)
121
-
121
1,708
-
1,708
-
-
-
-
173
173
1,829
173
2,002
-
-
-
1,829
173
2,002
As at 30 June 2023
2,960
32,785
(22,477)
1,751
15,019
(687)
14,332
Red Rock Resources Plc
Annual Report and Accounts 2023
27
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023, continued
As at 1 July 2021
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
Warrants issued in the year
Total comprehensive expense for the year
As at 30 June 2022
Changes in equity for 2023
Other comprehensive income for the year
Transfer of FVTOCI reserve relating to disposals
Transfer of FVTOCI reserve relating to revalued FVTOCI
financial assets
Unrealised foreign currency gains on translation of foreign
operations
Warrants issued in the year
Total comprehensive income or the year
As at 30 June 2023
FVTOCI financial
instruments
revaluation
reserve
£’000
Foreign
currency
translation
reserve
£’000
Share-based
payment
reserve
£’000
Warrant
reserve
£’000
Total
other
reserves
£’000
426
158
230
813
1,627
(442)
418
-
-
(24)
402
-
-
-
-
-
402
-
-
(177)
-
(177)
(19)
-
-
144
-
144
125
-
-
-
-
-
-
-
-
8
8
230
821
-
-
-
-
-
230
-
-
-
173
173
994
(442)
418
(177)
8
(193)
1,434
-
-
144
173
317
1,751
See note 20 for a description of each reserve included above.
Red Rock Resources Plc
Annual Report and Accounts 2023
28
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
Cash flows from operating activities
Profit/(loss) before tax
Increase in receivables
Increase in payables
Finance costs
Share-based payments
Foreign exchange gain/loss
Equity settled transactions
Impairment of E&E assets
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
Purchase of PPE
Payments to acquire exploration asset
Payments to increase interest in associate
Payments for tenements
Net cash (outflow) / inflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Interest paid
Proceeds from new borrowings
Repayment of borrowings – Non current
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 23.
Year to
30 June
2023
£’000
Year to
30 June
2022
£’000
Notes
(2,953)
(239)
612
613
213
(10)
-
253
(1,511)
-
(1,511)
-
(18)
(139)
-
(187)
(344)
1,112
-
1,237
(38)
(494)
1,817
(38)
66
127
155
(2,800)
(140)
432
285
8
179
90
-
(1,946)
-
(1,946)
2,539
-
(150)
(141)
(387)
1,861
68
(250)
940
-
(1,035)
(277)
(362)
457
(29)
66
5
21
13
14
19
23
23
23
23
15
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2023
29
Company Statement of Financial Position
Red Rock Resources Plc (Registration Number: 05225394) as at 30 June 2023
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
PPE
Non-current receivables
Total non-current assets
Current assets
Cash and cash equivalents
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
Non-current liabilities
Borrowings
Total non-current liabilities
Current liabilities
Trade and other payables
Intra-group borrowings
Short-term external borrowings
Total current liabilities
TOTAL EQUITY AND LIABILITIES
Notes
30 June
2023
£’000
30 June
2022
£’000
11
12
14
13
13
16
15
17
19
18
18
18
18
76
1,111
736
12,948
-
1
4,978
19,850
149
601
750
20,600
76
1,111
736
12,948
258
3,945
19,074
31
456
487
19,561
2,961
32,785
1,676
(22,798)
14,624
2,839
31,078
1,502
(20,827)
14,592
756
756
822
822
1,602
2,115
1,503
5,220
20,600
1,235
1,890
1,022
4,147
19,561
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 for the financial year was £1.971 million (2022: loss of £1.907 million).
The Company’s total comprehensive loss for the financial year was £1.971 million (2022: loss of £1.455 million).
These Financial Statements on pages 25 to 71 were approved by the Board of Directors and authorised for issue on 18
December 2023 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 2023
30
Company Statement of Changes in Equity
for the year ended 30 June 2023
The movements in equity during the period were as follows:
As at 1 July 2021
Changes in equity for 2022
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
Issue of warrants
Total transactions with owners
As at 30 June 2022
Changes in equity for 2023
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares
Issue of warrants
Total transactions with owners
As at 30 June 2023
Share
capital
£’000
2,835
Share
premium
account
£’000
Retained
earnings
£’000
Other
reserves
£’000
Total
equity
£’000
30,924
(19,003)
1,043
15,799
-
-
-
-
-
4
-
4
-
-
-
-
-
154
-
154
(1,907)
-
(1,907)
-
-
83
(1,824)
-
-
-
518
(66)
-
452
-
7
7
518
(66)
83
(1,372)
158
7
165
2,839
31,078
(20,827)
1,502
14,592
-
-
122
-
122
-
-
(1,971)
(1,971)
1,707
-
1,707
-
-
-
-
-
-
174
174
(1,971)
(1,971)
1,829
174
2,003
2,961
32,785
(22,798)
1,676
14,624
Red Rock Resources Plc
Annual Report and Accounts 2023
31
Company Statement of Changes in Equity
for the year ended 30 June 2023, continued
As at 1 July 2021
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
Issue of warrants
Total Other comprehensive income
As at 30 June 2022
Changes in equity for 2023
Other comprehensive income for the year
Issue of warrants
Total Other comprehensive income
As at 30 June 2023
See note 20 for a description of each reserve included above.
FVTOCI financial
assets revaluation
reserve
£’000
Share-based
payment
reserve
£’000
Warrant
reserve
£’000
Total
other
reserves
£’000
—
230
813
1,043
518
(66)
-
452
452
-
-
-
-
-
-
-
-
7
7
518
(66)
7
459
230
820
1,502
-
-
174
174
994
174
174
1,676
452
230
Red Rock Resources Plc
Annual Report and Accounts 2023
32
Company Statement of Cash Flows
for the year ended 30 June 2023
Cash flows from operating activities
Profit/(loss) before taxation
Increase in receivables
Increase in payables
Finance costs (Note 5)
Share-based payments (Note 21)
Equity settled transactions
Change in value in FVTPL financial assets
Foreign exchange loss / (gain)
Impairment of E&E assets (Note 13)
Net cash outflow from operations
Corporation tax
Net cash used in operations
Cash flows from investing activities
Purchase of PPE
Proceeds from sale of FVTOCI financial assets
Investment in Joint venture projects
Investment in subsidiaries
Payments to acquire exploration asset
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from new borrowings (Note 23)
Repayment of borrowings – Non current (Note 23)
Repayment of borrowings (Note 23)
Net cash inflow from financing activities
Net increase/(decrease) 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 (Note 15)
30 June
2023
£’000
30 June
2022
£’000
(1,971)
(1,178)
644
613
214
-
-
(83)
259
(1,503)
-
(1,503)
(1)
-
-
-
-
(1)
1,112
1,078
(38)
(494)
1,659
155
31
(37)
149
(1,907)
(990)
859
90
7
90
-
235
-
(1,616)
-
(1,616)
-
577
(141)
(37)
(91)
308
68
940
(35)
973
(335)
366
-
31
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Red Rock Resources Plc
Annual Report and Accounts 2023
33
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies
1.1 Corporate Information
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. The principal activities of the Group are the exploration for and development of mineral
resources in multiple locations globally, principally in Africa and Australia.
1.2 Basis of Preparation
The Financial Statements have been prepared in accordance with UK-adopted international accounting standards and with
the requirements of the Companies Act 2006. The Financial Statements have been prepared on the historical 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 2023,
the Group had cash and cash equivalents of £0.155 million and £2.418 million of borrowings and, as at 13 December 2023,
the cash balance was c£11,000. The Directors anticipate having to raise additional funding over the course of the current
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 £1.5 million over the course of the year and estimated settlement of DRC litigation of up to £6.77 million (gross and
before deductions and expenses and subject to repatriation to the UK), 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.
However, as the amounts and timings of these sources of funding are currently uncertain, a material uncertainty exists
which may result in the need to raise additional equity or debt funding based on conditions in existence at the appropriate
time. In particular, if proceeds are not received from the DRC arbitration early in the New Year then, then in the absence
of adequate assets sales, another fundraising would likely be required.
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.
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: Classifications of current or non-current liabilities (effective 1 January 2024);
Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective 1 January 2023);
Amendments to IAS 12: Income Taxes – Deferred Tax arising from a Single Transaction (effective 1 January 2023).
Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting Policies (effective 1 January 2023).
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
34
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 2023, the Consolidated Financial Statements combine those of the Company with those of its subsidiaries, Red
Rock Australasia Pty Ltd, New Ballarat Gold Corporation Plc, RRR Coal Ltd, African Lithium Resources Limited, Lac
Minerals Ltd, Lacgold Resources SARLU, Faso Minerals Ltd, Faso Greenstone Resources SARLU, Jimano Ltd, Red Rock
Resources Congo S.A.U., Red Rock Galaxy SA, RedRock Kenya Ltd, RRR Kenya Ltd and Red Rock Resources (HK) Ltd.
The Group’s dormant subsidiaries Intrepid Resources Ltd, Red Rock Resources Inc., 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 also capitalised. 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. For
assets that move into production any intangible E&E assets values are amortised on a unit production basis over the period
of production.
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.
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
35
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies, continued
1.4 Summary of Significant Accounting Policies, continued
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.
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36
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 Pounds 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 currencies of the major foreign subsidiaries are Australian Dollars (“AUD”), the Congolese Franc (“CFD”),
and Kenyan Shillings (“KES”).
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.
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Annual Report and Accounts 2023
37
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies, continued
1.4 Summary of Significant Accounting Policies, continued
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.
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 costs is dependent upon successful development and commercial exploitation of each area
of interest and will not be amortised until the existence (or otherwise) of commercial reserves in the area of interest has
been determined. 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.
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Annual Report and Accounts 2023
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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:
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
39
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies, continued
1.4 Summary of Significant Accounting Policies, continued
Fair Value through Other Comprehensive Income (FVTOCI)
The Group has 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.
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.
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Annual Report and Accounts 2023
40
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 at Amortised Cost
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.
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.
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Annual Report and Accounts 2023
41
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies, continued
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 2023, 30 June 2022, 30 June 2021, 30 June 2020 and
30 June 2019.
The effect of recognising MMM as an FVTOCI financial asset would be to increase the profit by £5 (2022: increase the
profit by £29).
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.
Recoverability of VUP Litigation Related Receivable
The directors have reviewed progress as regards the outstanding litigation relating to the VUP project with a view to
assessing the recoverability of the amounts held within the balance sheet totalling £1,096,256. The directors consider that
the carrying value of this receivables at the current balance sheet date is more than justified given the potential quantum
and likelihood of a favourable outcome. Whilst the directors believe that this balance will become realised in the near term,
as there remains a level of uncertainty over the timing of such an event, the directors have determined it appropriate to
carry this balance as non-current so as to present the liquidity position of the Group on the most prudent basis. See note
16 for details.
Recoverability of Capitalised Exploration and Evaluation Costs
Kenya
After the year end the Kenyan exploration licences came due for renewal, with a 50% relinquishment obligation.
Applications for renewal have now been made and the directors do not anticipate any issues associated with processing
of these renewal applications. The Directors believe that the Migori gold project remains amongst the highest quality of
comparable Kenyan projects, with conservative estimations of 844,000 oz gold Resource (formerly calculated at 1.2m oz),
further supported by the strength of the gold price in local currency. The Directors therefore believe that it is prudent to
retain the current carrying value of the project in these financial statements.
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Annual Report and Accounts 2023
42
Australia
The Company has assembled a portfolio of Australian properties comprising a broad range from exploration targets to near
term appraisal (and hence resource potential targets), all of which remain largely undeveloped by modern standards of
exploration. Two key former mines, Ajax and the recently acquired Berringa, have been the focus of recent exploration
efforts, including a drilling campaign at Berringa. A high-grade target with a range reaching 1.2m oz and a most likely 500k
oz plus has been identified by this work at Berringa. The Company believes both mining areas can be brought into
production, with additional value catalysts being presented by proximity to third party processing plants, currently operating
sub capacity. The JV Partners expect, subject to market conditions, to accelerate preparations for the listing of the JV
company NBGC, including the intended completion of a Pre-IPO financing round for NBGC in 2024. The Company has
therefore deemed the carrying value of these assets to remain recoverable, given high asset quality, low “pegging” costs
and the proximity to underutilised infrastructure.
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$1,957 (2022: US$1,750);
Discount rate – 10% (2022: 10%); and
Annual production rate – 8,000oz (2022: 6,500oz)
The directors have reviewed the future gold model provided by MFP to consider the reasonableness of the assumptions,
following this review the directors deem the assumptions appropriate.
The fair value is directly sensitive to any changes in the key assumptions. For the overall carrying value (current and non-
current) to fall by a material amount, the above assumptions would have to change as follows:
•
•
•
Gold price (US$/oz) – US$1,000;
Discount rate – 17%; or
Annual production rate – 6,000oz
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.
Fair Value 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. With respect to Elephant Oil the fair value is based on
expected listing in Q1 2024, should this not happen then the value of the asset may need to be written down. The directors
current expect the listing to go ahead. 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
43
Notes to the Financial Statements
for the year ended 30 June 2023
1. Principal Accounting Policies, continued
1.5 Significant Accounting Judgements, Estimates and Assumptions, continued
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.
The group has the following Non-Financial Assets; Investments in associates, investments in subsidiaries and loans
extended to subsidiaries (Company only).
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.
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.
Year to 30 June 2022
Exploration expenses
Administration expenses
Project development
Other project costs
Share based payments
Currency gain
Other income
Dividend income
Finance income, net
Net profit/(loss) before tax from
continuing operations
Red Rock Resources Plc
Annual Report and Accounts 2023
Gold
Gold
Copper
Exploration
Exploration
Exploration
Australia
£’000
Kenya
£’000
DRC
Investments
£’000
£’000
-
-
-
(138)
-
(9)
-
-
-
(98)
(5)
-
(40)
-
-
-
-
-
-
(4)
(559)
-
-
-
-
-
-
(147)
(143)
(563)
-
-
-
-
-
-
-
126
(2)
124
Corporate
and
unallocated
£’000
(7)
(690)
-
(127)
(350)
43
290
-
Total
£’000
(105)
(699)
(559)
(305)
(350)
34
290
126
(129)
(131)
(970)
(1,699)
44
Gold
Gold
Copper
Exploration
Exploration
Exploration
Other
Projects
Investments
Corporate
and
unallocated
£’000
£’000
Year to 30 June 2023
Exploration expenses
Administration expenses
Project development
Other project costs
Impairment of E&E assets
Share based payments
Currency gain
Other income
Dividend income
Finance costs, net
Australia
Kenya
£’000
-
(383)
(14)
-
-
-
(73)
-
-
-
£’000
(252)
(3)
-
-
(253)
-
-
-
-
-
DRC
£’000
-
(13)
(234)
-
-
-
-
-
-
-
£’000
(66)
(5)
(8)
-
-
-
-
-
-
-
Total
£’000
(318)
-
(975)
(1,380)
(0)
(159)
-
(39)
84
-
-
(256)
(159)
(253)
(39)
11
228
-
(787)
(787)
-
(1)
-
-
-
-
-
228
-
-
Net profit/(loss) before tax from
continuing operations
(470)
(508)
(247)
(79)
227
(1,876)
(2,953)
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 2023
Non-current assets
Investments in associates and joint ventures
Mineral tenements
Exploration properties
Exploration assets
FVTOCI financial assets
PPE
Non-current receivables
Total segment non-current assets
Year ended 30 June 2022
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
Red Rock Resources Plc
Annual Report and Accounts 2023
UK
£’000
-
-
-
-
736
1
1,410
2,147
UK
£’000
-
-
-
-
736
1,224
1,960
Africa
£’000
Australia
£’000
1,030
165
12,949
410
-
17
1,096
15,667
-
533
-
-
-
-
-
533
Africa
£’000
Australia
£’000
1,030
165
12,949
316
-
1,096
15,556
-
346
-
-
-
-
346
Total
£’000
1,030
698
12,949
410
736
18
2,506
18,346
Total
£’000
1,030
511
12,949
316
736
2,320
17,862
45
Notes to the Financial Statements
for the year ended 30 June 2023
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
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 and Software Costs
Rent
Insurance
2023
£’000
2022
£’000
39
319
6
2
28
310
12
4
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
655
56
15
42
112
22
78
12
109
66
38
45
86
43
562
47
15
39
115
36
45
13
96
77
37
10
92
41
377
27
15
42
90
13
78
-
106
66
30
14
67
40
356
27
15
39
98
23
33
5
96
75
29
10
72
39
Total administrative expenses
1,380
1,225
965
917
5. Finance Income/(Costs), Net
Group
Interest income (other than MFP finance income)
Dividend income
Interest expense & other finance costs
Total finance (costs) / income (other than MFP finance income)
MFP finance (expense) / income – note 16
Total finance (costs) / income
Other gains
MFP finance income is reflected within other gains on the consolidated profit and loss.
Please refer to note 16 and note 17 for more details.
Red Rock Resources Plc
Annual Report and Accounts 2023
2023
£’000
-
-
(613)
(613)
228
(385)
2022
£’000
-
-
(209)
(209)
(76)
(285)
-
52
46
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.
Group and Company
2023
£’000
2022
£’000
Project development expenses
VUP (Congo)
Galaxy (Congo)
Other (Congo)
Luanshimba (Congo)
Kinsevere
Zimbabwe Lithium
Other
Total project development expenses
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% (2022: 19.00%) on profit/(loss) for the period
Deferred tax
Origination and reversal of temporary differences
Deferred tax assets not recognised
Tax credit
(161)
-
(62)
(12)
-
(64)
49
(250)
-
(159)
-
(159)
(328)
(47)
(79)
(166)
(2)
-
(54)
(676)
(10)
(68)
(133)
(211)
2023
£’000
2022
£’000
-
-
-
-
-
-
-
-
-
-
-
-
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
(2,700)
(519)
-
42
471
-
(2,800)
(532)
-
20
-
512
-
No deferred tax charge has been made due to the availability of trading losses due to uncertainty surrounding future
profitability. Unutilised tax losses, arising in the UK, amount to £4.7 million (2022: £4.4 million).
On 3 March 2021, the UK government announced that it intended to increase the main rate of corporation tax to 25% for
the financial years beginning 1 April 2023. This new rate was substantively enacted by Finance Act 2021 on 10 June 2021.
Red Rock Resources Plc
Annual Report and Accounts 2023
47
Notes to the Financial Statements
for the year ended 30 June 2023
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
2023
£’000
648
55
42
40
785
2022
£’000
562
47
39
9
657
2023
Number
4
1
9
14
2022
Number
4
1
9
14
The key management personnel are the Directors and their remuneration is disclosed within note 9.
11,675,670 free shares were issued to five employees (2022: 1,236,656), including Directors. 4,278,853 partnership and
8,557,706 matching shares, making the total of 24,512,229, were issued in the year ended 30 June 2023 (2022: 1,267,199
partnership, 2,534,398 matching, 3,801,597 total).
9. Directors’ Emoluments
2023
Executive Directors
A R M Bell
Other Directors
S Kaintz
S Quinn
A Borrelli
2022
Executive Directors
A R M Bell
Other Directors
S Kaintz
S Quinn
A Borrelli
Directors’
fees
£’000
Directors' fees -
discretionary
bonus
£’000
Consultancy
fees
£’000
Share
Incentive Plan
£’000
Pension
contributions
£’000
Social
security costs
£’000
120
65
24
22
231
10
5
2
-
17
15
-
-
-
15
2
2
2
2
8
10
6
2
-
18
17
9
2
2
30
Directors’
fees
£’000
Directors' fees -
discretionary
bonus,
£’000
Consultancy
fees
£’000
Share
Incentive
Plan
£’000
Pension
contributions
£’000
Social
security costs
£’000
120
65
24
22
231
-
-
-
-
-
15
-
-
-
15
4
3
3
2
12
10
6
2
-
18
15
7
2
2
26
Total
£’000
174
87
32
26
319
Total
£’000
164
81
31
26
302
The highest paid director in the current year was Mr A Bell who was paid total remuneration of £174,000 (2022: £164,000).
Red Rock Resources Plc
Annual Report and Accounts 2023
48
Social security costs have been included in the above figures for completeness however does not typically form a
component of director’s remuneration.
No Directors exercised share options in the year, (2022: 5,670,000). During the year, the Company contributed to a Share
Incentive Plan more fully described in the Directors’ Report on pages 10-13.
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.
(Loss)/profit attributable to equity holders of the parent
company, £
2023
2022
(2,952,933)
(2,799,730)
Adjusted for interest accrued on the convertible notes
-
-
Adjusted (loss) / profit attributable to equity holders of the
parent company used for diluted EPS calculation
(2,952,933)
(2,799,730)
Weighted average number of ordinary shares of £0.0001 in
1,592,083,739
1,221,091,538
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
1,592,083,739
1,221,091,538
(Loss)/earnings per share – basic
2023
2022
(0.19 pence)
(0.23 pence)
(Loss)/earnings per share – fully diluted
(0.19 pence)
(0.23 pence)
At 30 June 2023, 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
49
Notes to the Financial Statements
for the year ended 30 June 2023
10. Earnings Per Share, continued
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:
Share options granted to employees – either not vested and/or out of the
money
2023
2022
21,000,000
50,000,000
Number of warrants given to shareholders as a part of placing equity
314,178,213
389,430,010
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
335,178,213
439,430,010
There were no ordinary share transactions such as share capitalisation, share split or bonus issue after 30 June 2023, that
could have changed the EPS calculations significantly, if those transactions had occurred before the end of the reporting
period.
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
Red Rock Resources Plc
Annual Report and Accounts 2023
2023
£’000
2022
£’000
77
-
77
(1)
-
(1)
76
40
37
77
(1)
-
(1)
76
50
As at 30 June 2023 and 30 June 2022, the Company held interests in the following subsidiary companies:
Company
Red Rock Australasia Pty Ltd
New Ballarat Gold Corporation Plc
RedRock Kenya Ltd
RRR Kenya Ltd
Red Rock Resources (HK) Ltd
Red Rock Resources Congo S.A.U.
African Lithium Resources PVT Ltd
Lac Minerals Ltd
Lacgold Resources SARLU
Faso Minerals Ltd
Faso Greenstone Resources SARL
RRR Coal Ltd
Jimano Ltd
Red Rock Galaxy SA
Country of
registration
Australia
UK
Kenya
Kenya
Hong Kong
DRC
Zimbabwe
UK
Ivory Coast
UK
Burkino Faso
UK
Cyprus
DRC
Proportion
Held
At 30 June
2022
50.1%
50.1%
87%
100%
100%
100%
65%
100%
100%
100%
100%
100%
100%
80%
Proportion
Held
At 30 June
2021
50.1%
50.1%
87%
100%
100%
100%
nil
100%
100%
100%
100%
100%
100%
80%
Class
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Nature of business
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Holding company
Holding company
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Mineral exploration
Holding company
Royalty Holdings
Holding company
Red Rock Australasia Pty Ltd registered office is c/o Paragon Consultants PTY Ltd, PO Box 903, Claremont WA, 6910,
Australia.
New Ballarat Gold Corporation Plc registered office is 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT.
RedRock Kenya Ltd and RRR Kenya Ltd registered office is PO Box 9306 – 003000, Nairobi, Kenya.
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.
African Lithium Resources PVT Ltd registered office is 3 Hex Road, Queensdale, Harrare, Zimbabwe.
Lac Minerals Ltd registered office is Salisbury House, London Wall, London EC2M 5PS.
Lacgold Resources SARLU registered office is Yamoussoukro Morofe Lot 420B Ilot 32, BP 1364 Yamoussoukro, Ivory
Coast.
Faso Minerals Ltd registered office is Salisbury House, London Wall, London EC2M 5PS.
Faso Greenstone Resources SARL registered office is Secteur 54, Quartier Ouaga 2000, Lot 28, Parcelle 18, Section 280,
01 BP 5602 Ouagadougou 01, Burkina Faso.
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 2023
51
Notes to the Financial Statements
for the year ended 30 June 2023
12. Investments in Associates and Joint Ventures
Cost
At 1 July
Reclassifications to Other Receivables
Additions during the year
At 30 June
Impairment
At 1 July
Impairment during the year
At 30 June
Group
Company
2023
£’000
2022
£’000
2023
£’000
2022
£’000
1,251
-
-
1,251
(221)
-
(221)
1,806
(696)
141
1,251
(221)
-
(221)
1,114
-
-
1,114
(3)
-
(3)
1,669
(696)
141
1,114
(3)
-
(3)
Net book amount at 30 June
1,030
1,030
1,111
1,111
The Company, at 30 June 2023 and at 30 June 2022, 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 2022
Summarised financial information for the Company’s associates and joint ventures, where available, is given below:
For the year as at 30 June 2023:
Company
Mid Migori Mining Company Limited
Revenue
£’000
-
Loss
£’000
-
Assets
£’000
1,889
Liabilities
£’000
(1,917)
For the year as at 30 June 2022:
Company
Mid Migori Mining Company Limited
Revenue
£’000
-
Profit
£’000
-
Assets
£’000
2,110
Liabilities
£’000
(2,238)
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).
Red Rock Resources Plc
Annual Report and Accounts 2023
52
VUP Musonoi Mining SA
On 28 February 2019, Vumilia Pendeza S.A. ("VUP") and Bring Minerals S.A.U. ("B.Min"), and Red Rock Resources
Congo S.A.U. ("RRRC"), a wholly owned local subsidiary of the Company, signed a “Joint Venture Agreement” and B.Min
and RRRC 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 was to be pursued. The Statutes were then taken by the
lawyer to procure the signature of the correct officer of VUP. RRRC owns 50.1% of the Joint Venture and was to own
50.1% of VMM SA. The Company sent the registration costs of VMM SA twice, but the lawyer failed to register the
company. The governing document of the joint venture therefore remains an unincorporated joint venture under the Joint
Venture Agreement. 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 interest in relation
to this joint venture. On 28 December 2021 it obtained an order from the Tribunal de Commerce de Lubumbashi against
VUP in the sum of US$2.5m in respect of US$5m that had been paid to VUP in relation to a sale of the JV Project to which
the Company had not been a party (the Unauthorised Sale). Subsequently on 28 June 2022 an Arbitration was ordered in
respect of a further US$15m due to be paid by the buyer to VUP pursuant to the Unauthorised Sale. The Company
continues to liaise closely with its advisors in country regarding the expectations for final ruling and settlement of this matter
and expect a conclusion to be arrived at in early 2024.
Due to the above development, the Company reclassified these amounts recognised in investments in the VUP joint
venture (£696,364), along with amounts previously classified as Exploration Assets (£399,892), as a Non-current
receivable in the prior year. These amounts remain recognised as a non-current receivable associated with the above as
at the current year end 30 June 2023.
Cost
At 1 July 2022
Additions during the year
Reclassified during the year
At 30 June 2023
Impairment and losses during the year
At 1 July 2022
The Group’s share of profit/(loss) during the year
At 30 June 2023
Carrying amount
At 30 June 2022
At 30 June 2023
Mid Migori
Mining Company
Limited
£’000
VUP Musonoi
Mining SA
£’000
1,111
-
-
1,111
(81)
-
(81)
1,030
1,030
-
-
-
-
-
-
-
-
-
Total
£’000
1,111
-
-
1,111
(81)
-
(81)
1,030
1,030
Red Rock Resources Plc
Annual Report and Accounts 2023
53
Notes to the Financial Statements
for the year ended 30 June 2023
13. Exploration Assets and Mineral Tenements
Group Exploration Assets
At 1 July
Additions
Impairments
Reclassification to non-current receivables
Reclassification from other current assets (note 17)
At 30 June
Group Mineral Tenements
At 1 July
Additions
At 30 June
Company Exploration Assets
At 1 July
Additions
Impairments
Reclassification to non-current receivables (note 16)
At 30 June
Exploration assets were capitalised:
2023
£’000
13,265
139
(259)
-
213
13,358
2023
£’000
511
187
698
2023
£’000
13,206
-
(258)
-
12,948
2022
£’000
13,515
150
-
(400)
-
13,265
2022
£’000
124
387
511
2022
£’000
13,515
91
-
(400)
13,206
•
•
•
•
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, with all
capitalised amounts having been reclassified as non-current receivables in the prior year.
For the African Lithium Resources Limited project, all amounts relate to the acquisition of mineral rights in Zimbabwe.
This includes the purchase of the Tin Hill project on 2 February 2022.
For the Faso Greenstone project since the acquisition of the Bilbale licence interest on 24 December 2021.
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 has 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 27.
Impairments in the year relate to the Congo Galaxy project, which has now been fully impaired, following commercial
determination not to progress the project and, as a consequence, the discontinuation of meeting mandatory expenditures
under the terms of the licences.
Reclassifications of exploration assets in the prior year relate to the reclassification of assets held under the VUP project
into non current receivables, following commencement of litigation regarding this JV and assessment of the Company’s
recourse through arbitration.
Reclassifications in the current year relate to expenditures undertaken on the Kenyan licence areas that had previously
been held as recoverable receivables and have been determined in the year to now form part of the base cost of the E&E
asset.
Red Rock Resources Plc
Annual Report and Accounts 2023
54
14. Financial Instruments with Fair Value Through Other Comprehensive Income
(FVTOCI)
Opening balance
Additions
Disposals
Change in fair value
At 30 June
Group
2023
£’000
736
-
-
-
736
2022
£’000
1,755
223
(1,693)
451
736
Company
2023
£’000
2022
£’000
778
223
(775)
510
736
736
-
-
-
736
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
Company
2023
£’000
-
-
736
736
2022
£’000
-
-
736
736
2023
£’000
-
-
736
736
2022
£’000
-
-
736
736
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, and consideration of the implied value of the company
by recent new subscriptions by investors and the intention to list the Company on the USA capital markets, the fair value
of the investment has been maintained at £736,281 (2022: £736,281).
Details of the fair value measurement hierarchy are included in note 22.
15. Cash and Cash Equivalents
Group
Cash in hand and at bank
30 June
2023
£’000
155
155
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank and in hand.
30 June
2023
£’000
149
149
Company
Cash in hand and at bank
Red Rock Resources Plc
Annual Report and Accounts 2023
30 June
2022
£’000
66
66
30 June
2022
£’000
31
31
55
Notes to the Financial Statements
for the year ended 30 June 2023
15. Cash and Cash Equivalents, continued
Credit Risk
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.
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.
16. Non-Current Receivables
Amounts receivable relating to VUP Joint Venture
Due from subsidiaries
MFP sale proceeds
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
1,096
1,096
-
1,410
2,506
-
1,224
2,320
1,096
2,472
1,410
4,978
1,096
1,625
1,224
3,945
Amounts receivable relating to the VUP joint venture have arisen due to the reclassification of Joint Venture investment
costs and capitalised exploration asset costs in the prior year. See note 12 for further detail.
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. Changes in the
fair value of the receivable at each reporting date are taken to profit/loss for the year as finance income/expense. See
note 5 for further details.
17. Other Receivables
Current trade and other receivables
Prepayments
Short-term loan receivable
MFP sales proceeds – current element
Other receivables
Total
Group
2023
£’000
2022
£’000
Company
2023
£’000
2022
£’000
32
164
171
303
670
310
164
129
221
824
32
164
171
234
601
46
164
129
120
459
During the year, amounts held in the group as recoverable receivables totalling £213,000 in Red Rock Kenya relating to
expenditures undertaken on the Kenyan licence areas have been determined in the year to now form part of the base
cost of the E&E asset and so have been reclassified from other receivables to intangibles in the current year. See note
13 for further details.
Red Rock Resources Plc
Annual Report and Accounts 2023
56
18. Trade and Other Payables
Non-current liabilities
Trade and other payables
Borrowings
Total non-current liabilities
Current liabilities
Trade payables
Accruals
Total trade and other payables
Intra-group borrowings
Short-term borrowings
Total current liabilities
Group
Company
2023
£’000
684
756
2022
£’000
415
822
1,440
1,237
1,646
91
1,737
-
1,662
3,399
1,149
206
1,355
-
1,042
2,397
2023
£’000
2022
£’000
-
756
756
1,512
91
1,602
2,115
1,503
5,220
-
822
822
1,029
206
1,235
1,890
1,022
4,147
During the year, the Company took out the following additional borrowings:
•
•
•
•
•
•
•
•
•
A £100,000 working capital loan from Power Metals Corporation plc, the joint venture partner in Red Rock Australasia
Pty Ltd was advanced to the Company for use in covering pre-IPO related costs of the New Ballarat Gold Corporation;
On 25 July 2022, the Company announced that it had issued £623,000 of convertible loan notes to high-net-worth
investors, with each note convertible into ordinary shares at a price of £0.006 per share over a twelve month period.
Each note holder also received 83,333 warrants for each note subscribed, entitling the holder to subscribe for shares
for 30 months from the date of issue at a price of £0.008 per share. The interest rate of the notes is 12% per annum,
payable upon maturity. These notes were refinanced after the year end.
On 19 August 2022, the Company announced the creation of an additional £50,000 of convertible loan notes, which
were ultimately transferred to a separate loan note with a further net amount of £50,000 added during the year. The
notes carry an interest rate of 0.05% per day, a cash repayment bonus of 25% of the outstanding principal, and allow
the investor to receive one for one warrants exercisable for two years into RRR shares at an exercise price of the
higher of £0.006 or 10% above the VWAP on the repayment date (or in the event of a placing on the repayment day,
10% above the placing price). The notes were payable from a date three weeks following the original drawdown
date.
On 30 November 2022, the Company entered into a prepayment agreement for the sum of £10,000. The prepayment
was to relate to a placing of shares expected to be completed on or around 8 December 2022, which ultimately did
not conclude. The prepayment amount attracts a cash bonus fee of 25% of the prepayment amount upon repayment
and allows the investor to receive one for one warrants exercisable for 24 months at the higher of £0.006 or 25%
above the closing price on the date of repayment. The notes were due for repayment three weeks from the
prepayment date, and any delay in repayment will draw interest of 0.5% per day.
On 22 Feb 2023 the Company entered into a loan agreement with a high-net-worth investor with an initial principal
amount of £125,000, and an additional £80,000 drawn down on this facility during the course of the year. The note
was due for repayment 14 days after the date of the initial agreement. The notes carry a 20% interest rate per annum,
with a 20% redemption fee payable on the total amount drawn down on the notes at repayment. The investor may
elect to require conversion of all or part of the loan and redemption fee into shares at a price of £0.0025 per share,
which may be reduced to the price, if lower, of any placing that completes before the loan is repaid.
On 5 May 2023, the Company entered into a loan note agreement with a principal amount of £50,000. The note
carries an interest rate of 0.05% per day from 20 May 2023, and a cash repayment bonus of 30% of the outstanding
principal. The notes are due within 3 days of receipt of funds from a settlement in the DRC.
On 25 May 2023, the Company entered into a loan note agreement with a principal amount of £50,000. The note
carries an interest rate of 0.05% per day from 20 May 2023, a repayment bonus of 30% of the outstanding principal.
The notes are due within 3 days of receipt of funds from a settlement in the DRC.
During the year a convertible loan note facility with Riverfort Global Opportunities Fund (“RGO”) was in place. The
facility was for up to £1,000,000 in funding for working capital purposes, with an initial drawdown of £385,000 in
principle (before costs). This loan was repaid through a series of conversions and cash repayments after the year
end.
A $955,000 loan note remains payable to Kansai Ltd, which would complete the acquisition of the Mid Migori Gold
project. Payment of this loan has been mutually agreed with Kansai to be delayed until the pending Democratic
Republic of Congo legal claim has been resolved.
Red Rock Resources Plc
Annual Report and Accounts 2023
57
Notes to the Financial Statements
for the year ended 30 June 2023
19. Share Capital of the Company
The share capital of the Group and the Company is as follows:
Authorized, Issued and fully paid
2,480,597,806 (2022: 1,256,147,238) 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
Movement in ordinary shares
As at 30 June 2021 – ordinary shares of £0.0001 each
Issued on 28 Jan 2022 at 0.45 pence per share (cash – options exercise)
Issued on 3 Feb 2022 at 0.45 pence per share (cash – options exercise)
Issued on 13 May 2022 at 0.425 pence per share (non-cash, SIP)
Issued on 15 Jun 2022 at 0.3791 pence per share (non-cash, secured shares for
convertible facility)
Issued on 15 Jun 2022 at 0.39 pence per share (cash, placing)
As at 30 June 2022 – ordinary shares of £0.0001 each
Issued on 27 Sep 2022 at 0.4 pence per share (allotment for cash)
Issued on 19 Dec 2022 at 0.1 pence per share (non-cash)
Issued on 19 Dec 2022 at 0.2829 pence per share (non-cash)
Issued on 2 Mar 2023 at 0.25 pence per share (non-cash)
Issued on 13 April 2023 at 0.18 pence per share (allotment for cash)
Issued on 19 April 2023 for 0.1661 pence per share (non-cash)
Issued on 11 May 2023 for 0.15741 pence per share (non-cash)
Issued on 18 May 2023 for 0.1425 pence per share (allotment for cash)
Issued on 18 May 2023 for 0.185 pence per share (non-cash, SIP)
Issued on 18 May 2023 for 0.21 pence per share (non-cash, SIP)
Issued on 31 May 2023 for 0.1298 pence per share (non-cash)
Issued on 5 June 2023 for 0.1425 pence per share (non-cash)
Issued on 5 June 2023 for 0.11 pence per share (non-cash)
Issued on 27 June 2023 for 0.11385 pence per share (non-cash)
Issued on 27 June 2023 for 0.116908 pence per share (non-cash)
Issued on 27 June 2023 for 0.11 pence per share (non-cash)
Issued on 28 June 2023 for 0.1650 pence per share (allotment for cash)
Issued on 27 Sep 2022 at 0.4 pence per share (allotment for cash)
As at 30 June 2023 – ordinary shares of £0.0001 each
The total net cash raised from allotments of shares was £1,112,227 for the year.
2023
£’000
248
2,134
579
2,961
Number
1,216,708,801
5,670,000
450,000
5,038,253
18,464,800
9,815,384
1,256,147,238
40,000,000
28,000,000
17,000,000
26,753,616
56,487,601
123,888,888
15,055,706
19,176,965
376,028,070
11,675,670
12,836,559
43,781,746
45,964,912
33,237,805
65,876,152
23,657,440
110,029,423
175,000,000
2,480,597,791
2022
£’000
126
2,134
579
2,839
Nominal
£’000
122
1
-
-
2
1
126
4
3
2
3
6
12
2
2
38
1
1
4
4
3
7
2
11
17
248
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
58
Warrants
At 30 June 2023, the Company had 314,178,213 warrants in issue (2022: 389,430,010) with a weighted average exercise
price of £0.0039 (2022: £0.0128). Weighted average remaining life of the warrants, at 30 June 2023, was 678 days (2022:
293 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
Expired during the period
Outstanding at the end of the year
2023
number of
warrants
389,430,010
304,945,821
-
-
(380,197,618)
314,178,213
2022
number of
warrants
380,197,618
9,232,392
-
-
-
389,430,010
During the year ended 30 June 2023, the Company had the following warrants to subscribe for shares in issue:
Grant date
8 Jun 2022
16 Aug 2022
16 Aug 2022
13 April 2023
13 April 2023
11 May 2023
Total warrants in issue at 30 June 2023
Expiry date
16 Aug 2025
16 Aug 2025
16 Feb 2025
12 Oct 2024
12 Oct 2024
10 May 2026
Warrant exercise
price, £
Number of warrants
0.005
0.005
0.008
0.0035
0.0035
0.0014
9,232,392
41,454,767
51,916,664
123,888,888
12,388,888
75,205,614
314,178,213
The aggregate fair value, related to the share warrants granted during the reporting period, was £173,825 (2022: £7,578).
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 22). 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
59
Notes to the Financial Statements
for the year ended 30 June 2023
20. 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.
21. 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.
Red Rock Resources Plc
Annual Report and Accounts 2023
60
At 30 June 2023, the Company had outstanding options to subscribe for ordinary shares as follows:
A R M Bell
S Kaintz
Employees
Total
Outstanding at the beginning of the year
Options issued in the year
Options exercised in the year
Options lapsed in the year
Outstanding at the beginning of the year
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
5,500,000
2,250,000
2,750,000
10,500,000
Number
5,500,000
2,250,000
2,750,000
10,500,000
Number
11,000,000
4,500,000
5,500,000
21,000,000
Company and Group
2023
2022
Number of
options
50,000,000
-
-
(29,000,000)
21,000,000
Weighted
average
exercise
price
pence
1.41
-
-
0.46
2.25
Number of
options
63,320,000
-
(6,120,000)
(7,200,000)
50,000,000
Weighted
average
exercise
price
pence
0.46
-
0.45
0.45
1.41
Nil share options were granted by the Company in the reporting year (2022: Nil). The weighted average fair value of each
option granted during the year was £nil (2022: Nil). The exercise price of options, outstanding at 30 June 2023, ranged
between £0.0025 and £0.02 (2022: £0.0008 and £0.025). Their weighted average contractual life was 1.63 years (2020:
2.41 years).
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 12,836,559 Partnership and Matching Shares were awarded and 11,675,670 Free
Shares (2022: 3,801,597 Partnership and Matching Shares and 1,236,656 Free Shares) with a fair value of £0.0021 for
the Partnership and the Matching Shares and £0.00185 for the Free Shares (2022: £0.00425 for the Partnership and the
Matching Shares and £0.00425 for the Free Shares), resulting in a share-based payment charge of £39,571 (2022:
£16,027), included in the administration expenses line in the Income Statement.
Red Rock Resources Plc
Annual Report and Accounts 2023
61
Notes to the Financial Statements
for the year ended 30 June 2023
22. Financial Instruments
22.1 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
Group
2023
£’000
Group
2022
£’000
Company
2023
£’000
Company
2022
£’000
736
-
736
155
736
-
-
736
66
736
-
736
149
736
-
-
736
31
2,506
506
3,012
2,320
660
2,980
4,978
601
5,579
3,945
456
4,401
Total financial assets
3,903
3,782
6,464
5,168
Total current financial assets
Total non-current financial assets
661
3,242
726
3,056
750
5,714
487
4,681
Financial liabilities
Short-term borrowings, including intra-group
Long-term borrowings
Trade and other payables, excluding accruals
Total current financial liabilities
1,662
1,440
1,646
4,748
1,042
1,237
1,149
3.428
3,618
756
1,511
5,885
2,912
822
1,029
4,763
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
62
22.2 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.
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 2023
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
736
-
-
Level 2
£’000
Level 1
£’000
-
-
-
Level 3
£’000
-
-
-
Level 1
£’000
Level 2
£’000
Level 3
£’000
-
-
-
736
-
-
-
-
-
Level 1
£’000
Level 2
£’000
Level 3
£’000
-
-
-
736
-
-
-
-
-
Level 1
£’000
Level 2
£’000
Level 3
£’000
-
-
-
736
-
-
-
-
-
Company
30 June 2023
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
Group
30 June 2022
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
Company
30 June 2022
FVTOCI financial assets
– Unquoted equity shares
– Quoted equity shares
FVTPL (Para warrants)
Red Rock Resources Plc
Annual Report and Accounts 2023
Total
£’000
736
-
-
Total
£’000
736
-
-
Total
£’000
736
-
-
Total
£’000
736
-
-
63
Notes to the Financial Statements
for the year ended 30 June 2023
22. Financial Instruments, continued
22.3 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.
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.
Red Rock Resources Plc
Annual Report and Accounts 2023
64
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 2023
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
Long term borrowings
149
228
-
-
355
1,503
-
2
10
-
-
42
-
684
-
374
736
2,506
286
159
756
-
-
-
-
959
-
-
4
58
-
-
4
-
-
155
670
736
2,506
1,646
1,662
1,440
Group
30 June 2022
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
Amortised costs financial assets - Non-current receivables
Trade and other payables, excluding accruals
Short-term borrowings
Long term borrowings
31
125
-
-
77
1,042
-
13
8
-
-
26
-
415
16
332
736
2,320
166
-
822
-
-
-
-
876
-
-
6
360
-
-
4
-
-
Company
30 June 2023
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
Long term borrowings
149
2,700
-
-
351
3,618
-
-
-
-
-
-
-
-
-
373
736
2,506
200
-
756
-
-
-
-
959
-
-
-
-
-
-
1
-
-
Red Rock Resources Plc
Annual Report and Accounts 2023
66
825
736
2,320
1,149
1,042
1,237
Total
£’000
149
3,073
736
2,506
1,511
3,618
756
65
Notes to the Financial Statements
for the year ended 30 June 2023
22. Financial Instruments, continued
22.3 Financial Risk Management Policies, continued
Company
30 June 2022
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
Long term borrowings
31
1,750
-
-
74
2,912
-
-
-
-
-
-
-
-
-
331
736
2,320
79
-
822
-
-
-
-
876
-
-
-
-
-
-
-
-
-
Total
£’000
31
2,081
736
2,320
1,029
2,912
822
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas
transactions.
23. Reconciliation of Liabilities Arising from Financing Activities and Major Non-
Cash Transactions
Cash
flow
loans
received
Cash flow
principal re-
payment
30 June
2022
Cash
flow
Interest
paid
Non-cash
flow
Forex
movemen
t
Non-cash
flow -
Conversion
Non-cash
flow
Interest
and
arrangeme
nt fee
accreted
Non-cash
flow
Introduce
rs fee
accrued
30 June
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
577
317
100
994
410
47
780
1,237
(205)
(190)
(99)
(494)
-
-
-
-
18
-
-
18
(903)
350
(66)
(619)
103
170
252
525
-
-
-
-
-
694
967
1,661
30 June
2022
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
accreted
Non-cash
flow
arrangeme
nt fee
accreted
30 June
2023
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
1,889
225
-
577
317
100
410
47
621
(205)
(190)
(99)
Total
2,883
1,303
(494)
Red Rock Resources Plc
Annual Report and Accounts 2023
-
-
-
-
-
-
18
-
-
18
-
-
(903)
350
(65)
(618)
103
170
252
525
-
-
-
-
-
2,115
-
694
809
3,618
66
Group
Loan from
institutional
investors
Convertible
notes
Other loans
Total
Company
Loan from
subsidiary
Loan from
institutional
investors
Convertible
notes
Other loans
Repayments of borrowings in the year include £37,636 paid against non-current borrowings from Kansai not included in
the above table of current borrowings.
Significant non-cash transactions from financing activities, in relation to raising new capital, are disclosed in note 18.
24. 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
26.
Financing
A convertible loan note facility was in place with Riverfort Global Opportunities Fund (“RGO”). The facility is for up to
£1,000,000 in funding for working capital purposes, with an initial drawdown of £385,000 in principal (before costs). This
loan was repaid through a series of conversions and cash repayments after the year end.
On 25 July 2022, the Company announced that it had issued £623,000 of convertible loan notes to high-net-worth investors,
with each note convertible into ordinary shares at a price of £0.006 per share over a twelve-month period. Each note
holder also received 83,333 warrants for each note subscribed, entitling the holder to subscribe for shares for 30 months
from the date of issue at a price of £0.008 per share. The interest rate of the notes is 12% per annum, payable upon
maturity.
On 19 August 2022, the Company announced the creation of an additional £50,000 of convertible loan notes, which were
ultimately transferred to a separate loan note with a further net amount of £50,000 added during the year. The notes carry
an interest rate of 0.05% per day, a cash repayment bonus of 25% of the outstanding principal, and allow the investor to
receive one for one warrants exercisable for two years into RRR shares at an exercise price of the higher of £0.006 or 10%
above the VWAP on the repayment date (or in the invent of a placing on the repayment day, 10% above the placing price).
The notes were originally payable from a date three weeks following the original drawdown date.
On 21 September 2022, the Group announced the placing of 40,000,000 new ordinary shares to institutional investors at
0.4 pence per share, raising gross proceeds of £160,000 before costs. Additionally, 20,000,000 warrants to subscribe to
ordinary shares at 0.8 pence each for a period of 24 months were issued to placees. The Company further announced
that it had appointed OvalX as joint broker to the Company.
On 30 November 2022, the Company entered into a prepayment agreement for the sum of £10,000. The prepayment was
to relate to a placing of shares expected to be completed on or around 8 December 2022. The prepayment amount attracts
a cash bonus fee of 25% of the prepayment amount upon repayment and allows the investor to receive one for one
warrants exercisable for 24 months at the higher of £0.006 or 25% above the closing price on the date of repayment. The
notes were due for repayment three weeks from the prepayment date, and any delay in repayment will draw interest of
0.5% per day.
On 15 December 2022, the Company announced a fundraising of US$500,000 by way of a subscription of new ordinary
shares with an ascribed value of US$548,000 by Diversified Metal Holdings LLC. Following this subscription, the investor
may make an additional advance of US$1,000,000 by way of a further subscription for shares to an ascribed value of
US$1,098,000. Each subscription under the agreement will be made by way of the subscriber prepaying for shares to be
issued at the subscriber's request, in one or several tranches. These subscriptions must occur within twenty-four months
of the date of the placing at the subscription price, initially set at £0.007 per share, then after the first month, adjusting to
the average of five VWAPs selected by the investor during a twenty-day period prior to the date of the subscriber’s formal
notice, but subject to a floor price of £0.002 per share. The Company will also have the right (but no obligation) to forego
issuing shares in relation to the subscriber's request for issuance and instead opt to repay the applicable subscription
amount by making a payment to the subscriber equal to the market value of the shares that would have otherwise been
issued. Concurrent with the subscription, the Company will issue 28,000,000 of the subscription shares to the subscriber
at par value, reducing the amount to be ultimately issued under the agreement. In lieu of applying these shares towards
the aggregate number of subscription shares to be issued, the subscriber may make an additional cash payment to the
Company. The Company will further issue to the subscriber 17,000,000 shares in satisfaction of an arrangement fee.
Red Rock Resources Plc
Annual Report and Accounts 2023
67
Notes to the Financial Statements
for the year ended 30 June 2023
24. Significant Agreements and Transactions, continued
On 24 February 2023, the Company announced that following to the funding of 15 December 2022, that Diversified Metal
Holdings LLC had requested that the Company issue 26,753,616 new ordinary shares at a price of £0.0025 per share,
which had been prepaid by the subscriber at the time of the initial investment. The Company further agreed with the
investor that it could apply in respect of a further amount of US$274,000 at this same purchase price. The Company had
agreed to a variation fee of US$78,000 payable within thirty days or by way of an increase in the total amount outstanding,
in relation to agreeing to this modification of the agreement.
On 22 Feb 2023, the Company entered into a loan agreement with a high-net-worth investor with an initial principal amount
of £125,000, and with an additional £80,000 drawn down on this facility during the course of the year. The note was due
for repayment 14 days after the date of the agreement. The notes carry a 20% interest rate per annum, with a 20%
redemption fee payable on the total amount drawn down on the notes at repayment. The investor may elect to require
conversion of all or part of the loan and redemption fee into shares at a price of £0.0025 per share, which may be reduced
to the price of any placing in the event of any issue of new ordinary shares at a lower price before the loan is repaid.
On 15 March 2023, the Company announced that Diversified Metal Holdings LLC had subscribed for a further 56,487,601
new ordinary shares at a price of £0.0018 per share. This purchase had been prepaid by the investor at the time of the
original subscription agreement on 15 December 2022. The total amount of the subscription outstanding then stood at
US$348,000.
On 14 April 2023, the Company announced that it had issued 15,055,706 new ordinary shares of the Company at a price
of £0.001661 per share in settlement of £25,000 of outstanding debt owed to Riverfort Global Opportunities PCC Ltd.
On 4 May 2023, the Company announced that it had issued 19,176,965 new ordinary shares of the Company at a price of
£0.0015741 per share in settlement of £30,186.46 of outstanding debt owed to Riverfort Global Opportunities PCC Ltd.
On 5 May 2023, the Company entered into a loan note agreement with a principal amount of £50,000. The note carries
an interest rate of 0.05% per day from 20 May 2023, and a cash repayment bonus of 30% of the outstanding principal.
The notes are due within 3 days of receipt of funds from a settlement in the DRC.
On 11 May 2023, the Company announced it had completed a placing of 376,028,070 new ordinary shares of the Company,
which raised £535,840 before expenses at a price of £0.001425 per share. A fee of 7.5% was to be paid to Clear Capital
Corporate Broking, and Clear Capital was to receive £107,168 of warrants exercisable for three years also at a price of
£0.001425 per warrant.
On 12 May 2023, the Company announced the issuance of 24,512,229 new ordinary shares to employees of the Company
under the Company’s Share Incentive Plan for the 2022-23 tax year as agreed by the Trustees of the plan in their meeting
held on 5 April 2023.
On 24 May 2023, the Company announced that it had issued 43,781,746 new ordinary shares of the Company to Riverfort
Global Opportunities PCC LTD at a price of £0.0012978 in settlement of £56,819.95 of outstanding debt.
On 25 May 2023, the Company entered into a loan note agreement with a principal amount of £50,000. The note carries
an interest rate of 0.05% per day from 20 June 2023, a repayment bonus of 30% of the outstanding principal. The notes
are due within 3 days of receipt of funds from a settlement in the DRC.
On 30 May 2023, the Company announced that it had repaid £65,500 of outstanding corporate debt through the issuance
of 45,964,912 new ordinary shares of the Company at a price of £0.001425 per share.
On 30 May 2023, the Company announced that had issued Diversified Metal Holdings LLC 33,237,805 new ordinary
shares at a price of £0.0011 per share in satisfaction of £36,562 of the subscription originally announced and prepaid on
15 December 2022.
Red Rock Resources Plc
Annual Report and Accounts 2023
68
24. Significant Agreements and Transactions, continued
On 21 June 2023, the Company announced that it had issued 65,876,152 to Riverfort Global Opportunities PCC LTD in
repayment of £75,000 of outstanding debt at a price of £0.0011385 per share. It further announced the issuance of
23,657,440 new ordinary shares at a price of £0.0016908 per share to Riverfort Global Opportunities PCC Ltd in relation
to a consent fee of £40,000 in relation to a Deed of Consent executed on 19 January 2023. Lastly the Company announced
the that an issuance of 110,029,438 shares at a price of £0.0011 per share had been issued to Diversified Metals Holdings
LLC in repayment of £121,032.38, in full settlement of the subscription originally prepaid on 15 December 2022. The
amount outstanding to Riverfort Global Opportunities PCC Ltd was approximately £60,000 and would be immediately
settled in cash.
On 22 June 2023, the Company announced that CMC Markets UK Plc had raised the Company £288,750 before expenses
through the placing of 175,000,000 new ordinary shares at a price of £0.00165 per share.
A $1,000,000 loan note remains payable to Kansai Ltd, which would complete the acquisition of the Mid Migori Gold project.
Payment of this loan has been mutually agreed with Kansai to be delayed until a transaction or exit of the project is
completed.
New Ballarat Gold Corporation
On 6 July 2022, the Group announced that it had entered into an agreement for the acquisition of EL 5535, a 9 block (288
net hectare) exploration licence south-west of Ballarat containing the historic Berringa Mine from Balmaine Gold Pty Ltd.
Under the terms of the agreement Balmaine was to transfer license EL 5535 to RRAL for an initial payment of A$20,000.
Pending successful renewal of the license for five additional years, RRAL has agreed to pay a further A$130,000 to the
vendor. A further payment of A$350,000 was to be made upon the public release of a mineral resource estimate of no
less than 100,000 of gold in the inferred category as defined by the JORC code. Finally a net smelter royalty of 1.5% is
payable to the vendor up to a maximum total of A$1,500,000. Completion of the acquisition was announced on 22
September 2022.
Elephant Oil & Gas
Elephant Oil is currently finalizing an IPO on the Nasdaq market. This is expected to complete with an up to US$7m funding.
The most recent Elephant Oil pre-IPO funding has valued the price per share to US$2.25 per share. Given the pricing and
the pending IPO, the Company believes that it would be prudent to hold this investment at the pre-IPO funding pricing of
US$2.25 per share pending the final listing, now expected in early 2024, when the holding can be marked to market.
VUP Project – Democratic Republic of Congo
On 6 January 2022, the Company announced that it had obtained an order Ordonnance No 437/BIL/12/2021 Portant
Injonction de Payer (the "Payment Order") from the Commercial Court in Lubumbashi instructing VUP SA, the Company's
partner in the joint venture, to pay US$2,505,000 as a principal amount to Red Rock. It further indicated that
an audience took place in Lubumbashi at which the Company's claim for interest and damages of US$11,000,000 was
heard, with judgment was to be given within eight days. Red Rock indicated that it continues to investigate additional
remedies that may be available to it in the Congo and elsewhere.
On 19 January 2022, the Company announced that the Commercial Court of Lubumbashi issued an executory judgment
ordering VUP SA, the Company's partner in the Joint Venture, to pay US$2,000,000 as damages, with costs. This follows
the earlier judgment for payment of a principal amount of US$2,505,000, representing 50.1% of the payment already made
by a third party to VUP SA.
As of 2023, the Company has been provided with a draft arbitration result in which it would receive a gross award of
US$7,500,000, in addition to the executory judgement for US$2,500,000. The Company believes that execution of this
agreement is likely in early 2024.
Red Rock Resources Plc
Annual Report and Accounts 2023
69
Notes to the Financial Statements
for the year ended 30 June 2023
25. Related Party Transactions
•
•
•
•
Power Metal Resources Plc (POW) are the Company's partner and holder of 49.9% in the Company's 50.1% owned
subsidiary Red Rock Australasia Pty Ltd (“RRAL”). During the prior year, the Company entered into an agreement
with POW for the provision of a £100,000 working capital loan to the Company. See note 24 for further details.
Amounts drawn under this facility were converted after the reporting period. See note 26 for further details.
Related party receivables and payables are disclosed in notes 17 and 18.
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2023 and at 30 June
2022 are shown in the Director’s Report.
The key management personnel are the board of Directors and their remuneration is disclosed within note 9.
26. Significant Events After the Reporting Period
On 3 July 2023, the Company announced that it had been issued of a Certificate of Registration in relation to the Company’s
application through its local subsidiary for a new lithium license near Bikita, giving the Company a license covering 94
hectares. Certificates for two small extension applications adding 45 hectares to the core license in this area were also
recently granted. Also near Bikita, adjacent to a purchased areas where transfer is in progress, registration of two small
extension license areas of 21 and 22ha were recently granted.
On 7 August 2023, the Company announced the extension and partial conversion of its 12% convertible loan notes. The
Company had agreed with investors to extend the terms of the notes and the related warrants, including accrued interest
by one year to 18 July 2024 and 18 January 2026 respectively. The total amount of the extended convertible loan notes
at the time of the extension was £689,840. The conversion priced of the extended notes had been adjusted to a price set
at a 20% uplift from the 30 day VWAP starting from 9 July 2023, provided that the conversion price must fall between
£0.002 and £0.006 per share. The partial conversion of £127,000 of the notes prior to the extension, was to be settled by
the issuance of £63,500,000 new shares a price of £0.002 per share. Following this conversion, the residual balance of
the notes due in July 2024 would be £562,840 plus any interest accumulated during this period.
On 22 August 2023, the Company announced that it had received notice of the conversion of £52,509.60 of convertible
loan notes by a high-net-worth investor inclusive of interest at a price of £0.0020196 per share, retiring this note in full.
On 20 September 2023, the Company announced that it had sent three samples of approximately 2KG each from the
pegmatites at the first permitted area at the Company’s African Lithium Resources lithium project in Zimbabwe, to an ISO
accredited laboratory in Harare.
On 19 October 2023, the Company announced that it had approved the issuance of up to £500,000 of convertible loan
notes at a price of £10,000 per note. The notes would attract interest of 6% + 0.5% per month from the issue date to the
final conversion date or 23 March 2024. The notes were convertible into new ordinary shares of the company at a price
set at a 15% discount to the price of any placing conducted during the period that raised a minimum of £200,000 or more,
provided that this placing were to take place prior to 23 March 2024 Default interest of 10% + 1% would be payable for
each month or portion of a month and would accrue from the date of any default until payment. For every share issued to
the noteholder as part of conversion of any note, or that would have been issued to the holder had the investor not made
an election to be paid in cash, one warrant will be issued to the investor with a life of 30 months and set at an exercise
price at 50% above the placing price. In the event that a noteholder is repaid in cash by 23 March 2024, each note will
receive 4,500,000 warrants with a life of 30 months and an exercise of £0.0025 per share. The Company further announced
that it had raised £210,000 before expenses by subscription to 21 of these Notes as a First Tranche closing of this facility.
Additional for every 12 warrants issued to holders either via conversion or by cash repayment, 1 broker warrant will be
issued to First Equity Limited on the same terms as the relevant note holder warrants.
On 15 November 2023, announced that at the Company’s lithium project in Zimbabwe, 200 tons of lithium ore has been
prepared for export and that the first truck had now left Harare for the Mozambican port of Beria.
Red Rock Resources Plc
Annual Report and Accounts 2023
70
26. Significant Events After the Reporting Period, continued
On 28 November 2023, the Company announced that at the Company’s operations in Cote d’Ivoire, a decree had been
issued granting a second license to the Company’s subsidiary LacGold Resources SARLU for an initial term of 4 years.
The license covers 380.94 sq km in the departments of Yamoussoukro and others, and this grant was one of a total of Red
Rock’s applications consisting of a total of 1,404,.86 sq km. This decree brought the total of granted licenses 725.55 sq
km of prospective gold ground. Each application is located on a known regional shear zone where gold mines are currently
operating, and each grant has significant artisanal mining occurring within and around them.
On 11 December 2023, the Company announced that it had placed £110,000 in the form of 100,000,000 new ordinary
shares at a price of £0.0011 per share to a high net worth investor in satisfaction of costs that had been incurred at the
Company’s Zimbabwe lithium project and Burkina Faso gold projects respectively.
On 14 December 2023, the Company announced that it had raised gross proceeds of £500,000 through the issuance of
666,666,667 new ordinary shares at a price of £0.00075 per share.
27. Commitments
As at 30 June 2023, 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 1 January 2023, the Company extended its existing lease at We Work, Aldwych House, through to 30 June 2024.
Total lease rentals payable to 30 June 2024 are £69,454.
• 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 US$ 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) US$ 2.5 million payable in cash; (2) a US$ 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 US$ 1 million, of which US$ 0.5 million has been paid
on 24 December 2020, and to defer payment of US$ 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 2021. As at the reporting date, the amount of $1,000,000 remains payable, with
agreement having been arrived at between the parties that payment shall be deferred until receipt by the Company of
any funds awarded by the court of the DRC.
28. Control
There is considered to be no controlling party.
Red Rock Resources Plc
Annual Report and Accounts 2023
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