Registration Number: 05225394
Red Rock Resources Plc
Annual Report and Accounts 2024
Red Rock Resources Plc
1
Annual Report and Accounts 2024
Contents
PAGES
STRATEGIC REPORT ....................................................................................................................................... 2
COMPANY INFORMATION ................................................................................................................................... 2
CHAIRMAN’S STATEMENT .................................................................................................................................. 3
STRATEGIC REVIEW .......................................................................................................................................... 6
GOVERNANCE ................................................................................................................................................ 10
BOARD OF DIRECTORS .................................................................................................................................... 10
DIRECTORS’ REPORT ...................................................................................................................................... 11
STATEMENT OF DIRECTORS’ RESPONSIBILITIES ................................................................................................ 15
CORPORATE GOVERNANCE STATEMENT .......................................................................................................... 16
FINANCIAL STATEMENTS ............................................................................................................................. 20
INDEPENDENT AUDITOR’S REPORT .................................................................................................................. 20
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................................... 26
CONSOLIDATED INCOME STATEMENT ............................................................................................................... 27
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ....................................................................................... 28
CONSOLIDATED STATEMENT OF CASH FLOWS .................................................................................................. 30
COMPANY STATEMENT OF FINANCIAL POSITION ............................................................................................... 31
COMPANY STATEMENT OF CHANGES IN EQUITY ............................................................................................... 32
COMPANY STATEMENT OF CASH FLOWS .......................................................................................................... 34
NOTES TO THE FINANCIAL STATEMENTS ........................................................................................................... 35
Red Rock Resources Plc
2
Annual Report and Accounts 2024
Strategic Report
Company Information
Directors
Andrew Bell
Executive Chairman and CEO
Alex Borrelli
Independent Non-Executive Director
Sam Quinn
Non-Executive Director
all of:
Red Rock Resources Plc
71-91 Aldwych House
London
WC2B 4HN
Tel: 020 7747 9990
Company Secretary
Stephen Ronaldson
Company Number
05225394
Website
www.rrrplc.com
Registered Address
Salisbury House
London Wall
London
EC2M 5PS
Company’s Solicitors
Druces LLP
Salisbury House
London Wall
London
EC2M 5PS
Nominated Adviser
Beaumont Cornish Limited
Building 3
566 Chiswick High Road
London
W4 5YA
Broker
Clear Capital Corporate Broking
Office 1213, 20 Primrose Street
London
EC2A 2EW
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
3
Annual Report and Accounts 2024
Chairman’s Statement
Dear Shareholders,
We present the Report and Accounts of Red Rock Resources Plc (the “Company”, “Red Rock”) for the year ending 30
June 2024. We also report on the progress of the Company since the balance sheet date and review prospects for 2025.
Activity During the Year
The period has been an unusual one for the mineral exploration and production sectors. Most people would consider it to
have been dominated by the rise in the gold price from a range, bouncing around USD 2,000 per ounce up to March this
year and then a sharp step up to around USD 2,400 and then a renewed and steady climb to the current level of around
USD 2,700 an ounce. Yet the performance of stocks, whether exploration (at one extreme) or royalty (at the other), has
failed to reflect this improvement and the sector has underperformed other sectors, including technology. At the junior
stock level this has been particularly evident, with poor liquidity in junior markets and a shortage of brokerage and
fundraising support. Also the AIM market, on which we are listed, has seen a decline in the number of listings and in
liquidity, a matter on which we do not comment here.
Our situation has even within this environment been that of an outlier because our efforts and probably our share
performance has been weighted towards the ebb and flow of news, relating to our constant effort to achieve a resolution
of our initial compensation claim in the Democratic Republic of Congo, in relation to our copper and cobalt joint venture
near Kolwezi.
It is worth recapitulating, though with caution and with the note that no settlement has yet been signed, why this is so
important to Red Rock.
DRC
Red Rock’s copper-cobalt joint venture underwent extensive analysis of the historical records up to and after the time of
signing the JV in February 2019. Geologists, working for Red Rock, gathered historical data from the area and created a
3-D model of the mineralisation. Historic work had been based on much higher cut-off grades than would be used today,
and aimed to test only the upper oxide layer of mineralisation. The old pit had reached a depth at maximum of c105m,
compared with workings down to 1000m in nearby licences, and had on abandonment, been backfilled with several tens
of metres of rocks. Our work led to an estimation of up to 180,000 tonnes of contained copper at 2.7% grade and up to
17,000 tonnes of cobalt at 0.8% grade. This study was based on 83 drill holes, assays and over 750 pages of reports.
Drilling reached to a little below the pit depth. Typical grades in the area ranged from 3-5% copper and 0.5-1% cobalt.
At a current copper price of over USD 9,000 per tonne and a cobalt price over USD 24,000 per tonne, and bearing in mind
that the mineralisation would have been open pit, mined from surface at a grade far above breakeven for each mineral
taken individually, and that the deeper and sulphide mineralisation would have been drill tested by us to prove up further
resource, it can readily be calculated that the asset was one with a value after mining costs, royalties and taxes that was
very considerable and was transformative in terms of its potential effect on Company value.
It bears repeating that transforming what was originally a JV over quite mediocre assets, as our due diligence showed, into
a portfolio of exceptional value and also high prospectivity in other areas was entirely the result of our perseverance,
determination, and speed of analysis. Our partners were the beneficiaries, and in particular our free-carried local partner
VUP.
When our work was interrupted, we had already dozens of workers working on collection of historic drill core from the
Gécamines sheds at Kolwezi to verify the written record of the old drilling, and we had a plan for the accelerated calculation
of a compliant Resource based on the historic record even before, or with minimal, further drilling.
Our asset was purportedly sold behind our backs by our 25% local partner in December 2019, and to be deprived of this
interest that Red Rock had worked so hard to acquire was an unexpected blow that necessitated prompt follow up action.
On discovery of what had occurred but been hidden from us we went to court and obtained a final and non-appealable
judgment in January 2022 that we were entitled to 50.1% of the USD 5 million consideration already paid. We then began
an arbitration process in relation to the USD 15 million consideration not yet paid. These current actions relate to the initial
sale back to Gécamines, not the stage 2 immediate on-sale by Gécamines for a quantum an order of magnitude larger.
Some 30 months after the conclusion of the arbitration hearings, we are pushing for release of the award. A number of
delaying tactics were earlier used to obstruct us, but we have worked to preserve the integrity of the process and keep it
on track and it now appears that we are in a position to conclude and opposition and obstruction have visibly melted away.
At the same time, we have engaged in indirect discussion with the former local partner and in the last days have reached
an understanding on acceptance of the terms of settlement.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Chairman’s Statement
continued
We, therefore, expect a successful conclusion in the near future to our current arbitration, with early payment of any award.
The implications, however, go far beyond these initial victories, and we look forward to a successful future in the DRC and
with other ongoing matters.
Should we succeed, we will have put down a marker locally that we are prepared to work in good faith with the DRC
authorities and to spend a long time over an extended period, acting always with patience and goodwill, in order to protect
our legitimate interests.
We will, in terms of our contacts and possibilities, have used this period to enhance our reputation and position to a point,
where many opportunities will open up.
Understandably, shareholders have found this a frustrating time, not least because some of the detail of any discussions
and difficulties have not been possible to share without compromising the result.
Other Activity
After starting a lithium export product pipeline from Zimbabwe in late 2023, the sudden and rapid decline in the lithium
price at the end of that year, which continued at various points in 2024, caused us to halt further sales. Although we could
source material cheaper than it could be produced, costs including the royalty level, which had been set at a fixed price,
when prices of the commodity were higher, and price softness in the destination market, meant that operations could not
be profitable. Fortunately, by starting with a trading operation, we had avoided stranding capital and had the flexibility to
respond swiftly to these changing economic conditions.
In Burkina Faso, we made the final purchase payments for the Boulon licence, and developed plans for operations at
Bilbale. We identified a London and South Africa-based partner, with equipment that they were ready to contribute to an
initial alluvial operation. Illnesses on their side and their strategy of bringing in a substantial complement of Indian staff led
to some delay, especially when new requirements for overseas labour were introduced at the Indian end. We therefore, in
order to have activity on the ground as required, brought in an experienced camp and mine operator from South Africa,
who with a local partner runs mining operations in the Congo, in order to achieve a quick start and are happy with recent
progress. Mike Billings has been on site with the first of the equipment and has proved an efficient and schedule-conscious
manager.
Also in West Africa, the Company has two granted gold licences in Côte d’Ivoire.
In Kenya, our licences came up for renewal in 2024, and with that, an obligation to drop 50% of the ground. We have been
much occupied with the renewal process, where we are well advised by local consultants and lawyers. We are not
implementing our current plans for ground activity until the uncertainties, involved in the surrender process, renewal, and
designation of artisanal reserves, are resolved. However, given the relatively modest grade of the currently identified
Resource, compared with other commercially viable projects, the rise in the gold price over the course of 2024 significantly
enhances the prospects for our ground.
During the year, we contracted to acquire the 49.9% of our Australian gold asset portfolio, held through Red Rock
Australasia Pty Ltd not already owned, making this a wholly owned subsidiary. We have continued exploration on our gold
licences in Victoria, identifying antimony anomalism at O’Loughlins and rare earth potential in the eastern licences. The
two key assets remain the old Berringa Mine near Ballarat and the Ajax workings a little to the north. We have begun to
engage with a number of local companies in the second half of 2024, in order potentially to obtain a listing for the Australian
gold portfolio.
We had looked forward during the period under review to the proposed listing of Elephant Oil, where we have a small but
longstanding shareholding, on the NASDAQ market in the U.S. These plans were abandoned and Elephant acquired two
onshore licences in the Ivory Coast, and preliminary commitments of the funding to develop further these comparatively
advanced plays. The implications of this are that Elephant is likely to remain private for longer, while it uses these funds to
add value through further exploratory work, but the countervailing benefit should be that it becomes a considerably more
valuable company before seeking a future liquidity event, and the possibility of the sale of a non-core asset may exist in a
way it did not while Elephant was seeking a listing and so any offer by us competed with their own fundraising.
Financial Results
We report pre-tax losses for the year ended 30 June 2024 of £3,012 million (2023: loss of £2,953 million). Reductions in
administration expenses and share based payments have been offset by various project and asset related expenses,
resulting in a fairly comparable bottom line result to the prior year. Reduced administrative costs in particular, reflect
reductions in payroll, as well as marketing and compliance costs during the year.
Red Rock Resources Plc
5
Annual Report and Accounts 2024
Conclusion
We expect to generate cash from sales of assets and from court and arbitration awards over the next few months.
The Company remains fairly highly indebted, as it has sought to maintain a portfolio of what it considers to be high quality
exploration assets, while waiting for a major, and excessively delayed, liquidity event in the DRC. It will be important to
address this either by sourcing substantial funds by compensation awards and sales, or by negotiating farm ins, or by sales
of significant but non-core assets.
A continuing strong gold price may help us in this regard, and the combination of strong gold and a weak Australian dollar
is likely in particular to create additional local investment and market interest in the Australian gold sector, providing
potential opportunities to finance drilling with local capital.
We are now making sales of gold a current priority, and a key operational task at present is to develop our operations in
Burkina Faso and elsewhere to generate a steady stream of income.
Andrew Bell
Chairman and CEO
12 December 2024
Red Rock Resources Plc
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Annual Report and Accounts 2024
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 are inherently high-risk activities. Below are some primary risks identified:
Exploration Risk
The Group's business involves mineral exploration and evaluation, which are speculative by nature. There is no guarantee
that Red Rock will advance any of its projects to the development stage or realise their full value. To mitigate this risk, the
Group focuses on areas with potential, particularly those with historical drilling or geological data, and works with leading
exploration consultants, who identify strong evidence of world-class mineral deposits.
Resource Risk
All mineral projects carry risks, related to grade definition and continuity. The geology of an exploration area can be
complex, leading to unexpected challenges in identifying economically viable deposits. Geological formations may vary,
making it difficult to predict ore body continuity. The Group calculates mineral reserves and resources in line with industry
standards and codes, though uncertainties remain due to assumptions about geological projections and commodity prices.
Variations in mineralisation styles, or the failure to achieve economically viable deposits, can also affect project outcomes.
Environmental Risk
Environmental regulations and the unforeseen results of environmental studies may impact project exploration. Any
environmental disturbances, during exploration activities, will be rehabilitated according to local regulatory requirements.
Operational Risk
Operational delays and cost overruns from unforeseen issues can impact timelines and budgets. The Group mitigates
these risks through detailed project planning, skilled management, equipment maintenance, contingency funds, and project
management software.
Financing & Liquidity Risk
The Group periodically requires capital from financial markets to fund its activities. While it has been able to secure
necessary funding, primarily through equity placements, this is not guaranteed, especially in challenging funding markets
for junior mining. The cost of capital may vary, potentially involving high interest rates or equity, offered at a discount.
International markets, future GDP projections, and commodity demand may affect asset valuations and the Group's
projects.
Corporate financial planning includes exploring various funding sources, including internal cash flow. Strengthening capital
reserves and reducing costs provide resilience during industry downturns. The Directors have prepared cash flow forecasts
for the next 12 months to 31 December 2025, expecting the Group to secure funds if needed through asset sales, debt, or
equity financing. However, if unable to raise funds, the Group’s exploration activities and licence viability could be impacted.
Political Risk
Political risk exists in all countries and can disrupt operations. Stable countries may pose risks like changes in taxation,
while less stable regions may add risks like legal changes, civil unrest, or government expropriation. The Company’s team,
with experience in its operating regions, works with skilled local partners to manage these risks. However, events of force
majeure remain possible in areas such as Burkina Faso (coups), DRC and Côte d'Ivoire (civil strife), and Zimbabwe
(instability).
Health and Safety Risk
Exploration sites often involve physical risks, including accidents, harsh weather, and remote location challenges, which
can impact worker safety and project progress.
The Group addresses these risks by establishing strict health and safety protocols and training programs. The aim is to
ensure compliance with industry health and safety regulations and to regularly audit practices. Sites are equipped with
necessary safety gear and first-aid resources, along with protocols for emergency response and medical evacuation.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Community and Social Risk
Conflicts may arise with local communities regarding land rights, environmental impact, and social issues. Negative public
perception or resistance from communities can disrupt operations.
The Group seeks to develop strong community relations through transparent communication and regular engagement. To
offer social investment programs, such as infrastructure improvements, job creation, and community development, and to
conduct social impact assessments and implement a community relations team to address concerns proactively.
Internal Controls & Risk Management
The Directors oversee the Group's internal financial controls. Although no system guarantees complete protection against
misstatement or loss, the Group’s framework aims to identify and address issues promptly. This includes monitoring
financial performance, taking corrective actions, and detecting risks early. The Directors have reviewed the effectiveness
of these 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
Male
Female
Directors
3
0
Other Employees
2
1
The analysis by gender reveals a lack of diversity within the Board of Directors, with all three positions currently held by
males. This absence of female representation at the Director level highlights the need for a more inclusive approach to
Board appointments, which the Company recognises and intends to focus on at the appropriate time in its future
development.
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.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Strategic Review
continued
Diversity and Inclusion
The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-
disability, sexual orientation or marital status. The Company gives due consideration to all applications and provides
training and the opportunity for career development, wherever possible. The Board does not support discrimination of any
form, positive or negative, and all appointments are based solely on merit.
Health and Safety
The Company includes Health and Safety (“H&S”) procedures and frameworks in all of its planning and field activities, with
emphasis on top-down as well as bottom-up ownership and responsibility, quality training of all personnel and risk
assessments that go beyond regulatory compliance. Comprehensive Risk Assessments of Health and Safety Systems
have been developed to identify existing risks, to implement relevant mitigation measures and to identify potential risks
before they may be directly applicable to our operations. Red Rock’s H&S strategy includes project and location specific
training as well as H&S inductions, Emergency Response Plans and field team reporting procedures.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to act in a way they consider, in good faith, would most likely
promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst
other matters) to:
•
The likely consequences of any decision in the long term;
•
The interests of the Company's employees;
•
The need to foster the Company's business relationships with suppliers, customers, and others;
•
The impact of the Company's operations on the community and the environment;
•
The desirability of the Company maintaining a reputation for high standards of business conduct; and
•
The need to act fairly as between members of the Company.
The Directors of the Company are aware of their responsibilities under Section 172, and have taken these considerations
into account in their decision making throughout the year. This statement outlines how the Directors have fulfilled their
duties under Section 172 in promoting the success of the Company.
Long-Term Decision Making
The Directors consistently evaluate the long-term impact of their strategic decisions, ensuring that the Company is well-
positioned for future growth and sustainability. By focusing on long-term value creation, the Directors aim to secure a
prosperous future for the Company and its stakeholders.
Employee Interests
Recognising that our employees are integral to our success, the Company prioritises their development and well-being.
We have established comprehensive performance review processes and incentive programs to align employees' goals
with the strategic objectives of the Company. Regular briefings and communications keep employees informed and
engaged with the Company's activities.
Business Relationships
We understand the importance of fostering strong relationships with our business partners, including suppliers and
customers. The Directors are committed to maintaining transparent and collaborative relationships that drive mutual
success and long-term partnerships.
Community and Environmental Impact
The Company is committed to operating responsibly and sustainably, recognising the impact of our activities on the
community and the environment. Our health and safety procedures and frameworks are designed to exceed regulatory
compliance, ensuring the well-being of our employees and the communities in which we operate.
High Standards of Business Conduct
Maintaining a reputation for high standards of business conduct is paramount to the Company. The Directors are dedicated
to upholding ethical practices and governance standards, fostering trust and integrity in all business operations.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Fair Treatment of Members
The Directors are committed to acting fairly and equitably as between the members of the Company. Decisions are made
with consideration of the interests of all shareholders, ensuring transparency and fairness in all corporate actions.
By adhering to these principles, the Directors strive to promote the long-term success of the Company for the benefit of its
members and stakeholders as a whole.
Signed by order of the Board.
Andrew Bell
Chairman and CEO
12 December 2024
Red Rock Resources Plc
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Annual Report and Accounts 2024
Governance
Board of Directors
The Board of Directors makes decisions on shareholders’ behalf. Red Rock has one Executive Chairman 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 Resource Star Ltd (now Complii Fintech Solutions 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.
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, listed on the LSE. Sam Quinn has strong legal expertise as well
as significant experience in public markets, the resources sector and in corporate finance. Sam Quinn is the former legal
counsel to the Dragon Group, a mining finance boutique and a partner of Corporate Service Providers Silvertree Partners.
Responsibilities of the Board
•
Focus on governance over management;
•
Formulate, review and approve the Company’s strategy;
•
Oversee financial activities and operational performance; and
•
Approval of annual budget and periodic fiscal reviews.
Focus Areas for 2024-25
•
License renewal as well as continued exploration and development of Kenyan gold assets;
•
Pursuit of IPO or transaction involving the New Ballarat Gold Corporation Plc subsidiary undertaking;
•
Further development of the Company’s Côte d’Ivoire and Burkina Faso assets;
•
Settlement of the Company’s claims in the DRC; and
•
Bolstering the Company’s financial resources and balance sheet.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Red Rock Resources Plc – Company Number: 05225394
Directors’ Report
for the year ended 30 June 2024
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 2024.
Results and Dividends
The Group’s results are set out in the Consolidated Income Statement on page 27. The audited Financial Statements for
the year ended 30 June 2024 are set out on pages 26 to 69.
The Group made a post-tax loss of £3.012 million (2023: loss of £2.953 million).
The Directors do not recommend the payment of a dividend (2023: 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 9.
Fundraising and Share Capital
During the year, the Company raised £1.12 million in new equity (2023: £1.42 million); 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 (resigned 16 February 2024)
Sam Quinn
Alex Borrelli
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2024 were as follows:
Ordinary shares
As percentage
of issued
share capital
Direct
Beneficial
Total
Options
Warrants
Andrew R M Bell
34,316,883
37,031,503
71,348,386
1.66%
13,880,000
-
Alexander Borrelli
-
20,364,429
20,364,429
0.47%
0
-
Sam Quinn
2,656,766
34,954,225
37,610,991
0.87%
0
-
The direct and beneficial interests of the Board in the shares of the Company as at 30 June 2023 were as follows:
Ordinary shares
As percentage
of issued
share capital
Direct
Beneficial
Total
Options
Warrants
Andrew R M Bell
34,316,883
22,031,503
56,348,386
2.27%
13,880,000
-
Alexander Borrelli
-
5,364,429
5,364,429
0.22%
0
-
Scott Kaintz
3,072,093
22,031,503
25,103,596
1.01%
6,840,000
-
Sam Quinn
2,656,766
20,026,225
22,682,991
0.91%
0
-
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
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Annual Report and Accounts 2024
Red Rock Resources Plc – Company Number: 05225394
Directors’ Report
for the year ended 30 June 2024, continued
Substantial Shareholdings
On 30 June 2024 and 1 December 2024, the following were registered as being interested in 3% or more of the Company’s
Ordinary share capital:
30 June 2024
1 December 2024
Ordinary
shares of
£0.0001 each
Percentage
of issued
share
capital
Ordinary
shares of
£0.0001 each
Percentage
of issued
share capital
Nortrust Nominees Limited – Designation GSYA
389,000,000
9.03%
509,000,000
9.00%
Interactive Investor Services Nominees Limited – Designation SMKTNOMS
381,505,789
8.86%
372,444,364
6.59%
Interactive Investor Services Nominees Limited – Designation SMKTISAS
336,859,447
7.82%
332,848,050
5.89%
HSBC Global Custody Nominee (UK) Limited – Designation 941346
334,809,518
7.78%
423,301,854
7.48%
James Brearley Crest Nominees Limited – Designation WALPOLE
244,634,030
5.68%
105,006,519
1.86%
Hargreaves Lansdown (Nominees) Limited – Designation 15942
221,364,250
5.14%
295,222,663
5.22%
Hargreaves Lansdown (Nominees) Limited – Designation HLNOM
209,714,169
4.87%
189,804,315
3.36%
Hargreaves Lansdown (Nominees) Limited – Designation VRA
175,331,040
4.07%
178,823,835
3.16%
Interactive Investor Services Nominees Limited – Designation TDWHSIPP
168,951,455
3.92%
182,174,122
3.22%
Power Metal Resources Plc
166,666,667
3.87%
0
0.00%
Red Rock Resources Plc Share Incentive Plan
161,823,807
3.76%
161,823,807
2.86%
Barclays Direct Investing Nominees Limited – Designation CLIENT1
150,271,304
3.49%
176,154,360
3.11%
Vidacos Nominees Limited – Designation CBGORCA
0
0.00%
488,000,000
8.63%
St Anns Square Nominees Limited – Designation ISA
67,915,740
1.58%
498,610,828
8.82%
Total number of shares in issue
4,305,645,478
5,655,797,411
Management Incentives
In the year to 30 June 2024, the Company has granted nil options over its Ordinary shares (2023: Nil). As at 30 June 2024,
21,000,000 options were outstanding (2023: 21,000,000).
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 2024 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
13
Annual Report and Accounts 2024
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 2024. 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 16 to 19.
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.
Red Rock Resources Plc
14
Annual Report and Accounts 2024
Red Rock Resources Plc – Company Number: 05225394
Directors’ Report
for the year ended 30 June 2024, continued
Suppliers, Customers and Regulatory Authorities
The Board acknowledges that a strong business relationship with suppliers and customers is a vital part of the growth.
Whilst day to day business operations are delegated to the executive management, the Board sets directions with regard
to new business ventures. The Board upholds ethical behaviour across all sectors of the business and encourages
management to seek comparable business practices from all suppliers and customers doing business with the Company.
We value the feedback we receive from our stakeholders, and we take every opportunity to ensure that, where possible,
their wishes are duly considered.
Going Concern
It is the prime responsibility of the Board to ensure the Company and the Group remains a going concern. At 30 June 2024,
the Group had cash and cash equivalents of £38,000 and £3.03 million of borrowings. The Directors anticipate having to
raise additional funding over the course of the current financial year in order to continue to meet working capital
requirements and fund work programmes as planned.
Having considered the prepared cashflow forecasts and the Group budgets, which includes anticipated fundraising activity,
the possibility of Directors reducing or foregoing their salaries if required, the progress in activities post year-end, the
capacity to defer expenditure and seek the support of suppliers and other creditors defer settlement of fees if necessary
and the 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 to meet their financial obligations as they fall due. 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. As the ability to meet minimum work obligations on the Group’s various licences is dependent on the availability of
further funding, should the funding not be available as and when required then any impact on licence terms compliance
may result in an impairment of the licences in question.
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
12 December 2024
Red Rock Resources Plc
15
Annual Report and Accounts 2024
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 Financial Statements for each financial year. Under that law the Directors
have prepared the Group and the Company Financial Statements in accordance with UK-adopted international accounting
standards (UK 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 the
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 UK 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
16
Annual Report and Accounts 2024
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. The QCA Code 2023 becomes applicable
for financial periods, commencing on or after 1 April 2024. Consequently, the Company shall implement the necessary
changes for the updated guidance in the 2023 Code in the next Financial Statements to 30 June 2025.
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 three Directors, one of whom is Chairman and CEO as of the year end. In addition, 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.
Red Rock Resources Plc
17
Annual Report and Accounts 2024
All Directors have access to the advice of the Company’s solicitors and the Company Secretary, necessary information is
supplied to the Directors on a timely basis to enable them to discharge their duties effectively, and all Directors have access
to independent professional advice, at the Company’s expense, as and when required.
Executive Chairman
The Board acknowledges that, in having a Chairman, who is also the Chief Executive Officer, best practice 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 the 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 2024, the Board held 11 Board meetings
and 1 Audit Committee meeting. The Remuneration Committee did not meet during the period.
Board Meeting Attendance
The Director’s attendance at Board meetings and Board Committees during the year ended 30 June 2024 is detailed in
the table below:
Director
Board Meetings
(11)
Audit
Committee (1)
Remuneration
Committee (0)
Andrew Bell, Chairman and CEO
11
-
-
Scott Kaintz, Director*
8
1
0
Alexander Borrelli, Non-Executive Director
11
1
0
Sam Quinn, Non-Executive Director
11
1
0
Total Meetings
11
1
0
* On 16 February 2024, Scott Kaintz retired as a Director of the Company
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.
Red Rock Resources Plc
18
Annual Report and Accounts 2024
Corporate Governance Statement
continued
Nominations Committee
The Board has not established a Nominations Committee. The Board considers that a separately established committee
is not warranted at this stage of the Group’s development and that the functions of such a committee are being adequately
discharged by the Board as a whole.
Board Evaluation
The internal evaluation of the Board, the Committees and individual Directors, including any succession planning, is
undertaken on an annual basis to determine the effectiveness of their performance and suitability to the changing business
requirements. The assessment criteria are based on the need to promote the Company’s Business Model, industry
practices and the need for balance, the Company’s immediate aspirations as well as the specific skills, knowledge and
capabilities that are required to perform certain roles. The results and recommendations that come out of the appraisals of
the Directors and members of the Committees, identify the required changes and actions for the Board and the Committees
as units as well as individually for the Directors and members of the Committees.
Ethical Decision Making
Confidentiality
In accordance with legal requirements and agreed ethical standards, Directors and all staff have agreed to maintain
confidentiality of non-public information, except where disclosure is authorised or legally mandated.
Bribery
In accordance with the provisions of the Bribery Act, all Directors and staff have been informed and have acknowledged
that it is an offence under the act to engage in any form of bribery. The Company has an Anti-Bribery and Whistleblowing
Policy in force. The strong law-based culture of the Company is reflected in a willingness occasionally to litigate to protect
its interests rather than to negotiate.
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.
Red Rock Resources Plc
19
Annual Report and Accounts 2024
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 organisation, and also to set a benchmark and send a signal
of what it will and will not do in some of the jurisdictions in which the Company operates.
Relations with Shareholders
The Board recognises that it is accountable to shareholders for the performance and activities of the Company and Group
and to this end is committed to providing effective communication with the shareholders of the Company.
Significant developments are disseminated through stock exchange announcements and regular updates of the Company
website where descriptions of the Group projects are available and updated regularly. In addition, copies of press
comments, broker notes, video updates and presentations are available. On the website, shareholders may sign up to
receive news releases directly by e-mail. The Board views the Annual General Meeting as an important forum for
communication between the Company and its shareholders and encourages shareholders to express their views on the
Group’s business activities and performance.
Red Rock Resources Plc
20
Annual Report and Accounts 2024
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 “Parent Company”) and its subsidiaries (the
“Group”) for the year ended 30 June 2024, 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 Parent Company’s affairs
as at 30 June 2024 and of the Group’s loss for the year then ended;
•
The Group Financial Statements have been properly prepared in accordance with UK-adopted international
accounting standards;
•
The Parent Company Financial Statements have been properly prepared in accordance with UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act 2006;
and
•
The Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical
requirements that are relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence, we have obtained, is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1.2 in the Financial Statements, which indicates that the 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 the 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 the 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 the
Company will require additional funding in order to meet their liabilities as and when they fall due, and to fund
planned exploration activities;
•
Obtaining evidence where possible in support of the Group’s and the Company’s ability to defer certain payments,
including evidence of the ongoing financial support of key stakeholders, currently providing loans to the Company;
•
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
21
Annual Report and Accounts 2024
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 (2023: 1.5% of gross assets).
Materiality of the Company was based upon 3% of net assets, capped below group materiality (2023: 3% of net 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 the Company materiality for the Financial Statements as a whole to be £322,000 and
£320,000 (2023: £287,000 and £285,000), respectively. Performance materiality was set at 60% (2023: 60%) of overall
materiality for the Group and the Company at £193,200 and £192,000 (2023: £172,200 and £171,000), respectively, whilst
the threshold for reporting unadjusted differences to those charged with governance was set at £16,100 for the Group and
£16,000 for the Company (2023: £14,350 and £14,250). 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 £62,600 to £120,400 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
22
Annual Report and Accounts 2024
Financial Statements
Independent Auditor’s Report
to the Members of Red Rock Resources Plc, continued
Key Audit Matter
How Our Scope Addressed this Matter
Recoverability of exploration assets (see Notes 1.5 and
13)
Exploration and evaluation assets comprise exploration
assets of £13,576k (2023: £13,358k) and mineral
tenements of £532k (2023: £698k) as at 30 June 2024.
There is a risk that these amounts are 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
paper,
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.
Key Observations
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 £12.9 million as at 30 June 2024, expired 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 and the circumstances,
surrounding this matter, are described in Note 1.5 to the Financial Statements. If the licenses are not renewed,
this may result in an impairment to these assets.
We also note that certain licences have minimum spend requirements and the ability to meet these over the
course of the licence terms will depend on availability of funding as mentioned in Note 1.2. Should these not
be met in the future, this could result in impairment to the related assets.
Red Rock Resources Plc
23
Annual Report and Accounts 2024
Recoverability of current and non-current receivables
for MFP sales proceeds (see Notes 1.5, 16 and 17)
Non-current receivables for MFP sales proceeds have a
carrying value in the Financial Statements of £1,464,000
as at 30 June 2024 (2023: £1,410,000), with the current
portion being £239,000 (2023: £171,000).
These 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 due to the
financially significant value of the total receivable, and
the fact that 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. Performing sensitivity analysis
on the key assumptions, being production
volume, discount rate and gold price;
•
Engaging
auditor’s
expert
to
review
mechanics of the discounted cash flow
model and the appropriateness of the
discount rate used;
•
Considering whether management have
included all possible factors, which could
impact the valuation;
•
Considering whether there are indications
of impairment in the valuation to suggest
the balance is not recoverable; and
•
Reviewing disclosures, surrounding the
balance
in
the
Financial
Statements,
including any uncertainties or judgements.
Key Observations
In reviewing the calculations prepared by management, we noted the following assumptions as key:
•
Estimated production volumes and timing;
•
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 Q4 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 the receivable. The recoverability of this asset is dependent on the ability of the Company to fully
realise the potential of the site to achieve a minimum level of production, which in turn will enable a potential
return through the net smelter royalty agreement.
Red Rock Resources Plc
24
Annual Report and Accounts 2024
Financial Statements
Independent Auditor’s Report
to the Members of Red Rock Resources Plc, continued
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 the Parent Company Financial Statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the Financial Statements or our knowledge obtained in the course of the audit, or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required
to determine whether this gives rise to a material misstatement in the Financial Statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on Other Matters Prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
The information given in the Strategic Report and the Directors’ Report for the financial year, for which the
Financial Statements are prepared, is consistent with the Financial Statements; and
•
The Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on Which We are Required to Report by Exception
In the light of the knowledge and understanding of the Group and the Parent Company and their environment, obtained in
the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
Adequate accounting records have not been kept by the Parent Company, or returns, adequate for our audit,
have not been received from branches not visited by us; or
•
The Parent Company Financial Statements are not in agreement with the accounting records and returns; or
•
Certain disclosures of Directors’ remuneration, specified by law are not made; or
•
We have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors are responsible for the preparation of
the Group and Parent Company Financial Statements and for being satisfied that they give a true and fair view, and for
such internal control as the Directors determine is necessary to enable the preparation of Financial Statements that are
free from material misstatement, whether due to fraud or error.
In preparing the Group and the Parent Company Financial Statements, the Directors are responsible for assessing the
Group and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic alternative but to do so.
Red Rock Resources Plc
25
Annual Report and Accounts 2024
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 the 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 the Company with those laws and regulations. These procedures included, but
were not limited to, making enquiries of management, performing a review of Board minutes and a review of legal
and regulatory correspondence;
•
We also identified the risks of material misstatement of the Financial Statements due to fraud. We considered, in
addition to the non-rebuttable presumption of a risk of fraud, arising from management override of controls, that
the risk of fraud related to the estimates, judgements and assumptions, applied by management in their
assessment of impairment of intangible assets and the recoverability of non-current receivables. Refer to the Key
Audit Matters section above on how our audit scope addressed these matters; and
•
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)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
12 December 2024
Red Rock Resources Plc
26
Annual Report and Accounts 2024
Consolidated Statement of Financial Position
as at 30 June 2024
Notes
30 June
2024
£’000
30 June
2023
£’000
ASSETS
Non-current assets
Investments in associates and joint ventures
12
1,030
1,030
Exploration assets
13
13,576
13,358
Mineral tenements
13
532
698
Financial instruments - fair value through other comprehensive income (FVTOCI)
14
736
736
PPE
19
18
Non-current receivables
16
2,560
2,506
Total non-current assets
18,453
18,346
Current assets
Cash and cash equivalents
15
38
155
Other receivables
17
807
670
Total current assets
845
825
TOTAL ASSETS
19,298
19,171
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent
Called up share capital
19
3,143
2,960
Share premium account
20
33,804
32,785
Other reserves
20
1,193
1,751
Retained earnings
(25,323)
(22,477)
Total equity attributable to owners of the Parent
12,817
15,019
Non-controlling interest
(150)
(687)
Total equity
12,667
14,332
LIABILITIES
Non-current liabilities
Trade and other payables
18
-
684
Borrowings
18
756
756
Total non-current liabilities
756
1,440
Current liabilities
Trade and other payables
18
2,838
1,737
Short-term borrowings
18
3,037
1,662
Total current liabilities
5,875
3,399
TOTAL EQUITY AND LIABILITIES
19,298
19,171
These Financial Statements on pages 26 to 69 were approved by the Board of Directors and authorised for issue on 12
December 2024 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
27
Annual Report and Accounts 2024
Consolidated Income Statement
for the year ended 30 June 2024
Continuing operations
Notes
Year to
30 June
2024
£’000
Year to
30 June
2023
£’000
Administrative expenses
4
(1,273)
(1,380)
Exploration expenses
(293)
(318)
Project development
6
(280)
(250)
Other project costs
6
(153)
(159)
Impairment of E&E assets
13
(202)
(259)
Impairment of Mineral Tenements
13
(184)
-
Share based payments
21
(136)
(213)
Currency gains
27
11
Other income / gains
5
122
228
Finance costs
5
(640)
(613)
Profit/(loss) for the year before taxation
(3,012)
(2,953)
Tax
7
-
-
Profit/(loss) for the year
(3,012)
(2,953)
Profit/(loss) for the year attributable to:
Equity holders of the Parent
(2,846)
(2,665)
Non-controlling interest
(166)
(288)
(3,012)
(2,953)
Earnings per share attributable to owners of the Parent:
Basic loss per share, pence
10
(0.09)
(0.19)
Diluted loss per share, pence
10
(0.09)
(0.19)
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2024
30 June
2024
£’000
30 June
2023
£’000
Profit/(loss) for the year
(3,012)
(2,953)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Unrealised foreign currency (loss) / gain arising upon retranslation of foreign
operations
60
165
Total other comprehensive income net of tax for the year
60
165
Total comprehensive income, net of tax for the year
(2,952)
(2,788)
Total comprehensive income net of tax attributable to:
Owners of the Parent
(2,813)
(2,521)
Non-controlling interest
(139)
(267)
(2,952)
(2,788)
The accompanying notes form an integral part of these Financial Statements.
Red Rock Resources Plc
28
Annual Report and Accounts 2024
Consolidated Statement of Changes in Equity
for the year ended 30 June 2024
The movements in equity during the period were as follows:
Share
capital
£’000
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
As at 1 July 2022
2,839
31,077
(19,812)
1,434
15,538
(420)
15,118
Changes in equity for 2023
Loss for the year
-
-
(2,665)
-
(2,665)
(288)
(2,953)
Other comprehensive income for the year
Unrealised foreign currency (loss) / gain arising
upon retranslation of foreign operations
-
-
-
144
144
21
165
Total comprehensive income for the year
-
-
(2,665)
144
(2,521)
(267)
(2,788)
Transactions with owners
Issue of shares
121
1,708
-
-
1,829
-
1,829
Issue of warrants
-
-
-
173
173
-
173
Total transactions with owners
121
1,708
-
173
2,002
-
2,002
As at 30 June 2023
2,960
32,785
(22,477)
1,751
15,019
(687)
14,332
Changes in equity for 2024
Loss for the year
-
-
(2,846)
-
(2,846)
(166)
(3,012)
Other comprehensive income for the year
Unrealised foreign currency (loss) / gain arising
upon retranslation of foreign operations
-
-
-
(7)
(7)
27
(20
Total comprehensive income for the year
-
-
(2,846)
(7)
(2,853)
(139)
(2,992)
Transactions with owners
Issue of shares
183
1,019
-
-
1,202
-
1,202
Issue of warrants
-
-
-
97
97
-
97
Acquisition of NCI
-
-
-
(648)
(648)
676
28
Total transactions with owners
183
1,019
-
(551)
651
676
1,327
As at 30 June 2024
3,143
33,804
(25,323)
1,193
12,817
(150)
12,667
Red Rock Resources Plc
29
Annual Report and Accounts 2024
Consolidated Statement of Changes in Equity
for the year ended 30 June 2024, continued
FVTOCI financial
instruments
revaluation
reserve
£’000
Foreign
currency
translation
reserve
£’000
Share-based
payment
reserve
£’000
Warrant
reserve
£’000
Other
reserve
£’000
Total
other
reserves
£’000
As at 1 July 2022
402
(19)
230
821
-
1,434
Changes in equity for 2022
Other comprehensive income for the year
Unrealised foreign currency gains on translation of
foreign operations
-
144
-
-
-
144
Total comprehensive Income for the year
-
144
-
-
-
144
Warrants issued in the year
-
-
-
173
-
173
Total transactions with owners
-
-
-
173
-
173
As at 30 June 2023
402
125
230
994
-
1,751
Changes in equity for 2024
Other comprehensive income for the year
Unrealised foreign currency gains on translation of
foreign operations
-
(7)
-
-
-
(7)
Total comprehensive income for the year
-
(7)
-
-
-
(7)
Warrants issued in the year
-
-
-
97
-
97
Acquisition of NCI
-
-
-
-
(648)
(648)
Total transactions with owners
-
-
-
97
(648)
(551)
As at 30 June 2024
402
118
230
1,091
(648)
1,193
See Note 20 for a description of each reserve included above.
Red Rock Resources Plc
30
Annual Report and Accounts 2024
Consolidated Statement of Cash Flows
for the year ended 30 June 2024
Notes
Year to
30 June
2024
£’000
Year to
30 June
2023
£’000
Cash flows from operating activities
Loss before tax
(3,012)
(2,953)
Increase in receivables
(192)
(239)
Increase in payables
293
612
Finance costs
5
640
613
Share-based payments
21
136
213
Foreign exchange gain/loss
-
(10)
Impairment of E&E assets
13
202
253
Impairment of Mineral Tenements
13
184
-
Net cash outflow from operations
(1,749)
(1,511)
Corporation tax (paid)
-
-
Net cash used in operations
(1,749)
(1,511)
Cash flows from investing activities
Purchase of PPE
(1)
(18)
Payments to acquire exploration asset
13
(419)
(139)
Payments for tenements
13
(17)
(187)
Net cash (outflow) from investing activities
(437)
(344)
Cash flows from financing activities
Proceeds from issue of shares
19
772
1,112
Proceeds from new borrowings
23
1,460
1,237
Repayment of borrowings – Non current
23
(24)
(38)
Repayments of borrowings
23
(79)
(494)
Net cash inflow from financing activities
2,129
1,817
Net (decrease) in cash and cash equivalents
(57)
(38)
Cash and cash equivalents at the beginning of period
155
66
Exchange (losses)/gains on cash and cash equivalents
(60)
127
Cash and cash equivalents at end of period
15
38
155
Major non-cash transactions are disclosed in Note 23.
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Red Rock Resources Plc
31
Annual Report and Accounts 2024
Company Statement of Financial Position
Red Rock Resources Plc (Registration Number: 05225394) as at 30 June 2024
Notes
30 June
2024
£’000
30 June
2023
£’000
ASSETS
Non-current assets
Investments in subsidiaries
11
893
76
Investments in associates and joint ventures
12
1,111
1,111
Financial instruments - fair value through other comprehensive income (FVTOCI)
14
736
736
Exploration property
13
12,948
12,948
PPE
1
1
Non-current receivables
16
5,410
4,978
Total non-current assets
21,099
19,850
Current assets
Cash and cash equivalents
15
17
149
Loans and other receivables
17
727
601
Total current assets
744
750
TOTAL ASSETS
21,843
20,600
EQUITY AND LIABILITIES
Called up share capital
19
3,143
2,961
Share premium account
33,804
32,785
Other reserves
1,773
1,676
Retained earnings
(25,071)
(22,798)
Total equity
13,649
14,624
LIABILITIES
Non-current liabilities
Borrowings
18
756
756
Total non-current liabilities
756
756
Current liabilities
Trade and other payables
18
2,511
1,602
Intra-group borrowings
18
1,890
2,115
Short-term borrowings
18
3,037
1,503
Total current liabilities
7,438
5,220
TOTAL EQUITY AND LIABILITIES
21,843
20,600
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 £2.273 million (2023: loss of £1.971 million).
The Company’s total comprehensive loss for the financial year was £2.273 million (2023: loss of £1.971 million).
These Financial Statements on pages 26 to 69 were approved by the Board of Directors and authorised for issue on 12
December 2024 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
32
Annual Report and Accounts 2024
Company Statement of Changes in Equity
for the year ended 30 June 2024
The movements in equity during the period were as follows:
Share
capital
£’000
Share
premium
account
£’000
Retained
earnings
£’000
Other
reserves
£’000
Total
equity
£’000
As at 1 July 2022
2,839
31,078
(20,827)
1,502
14,592
Changes in equity for 2023
Loss for the year
-
-
(1,971)
-
(1,971)
Other comprehensive income for the year
Total comprehensive income for the year
-
-
(1,971)
-
(1,971)
Transactions with owners
Issue of shares
122
1,707
-
-
1,829
Issue of warrants
-
-
-
174
174
Total transactions with owners
122
1,707
-
174
2,003
As at 30 June 2023
2,961
32,785
(22,798)
1,676
14,624
Changes in equity for 2024
Loss for the year
-
-
(2,273)
-
(2,273)
Other comprehensive income for the year
Total comprehensive income for the year
-
-
(2,273)
-
(2,273)
Transactions with owners
Issue of shares
182
1,019
-
-
1,201
Issue of warrants
-
-
-
97
97
Total transactions with owners
182
1,019
-
97
1,298
As at 30 June 2024
3,143
33,804
(25,071)
1,773
13,649
Red Rock Resources Plc
33
Annual Report and Accounts 2024
Company Statement of Changes in Equity
for the year ended 30 June 2024, continued
FVTOCI financial
assets revaluation
reserve
£’000
Share-based
payment
reserve
£’000
Warrant
reserve
£’000
Total
other
reserves
£’000
As at 1 July 2022
452
230
820
1,502
Changes in equity for 2023
Transactions with owners
Issue of warrants
-
-
174
174
Total transactions with owners
-
-
174
174
As at 30 June 2023
452
230
994
1,676
Changes in equity for 2024
Transactions with owners
Issue of warrants
-
-
97
97
Total transactions with owners
-
-
97
97
As at 30 June 2024
452
230
1,091
1,773
See Note 20 for a description of each reserve included above.
Red Rock Resources Plc
34
Annual Report and Accounts 2024
Company Statement of Cash Flows
for the year ended 30 June 2024
30 June
2024
£’000
30 June
2023
£’000
Cash flows from operating activities
Loss before taxation
(2,273)
(1,971)
Increase in receivables
(854)
(1,178)
Increase in payables
156
644
Finance costs (Note 5)
640
613
Share-based payments (Note 21)
136
214
Equity settled transactions
-
-
Change in value in FVTPL financial assets
-
-
Foreign exchange loss / (gain)
-
(83)
Impairment of E&E assets (Note 13)
-
259
Impairment of loans to subsidiaries
295
-
Net cash outflow from operations
(1,900)
(1,502)
Cash flows from investing activities
Purchase of PPE
-
(1)
Net cash outflow from investing activities
-
(1)
Cash flows from financing activities
Proceeds from issue of shares
772
1,112
Proceeds from new borrowings (Note 23)
1,169
1,078
Repayment of borrowings – Non current (Note 23)
(24)
(38)
Repayment of borrowings (Note 23)
(79)
(494)
Net cash inflow from financing activities
1,838
1,658
Net (decrease)/increase in cash and cash equivalents
(61)
155
Cash and cash equivalents at the beginning of period
149
31
Exchange losses on cash and cash equivalents
(71)
(37)
Cash and cash equivalents at end of period (Note 15)
17
149
The accompanying notes and accounting policies form an integral part of these Financial Statements.
Significant non cash transactions undertaken in the year are disclosed in Note 23 to these Financial Statements.
Red Rock Resources Plc
35
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024
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 2024,
the Group had cash and cash equivalents of £38,000 and £3.03 million of borrowings. The Directors anticipate having to
raise additional funding over the course of the current financial year in order to continue to meet working capital
requirements and fund work programmes as planned.
Having considered the prepared cashflow forecasts and the Group budgets, which includes anticipated fundraising activity,
the possibility of Directors reducing or foregoing their salaries if required, the progress in activities post year-end, the
capacity to defer expenditure and seek the support of suppliers and other creditors defer settlement of fees if necessary
and the 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 to meet their financial obligations as they fall due. 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. As the ability to meet minimum work obligations on the Group’s various licences is dependent on the availability of
further funding, should the funding not be available as and when required, then any impact on licence terms compliance
may result in an impairment of the licences in question.
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: Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
(effective 1 January 2024);
•
Amendments to IAS 1: Classification of Liabilities as Current or Non-current – Deferral of Effective Date (effective
1 January 2024);
•
Amendments to IAS 1 Presentation of Financial Statements: Non-current Liabilities with Covenants (effective 1
January 2024);
•
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance
Arrangements (effective 1 January 2024); and
•
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability (effective 1
January 2025).
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.
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Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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 2024, 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 ”other reserves” 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.
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Annual Report and Accounts 2024
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.
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.
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Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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.
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.
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Annual Report and Accounts 2024
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.
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.
Red Rock Resources Plc
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Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then
multiplied by the amount of the expected loss, arising from default to determine the lifetime expected credit loss for the
trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision
account, with the loss being recognised in the Consolidated Statement of Comprehensive Income. On confirmation that
the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Impairment provisions, for receivables from related parties and loans to related parties, are recognised, based on a forward-
looking expected credit loss model. The methodology, used to determine the amount of the provision, is based on whether
there has been a significant increase in credit risk since initial recognition of the financial asset, based on analysis of
internal or external information. For those where the credit risk has not increased significantly since initial recognition of
the financial asset, twelve month expected credit losses, along with gross interest income, are recognised. For those for
which credit risk has increased significantly, lifetime expected credit losses, along with the gross interest income, are
recognised. For those that are determined to be credit impaired, lifetime expected credit losses, along with interest income
on a net basis, are recognised.
The Group considers a financial asset in default, when contractual payments are 180 days past due. However, in certain
cases, the Group may also consider a financial asset to be in default, when internal or external information indicates that
the Group is unlikely to receive the outstanding contractual amounts in full, before taking into account any credit
enhancements held by the Group. A financial asset is written off, when there is no reasonable expectation of recovering
the contractual cash flows.
The Group's financial assets, measured at amortised cost, comprise trade and other receivables and cash and cash
equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits
held at call with banks, other short term highly liquid investments with original maturities of three months or less, and, for
the purpose of the Statement of Cash Flows, bank overdrafts. Bank overdrafts are shown within loans and borrowings in
current liabilities on the Consolidated Statement of Financial Position.
Fair Value through Other Comprehensive Income (FVTOCI)
The Group has 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.
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Annual Report and Accounts 2024
All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within
the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
•
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
•
Level 2: Valuation techniques, for which the lowest level input that is significant to the fair value measurement, is
directly or indirectly observable; and
•
Level 3: Valuation techniques, for which the lowest level input that is significant to the fair value measurement, is
unobservable.
For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines,
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Financial Liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was
acquired:
Fair Value through Profit or Loss (FVTPL)
This category comprises out-of-the-money derivatives, where the time value does not offset the negative intrinsic value or
any liabilities held for trading. They are carried in the consolidated statement of financial position at fair value, with changes
in fair value recognised in the Consolidated Statement of Comprehensive Income. The Group did not hold any such
liabilities at the date of IFRS 9 adoption or at the end of the reporting year.
Other Financial Liabilities 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.
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Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
1.4.15
Convertible Debt
The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components.
The amount initially attributed to the debt component equals the discounted cash flows, using a market rate of interest that
would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt
component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity
of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt
option reserve" within shareholders' equity, net of income tax effects.
1.4.16
Warrants
Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number
of an entity’s own equity instruments, are classified as equity instruments. When warrants are issued, attached to specific
loan notes, the Company estimates the fair value of the issued warrants, using the Black-Scholes pricing model, taking
into account the terms and conditions upon which the warrants were issued, value of such warrants is deducted from the
balance of loan notes, a directly attributable transaction cost. Warrants, relating to equity finance and issued together with
ordinary shares placement, are valued by residual method and treated as directly attributable transaction costs and
recorded as a reduction of share premium account based on the fair value of the warrants. Warrants, classified as equity
instruments, are not subsequently re-measured.
1.5 Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group’s Consolidated Financial Statements, requires management to make judgements, estimates
and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting
period. However, uncertainty, about these assumptions and estimates, could result in outcomes that require a material
adjustment to the carrying amount of the asset or liability, affected in future periods.
Significant Judgements in Applying the Accounting Policies
In the process of applying the Group’s accounting policies, management has made the following judgements, which have
the most significant effect on the amounts, recognised in the Consolidated Financial Statements:
Contingent Consideration for the Acquisition of 49.9% Interest in Red Rock Australasia
During the year, the Company entered into an agreement to acquire the 49.9% interest in Red Rock Australasia Pty Ltd
from Power Metals Plc, via its ownership in the holding company New Ballarat Gold Corporation Plc - see Note 24 for
details. The consideration, payable for the acquisition, includes two tranches payable in cash or shares in the event of a
threshold level of JORC compliant reserves being attained following a reassessment of the mineral resource within the
Company licence areas – see Note 24 for further details. The Directors have determined that there can be no certainty that
levels of resource will be attained sufficient to trigger the crystallisation of these contingent consideration tranches, such
that they have not been recognised as liabilities in these 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 2024, 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 £nil (2023: increase the
profit by £nil).
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 to £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.
The VUP JV asset was misappropriated some years ago by the 25% local partner by way of a sale of the project to a third
party without our consent, for a total consideration of USD 20 million. On discovery of this development, the Company
pursued a cure through the DRC courts and obtained a final and non-appealable judgment that it is entitled to 50.1% of
the USD 5 million consideration, already paid to the JV partner, for the unapproved sale of the project. The Company then
began an arbitration process in relation to the USD 15 million consideration not yet paid by the purchaser to the JV partner.
Red Rock Resources Plc
43
Annual Report and Accounts 2024
Some 30 months following the conclusion of the arbitration hearings, we are pushing for release of the award. A number
of delays have been encountered to this process, however, it now appears that the matter should be concluded in the near
term. At the same time, we have engaged in indirect discussion with the former local partner and in the last days have
reached an understanding on acceptance of the terms of settlement.
The Company therefore expects a successful conclusion in the near future to our current arbitration, with early payment of
any award.
In assessing the above matters and impact on the recoverability of the asset carrying value, the Directors have had to
apply judgements, based on the legal advice received from local counsel, as to the likelihood of a successful outcome to
the remaining legal process and the likelihood of successfully receiving funds due once the legal process has fully
completed. The Directors have estimated that the recoverable amounts greatly exceed the carrying value of the asset,
albeit it subject to the above described uncertainties, such that no impairment of the asset carrying value is required.
Whilst the Directors believe that this balance will become realised in the near term, given the time taken to date, there
remains a level of uncertainty over the timing of such an event, such that 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
During the year, the Kenyan exploration licences came due for renewal, inclusive of a 50% relinquishment obligation.
Applications for renewal have now been made and the Directors believe they have dealt with any issues raised in relation
to the 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 1.2 million 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. As at the date of
these Financial Statements, the formal renewal of the Group’s licences in Kenya remained subject to administrative and
legal processes, currently under way. However, the Directors remain strongly of the view that renewal of the licences will
be formalised in due course and note that the process of renewal has not in the past been completed until some time after
the expiry date. The administrative processes, associated with the renewal, have been affected also by the replacement
of the Responsible Cabinet Secretary and Principal Secretary.
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 1.2 million oz and a most likely
500,000 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.
During the year, the Company acquired the remaining interest in the Australia projects from its JV partner, see Note 24 for
further details.
The Company expects, subject to market conditions, to continue preparations for the listing of the Australian subsidiary
NBGC, including the intended completion of a Pre-IPO financing round for NBGC in 2025. 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 (USD/oz) – USD 2,735 (2023 USD 1,957);
•
Discount rate – 10% (2023: 10%); and
•
Annual production rate – 8,000 oz (2023: 8,000 oz).
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.
Red Rock Resources Plc
44
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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 (USD/oz) – USD 1,300;
•
Discount rate – 18%; or
•
Annual production rate – 5,000 oz.
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
the fair value implied by the last fundraising round, undertaken by the Company during preparations for its proposed listing.
The Company has determined not to pursue a listing at this time and instead is evaluating funding strategies to continue
development of its portfolio without a listing, which may include a significant private financing. The Directors of the
Company believe that there is no current indication that the current carrying value of this investment is not recoverable and
continues to monitor the investment for additional fair value datapoints. The Directors are aware of intended fundraising
activity commensurate with the levels taken as the last fair value data point in arriving at the current carrying value of the
asset, further supporting the above position.
Mining share prices typically have more volatility than most other shares and this is taken into account by management,
when considering if a significant decline in the fair value of its mining investments has occurred. Management would
consider that there is a prolonged decline in the fair value of an equity investment, when the period of decline in fair value
has extended to beyond the expectation management have for the equity investment. This expectation will be influenced
particularly by the Company development cycle of the investment.
Impairment of Non-Financial Assets
The Group follows the guidance of IAS 36 to determine, when a non-financial asset is impaired. The Group assesses, at
each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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.
Red Rock Resources Plc
45
Annual Report and Accounts 2024
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 2024
Gold
Exploration
Australia
£’000
Gold
Exploration
Kenya
£’000
Copper
Exploration
DRC
£’000
Other
Projects
£’000
Investments
£’000
Corporate
and
unallocated
£’000
Total
£’000
Exploration expenses
-
(166)
-
(127)
-
-
(293)
Administration expenses
(261)
-
(8)
(3)
(2)
(999)
(1,273)
Project development
(13)
(41)
(8)
(218)
-
-
(280)
Other project costs
-
(18)
-
(135)
-
-
(153)
Impairment of E&E assets
-
-
-
(202)
-
-
(202)
Impairment of mineral tenements
(19)
-
-
(165)
-
-
(184)
Share based payments
-
-
-
-
-
(136)
(136)
Currency gain
(3)
-
-
-
-
30
27
Other income
-
-
-
-
122
-
122
Finance costs, net
-
-
-
-
-
(640)
(640)
Net profit/(loss) before tax from
continuing operations
(296)
(225)
(16)
(850)
120
(1,745)
(3,012)
Year to 30 June 2023
Gold
Exploration
Australia
£’000
Gold
Exploration
Kenya
£’000
Copper
Exploration
DRC
£’000
Other
Projects
£’000
Investments
£’000
Corporate
and
unallocated
£’000
Total
£’000
Exploration expenses
-
(252)
-
(66)
-
-
(318)
Administration expenses
(383)
(3)
(13)
(5)
(1)
(975)
(1,380)
Project development
(14)
-
(234)
(8)
-
-
(256)
Other project costs
-
-
-
-
-
(159)
(159)
Impairment of E&E assets
-
(253)
-
-
-
-
(253)
Share based payments
-
-
-
-
-
(39)
(39)
Currency gain
(73)
-
-
-
-
84
11
Other income
-
-
-
-
228
-
228
Dividend income
-
-
-
-
-
-
-
Finance costs, net
-
-
-
-
-
(787)
(787)
Net profit/(loss) before tax from
continuing operations
(470)
(508)
(247)
(79)
227
(1,876)
(2,953)
Red Rock Resources Plc
46
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
Information by Geographical Area
Presented below is certain information by the geographical area of the Group’s activities. Revenue, from investment sales
and the sale of exploration assets, is allocated to the location of the asset sold.
Year ended 30 June 2024
UK
£’000
Africa
£’000
Australia
£’000
Total
£’000
Non-current assets
Investments in associates and joint ventures
-
1,030
-
1,030
Mineral tenements
-
-
532
532
Exploration properties
-
12,949
-
12,949
Exploration assets
-
627
-
627
FVTOCI financial assets
736
-
-
736
PPE
1
18
-
19
Non-current receivables
1,464
1,096
-
2,560
Total segment non-current assets
2,201
15,720
532
18,453
Year ended 30 June 2023
UK
£’000
Africa
£’000
Australia
£’000
Total
£’000
Non-current assets
Investments in associates and joint ventures
-
1,030
-
1,030
Mineral tenements
-
165
533
698
Exploration properties
-
12,949
-
12,949
Exploration assets
-
410
-
410
FVTOCI financial assets
736
-
-
736
PPE
1
17
-
18
Non-current receivables
1,410
1,096
-
2,506
Total segment non-current assets
2,147
15,667
533
18,347
3. (Loss)/Profit for the Year Before Taxation
(Loss)/profit for the year before taxation is stated after charging:
2024
£’000
2023
£’000
Auditor’s remuneration:
- fees payable to the Company’s auditor for the audit of consolidated and Company Financial
Statements
47
39
Directors’ emoluments (note 9)
283
319
- Share Incentive plan – Directors
8
6
- Share Incentive plan – staff
2
2
Red Rock Resources Plc
47
Annual Report and Accounts 2024
4. Administrative Expenses
Group
2024
£’000
Group
2023
£’000
Company
2024
£’000
Company
2023
£’000
Staff costs
Payroll
546
655
354
377
Pension
49
56
28
27
Consultants
40
15
40
15
HMRC / PAYE
40
42
40
42
Professional services
Accounting and Audit
124
112
111
90
Legal
9
22
7
13
Marketing
47
78
47
78
Other
10
12
-
-
Regulatory compliance
93
109
93
106
Travel
76
66
75
66
Office and Admin
General
95
38
87
30
IT and Software Costs
8
45
6
14
Rent
90
86
69
67
Insurance
47
43
42
40
Total administrative expenses
1,274
1,379
999
965
5. Finance Income/(Costs), Net
Group
2024
£’000
2023
£’000
Interest income (other than MFP finance income)
-
-
Dividend income
-
-
Interest expense & other finance costs
(640)
(613)
Total finance (costs) / income (other than MFP finance income)
(640)
(613)
MFP finance income – note 16
122
228
Total finance (costs) / income
(518)
(385)
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
48
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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
2024
£’000
2023
£’000
Project development expenses
VUP (Congo)
(8)
(161)
Galaxy (Congo)
-
-
Other (Congo)
(36)
(62)
Luanshimba (Congo)
-
(12)
Kinsevere
-
-
Zimbabwe Lithium
(107)
(64)
Other
(129)
49
Total project development expenses
(280)
(250)
Other project costs
Mid Migori Mines (Kenya)
(18)
-
Greenland
(135)
(159)
Other
-
-
Total other project expenses
(153)
(159)
7. Taxation
2024
£’000
2023
£’000
Current period taxation on the Group
UK corporation tax at 19.00% (2023: 19.00%) on profit/(loss) for the period
-
-
-
Deferred tax
Origination and reversal of temporary differences
-
-
Deferred tax assets not recognised
-
-
Tax credit
-
-
Factors affecting the tax charge/(credit) for the year
Profit/(loss) on ordinary activities before taxation
(3,012)
(2,700)
Profit/(loss) on ordinary activities at the small company UK standard rate of 19.00% (2023:
19.00%)
(572)
(519)
Income not taxable
-
-
Effect of expenditure not deductible
50
42
Losses brought forward utilised in the current period
-
-
Tax losses carried forward
522
471
Tax charge
-
-
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 £5.2 million (2023: £4.7 million). The Company has applied
the “small company” tax rate in the UK of 19% as it falls within the thresholds of profitability for application of this preferential
rate.
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
49
Annual Report and Accounts 2024
8. Staff Costs
The aggregate employment costs of staff (including Directors) for the year in respect of the Group was:
2024
£’000
2023
£’000
Wages and salaries
546
648
Pension
48
55
Social security costs
40
42
Employee share-based payment charge
40
40
Total staff costs
674
785
The average number of Group employees (including Directors) during the year was:
2024
Number
2023
Number
Executives
4
4
Administration
1
1
Exploration
5
9
10
14
The key management personnel are the Directors and their remuneration is disclosed within Note 9.
36,000,000 free shares were issued to six employees (2023: 11,675,670), including Directors. 14,976,000 partnership and
29,952,000 matching shares, making the total of 80,928,000, were issued in the year ended 30 June 2024 (2023: 4,278,853
partnership, 8,557,706 matching, 24,512,229 total).
9. Directors’ Emoluments
2024
Directors’
fees
£’000
Directors' fees -
discretionary
bonus
£’000
Consultancy
fees
£’000
Share
Incentive Plan
£’000
Pension
contributions
£’000
Social
security costs*
£’000
Total
£’000
Executive Directors
A R M Bell
120
5
15
2
10
16
168
Other Directors
S Kaintz
41
3
-
2
4
5
55
S Quinn
24
1
-
2
2
2
31
A Borrelli
24
1
-
2
-
2
29
209
10
15
8
16
25
283
2023
Directors’
fees
£’000
Directors' fees -
discretionary
bonus,
£’000
Consultancy
fees
£’000
Share
Incentive
Plan
£’000
Pension
contributions
£’000
Social
security costs*
£’000
Total
£’000
Executive Directors
A R M Bell
120
10
15
2
10
17
174
Other Directors
S Kaintz
65
5
-
2
6
9
87
S Quinn
24
2
-
2
2
2
32
A Borrelli
22
-
-
2
-
2
26
231
17
15
8
18
30
319
*Social security costs have been included in these disclosures but do not form a disclosable component of Directors
remuneration.
The highest paid Director in the current year was Mr A Bell, who was paid total remuneration of £151,400 (2023: £156,400).
Social security costs have been included in the above figures for completeness, however, does not typically form a
component of Director’s remuneration.
Red Rock Resources Plc
50
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
No Directors exercised share options in the year, (2023: nil). During the year, the Company contributed to a Share Incentive
Plan more fully described in the Directors’ Report on pages 11-14.
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.
2024
2023
(Loss)/profit attributable to equity holders of the parent
company, £
(3,010,495)
(2,952,933)
Adjusted for interest accrued on the convertible notes
-
-
Adjusted (loss) / profit attributable to equity holders of the
parent company used for diluted EPS calculation
(3,010,495)
(2,952,933)
Weighted average number of ordinary shares of £0.0001 in
issue, used for basic EPS
3,176,919,382
1,592,083,739
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
3,176,919,382
1,592,083,739
2024
2023
(Loss)/earnings per share – basic
(0.09 pence)
(0.19 pence)
(Loss)/earnings per share – fully diluted
(0.09 pence)
(0.19 pence)
At 30 June 2024, the effect of all the instruments (fully vested and in the money) is anti-dilutive as it would lead to a further
reduction of loss per share, therefore, they were not included into the diluted loss per share calculation.
Options and warrants, that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted
EPS for the periods presented:
2024
2023
Share options granted to employees – either not vested and/or out of the
money
21,000,000
21,000,000
Number of warrants given to shareholders as a part of placing equity
instruments – out of the money
849,156,350
314,178,213
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
870,156,350
335,178,213
Red Rock Resources Plc
51
Annual Report and Accounts 2024
There were no ordinary share transactions such as share capitalisation, share split or bonus issue after 30 June 2024, 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
2024
£’000
2023
£’000
Cost
At 1 July
77
77
Investment in subsidiaries *
817
-
At 30 June
894
77
Impairment
At 1 July
(1)
(1)
Charge in the year
-
-
At 30 June
(1)
(1)
Net book value
893
76
*Additions to investments in subsidiaries in the year arise from the acquisition of the remaining 49.9% interest in the equity
of Red Rock Australasia Pty Ltd, not previously held by the Company from Power Metals Plc. See Note 24 for further
details.
As at 30 June 2024 and 30 June 2023, the Company held interests in the following subsidiary companies:
Company
Country of
registration
Class
Proportion
Held
At 30 June
2024
Proportion
Held
At 30 June
2023
Nature of business
Red Rock Australasia Pty Ltd
Australia
Ordinary
100%
50.1%
Mineral exploration
New Ballarat Gold Corporation Plc
UK
Ordinary
100%
50.1%
Mineral exploration
RedRock Kenya Ltd
Kenya
Ordinary
87%
87%
Mineral exploration
RRR Kenya Ltd
Kenya
Ordinary
100%
100%
Mineral exploration
Red Rock Resources Congo S.A.U.
DRC
Ordinary
100%
100%
Holding company
African Lithium Resources PVT Ltd
Zimbabwe
Ordinary
64.5%
65%
Mineral exploration
African Lithium Resources Limited
UK
Ordinary
100%
100%
Holding Company
Lac Minerals Ltd
UK
Ordinary
100%
100%
Mineral exploration
Lacgold Resources SARLU
Ivory Coast
Ordinary
100%
100%
Mineral exploration
Faso Minerals Ltd
UK
Ordinary
100%
100%
Mineral exploration
Faso Greenstone Resources SARL
Burkino Faso
Ordinary
100%
100%
Mineral exploration
RRR Coal Ltd
UK
Ordinary
100%
100%
Holding company
RRR Lithium Limited
UK
Ordinary
100%
100%
Holding Company
Tripler Royalties Limited
UK
Ordinary
100%
100%
Holding Company
Jimano Ltd
Cyprus
Ordinary
100%
100%
Royalty Holdings
Red Rock Galaxy SA
DRC
Ordinary
80%
80%
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 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.
Red Rock Resources Plc
52
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
African Lithium Resources Limited registered office is Aldwych House 71-91 Aldwych, London, England, WC2B 4HN
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.
RRR Lithium Limited registered office is Aldwych House 71-91 Aldwych, London, England, WC2B 4HN
Jimano Ltd registered office Strovolou, 77 Strovolos Center, 4th Floor Office 401, Nicosia, Cyprus
Tripler Royalties Ltd registered office is Aldwych House 71-91 Aldwych, London, England, WC2B 4HN
Red Rock Galaxy SA office is 1320 Av Meteo 2 Q/Meteo C/Lumbumbashi, DRC
12. Investments in Associates and Joint Ventures
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Cost
At 1 July
1,251
1,251
1,114
1,114
At 30 June
1,251
1,251
1,114
1,114
Impairment
At 1 July
(221)
(221)
(3)
(3)
At 30 June
(221)
(221)
(3)
(3)
Net book amount at 30 June
1,030
1,030
1,111
1,111
The Company, at 30 June 2024 and at 30 June 2023, had significant influence by virtue other than shareholding over 20%
over Mid Migori Mining Company Ltd.
Company
Country of
incorporation
Class of
shares held
Percentage of
issued capital
Accounting year ended
Mid Migori Mining Company Limited
Kenya
Ordinary
15.00%
30 September 2024
Summarised financial information for the Company’s associates and joint ventures, where available, is given below:
For the year as at 30 June 2024:
Company
Revenue
£’000
Loss
£’000
Assets
£’000
Liabilities
£’000
Mid Migori Mining Company Limited
-
-
2,745
(2,775)
For the year as at 30 June 2023:
Company
Revenue
£’000
Profit
£’000
Assets
£’000
Liabilities
£’000
Mid Migori Mining Company Limited
-
-
2,551
(2,579)
Red Rock Resources Plc
53
Annual Report and Accounts 2024
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).
Mid Migori
Mining Company
Limited
£’000
VUP Musonoi
Mining SA
£’000
Total
£’000
Cost
At 1 July 2023
1,111
-
1,111
Additions during the year
-
-
-
Reclassified during the year
-
-
-
At 30 June 2024
1,111
-
1,111
Impairment and losses during the year
At 1 July 2023
(81)
-
(81)
The Group’s share of profit/(loss) during the year
-
-
-
At 30 June 2024
(81)
-
(81)
Carrying amount
At 30 June 2023
1,030
-
1,030
At 30 June 2024
1,030
-
1,030
13. Exploration Assets and Mineral Tenements
Group Exploration Assets
2024
£’000
2023
£’000
At 1 July
13,358
13,265
Additions
419
139
Impairments
(201)
(259)
Reclassification from other current assets (Note 17)
-
213
At 30 June
13,576
13,358
Group Mineral Tenements
2024
£’000
2023
£’000
At 1 July
698
511
Additions
17
187
Impairment
(184)
-
At 30 June
532
698
Company Exploration Assets
2024
£’000
2023
£’000
At 1 July
12,948
13,206
Impairments
-
(258)
At 30 June
12,948
12,948
Exploration assets were capitalised:
•
For the Galaxy (DRC) project since 17 October 2018, when exploration commenced at the project license in the
DRC;
•
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. Amounts, incurred on this project
to date, have been fully impaired in the current year, following uncertainty over ultimate commercialisation of the
asset;
Red Rock Resources Plc
54
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
•
For the Faso Greenstone project since the acquisition of the Bilbale licence interest on 24 December 2021
(expiring / due for renewal in November 2025); and
•
For the Ballarat project since the acquisition of the remaining license interest from RRAL on 19 June 2024.
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 had within three months to make further payment of USD 2.5 million (£2.028
million) to Kansai Mining Corporation Ltd. For further details of the payments see Note 26.
Impairments in the prior 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 in the prior year relate to expenditures undertaken on the Kenyan licence areas that had previously been
held as recoverable receivables and have been determined in the prior year to now form part of the base cost of the E&E
asset.
14. Financial Instruments at Fair Value Through Other Comprehensive Income
(FVTOCI)
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Opening balance
736
736
736
736
Additions
-
-
-
-
Disposals
-
-
-
-
Change in fair value
-
-
-
-
At 30 June
736
736
736
736
Fair Value of Investments
The fair value as at 30 June of the listed and unlisted investments was as follows:
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Quoted on London AIM
-
-
-
-
Quoted on other foreign stock exchanges
-
-
-
-
Unquoted investments at fair value
736
736
736
736
736
736
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, the fair value of the investment has been maintained at £736,281 (2023:
£736,281).
Details of the fair value measurement hierarchy are included in Note 22.
15. Cash and Cash Equivalents
Group
30 June
2024
£’000
30 June
2023
£’000
Cash in hand and at bank
38
155
38
155
Red Rock Resources Plc
55
Annual Report and Accounts 2024
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank and in hand.
Company
30 June
2024
£’000
30 June
2023
£’000
Cash in hand and at bank
17
149
17
149
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
Group
2024
£’000
Group
2023
£’000
Company
2024
£’000
Company
2023
£’000
Amounts receivable relating to VUP Joint Venture
1,096
1,096
1,096
1,096
Due from subsidiaries
-
-
2,850
2,472
MFP sale proceeds
1,464
1,410
1,464
1,410
2,560
2,506
5,410
4,978
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 USD 2.5 million in respect of USD 5 million 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 USD 15 million 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 2025.
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 year ended 30 June 2022. These amounts remain recognised as a non-current receivable, associated
with the above as at the current year end 30 June 2024.
Red Rock Resources Plc
56
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
MFP Sale Proceeds
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
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Current trade and other receivables
Prepayments
68
32
68
32
Short-term loan receivable
164
164
164
164
MFP sales proceeds – current element
239
171
239
171
Other receivables
336
303
256
234
Total
807
670
727
601
18. Trade and Other Payables
Group
Company
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Non-current liabilities
Trade and other payables
-
684
-
-
Borrowings
756
756
756
756
Total non-current liabilities
756
1,440
756
756
Current liabilities
Trade payables
2,754
1,646
2,426
1,512
Accruals
84
91
84
91
Total trade and other payables
2,838
1,737
2,510
1,602
Intra-group borrowings
-
-
1,890
2,115
Short-term borrowings
3,037
1,662
3,037
1,503
Total current liabilities
5,875
3,399
7,437
5,220
During the year, the Company took out the following additional borrowings against both new and pre-existing facilities:
•
In October 2023, convertible loan notes totalling £210,000 were issued to various investors and recognised in
current borrowings. The notes attract interest at 12% per annum and were subject to £135,000 of conversions in
the year with the notes fully retired;
•
During the year convertible loan notes of £693,645 were outstanding. £127,000 of these notes were converted,
leaving a balance of £566,645. The notes carry an interest rate of 12% per annum. The balance owing at year
end was £638,535 and is recognised in current borrowings;
•
Over the course of the year £1,050,000 was drawn on an existing loan facility with a high-net-worth investor. The
facility attracts interest at 20% per annum and carries a 20% redemption fee and has been recognised in current
borrowings;
•
During the year a loan from a high net worth investor of £50,000 remained drawn, carrying interest of 0.5% per
day and a repayment bonus of 30% and has been recognised in current borrowings;
•
During the year a loan from a high-net-worth investor of £150,000 remained drawn, carrying interest of 0.5% per
day and a repayment bonus of 25% and has been recognised in current borrowings;
Red Rock Resources Plc
57
Annual Report and Accounts 2024
•
During the year a loan from a high-net worth investor of £100,000 remained drawn, carrying interest at 20% per
annum if unpaid at redemption date and carries a 20% redemption fee and has been recognised in current
borrowings; and
•
A USD 925,000 loan note (£756,000), recognised in non-current borrowings, 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.
19. Share Capital of the Company
The share capital of the Group and the Company is as follows:
Authorized, Issued and fully paid
2024
£’000
2023
£’000
4,305,645,493 (2023: 2,480,597,806) ordinary shares of £0.0001 each
430
247
2,371,116,172 deferred shares of £0.0009 each
2,134
2,134
6,033,861,125 A deferred shares of £0.000096 each
579
579
As at 30 June
3,143
2,960
Movement in ordinary shares
Number
Nominal
£’000
As at 30 June 2022 – ordinary shares of £0.0001 each
1,256,147,238
126
Issued on 27 Sep 2022 at 0.4 pence per share (allotment for cash)
40,000,000
4
Issued on 19 Dec 2022 at 0.1 pence per share (non-cash)
28,000,000
3
Issued on 19 Dec 2022 at 0.2829 pence per share (non-cash)
17,000,000
2
Issued on 2 Mar 2023 at 0.25 pence per share (non-cash)
26,753,616
3
Issued on 13 April 2023 at 0.18 pence per share (allotment for cash)
56,487,601
6
Issued on 19 April 2023 for 0.1661 pence per share (non-cash)
123,888,888
12
Issued on 11 May 2023 for 0.15741 pence per share (non-cash)
15,055,706
2
Issued on 18 May 2023 for 0.1425 pence per share (allotment for cash)
19,176,965
2
Issued on 18 May 2023 for 0.185 pence per share (non-cash, SIP)
376,028,070
38
Issued on 18 May 2023 for 0.21 pence per share (non-cash, SIP)
11,675,670
1
Issued on 31 May 2023 for 0.1298 pence per share (non-cash)
12,836,559
1
Issued on 5 June 2023 for 0.1425 pence per share (non-cash)
43,781,746
4
Issued on 5 June 2023 for 0.11 pence per share (non-cash)
45,964,912
4
Issued on 27 June 2023 for 0.11385 pence per share (non-cash)
33,237,805
3
Issued on 27 June 2023 for 0.116908 pence per share (non-cash)
65,876,152
7
Issued on 27 June 2023 for 0.11 pence per share (non-cash)
23,657,440
2
Issued on 28 June 2023 for 0.1650 pence per share (allotment for cash)
110,029,423
11
Issued on 27 Sep 2022 at 0.4 pence per share (allotment for cash)
175,000,000
17
As at 30 June 2023 – ordinary shares of £0.0001 each
2,480,597,791
248
Issued on 10 Aug 2023 at 0.2 pence per share (non-cash)
63,500,000
6
Issued on 29 Aug 2023 at 0.2 pence per share (non-cash)
26,000,000
3
Issued on 18 Dec 2023 at 0.011 pence per share (allotment for cash)
100,000,000
10
Issued on 21 Dec 2023 at 0.0075 pence per share (allotment for cash)
666,666,667
66
Issued on 12 Feb 2024 at 0.00637 pence per share (non-cash)
211,482,353
21
Issued on 12 Apr 2024 at 0.0051 pence per share (allotment for cash)
509,804,000
51
Issued on 12 Apr 2024 for 0.06 pence per share (non-cash, SIP)
80,928,000
8
Issued on 18 June 2024 for 0.015 pence per share (non-cash, SIP)
166,666,667
17
As at 30 June 2024 – ordinary shares of £0.0001 each
4,305,645,478
430
The total net cash, raised from allotments of shares was £772,000 for the year (£488,000 in non-cash share allotments,
giving rise to total share allotments of £1,202,000 in value).
Red Rock Resources Plc
58
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
Ordinary shares represent the Company's basic voting rights and reflect the equity ownership of the Company. Ordinary
shares carry one vote per share and each share gives equal right to dividends. These shares also give right to the
distribution of the Company's assets in the event of winding-up or sale.
Subject to the provisions of the Companies Act 2006, the deferred shares may be cancelled by the Company, or bought
back for £1 and then cancelled. The deferred shares are not quoted and carry no rights whatsoever.
Warrants
At 30 June 2024, the Company had 849,156,350 warrants in issue (2023: 314,178,213) with a weighted average exercise
price of £0.0019 (2023: £0.0023). Weighted average remaining life of the warrants, at 30 June 2024, was 615 days (2023:
678 days). The majority of the warrants were issued by the Group to its investors in the capacity of investors and, therefore,
are outside of IFRS 2 scope. Warrants issued to finance providers, not subscribing to new ordinary shares, are recognised
within the scope of IFRS 2.
Group and Company
2024
number of
warrants
2023
number of
warrants
Outstanding at the beginning of the year
314,178,213
389,430,010
Granted during the period
534,978,137
304,945,821
Exercised during the period
-
-
Cancelled during the period
-
-
Expired during the period
-
(380,197,618)
Outstanding at the end of the year
849,156,350
314,178,213
During the year ended 30 June 2024, the Company had the following warrants to subscribe for shares in issue:
Grant date
Expiry date
Warrant exercise
price, £
Number of warrants
16 Aug 2022
16 Aug 2025
0.0045
50,778,159
* 16 Aug 2022
18 Jan 2026
0.008
51,916,664
13 April 2023
12 Oct 2024
0.0035
123,888,888
13 April 2023
12 Oct 2024
0.0035
12,388,888
11 May 2023
10 May 2026
0.0014
75,205,614
7 Aug 2023
18 Jan 2026
0.0025
3,135,000
22 Aug 2023
21 Aug 2025
0.002
50,000,000
19 June 2024
19 June 2027
0.0015
100,000,000
20 June 2024
21 June 2026
0.001125
381,843,137
Total warrants in issue at 30 June 2024
849,156,350
* In August 2023, the Company’s 51,916,664 warrants outstanding were repriced from 0.8 pence to 0.25 pence and expiry
date extended from 16 Feb 2025 to 18 Jan 2026. Consequently, the Company undertook a fair value determination of
these instruments as if they had been issued on the date of modification, on the basis of the new expiry and exercise price
and utilising volatility and risk free rates, based on the date of modification and remaining contractual life, with the difference
in the fair value determined for the new terms of the warrants as if they had been issued at the date of modification and
the original fair value, recognised on grant having been recognised in the current year.
The aggregate fair value, related to the share warrants granted during the reporting period to non-equity finance providers
and recognised in finance costs for the year, was £96,781 (2023: £173,825).
Red Rock Resources Plc
59
Annual Report and Accounts 2024
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.
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.
At 30 June 2024, the Company had outstanding options to subscribe for ordinary shares as follows:
Options issued on
24 August 2020 at 0.2p
per share, expiring on
19 August 2025
Number
Options issued on
24 August 2020 at 0.25p
per share, expiring on
19 August 2025
Number
Total
Number
A R M Bell
5,500,000
5,500,000
11,000,000
Employees
5,000,000
5,000,000
10,000,000
Total
10,500,000
10,500,000
21,000,000
Red Rock Resources Plc
60
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
Company and Group
2024
2023
Number of
options
Weighted
average
exercise
price
pence
Number of
options
Weighted
average
exercise
price
pence
Outstanding at the beginning of the year
21,000,000
2.25
50,000,000
1.41
Options issued in the year
-
-
-
-
Options exercised in the year
-
-
-
-
Options lapsed in the year
-
-
(29,000,000)
0.46
Outstanding at the end of the year
21,000,000
2.25
21,000,000
2.25
Nil share options were granted by the Company in the reporting year (2023: Nil). The weighted average fair value of each
option granted during the year was £nil (2023: Nil). The exercise price of options, outstanding at 30 June 2024, ranged
between £0.0025 and £0.02 (2023: £0.0025 and £0.02 Their weighted average contractual life was 1.14 years (2023: 1.63
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 44,928,000 Partnership and Matching Shares were awarded and 36,000,000 Free
Shares (2023: 12,836,559 Partnership and Matching Shares and 11,675,670 Free Shares) with a fair value of £0.0060 for
the Partnership and the Matching Shares and £0.0060 for the Free Shares (2023: £0.0021 for the Partnership and the
Matching Shares and £0.00185 for the Free Shares), resulting in a share-based payment charge of £39,571 (2023:
£39,571), included in the administration expenses line in the Income Statement.
Red Rock Resources Plc
61
Annual Report and Accounts 2024
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
Group
2024
£’000
Group
2023
£’000
Company
2024
£’000
Company
2023
£’000
Financial assets
Available for sale financial assets at fair value through OCI
Unquoted equity shares
736
736
736
736
Quoted equity shares
-
-
-
-
Total available for sale financial assets at fair value through OCI
736
736
736
736
Financial assets FVTPL (Para warrants)
-
-
-
-
Total financial assets carried at fair value through profit and loss
736
736
736
736
Cash and cash equivalents
38
155
17
149
Loans and receivables
Non-current receivables
2,560
2,506
5,410
4,978
Other receivables – current
807
506
727
601
Total loans and receivables carried at amortised cost
3,367
3,012
6,137
5,579
Total financial assets
4,141
3,903
6,890
6,464
Total current financial assets
845
661
744
750
Total non-current financial assets
3,296
3,242
6,146
5,714
Financial liabilities
Short-term borrowings, including intra-group
3,037
1,662
4,927
3,618
Long-term borrowings
756
1,440
756
756
Trade and other payables
2,838
1,646
2,511
1,511
Total current financial liabilities
6,631
4,748
8,194
5,885
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
62
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
FVTOCI financial assets
– Unquoted equity shares
-
736
-
736
– Quoted equity shares
-
-
-
-
FVTPL (Para warrants)
-
-
-
-
Company
30 June 2024
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
FVTOCI financial assets
– Unquoted equity shares
-
736
-
736
– Quoted equity shares
-
-
-
-
FVTPL (Para warrants)
-
-
-
-
Group
30 June 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
FVTOCI financial assets
– Unquoted equity shares
-
736
-
736
– Quoted equity shares
-
-
-
-
FVTPL (Para warrants)
-
-
-
-
Company
30 June 2023
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
FVTOCI financial assets
– Unquoted equity shares
-
736
-
736
– Quoted equity shares
-
-
-
-
FVTPL (Para warrants)
-
-
-
-
Red Rock Resources Plc
63
Annual Report and Accounts 2024
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;
•
Obtaining funding from a variety of sources; and
•
Maintaining a reputable credit profile.
The Directors are confident that adequate resources exist to finance operations for commercial exploration and
development and that controls over expenditure are carefully managed.
Management intend to meet obligations as they become due through ongoing revenue streams, the sale of assets, the
issuance of new shares, the collection of debts owed to the Company and the drawing of additional credit facilities.
Market Risk
Interest Rate Risk
The Company is not exposed to any material interest rate risk.
Equity Price Risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market prices largely due to demand and supply factors for commodities, but also include political, economic, social,
technical, environmental and regulatory factors.
Foreign Currency Risk
The Group’s transactions are carried out in a variety of currencies, including Sterling, Australian Dollar, US Dollar, Kenyan
and Shilling.
To mitigate the Group’s exposure to foreign currency risk, non-Sterling cash flows are monitored. The Group does not
enter into forward exchange contracts to mitigate the exposure to foreign currency risk as amounts paid and received in
specific currencies are expected to largely offset one another and the currencies most widely traded in are relatively stable.
The Directors consider the balances, most susceptible to foreign currency movements, to be financial assets with FVTOCI.
Red Rock Resources Plc
64
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
These assets are denominated in the following currencies:
Group
30 June 2024
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Total
£’000
Cash and cash equivalents
17
17
-
-
4
38
Amortised cost financial assets - Other receivables
724
-
1
-
103
828
FVTOCI financial assets
-
-
736
-
-
736
Amortised costs financial assets - Non-current receivables
-
-
2,560
-
-
2,560
Trade and other payables, excluding accruals
1,195
17
288
1,248
5
2,753
Short-term borrowings
3,037
-
-
-
-
3,037
Long term borrowings
-
-
756
-
-
756
Group
30 June 2023
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Total
£’000
Cash and cash equivalents
149
2
-
-
4
155
Amortised cost financial assets - Other receivables
228
10
374
-
58
670
FVTOCI financial assets
-
-
736
-
-
736
Amortised costs financial assets - Non-current receivables
-
-
2,506
-
-
2,506
Trade and other payables, excluding accruals
355
42
286
959
4
1,646
Short-term borrowings
1,503
-
159
-
-
1,662
Long term borrowings
-
684
756
-
-
1,440
Company
30 June 2024
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Total
£’000
Cash and cash equivalents
17
-
-
-
-
17
Amortised cost financial assets - Other receivables
3,598
-
-
-
-
3,598
FVTOCI financial assets
-
-
736
-
-
736
Amortised costs financial assets - Non-current receivables
-
-
2,560
-
-
2,560
Trade and other payables, excluding accruals
966
7
204
1,248
2
2,427
Short-term borrowings, including intra-group
4,926
-
-
-
-
4,926
Long term borrowings
-
-
756
-
-
756
Company
30 June 2023
GBP
£’000
AUD
£’000
USD
£’000
CAD
£’000
Other
£’000
Total
£’000
Cash and cash equivalents
149
-
-
-
-
149
Amortised cost financial assets - Other receivables
2,700
-
373
-
-
3,073
FVTOCI financial assets
-
-
736
-
-
736
Amortised costs financial assets - Non-current receivables
-
-
2,506
-
-
2,506
Trade and other payables, excluding accruals
351
-
200
959
1
1,511
Short-term borrowings, including intra-group
3,618
-
-
-
-
3,618
Long term borrowings
-
-
756
-
-
756
Exposures to foreign exchange rates vary during the year, depending on the volume and nature of overseas transactions.
Red Rock Resources Plc
65
Annual Report and Accounts 2024
23. Reconciliation of Liabilities Arising from Financing Activities and Major Non-Cash
Transactions
Group
30 June
2023
Cash
flow
loans
received
Cash flow
principal
re-payment
Cash
flow
Interest
paid
Non-cash
flow Forex
movement
Non-cash
flow -
Conversion
Non-cash
flow
Interest
and
arrangeme
nt fee
accreted
Non-cash
flow
Introduce
rs fee
accrued
30 June
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Loan from
institutional
investors
-
-
-
-
-
-
-
-
-
Convertible
notes
694
210
-
-
-
(262)
83
-
725
Other loans
967
1,250
(79)
-
-
(352)
525
-
2,311
Total
1,661
1,460
(79)
-
-
(614)
608
-
3,036
Company
30 June
2023
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
2024
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Loan from
subsidiary
2,115
-
(225)
-
-
-
-
-
1,890
Loan from
institutional
investors
-
-
-
-
-
-
-
-
-
Convertible
notes
694
210
-
-
-
(262)
83
-
725
Other loans
809
1,250
(79)
-
-
(193)
525
-
2,312
Total
3,618
1,460
(304)
-
-
(455)
608
-
4,927
Significant non-cash transactions from financing activities, in relation to raising new capital, are disclosed in Note 18.
On 19 June 2024, the Company announced the completion of the acquisition of the remaining 49.9% interest in the
Company’s subsidiary New Ballarat Gold Corporation Plc, which holds the Group’s Australian gold interests, from Power
Metals Plc. The transaction includes significant non cash components to the consideration payable. See Note 24 below for
details.
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
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 price 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 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.
Red Rock Resources Plc
66
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
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 of 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.
Additionally, 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 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.
On 12 February 2024, the Company announced the partial conversion and full retirement of its loan notes, issued 23
October 2023 for 211,482,353 shares at a price of £0.000637 per share.
On 12 April 2024, the Company announced that it had raised gross proceeds of £260,000 through the issuance of
501,804,000 new ordinary shares at a price of £0.00051 per share.
On 22 April 2024, the Company announced the issuance of 80,928,000 new ordinary shares to employees of the Company
under the Company’s Share Incentive Plan for the 2023-24 tax year as agreed by the Trustees of the plan.
On 19 June 2024, the Company announced the completion of the acquisition of the remaining 49.9% interest in the
Company’s subsidiary Red Rock Australasia Pty Ltd (“RRAL”), which holds the Group’s Australian gold interests, from
Power Metals Plc (“POW”). Consideration for the acquisition of the interest from the JV partner comprised the following:
•
£250,000 in Company shares, priced at 0.15p each, issuable immediately on close of the agreement and with 1:1
attendant warrants at 0.25p strike and exercisable for 3 years;
•
£250,000 in convertible loan notes to be issued immediately on close of the agreement, converting at the price of
any placing in excess of £200,000 taking place within 6 months of transaction close, failing which become
repayable in cash;
•
£250,000 in cash 2 months from transaction completion;
•
£250,000 in cash or shares, at the Company election and based on 5 day VWAP at the time of the election, 9
months from transaction completion;
•
£250,000 in cash or shares, at the Company election and based on 5 day VWAP at the time of the election, on
achievement of a 20,000oz gold JORC on the assets acquired; and
•
£250,000 in cash or shares, at the Company election and based on 5 day VWAP at the time of the election, on
achievement of a 200,000oz gold JORC on the assets acquired.
Included in the assets acquired by the Company in the above transaction was the loan account payable by RRAL to POW
totalling £845,237, which was assigned to the benefit of the Company and so forms part of the calculation of the accounting
loss on acquisition of the non-controlling interest taken to “other reserves” on recognition of the transaction.
VUP Project – Democratic Republic of Congo
In the DRC, we seek compensation for the illegitimate process, whereby our majority-owned project was purportedly sold
behind our backs at a serious undervaluation at the end of 2019 by local partner VUP, a fact that did not come to light until
some time afterwards. The Company conducted successful legal proceedings at the end of 2021 and beginning of 2022
and established its right to 50.1% of the USD 5 million already paid by the purchaser by a final and non-appealable
judgment. The Company then went to arbitration, under the aegis of the Presidential office, in order to ensure that the
50.1% of the USD 15 million still to be paid by the purchaser came to Red Rock. The Company was on the point of
achieving a result from the arbitration in November last year, in the normal course and after a long process of negotiation,
debate, discussion, and pressure to announce a result.
Red Rock Resources Plc
67
Annual Report and Accounts 2024
A conclusion to the arbitration was then deferred until after the end-2023 Presidential and parliamentary elections, in order
to distance the result from the pre-election period, where hurried and irregular transactions can sometimes occur. We have
followed a regular process and it is better that it is seen as such and does not get caught up in any election-period
controversies.
It was of course painful for us to agree to a further delay, but the best advice was to accept this, and we were assured the
delay would be a short one. In fact it was not. After the election there were Electoral Tribunal hearings before the President
could take up his position, followed by a process of selection of a Prime Minister, and then a long and painful process of
selecting a Speaker and then choosing a Cabinet, from the plethora of political parties that had formed the Presidential
alliance, that commanded sufficient consent to win Parliamentary approval.
Then a new Chief of Staff of the Presidential Office had to be selected, with his predecessor, who had presided over our
arbitration hearings, going off to be a Minister. By this time we were heading into the Autumn, and the new Chief of Staff
barely had his feet under the desk.
Thus it was only towards the end of the year that we could get attention paid to our case. From the President down, there
is awareness of our case, but in a country of nearly 100m with an occasionally high intensity conflict, raging on its Eastern
border with Rwanda, our case is never top of the agenda of a very busy office. It is probably fair to say that there is broad
recognition of our rights, which have been confirmed in a formal letter to the Presidency by the lawyer acting for VUP at all
material times. We assert that we are entitled to 50.1% of the sale proceeds of the JV assets, ie USD 7.5 million of the
USD 15 million under arbitration and USD 10 million out of USD 20 million in total.
Parastatal miner Gécamines has paid USD 5 million to VUP, in respect of which we have our judgment, but has not yet
paid the other USD 15 million, though, is ready to do so and of course has the money: it is this in relation to which we have
been arbitrating.
We have also reached out to certain persons, who can bring VUP to the table, and believe we have the outline of an
agreement, though we wait for a date, where we might meet to sign. Our preference is to sign a settlement in front of the
Chief of Staff’s office, since that would carry its own enforcement and completion mechanisms, but the latter office acts
slowly, though, we have promises that a concluding session will be called imminently. A private ceremony is also possible.
We are working also through other channels since we have other possible causes of action locally and the harms we have
suffered, including lost interest and opportunity, cost, and delay are not fully compensated by an arbitration settlement.
There is some recognition of this and other settlements are possible.
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 year, the Company entered into an
agreement with POW for the purchase of their 49.9% holding. See Note 24 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 2024 and at 30 June
2023 are shown in the Director’s Report; and
•
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 2024, the Company issued 75 million new ordinary shares at a price of 0.045 pence per share in settlement of
conversion of £33,750 of debt owed to a service provider.
On 4 July 2024, the Company issued 405,175,088 new ordinary shares at a price of 0.045 pence per share in conversion
of debts totalling £182,329.
On 16 August 2024, the Company issued 44,444,444 new ordinary shares at a price of 0.045 pence per share in conversion
of £20,000 of debts.
Red Rock Resources Plc
68
Annual Report and Accounts 2024
Notes to the Financial Statements
for the year ended 30 June 2024, continued
On 23 August 2024, the Company announced the extension of the maturity of existing convertible loan notes to 18
November 2024, alongside partial conversion of £68,403 of interest by the issuance of 129,628,588 new ordinary shares
at a price of 0.0475p per share. The extension of the convertible loan notes maturity includes an adjustment of the
conversion price of the notes to 0.095 pence per share and adjustment of the attendant warrants strike price to 0.11875p
per share. An extension fee was also payable by way of issuing additional warrants to the noteholders to the value of 5%
of amounts extended, with such warrants, having a strike price of 0.11875p per share and exercisability period of 3 years.
On 27 August 2024, the Company issued 44,444,444 new ordinary shares at a price of 0.045 pence per share in conversion
of £20,000 of debts.
On 26 September 2024, the Company issued 54,444,444 new ordinary shares at a price of 0.045 pence per share in
conversion of £24,500 of debt.
On 23 October 2024, the Company issued 597,014,925 new ordinary shares at a price of 0.0335 pence per share to raise
£200,000 in gross cash proceeds.
On 11 December 2024, the Company announced an amendment to its agreement with Power Metals Plc (“POW”) as
regards consideration, payable for the acquisition of the 49.9% interest in Red Rock Australasia Pty Ltd (“RRAL”) as
follows:
•
£200,000 of the £250,000 payable in cash nine months after completion of the acquisition of POW's holding
in RRAL has been paid by the Company with the remaining £50,000 owed being rescheduled for payment on 20
January 2025;
•
The £250,000 convertible loan notes, issued to the POW at Completion and expiring on 19 December 2024, will
instead be repaid in cash on 19 March 2025; and
•
The 166,666,667 Company warrants, issued to POW and expiring three years after the date of issue, will be
repriced to an exercise price of 0.041 pence each.
27. Commitments
As at 30 June 2024, 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 30 April 2024, the Company extended its existing lease at We Work, Aldwych House, through to 30 June
2026. Total lease rentals, payable over the full term to June 2026 are £147,492. However, as the lease allows for
a 3 month notice period to terminate, no lease liability and corresponding right of use asset has been recognised
in these financial statements.
•
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 to the point of an Indicated
Mineral Resource of 2 million oz of gold. Red Rock was to have full management rights of the operations and of
the conduct of legal proceedings on behalf of both Mid Migori Mines and itself. On 15 June 2018, Red Rock
announced a revision to this agreement. The effect of the revision is that Kansai exchanged its 25% carried
interest under the 2015 agreement for a USD 50,000 payment, leaving Red Rock with a 100% interest. In the
event of a renewal or reissue of licenses, covering the relevant assets, the Company will within three months
make further payments, subject to such renewal or reissue not being on unduly onerous terms, as follows: (1)
USD 2.5 million payable in cash; (2) a USD 1 million promissory note, payable 15 months after issue; and (3)
£0.500 million of warrants into Red Rock shares at a price 20% above their average closing price on the three
trading days prior to issue. This agreement was further amended on 21 December 2020 through agreement with
Kansai to pay USD 1 million, with all other amounts having been settled since. As at the reporting date, the amount
of USD 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.
Red Rock Resources Plc
69
Annual Report and Accounts 2024
•
On 19 June 2024 the Company completed the acquisition of the remaining 49.9% equity interest in Red Rock
Australasia Pty Ltd from Power Metals Plc. The acquisition agreement includes unconditional deferred
consideration, which has been recognised as a liability in these Financial Statements, and conditional
consideration, which has not been recognised as a liability in these Financial Statements due to the inability to
assess the probability of the conditions for such consideration to become payable being met. The two tranches
of conditional consideration are as follows:
o
£250,000 in cash or shares (at the Company election and priced at 5 day VWAP) in the event of a JORC
determination in excess of 20,000oz of gold in any of the Company held licence areas; and
o
£250,000 in cash or shares (at the Company election and priced at 5 day VWAP) in the event of a JORC
determination in excess of 200,000oz of gold in any of the Company held licence areas.
28. Control
There is considered to be no controlling party.