Company No. 05363956
Annual Report and Accounts
For the year ended 30 September 2021
Contents
Our Performance
3
5
Chairman’s Statement
Strategic Report
5
5
7
14
16
Organisation Overview
Financial & Performance Review
Operating Review
Risks & Uncertainties
Section 172 (1) Statement
Our Responsibilities
18 Directors’ Responsibilities
19 Directors’ Report
21
Board of Directors
22 Corporate Governance
22 Chairman’s Overview
23 Corporate Governance Statement
25
26
Audit Committee Report
Remuneration Committee Report
26 Nomination Committee Report
Our Financials
27
Independent Auditor’s Report
31 Consolidated Income Statement
31 Consolidated Statement of Comprehensive Income
32 Consolidated and Company Statements of Financial
Position
33 Consolidated Statement of Changes in Equity
34 Company Statement of Changes in Equity
35 Consolidated and Company Statements of Cash Flows
36 Notes to the Financial Statements
Annual General Meeting
54 Notice of Annual General Meeting
55
57
Annual General Meeting - Explanatory Notes
Voting at the Annual General Meeting, Electronic
Voting, Proxy Notes and Instructions
IBC Company Information
2
Sunrise Resources plc Annual Report & Accounts 2021
Chairman’s Statement
Dear Shareholders,
In 2021 our attention has been
firmly fixed on the development
of our CS Pozzolan-Perlite
Project and the valorisation of
non-core projects. Progress is
being made on both fronts.
For most of the year we have
been working with an existing
cement manufacturer and
ready-mix concrete company
(CRMC) on a programme of
commercial scale testwork. This
started with a jointly funded test mining programme and the delivery
of a 500-ton bulk sample to the CRMC’s cement plant for test grinding.
The CS bulk sample material was successfully ground to the target size
direct from run-of-mine ore without the need for crushing. This offers
the potential of minimal site infrastructure and lower costs if this can
be applied more widely. The objective was to assess the suitability of
using the CRMC’s surplus cement milling facility for grinding the CS
natural pozzolan. The use of this surplus facility will allow for a low
capital cost, low risk start up to production. The ground pozzolan
produced by the CRMC was then tested on a commercial scale with
excellent results confirming the Company’s own extensive laboratory
test work results and our CS material as a high quality natural pozzolan.
The CRMC is an internationally recognised company and has a
substantial ready-mix concrete business. The ready-mix business is a
captive customer for its cement products and can use CS natural
pozzolan as a replacement for the large volumes of coal power fly ash
it has traditionally used. The US supply of coal fly ash is now declining
with the continuing closure of US coal-fired power plants. The COP26
Conference in 2021 has heralded the closure of the coal industry and
a new urgency to find materials that can replace fly ash in concrete.
Commercial discussions with the CRMC have progressed to the point
where the CRMC now has the support of its Board to enter into a joint
development of the CS Project. I met with the President of the CRMC
last week and detailed financial terms are being discussed. A second
major building materials producer has also been testing our materials
during this year although discussions are at an earlier stage.
We acknowledge that progress may appear slow, and this has been
frustrating for shareholders as well as management, but the cement
and concrete industries are conservative and have traditionally been
slow to change and adopt new technologies and materials.
Nevertheless, your Board believes that the value of the CS Project has
only been enhanced during the year and change is now inevitable.
Our negotiations are taking place against a background of fundamental
industrial change driven by climate targets and the inexorable drive to
reduce carbon emissions. Concrete is the second most used material
in the world after water and one of the hardest to decarbonise as the
production of traditional Portland cement is responsible for 7-8% of
global carbon emissions.
California is at the forefront of this change and cement producers in
California are under pressure, not only from new State legislation
mandating carbon neutrality by 2045 and carbon caps but also from
their customers who are themselves under pressure to build greener
structures with lower embodied carbon. At the same time, the market
outlook for cement and concrete demand in the USA is very positive
and enhanced by the recent signing into law in the US of the $1trillion
Infrastructure Bill.
We continue to advance the testing of the perlite from our CS Project
where market developments have also been favourable as outlined in
the Operating Review on page 7. Our potential customers’ testwork was
delayed due to the low availability of furnace capacity and the results
muddied by poor sizing of the raw material supplied, but they have
been sufficiently encouraged to move forward with additional testing
and additional raw material was mined during the year for this purpose.
As we advance the CS Project we have this year also been looking to
the future and your Board has ambitions to build on its experience at
the CS Project to expand its pozzolan business. The Company’s
specific opportunity for the CS Project is for use in the concrete markets
in southern California and southern Nevada, but similar opportunities
for the supply of natural pozzolan exist in all of the major population
centres in the western USA and the Company has been researching
opportunities in these additional markets.
As a result of this ongoing research, we have staked additional claims
covering a deposit of natural pozzolan near the historic settlement of
Hazen in northern Nevada, which is rail-linked to the markets of Reno
and northern California. It is early days, but initial testing results are
positive. The Company is also evaluating markets for the CS Pozzolan
and Hazen Pozzolan as a lightweight aggregate which has a high
demand and high value in lightweight concrete and facing bricks in
earthquake prone California.
In a separate development the Company, whilst researching pozzolan
opportunities, has identified an opportunity for the rare industrial
mineral sepiolite near Pioche in Nevada. Sepiolite is a clay used as a
viscosity modifier in a number of materials, as well as an absorbent.
Claims have been staked and positive initial tests by a European
industrial minerals producer led to a successful joint field evaluation
last week.
During the year we continued with our strategy to divest non-core
projects and reached agreement with Power Metal Resources to sell
our Garfield and Stonewall projects for cash, shares, warrants and a
royalty interest. We also leased our Jackson Wash claims to Kinross
Gold (the fifth largest gold miner globally) which is exploring for gold
Sunrise Resources plc Annual Report & Accounts 2021
3
Chairman’s Statement continued
on adjacent claims and we also granted Kinross an option to purchase
these claims whilst retaining royalty rights.
Also, in line with strategy to carry out drilling programmes on projects
where this might encourage potential joint venture partners, we drilled
our Baker’s Gold Project in Western Australia, intersecting high-grade
gold mineralisation that warrants follow up. We also received the high-
grade silver assay results from last years’ drilling at the Clayton Silver
Project and are responding to a number of joint venture enquiries.
In 2021, despite the US COVID-19 related travel ban, we have been
able to continue business largely as usual and now the US recently
opened up to travel from the UK and we are hoping for a more
normalised business in 2022.
For our next Annual General Meeting we will be returning to our usual
venue, Arundel House, 6 Temple Place, London. WC2R 2PG, in London,
on Thursday 27 January 2022. The Notice of AGM is set out on
page 54. Further detailed instructions on proxy voting are on pages 57
and 58. In order to protect the health of our staff and shareholders
certain COVID-19 protocols may be in place at the meeting. Please see
the notes on page 55. For those who do not wish to attend, we are
encouraging shareholders to appoint the Chairman as their proxy
(online at www.signalshares.com or by requesting and submitting a
hard copy Form of Proxy).
I look forward to reporting further progress in 2022 and wish all our
shareholders a Merry Christmas and a Happy New Year.
Patrick Cheetham
Executive Chairman
10 December 2021
4
Sunrise Resources plc Annual Report & Accounts 2021
Strategic Report
The Directors of the Company and
its subsidiary
undertakings (which together comprise “the Group”)
present their Strategic Report for the year ended
30 September 2021.
The principal activity of the Company is the acquisition,
exploration and development of mineral projects, primarily in
the western USA.
Our strategy is to develop the CS Pozzolan-Perlite Project
through to profitable production in order that the Company’s
activities become self-funding and to unlock the value inherent
in its portfolio of mineral projects through sale, joint venture or
other arrangements.
The Company’s Business Model is to acquire 100% ownership
of mineral assets at minimal expense. This usually involves
staking claims as was the case for the CS and NewPerl Projects
or applying for exploration licences from the relevant authority,
as was the case in Australia. In other cases, rights are
negotiated with existing project owners for initially low periodic
payments that rise over time as confidence in the project value
increases and this was the case for the Bay State Silver Project.
The Group currently operates with a low-cost base to maximise
the funds that can be spent on value adding exploration and
development activities. The Company’s administration costs are
reduced via a cost sharing Management Services Agreement
with Tertiary Minerals plc.
The Strategic Plan is on track although the timeframe for first
commercial production from the CS Project has moved out due
to delays in customer trials and protracted offtake negotiations.
Further details of our progress on the CS Project are given in
the Operating Review set out on pages 7 to 13.
The Company’s activities are financed by periodic capital
raisings, through private share placings. For more advanced
projects such as the CS Project the Board will seek to secure
additional funding from a range of sources, for example debt
funding, pre-financing through off-take agreements and other
joint arrangements.
Over the past few years, the Company has established a
valuable portfolio of drill-ready precious metal, base metal and
industrial mineral projects. Our strategy remains to valorise
those projects through sale or other arrangements seeking,
wherever possible, free-carried exposure to increases in value
and production from the projects. Examples during the year
include the sale of our interests in the Garfield and Stonewall
Projects as detailed on page 12. This strategy allows for drill
testing of drill ready targets in order to add further value prior
to offering these projects for joint venture or sale. This process
was initiated with a drill programme at the Clayton Silver-Gold
Project last year and continued with drill testing of the Baker’s
Gold Project in Australia in 2021 as set out on page 12.
Organisation Overview
The Group’s business is directed by the Board and is managed
by the Executive Chairman. The Company has a Management
Services Agreement with Tertiary Minerals plc (“Tertiary”) which
was the original parent of the Company. Under this cost sharing
agreement Tertiary provides all of
the Company’s
administration and technical services, including the technical
and management services of the Executive Chairman, at cost.
Day-to-day activities are managed from Tertiary’s offices in
Macclesfield in the United Kingdom, but the Group operates in
two other countries and the corporate structure of the Group
reflects the historical pattern of project acquisition by the Group
and the need, where appropriate, for fiscal and other reasons,
to have incorporated entities in particular territories.
The Group’s exploration activity in Nevada, USA, is undertaken
through two local subsidiaries, SR Minerals Inc. and Westgold
Inc.
In Australia the Company operates through an Australian
subsidiary, Sunrise Minerals Australia Pty Ltd.
The Board of Directors comprises two independent non-
executive directors and the Executive Chairman. Their profiles
are provided on page 21. The Executive Chairman is also
Executive Chairman of Tertiary, but otherwise the Board is
independent of Tertiary. Tertiary is not a significant shareholder
(as defined under the AIM Rules) in the Company.
Financial & Performance Review
The Group is not yet producing minerals and so has no income
other than a small amount of bank interest. Consequently, the
Group is not expected to report profits until it disposes of or is
able to profitably develop or otherwise turn to account its
exploration and development projects.
The financial statements for the Group are set out in detail on
pages 31 to 53. The Group reports a loss of £335,252 for the
year (2020: £302,902) after administration costs of £318,630
(2020: £298,980) and after crediting interest receivable of £61
(2020: £261). The loss includes expensed pre-licence and
reconnaissance exploration costs of £17,320 (2020: £4,183),
impairment of exploration assets of £30,021 (2020: £Nil) and
gain on sale of exploration assets of £30,658 (2020: £Nil).
Administration costs include an amount of £19,633 (2020:
£18,932) as non-cash costs for the value of certain share
warrants held by employees of both Tertiary and Sunrise,
calculated in accordance with IFRS 2. Cash administration
costs are therefore £298,967 (2020: £280,048).
Sunrise Resources plc Annual Report & Accounts 2021
5
Strategic Report continued
The Financial Statements show that, at 30 September 2021, the
Group had net current assets of £399,384 (2020: £1,048,356).
This represents the cash position and receivables, less trade
and other payables. These amounts are shown in the
Consolidated and Company Statements of Financial Position
on page 32 and are also components of the Net assets of the
Group. Net assets also include various “intangible” assets of
the Company. As the term suggests, these intangible assets are
not cash assets but include some of this year’s and previous
years’ expenditure on mineral projects where that expenditure
meets the criteria in Note 1(d) of the accounting policies. The
intangible assets total £2,133,137 (2020: £1,867,218) and a
breakdown by project is shown in Note 2 to the financial
statements on page 40.
Details of intangible assets, property, plant and equipment,
investments and right of use assets are also set out in Notes 8,
9, 10 and 17 of the financial statements.
Net assets also include the market value at year end of shares
in VR Resources Ltd and Power Metal Resources plc which are
held as “available for sale” investments as set out in Note 8.
Impairment
Expenditures which do not meet the criteria in Note 1(d), such
as pre-licence and reconnaissance costs, are expensed and
added to the Company’s loss. The loss reported in any year can
also include expenditure for specific projects carried forward
in previous reporting periods as an intangible asset but which
the Board determines is “impaired” in this reporting period.
It is a consequence of the Company’s business model that
there will be impairments of unsuccessful exploration projects
from time to time. The extent to which expenditure is carried
forward as intangible assets is a measure of the extent to which
the value of the Company’s expenditure is preserved.
Biannual reviews are carried out by the Directors as to whether
there are any indications of impairment of the Group’s assets.
At the year-end, an impairment review was undertaken by the
Directors to ascertain whether the carrying value of its
exploration and development projects and the associated
intercompany loans should be impaired under IFRS 6 and IAS
36. As a result of the year end review it was judged that the
Sundance Project expenditure should be impaired and none of
the Group’s intercompany loans should be impaired. Projects
which are held for sale or joint venture as shown in the
Operating Review on page 7 have not been impaired as it is
anticipated that their carrying values will be recovered through
sale or through residual joint venture interests in future.
The intangible asset value of a project, shown at cost, should
not be confused with the realisable or market value of a
particular project which will, in the Directors’ opinion, be at least
equal in value and often considerably higher. Hence the
Company’s market capitalisation on the AIM Market is usually
in excess of the net asset value of the Group.
The Company finances its activities through periodic capital
raisings, via share placings and asset sales. As the Company’s
projects become more advanced there may be strategic
opportunities to obtain funding for some projects through joint
venture, production sharing, royalty and other marketing
arrangements.
Key Performance Indicators
The financial statements of a mineral exploration and
development company can provide a moment in time snapshot
of the financial health of a company but do not provide a
reliable guide to the performance of the Company or its Board.
The usual financial key performance indicators (“KPIs”) are
neither applicable nor appropriate to measurement of the value
creation of a company which is involved in mineral exploration
and development which currently has no turnover. The Directors
consider that the detailed information in the Operating Review
is the best guide to the Group’s progress and performance
during the year.
The Directors highlight the following KPIs and expect that
further KPIs will be reported as the Company progresses
through development:
Environment
Health & Safety The Group has not lost any man-days
through injury and there have been no
Health and Safety incidents or reportable
accidents during the year.
No Group company has had notice or been
notified of any instance of non-compliance
with environmental legislation in any of the
countries in which they work.
No fundraising was carried out during the
year ended 30 September 2021,
the
Company having raised funds in the previous
financial year. The Company did issue equity
to the value of £30,818 in settlement of
outstanding fees payable to Directors and
£12,825 through the exercise of warrants.
Fundraising
In exploring for valuable mineral deposits, we accept that not
all our exploration will be successful but also that the rewards
for success can be high. We therefore expect that our
shareholders will be invested for the potential for capital growth
taking a long-term view of management’s track record in
mineral discovery and development.
6
Sunrise Resources plc Annual Report & Accounts 2021
Fundraising
The Directors prepare annual budgets and cash flow
projections that extend beyond 12 months from the date of this
report. Given the Group’s cash position at year end (£371,740),
these projections include the proceeds of future fundraising
necessary within the next 12 months to meet the Group’s
overheads and planned discretionary project expenditures and
to maintain the Company and its subsidiaries as going
concerns.
Operating Review
In 2020-2021 the Group continued to focus on advancing its
CS Project in Nevada, USA towards production with positive
results being received from potential customer trials. The
Company has also carried out exploration on a number of its
precious metals projects whilst continuing to divest non-core
projects in line with its stated strategy.
The CS Project is held in the Company’s 100% owned
subsidiary, SR Minerals Inc. The Group’s other Nevada projects
are held through SR Minerals Inc. and Westgold Inc. and its
Baker’s Gold project in Australia is held through an Australian
subsidiary, Sunrise Minerals Australia Pty Ltd.
SR MINERALS INC.
CS POZZOLAN-PERLITE PROJECT, NEVADA, USA
The CS Project is located near Tonopah, in Nevada, USA, and
contains deposits of both natural pozzolan and perlite in three
separate zones – the Main Zone, the Tuff Zone and the
Northeast Exploration Area. Further details of the market and
market developments for these two commodities are set out
from page 8.
As reported last year, the Company has received the key
permits needed to advance the project towards production and
with these permits now in place the Company has been able to
concentrate on the acquisition of bulk samples and customer
trials and the refinement of its production options.
Permits
The three key permits required to operate the CS Project are
the BLM Decision of Record approving and authorising the
Company’s Mine Plan of Operations, the Air Quality Operation
Permit (“AQOP”) and the Reclamation Permit.
Production Options
Since the grant of the required permits, the Company has been
working on the following options for production of natural
pozzolan and perlite.
Natural Pozzolan
The use of natural pozzolan in cement and concrete mixes
requires that the pozzolan be ground to a fine size before use.
The production options being evaluated by the Company are:
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Direct use of run-of-mine or crushed ore and by-product
perlite by cement companies in their grinding facilities.
Construction of a fixed process plant to grind the crushed
natural pozzolan for sale to cement companies and
ready-mix concrete companies.
Pozzolan can be crushed, if necessary, using the same mobile
plant used for perlite crushing and so the first of these options
has the lowest capital and operating cost but a fewer number
of potential customers who would need to have their own
pozzolan grinding capacity. Different grinding technologies,
plant capital and operating costs are being evaluated for the
second option of a stand-alone perlite grinding plant.
Perlite
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Production of coarse horticultural grade perlite using
mobile crushing and screening equipment and use of
undersized perlite as natural pozzolan; and
Construction of a fixed perlite processing plant to
produce a range of raw perlite products in coarse,
medium and fine grades.
The Company is currently evaluating the first of these two
options because production can start quickly at a relatively low
capital cost as the mobile plant is available from the quarry
industry and can be bought, rented or leased, subject to
availability. Estimates of capital and rental costs have been
obtained and have been factored into the Company’s financial
planning and forecasting. The Company’s Class II AQOP, which
primarily applies to an on-site process plant, is based on the
first of these options.
The Company has permission to construct the onsite fixed
perlite processing plant set out in the second option and as
referenced in Phase II of the Plan of Operations, this has
already been designed and costed. However, it may be
preferable to construct this at a more suitable, rail-linked site
elsewhere in Nevada.
Most recently, the Company has been evaluating the production
of a lightweight aggregate from the CS Project but this work is
still at an early stage.
Sunrise Resources plc Annual Report & Accounts 2021
7
Strategic Report continued
Bulk Sampling and Customer Trials
Natural Pozzolan
Towards the end of 2020, a 500-ton sample of natural pozzolan
was mined in collaboration with a large cement and ready-mix
company (CRMC). This collaboration took place following a
series of successful bench-scale laboratory tests carried out
by the CRMC.
crushing of the perlite and the inclusion of too much fine perlite
in the products. This has adversely affected the quality of the
raw perlite produced. The production of a coarser particle size
product can be resolved with small adjustments to the crushing
and screening process, but in this case only 100 tons of
material was available for processing and there was insufficient
opportunity to optimise the crusher and screen settings.
The CRMC’s test grind objective was to assess the suitability
of its surplus cement milling facility for grinding the CS natural
pozzolan and to then test the ground product in some
commercial scale concrete pours.
The test grind was successfully completed, and this led to
commercial concrete trials made using the ground pozzolan in
partial substitution for Portland cement.
Concrete mixes are tailored to achieve target strengths
appropriate to the demands placed on the structures being
manufactured and a target strength is set at a specified number
of days after pouring.
In the case of the concrete pours reported to date the specified
(target) strength was 3,000 psi at 28 days. In both cases the
concrete exceeded this target strength after just 7 days curing.
This result was consistent with previous laboratory testing of
the CS natural pozzolan by both the Company and the CRMC.
After 7 days curing, the concrete made using CS natural
pozzolan achieved 105% and 113% of the target strengths
respectively in the two separate tests. This was an excellent
result as the often specified seven-day target commonly
corresponds to approximately 70 percent of the target
compressive strengths.
The CRMC’s manager of mining completed a due diligence
field visit to the CS Project and discussions are at an advanced
stage for a joint development of the CS Project, although there
is no guarantee that a suitable commercial arrangement will
result.
Perlite
In late 2020, the Company contracted a company in Nevada to
supply and operate a mobile crushing and screening plant to
process a 100-ton bulk sample of raw perlite from the Project.
The plant comprised a crusher, high frequency screens and
associated conveyors and was a basic version of the plant that
is proposed for the initial production facility.
The perlite bulk sample was crushed and screened into two
separate size-grades of horticultural raw perlite. The
Company’s testing and analysis shows that during the crushing
and screening process carried out by the Company’s
contractor the screens operated inefficiently resulting in over-
The processed perlite was sent to a number of potential
customers for expansion of the raw perlite in their commercial
facilities. Different customers who expand perlite for end-use
horticultural markets do so in different types of furnaces and
consequently will achieve different production rates and yields
of expanded perlite using the same ore source and so must
test the material in their production furnaces prior to committing
to offtake agreements.
The sizing issues meant that two customers reported poor
expansion results despite one of these customers having
obtained good results previously with material from the same
location. Another described their test as promising but
inconclusive due to the feed material product being too fine
grained but otherwise the expanded perlite was described as
have a good, low, bulk density and a good colour. In the last
expansion trial to be completed so far the potential customer
advised that they were able to produce expanded horticultural
perlite at very low target densities with good production rates
and a good-looking product. They also advised that, assuming
the previously mentioned sizing issues were resolved as
expected, the CS raw perlite would be a premium product, very
good for the US market and that they would be happy to start
receiving a regular supply. One more set of test results is still
awaited.
During the year a further 200-ton bulk sample of perlite was
extracted for further processing and testing.
Markets & Market Developments
Natural Pozzolan
Natural pozzolan is one of a range of materials that can partially
replace ordinary Portland cement in cement and concrete
mixes (usually up to 35%) and which collectively are known as
Supplementary Cementitious Materials (“SCMs”). SCMs both
improve the long-term strength and resistance of concrete
compared to concrete made using only Portland cement. These
performance characteristics have resulted in many State
transport infrastructure regulators mandating the use of SCMs
in concrete used in public works.
Natural pozzolans include some glassy volcanic tuffs, tephra
and perlite such as those of interest on the CS Project and were
widely used in major dam construction projects in the western
USA. However, for more than 40 years coal-fired power station
8
Sunrise Resources plc Annual Report & Accounts 2021
fly ash has been the most widely used SCM but supplies of fly
ash are now constrained and declining rapidly. This is due to
the closure of a large number of coal-fired power stations with
many more closures planned.
These closures are being driven by two factors – economics
and climate change. In the US, power generation economics
favour cleaner and cheaper natural gas and, more recently,
renewable energy options from solar and wind.
The Company is targeting the concrete markets in southern
California and southern Nevada. These States are literally at the
end of the line when it comes to rail supplies of the remaining
coal fly ash produced in the continental interior.
In many ways 2021 has been a seminal year for the cement and
concrete industries. The COP26 climate conference has
sounded the death knell for coal and, with it fly ash supply, with
most countries around the world prepared to phase out coal
altogether and leading coal consumers China and India
agreeing to phase down coal usage over time.
The production of Portland cement is responsible for 7-8% of
the global man-made carbon dioxide emissions with nearly one
tonne of carbon dioxide (CO2) generated for each tonne of
cement produced. It is not then surprising that the cement and
concrete industries are targeted for emission reductions.
California already has a Carbon Cap and Trade scheme to limit
carbon emissions and in September 2021 Governor Gavin
Newsom signed legislation that directly targets greenhouse gas
emissions associated with the cement industry. This Cement
Decarbonization legislation is the first law of its kind in the US
and is focused on achieving net-zero emissions from the
industry by the end of 2045. Experts believe this will pave the
way for similar Federal legislation in the US. 2021 also saw the
publication by The US Portland Cement Association of its road
map to carbon neutrality. A key component for this road map is
the reduction in the quantity of cement used in cement and
concrete mixes through the use of SCMs such as natural
pozzolan.
Cement and concrete producers are also under pressure from
their specifiers and customers to supply concrete with lower
embodied carbon and it is expected that the California
Department of Transport may soon mandate the use of greener
concrete mixes in their infrastructure contracts. Both State and
Federal infrastructure contracts are set to increase now
President Biden has signed the US$1 trillion Infrastructure Bill
into law.
All of these developments favour increased use of natural
pozzolan. Established fly ash distributors are already looking to
supplement or replace their SCM offerings with natural
pozzolan and, similarly, their customers, cement and ready-mix
concrete companies, are looking to source supplies of natural
pozzolan independently of their fly ash suppliers.
The price of natural pozzolan varies from market to market and
is fixed by negotiation but is expected to follow the price of fly
ash for now, typically $100/ton delivered.
For more information on natural pozzolan see:
https://pozzolan.org/
Perlite
Perlite is a glassy raw material which, when heated in a furnace,
pops like popcorn and expands by up to 20 times in volume
into a white or pale coloured low-density material.
Expanded perlite is used in:
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Various industrial and household applications such as
insulation, paint texturing, plaster and concrete fillers,
field
fillers,
building materials
conditioners (soil porosity enhancement) and
fire
proofing.
insulation,
formed
Filter aids (in competition with diatomite).
Insulating industrial cryogenic storage vessels.
Potting medium in gardening and horticulture to aid water
retention and aeration of the soil.
According to the United States Geological Survey (“USGS”),
845,000 tons of raw perlite was mined in the USA in 2020, up
34% on 2019 with most material used internally. USGS statistics
show the price of raw perlite fell 4.7% in 2020 whilst the price
of imports, primarily from Greece rose 12.9%. China is the
world’s largest producer with most of its production consumed
internally.
The consumers of raw perlite are split between independent
expanders and downstream
integrated mining-perlite
expanding companies. In 2020-2021 the supply of perlite to the
independent expander sector has been severely disrupted due
to two major market developments.
Firstly, Cornerstone Minerals, the Oregon-based and largest US
independent mine producer of horticultural grade perlite was
purchased by multi-national industrial minerals company
Imerys. Imerys has reportedly ceased supplying perlite to the
many independent expanders who bought on spot, focusing
instead on existing contracts and its 100% owned expansion
plants.
Sunrise Resources plc Annual Report & Accounts 2021
9
Strategic Report continued
Secondly, downstream integrated miner-expander Dicaperl has
reportedly cut supply to all independent expanders retaining
the raw perlite for its own use. Whilst perlite can be and is
imported from Greece, it does not expand as well as the
traditional Oregon material and supply
reportedly
unpredictable.
is
These recent developments provide an opportunity for a new
supplier of raw perlite which the Company is looking to exploit.
The deposit is very well located, being just 9 miles from a rail
siding with good road and rail connections to Reno and to the
cement and ready-mix markets of northern California, and so
can be more readily targeted at these markets than the CS
Project.
Further work is required to determine the extent of the deposit
and access to the property. As this project is at an early stage,
costs have been expensed in the reporting period.
For more information on perlite see:
https://www.perlite.org/library/
NEWPERL PERLITE PROJECT, NEVADA
This project is located approximately 85km from the CS Project
in Nevada, USA.
The NewPerl Project contains a number of areas where surface
samples have shown excellent expandability results for
horticultural grades of perlite. Subject to further testing, this
could be suitable for feed into the CS Project in the future.
Drill testing of the NewPerl Project has been deferred in order
to focus resources on the CS Project although the Company
has a drill permit in place.
JACKSON WASH PERLITE PROJECT, NEVADA
In October 2021, the Company entered into a lease/option
agreement with Kinross Gold U.S.A Inc. granting Kinross a
Lease and Option to purchase the Company’s 25 Jackson
Wash mining claims in Nevada, USA. The Company retains the
right to mine perlite on the project claims during the
lease/option period.
The Jackson Wash Project is located 16km from the NewPerl
Project in Nevada and is also a target for horticultural grade
perlite with the potential to be suitable as a future feed for the
CS Project.
In addition to hosting large surface occurrences of perlite, the
project claims are located adjacent to the historic Montezuma
silver, gold and mercury mining centre being explored by
Kinross. Kinross produces more than 2 million ounces per year
gold (equivalent).
The terns of the lease/option agreement are given in Note 22
to the Financial Statements on page 53.
HAZEN POZZOLAN PROJECT, NEVADA.
During the year the Company applied for claims to cover a
deposit of pumice near Hazen in Nevada and is now testing
this material as a natural pozzolan. Initial tests results have
shown 7 and 28-day strength results very similar to the CS
natural pozzolan and the material is very lightweight and so it
will also be evaluated for its potential as a lightweight aggregate
for use in lightweight concrete blocks and facing stones.
PIOCHE SEPIOLITE PROJECT, NEVADA
Whilst researching new opportunities for natural pozzolan,
attention was drawn to an occurrence of the mineral sepiolite.
Sepiolite is used commercially as a viscosity modifier and is
rare in commercial sized deposits.
Claims have been staked and initial tests by a European mineral
producer were positive. A recent joint field visit indicated the
potential for an extensive deposit of sepiolite; further samples
were collected and additional tests will now be carried out in
Europe.
As this project is at an early stage, costs have been expensed
in the reporting period.
OTHER SR MINERALS INC. PROJECTS
SR Minerals Inc. continues to hold mining claims at a number
of additional projects in Nevada including the Bay State Silver
Project, the County Line Diatomite Project and the Ridge
Limestone Project. These projects are available for sale or joint
venture.
SR Minerals Inc. holds a royalty interest in the Junction
Copper-Gold-Silver Project held by VR Resources Ltd
although it is understood that no work is currently planned for
this Project.
SR Minerals Inc. also holds a royalty on the Garfield Copper-
Gold Project as a result of the recent sale of this project,
further details of which are given on page 12.
WESTGOLD INC.
The Company’s Westgold subsidiary holds interests in three
projects in Nevada – Clayton, Newark and Stonewall.
CLAYTON SILVER-GOLD PROJECT, NEVADA
The property lies at the south end of the Clayton Valley, a major
centre of lithium brine production, in the Walker Lane Mineral
Belt. It is some 19 miles southeast of the producing Mineral
Ridge Gold Mine, 19 miles southwest of the major historic
mining centre of Goldfield, where a number of large gold-silver
deposits are currently under development. The property also
lies 40 miles southwest of the famous silver deposits at Tonopah
which produced over 138 million ounces of silver and 1.5 million
ounces of gold from 1900-1921.
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Sunrise Resources plc Annual Report & Accounts 2021
Previous Exploration
The mineralisation at the Clayton Project was discovered in the
1980s when surface samples assayed up 5.4 grammes/tonne
(g/t) gold and 265 grammes/tonne silver. Fifteen drill holes were
drilled by Freeport-McMoRan Gold Co (“Freeport”) in 1987
within an area of about 500m x 350m. A number of these holes
intersected significant silver mineralisation within a zone of
extensive brecciation and silicification believed to represent the
upper levels of an epithermal system. In 1989 Coeur
Exploration drilled a further 6 shallow RC holes (CL-16 to 21) in
the central part of the project area. Wide intervals of low-grade
silver mineralisation were intersected.
Sunrise Resources Drilling
In November 2020, the Company completed a vertical diamond
core drill hole, 20CLDD001, to a depth of 104.7m to twin and
further evaluate silver mineralisation reported in Freeport Hole
CL-15.
Drilling conditions were difficult due to heavy faulting and
extensive zones of swelling clays in the fractured and
hydrothermally altered rock. Whilst these geological conditions
can be favourable indications for mineralisation, core recovery
was very poor as a result.
Massive quartz vein and quartz breccia were intersected in the
target zone from 82.30m to 90.22m downhole (true thickness
unknown) containing fine grained disseminated sulphides
including a mineral logged as the silver sulphide mineral
acanthite. Within this 7.92m interval there were two intervals
with no core recovery having an aggregate thickness of 1.98m.
The fire-assay weighted average grade of the core recovered
in this 7.92m down-hole interval, comprising 5.94m of
recovered core, was 303 g/t silver (8.84 troy ounces/ton) and
0.2g/t gold. When analysed by geochemical methods the
equivalent grade was 4% higher at 316 g/t silver (9.23
ounces/ton).
No information is available for the interval where no core was
recovered but, as it is internal to the mineralised zone and
includes 1.37m of missing core adjacent to the highest-grade
sample recovered, the Company believes that in-situ material
that was not recovered is also likely to be silver bearing.
When compared to the analytical results from the 1980s drill
hole, CL-15, hole twinned by hole 20CLDD001 shows an 84%
increase in silver grade. Corresponding gold grades were 50%
lower, but the economic value of the mineralisation is
overwhelmingly from the silver content in both drill holes.
These results, and the Company’s geological logging, support
Freeport’s mineralogical evaluation of drill samples and the
results of screen gold and silver analyses which were
interpreted by Freeport to indicate that silver occurs in
association with fine grained sulphide minerals that may have
preferentially been lost from the drill samples into the drill fluids
and that the historically reported silver grades are likely to be
understated.
The presence of primary silver and other sulphide minerals in
the mineralised intersection support a belief that the higher
grades are primary, rather than the result of supergene
enrichment, and so have depth potential.
The Clayton Project is available for joint venture although the
Company will consider follow up drilling as resources become
available.
NEWARK GOLD PROJECT, NEVADA
The Newark Gold Project is located at the southern end of the
Battle Mountain-Eureka (Cortez) gold trend. It lies 40 km south
of, and along the same structural zone as, the past-producing
Alligator Ridge Mine, 13 km southwest of the past producing
Illipah Gold Mine and 20 km east of the Pan Gold Mine.
The Newark Project was originally targeted for Carlin-style gold
mineralisation by Freeport in the 1980s following the discovery
of gold anomalous values in silicified rocks in a favourable
structural and stratigraphic setting. Carlin-style deposits can
be both large (e.g. Goldstrike which contains 39 million ounces
gold at a grade of 3.3 g/t) and high-grade (e.g. Barrick’s recent
Goldrush discovery which contains 8.6 million ounces gold at
a grade of 10.6 g/t).
Freeport drilled a total of 16 holes. Significantly, hole NWK8
intersected 47m of low-level gold (average 0.14 ppm gold) in
jasperoid from 75m to the end of the hole at 122m. Drilling is
warranted to test this gold bearing jasperoid and to deepen the
hole through to about 400m depth to test the underlying Joana
Limestone which can be a significant host for Carlin-style gold
mineralisation.
The Company will consider a joint venture partner for this
project and has obtained a permit for an initial drilling
programme at Newark and has lodged the required reclamation
bond.
SUNDANCE GOLD PROJECT
The Project is located approximately 90 miles southeast of
Reno. The area was targeted following the Company’s
discovery of anomalous gold in surface samples containing up
to 0.4 grammes/tonne gold in clay altered and quartz veined
volcanic rocks. The Company completed an initial soil sampling
programme and anomalous gold-in-soil values were returned
on most sample lines with values up to 168 ppb gold and a 60m
width >100 ppb gold on one particular sample traverse.
At present, due to commitments on its other projects, the
Company is not planning any further work on the Sundance
Project.
Sunrise Resources plc Annual Report & Accounts 2021
11
Strategic Report continued
MYRTLE GOLD PROJECT
The Company’s work at and around the Sundance Project
highlighted an area some few miles to the southwest where
surface sampling returned encouraging gold and silver values.
A number of mining claims were staked as a result around a
small historic mine known as the Myrtle Mine.
GARFIELD COPPER-GOLD PROJECT AND STONEWALL
GOLD PROJECT, NEVADA
During the reporting period the Company sold its exploration
rights at Garfield and Stonewall Properties in Nevada, USA to
AIM-listed Power Metal Resources plc
(“PMR”). The
consideration received was £20,000 cash, and the issue of
2.25 million new Ordinary Shares in PMR, plus 2.25 million
warrants, each warrant entitling the holder to subscribe for one
new Ordinary Share in PMR at a price of 3.75 pence per share.
The Company retains a 2% Net Smelter Return Royalty in
respect of the two properties, half of which can be purchased
by PMR for US$1million for each property.
The profit on disposal recognised in the Consolidated Income
Statement £30,658, arises from the fair value of consideration
received £74,000 (market value of shares, £54,000 and cash
£20,000) less the carrying value of the exploration assets,
accumulated costs of £43,342.
The warrants and royalties received are contingent assets and
their likely realisation is considered to be unpredictable at
present. They have not been assigned a valuation on this basis.
At the end of 2020, the Company commissioned Yugunga-Nya
Heritage Pty Ltd to undertake an archaeological and
ethnographic survey for a follow up drilling programme. During
the archaeological and ethnographic survey, the whole of the
Baker’s Project survey area was assessed. No archaeological
sites were identified within the three proposed drill areas and
no ethnographic sites were mentioned by Yugunga-Nya
representatives as being within project tenements.
The survey cleared the way for the proposed drill programme
to proceed, which included an initial five reverse circulation drill
holes to test three separate gold targets which include old mine
workings, areas of gold nugget production and a gold-in-soil
geochemical anomaly. Five holes were drilled for a total of 589m
using the reverse circulation percussion method.
The Dicky Lee Target
This is an area of small-scale open pit mining with pit
dimensions of approximately 60m by 40m and depths of up to
10m. The pit was excavated in the 1980s following the discovery
of specimen quality gold-quartz nuggets, by metal detectorists
both at surface and in-situ. The gold at Dicky Lee occurs in a
quartz vein stockwork in dolerite.
The Company had previously carried out mapping and
sampling of the pit area and only two historical drill holes have
tested the pit area, and both intersected wide intervals of low-
grade gold mineralisation (69m grading 0.2g/t gold and 80m
grading 0.2 g/t gold including 1m grading 5.7 g/t gold from 5m
down hole).
Nevertheless,
the Garfield and Stonewall Projects are
considered to be prospective for sediment hosted skarn and
porphyry-style copper-gold mineralisation at the Garfield
Project and epithermal-style gold-silver mineralisation at the
Stonewall Project.
One hole was drilled at the Dicky Lee pit, 21SBRC001, in 2021
to follow up on historical drill results This hole was drilled to a
depth of 196m and intersected a number of narrow low-grade
gold mineralisation with a best intersection of 1m grading
2.19 g/t Au.
SUNRISE MINERALS AUSTRALIA PTY LTD
BAKER’S GOLD PROJECT
The Baker’s Gold Project is located 25km southeast of
Meekatharra in the Murchison Goldfield of Western Australia.
It lies on the eastern limb of the Meekatharra Greenstone Belt
which has yielded over 5.5 million ounces of gold and contains
a number of present and past producing gold mines.
The Baker’s Project area licence has seen various rounds of
historical exploration including separate programmes of wide-
spaced percussion drilling.
The Company carried out mapping and sampling and three
rounds of soil sampling at Baker’s between 2014 and 2018
generating a number of gold-in-soil anomalies which, together
with historical exploration results, defined three drill testing
targets.
The DLR4 Target
The DLR4 target lies some 750m southwest of the Dicky Lee
pit and is named after the number of a shallow historic drill hole
DLR4 which was completed by Australian Consolidated
Minerals in 1987. This hole averaged 0.55 g/t gold over the 22m
interval from 2m down hole depth to the end of hole at 24m and
the final 2m sample assayed 1.17 g/t gold. No follow up drilling
was carried out.
Project-wide and follow-up soil sampling carried out by the
Company defined a 500m long zone of gold-in-soil anomalies
centred on hole DLR4. Quartz float can be observed at surface
and appears to be the target for the historical drilling.
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Sunrise Resources plc Annual Report & Accounts 2021
Three holes, 21SBRC002, 3 and 5, were drilled at 50m spacing
in a fence configuration across the soil anomaly with the most
north-easterly hole in the traverse, 21SBRC002 encountering
high-grade gold mineralisation proximal to historical hole DLR4.
A 2m interval from 64m down hole (approximately 50m below
surface) graded 11.5 g/t gold and included a 1m interval
grading 20.40 g/t gold. A 7-metre zone with low-grade gold
values was intersected immediately below.
As a check to eliminate any possible nugget effect, the pulp
rejects from the high-grade interval were re-submitted for
analysis by 1kg cyanide leach. In this method, a 1kg sample is
leached with a cyanide solution to extract the cyanide soluble
gold. The leach residue (tail) was then assayed by 50g fire
assay to allow determination of the total gold content. These
re-analysis results indicate that gold was previously under-
reported, and the high-grade intersection reporting as 2m
grading 14.4 g/t gold from 64m downhole including 1m grading
26.5 g/t gold.
The results also show that 95% of the gold in the sample is
cyanide soluble, a favourable metallurgical indication.
The Company believes the DLR4 Target to be highly
prospective being currently open along strike and at depth.
Further drilling is justified to determine the orientation and
extent of the newly discovered high-grade mineralisation.
Third Target
The Third Target was a narrow zone of prospector scale
working where sampling by the Company had returned high
gold values. This target was speculative and tested by a single
drill hole, 21SBRC004, but no significant results were returned.
Sunrise Resources plc Annual Report & Accounts 2021
13
Strategic Report continued
Risks & Uncertainties
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that
these risks are minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed
below together with risk mitigation strategies employed by the Board.
RISK
MITIGATION STRATEGIES
Exploration Risk
The Group’s business is mineral exploration and
development which are speculative activities. There is no
certainty that the Group will be successful in the definition
of economic mineral deposits, or that it will proceed to the
development of any of its projects or otherwise realise
their value.
Resource/Reserve Risk
All mineral projects have risk associated with defined
grade and continuity. Mineral Resources and Reserves
are always subject to uncertainties in the underlying
assumptions which include the quality of the underlying
data, geological interpretations, technical assumptions
and price forecasts.
Development and Marketing Risk
Delays in permitting, financing, mine commissioning and
marketing a project and its products may result in delays
to the Group meeting production targets.
Commodity Price Risk
Changes in commodity prices can affect the economic
viability of mining projects and affect decisions on
continuing exploration activity.
Mining and Processing Technical Risk
Notwithstanding the completion of metallurgical testwork,
test mining and pilot studies indicating the technical
viability of a mining operation, variations in mineralogy,
mineral continuity, ground stability, groundwater
conditions and other geological conditions may still
render a mining and processing operation economically
or technically non-viable.
Environmental and Social Governance (ESG) Risk
Exploration and development of a project can be
adversely affected by environmental and social legislation
and the unforeseen results of environmental and social
impact studies carried out during evaluation of a project.
Once a project is in production unforeseen events can
give rise to environmental liabilities.
The directors bring many years of combined mining and
exploration experience and an established track record
in mineral discovery.
The Company
targets advanced and drill-ready
exploration projects in order to avoid higher risk grass
roots exploration.
Mineral Resources and Reserves are estimated by
independent specialists on behalf of the Group and
reported in accordance with accepted industry standards
and codes. The directors are realistic in the use of metal
and mineral price forecasts and impose rigorous
practices in the QA/QC programmes that support its
independent estimates.
To reduce development risk the directors will ensure that
its permitting, financial evaluation and financing and
market mechanisms are robust and thorough and will
seek to position the Company as a low-cost producer.
The Company consistently reviews commodity prices and
trends for its key projects throughout the development
cycle.
From the earliest stages of exploration, the directors look
to use consultants and contractors who are leaders in
their field and in future will seek to strengthen executive
management and the Board with additional technical and
from
financial skills as
exploration to production.
the Company
transitions
The development of industrial minerals projects such as
the CS Project carry a lower level of environmental and
social liability than gold or base metal projects due to low
levels of toxic contaminants in the ore and processing
chemicals. The Company has adopted an Environmental
Policy and avoids the acquisition of projects where liability
for legacy environmental issues might fall upon the
Company. The Environmental Policy will be updated in
future to account for planned mining activities.
14
Sunrise Resources plc Annual Report & Accounts 2021
RISK
Political Risk
All countries carry political risk that can lead to
interruption of activity. Politically stable countries can have
enhanced environmental and social permitting risks, risks
of strikes and changes to taxation, whereas less
developed countries can have,
in addition, risks
associated with changes to the legal framework, civil
unrest and government expropriation of assets.
Partner Risk
Whilst there has been no past evidence of this, the Group
can be adversely affected if joint venture partners are
unable or unwilling to perform their obligations or fund
their share of future developments.
Financing & Liquidity Risk
The Company has an ongoing requirement to fund its
activities through the equity markets and in future to
obtain finance for project development. There is no
certainty such funds will be available when needed.
Financial Instruments
Details of risks associated with the Group’s Financial
Instruments are given in Note 19 to the financial
statements on page 51.
MITIGATION STRATEGIES
The Company’s strategy restricts its activities to stable,
democratic and mining friendly jurisdictions.
The Company has adopted a strong Anti-corruption
Policy and a Code of Conduct and these are strictly
enforced.
The Board’s policy is to maintain control of certain key
projects so that it can control the pace of exploration and
development and reduce partner risk.
For projects where other parties are responsible for
critical payments and expenditures the Company’s
agreements
that such payments and
expenditures are met.
legislate
The Company maintains a good network of contacts in
the capital markets that has historically met its financing
requirements. The Company’s low overheads and cost-
effective exploration strategies help reduce its funding
requirements and currently the outstanding directors’ fees
are settled in shares. Nevertheless, further equity issues
will be required over the next 12 months.
The directors are responsible for the Group’s systems of
internal financial control. Although no systems of internal
financial control can provide absolute assurance against
material misstatement or loss, the Group’s systems are
designed to provide reasonable assurance that problems
are
timely basis and dealt with
appropriately.
identified on a
In carrying out their responsibilities, the directors have put
in place a framework of controls to ensure as far as
possible that ongoing financial performance is monitored
in a timely manner, that corrective action is taken and that
risk is identified as early as practically possible, and they
have reviewed the effectiveness of internal financial
control.
The Board, subject to delegated authority, reviews capital
investment, property sales and purchases, additional
borrowing
insurance
facilities, guarantees and
arrangements.
Sunrise Resources plc Annual Report & Accounts 2021
15
Strategic Report continued
COVID-19
The Company has applied all government guidelines in its day-to-day operations and administration. The restrictions on
international travel have impacted the ability of the Company to meet with potential customers in the US and the ability to supervise
local operations. Fortunately, this has not caused any material delays or setbacks in the advancement of corporate objectives.
Management and staff have carried out their duties diligently and efficiently in the circumstances of the “work-from-home” rules
and social distancing.
The Company is pleased to report that, to date, there have been no cases of Coronavirus amongst its staff.
Forward-Looking Statements
This Annual Report may contain certain statements and expressions of belief, expectation or opinion which are forward-looking
statements, and which relate, inter alia, to the Company’s proposed strategy, plans and objectives or to the expectations or
intentions of the Company’s directors. Such forward-looking statements involve known and unknown risks, uncertainties and other
important factors beyond the control of the Company that could cause the actual performance or achievements of the Company
to be materially different from such forward-looking statements.
Section 172 (1) Statement
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith,
would be most likely to promote the success of the company for the benefit of its members as a whole. This requires a director
to have regard, among 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, clients, joint arrangement partners 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 with members of the Company.
The Company’s directors give careful consideration to these factors in discharging their duties. The stakeholders we consider are
our shareholders, employees, suppliers (including consultants and contractors), our joint arrangement partners, the regulatory
bodies that we engage with and those that live in the societies and geographical areas in which we operate. The directors
recognise that building strong, responsible and sustainable relationships with our stakeholders will help us to deliver our strategy
in line with our long-term objectives.
Having regard to:
The likely consequences of any decision in the long-term:
The Company’s Aims and Business Model are set out at the head of this Strategic Report on page 5 and in the Chairman’s
Statement on page 3. The Company’s mineral exploration and development business is, by its very nature, long-term and so the
decisions of the Board always consider the likely long-term consequences and take into consideration, for example, trends in
metal and minerals supply and demand, the long-term political stability of the countries in which the Company operate and the
potential impact of its decisions on its stakeholders and the environment. As the Company aims to transition the CS Project into
production other projects also become important to the long-term future of the Company and this has framed the Board’s decision
to allocate a portion of capital to the testing of some of the Company’s precious metal projects and to acquiring new projects.
The Board’s approach to general strategy and long-term risk management are set out in the Corporate Governance Statement
(Principle 1) on page 23 and the section on Risks and Uncertainties starting on page 14.
The interests of the Company’s employees:
The Company has no employees. It relies on the employees of Tertiary Minerals plc through a services agreement with Tertiary
Minerals plc, but all of these employees have daily access to the Executive Chairman and their views are considered in the Board’s
decision making. Further details on the Board’s employment policies, health and safety policy and employee engagement are
given in the Corporate Governance Statement (Principle 8) on page 24.
The need to foster the Company’s business relationships with its stakeholders:
The sustainability of the Company’s business long-term is dependent on maintaining strong relationships with its stakeholders.
The factors governing the Company’s decision making and the details of stakeholder engagement are set out in the Corporate
Governance Statement (Principles 2, 3, 8 and 10) starting on page 23.
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Sunrise Resources plc Annual Report & Accounts 2021
Having regard to the impact of the Company’s operations on the community and the environment:
The Company requires a “social licence” to operate sustainably in the mining industry and so the Board makes careful
consideration of any potential impacts of its activities on the local community and the environment. The Board strives to maintain
good relations with the local communities in which it operates and with local businesses. For example, in permitting the CS Project
for production the Board has carried our extensive work and consultation with regulators and the local community representatives
to evaluate the benefits and impacts of its CS Project. Further discussion of these activities and Board considerations can be
found in the Operating Review starting on page 7 and in the Corporate Governance Statement (Principle 3) on page 23.
The desirability of the Company maintaining a reputation for high standards of business contact:
The Board recognises that its reputation is key to its long-term success and depends on maintaining high standards of corporate
governance. It has adopted the QCA Code of Corporate Governance and sets out in detail how it has complied with the 10 key
principles of the QCA Code in the Corporate Governance Statement starting on page 23. This contains details of various Company
policies designed to maintain high standards of business conduct such as the Share Dealing Policy, Health and Safety Policy and
Anti-Bribery Policy and Code of Conduct.
The need to act fairly between Members of the Company:
The Board ensures that it takes decisions in the interests of the members (shareholders) as a whole and aims to keep shareholders
fully informed of significant developments, ensuring that all shareholders receive Company news at the same time. The Executive
Chairman devotes time to answering genuine shareholder queries, no individual or group of shareholders is given preferential
treatment. Further information is provided in the Corporate Governance Statement (Principles 2 and 10).
This Strategic Report was approved by the Board of Directors on 10 December 2021 and signed on its behalf.
Patrick Cheetham
Executive Chairman
Sunrise Resources plc Annual Report & Accounts 2021
17
Website Publication
The maintenance and integrity of the Sunrise Resources plc
website is the responsibility of the directors. Legislation in the
United Kingdom governing the preparation and dissemination
of the accounts and the other information included in annual
reports may differ from legislation in other jurisdictions.
Directors’ Responsibilities
The directors are responsible for preparing the Strategic
Report, the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires directors to prepare financial statements
for a company for each financial year. Under that law the
directors have elected to prepare the Group and Company
financial statements in accordance with applicable law and
International Accounting Standards in conformity with the
Companies Act 2006. Under company law the directors must
not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Group and Company and of the profit or loss of the Group for
that period. The directors are also required to prepare the
financial statements in accordance with the AIM Rules of the
London Stock Exchange for companies trading securities on
the AIM market.
In preparing these financial statements, the directors are
required to:
l
l
l
l
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether they have been prepared in accordance
with applicable
International Accounting
Standards in conformity with the Companies Act 2006,
subject to any material departures disclosed and
explained in the financial statements; and
law and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company and the Group will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to
ensure
the
requirements of 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.
financial statements comply with
that
the
They are further responsible for ensuring that the Strategic
Report and the Directors’ Report and other information included
in the Annual Report and financial statements are prepared in
accordance with applicable law in the United Kingdom.
18
Sunrise Resources plc Annual Report & Accounts 2021
Directors’ Report
The directors are pleased to submit their Annual Report and
audited financial statements for the year ended 30 September
2021.
foreseeable future and therefore believe that the going concern
basis is appropriate for the preparation of the financial
statements.
The Strategic Report starting on page 5 contains details of the
principal activities of the Company and includes the Operating
Review which provides detailed information on the development
of the Group’s business during the year and indications of likely
future developments and events that have occurred after the
financial year end.
Going Concern
In common with many exploration companies, the Company
raises finance for its exploration and appraisal activities in
discrete tranches. Further funding is raised as and when
required. When any of the Group’s projects move to the
development stage, specific project financing will be required.
to meet
The directors prepare annual budgets and cash flow
projections that extend beyond 12 months from the date of this
report. Given the Group’s cash position at the year-end of
£371,740 (2020: £1,089,417) these projections include the
proceeds of future fundraising necessary within the next 12
the Group’s overheads and planned
months
discretionary project expenditures and to maintain the
Company and its subsidiaries as going concerns. Although the
Company has been successful in raising finance in the past,
there is no assurance that it will obtain adequate finance in the
future. This represents a material uncertainty related to events
or conditions which may cast significant doubt on the Group
and Company’s ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and
discharge their liabilities in the normal course of business.
However, the directors have a reasonable expectation that they
will secure additional funding when required to continue
meeting corporate overheads and exploration costs for the
Dividend
The directors do not recommend the payment of any dividend.
Financial Instruments and Other Risks
The business of mineral exploration and evaluation has inherent
risks. Details of the Group’s financial instruments and risk
management objectives and of the Group’s exposure to risk
associated with its financial instruments are given in Note 19 to
the financial statements.
Details of risks and uncertainties that affect the Group’s
business are given in the Strategic Report on pages 5 to 17.
Directors
The directors holding office in the period were:
Mr P L Cheetham – Chairman of the Board and Chairman of
the Nomination Committee.
Mr R D Murphy – Chair of the Remuneration Committee and a
member of the Nomination and Audit Committees.
Mr J Cole – Chair of the Audit Committee and member of the
Nomination and Remuneration Committees (Appointed 27 May
2021)
Mr D J Swan – Previous Chair of the Audit Committee and
member of the Nomination and Remuneration Committees
(Retired 27 May 2021)
Attendance at Board and Committee Meetings
The Board retains control of the Group with day-to-day
operational control delegated to the Executive Chairman. The
full Board meets four times a year and on any other occasions
it considers necessary.
Director
P L Cheetham
R D Murphy
*J Cole
** D J Swan
Board
Meetings
Nomination
Committee
Audit
Committee
Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
12
12
1
11
12
1
1
0
1
1
2
2
0
1
2
0
0
0
0
0
*Appointed 27 May 2021 and so only eligible to attend 1 meeting during the reporting period
**Retired 27 May 2021
The directors’ shareholdings are shown in Note 16 to the financial statements.
Events After The Report Date
There were no events to report occurring after the reporting period.
Sunrise Resources plc Annual Report & Accounts 2021
19
Directors’ Report continued
Shareholders
As at the date of this report the following interests of 3% or more in the issued share capital of the Company appeared in the
share register.
As at 10 December 2021
Interactive Investor Services Nominees Limited SMKTISAS
Interactive Investor Services Nominees Limited SMKTNOMS
Pershing Nominees Limited BICLT
Hargreaves Lansdown (Nominees) Limited 15942
Barclays Direct Investing Nominees Limited CLIENT1
Hargreaves Lansdown (Nominees) Limited VRA
Euroclear Nominees Limited EOC01
Interactive Investor Services Nominees Limited TDWHSIPP
Hargreaves Lansdown (Nominees) Limited HLNOM
JIM Nominees Limited JARVIS
HSDL Nominees Limited
Disclosure of Audit Information
Each of the directors has confirmed that so far as they are
aware, there is no relevant audit information of which the
Company’s Auditor is unaware, and that they have taken all the
steps that they ought to have taken as a director in order to
make themselves aware of any relevant audit information and
to establish that the Company’s Auditor is aware of that
information.
Auditor
A resolution to reappoint Crowe U.K. LLP as Auditor of the
Company will be proposed at the forthcoming Annual General
Meeting.
Charitable and Political Donations
During the year, the Group made no charitable or political
donations.
Annual General Meeting
Notice of the Company’s Annual General Meeting convened for
Thursday 27 January 2022 at 10.00 a.m. is set out on page 54
of this report. Explanatory Notes giving further information
about the proposed resolutions are set out on page 55.
Number % of share
capital
of shares
397,811,800
312,041,563
284,029,545
247,184,245
225,222,350
213,357,929
182,765,338
170,607,382
147,434,313
119,380,611
117,135,839
10.75
8.43
7.67
6.68
6.08
5.76
4.94
4.61
3.98
3.22
3.16
Conflicts of Interest
The Companies Act 2006 permits directors of public
companies to authorise directors’ conflicts and potential
conflicts, where appropriate, where the Articles of Association
contain a provision to this effect. The Company’s Articles
contain such a provision. Procedures are in place in order to
avoid any conflict of interest between the Company and Tertiary
Minerals plc. Tertiary provides corporate and project
management services to Sunrise.
Approved by the Board on 10 December 2021 and signed on
its behalf.
Patrick Cheetham
Executive Chairman
20
Sunrise Resources plc Annual Report & Accounts 2021
Board of Directors
The Directors and Officers of the Company during the financial year were:
Patrick Cheetham
Executive Chairman
Key Strengths:
Roger Murphy
Non-Executive Director
Key Strengths:
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Founding director
Mining geologist with 39 years’ experience in mineral exploration
34 years in public company management
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Career focus in capital raising for mining and oil & gas companies
Former MD, Investment Banking, of Dundee Securities Europe Ltd
Geologist
Appointed: March 2005
Appointed: May 2016
Committee Memberships: Chairman of the Nomination Committee
External Commitments: Executive Chairman of Tertiary Minerals plc
Committee Memberships: Chairman of the Remuneration Committee and
Member of Audit and Nomination Committees
External Commitments: Partner and non-executive Director of Madini Minerals,
Executive Director of Zamare Minerals Ltd, Sarn Helen Gold Limited and TREO
Minerals Ltd.
James Cole
Non-Executive Director
Key Strengths:
Rod Venables
Company Secretary
Key Strengths:
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Chartered Accountant with strong commercial background and track
record of success in fundraising, mergers, disposals and acquisitions in
resource sector
Previously Finance Director for the Goal Group Limited. Formerly Chief
Financial Officer Cominco Resources Ltd, AIM/TSX traded European
Minerals Corporation plc and TSX/OSE traded Crew Gold Corporation.
Appointed: May 2021
Committee Memberships: Chairman of the Audit Committee and a Member of
the Remuneration and Nomination Committees
External Commitments: Not applicable.
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Qualified company/commercial solicitor
Director and Head of Company Secretarial Services at City Group PLC
Experienced in both Corporate Finance and Corporate Broking
Appointed: July 2019
External Commitments: Company Secretary for Tertiary Minerals plc and other
clients of City Group PLC
David Swan
Senior Non-Executive Director (Retired)
Key Strengths:
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Chartered Accountant with career focus in natural resources industry
Previous executive director of several public listed mining companies
Appointed: May 2012 Retired: May 2021
Previous Committee Memberships: Chairman of the Audit Committee and a
Member of the Remuneration and Nomination Committees
Sunrise Resources plc Annual Report & Accounts 2021
21
Corporate Governance
Chairman’s Overview
There is no prescribed corporate governance code for AIM
companies and the London Stock Exchange prefers to give
companies the flexibility to choose from a range of codes which
suit their specific stage of development, sector and size.
The Board considers the corporate governance code published
by the Quoted Companies Alliance to be the most suitable code
for the Company. Accordingly, the Company has adopted the
principles set out in the QCA Corporate Governance Code (the
“QCA Code”) and applies these principles wherever possible,
and where appropriate given its size and available resources.
The Company’s Corporate Governance Statement was
reviewed and amended by the Board on 10 December 2021.
The Company has set out on its website and in its Corporate
Governance Statement, set out on pages 23 to 26, the
10 principles of the QCA Code and details of the Company’s
compliance.
Patrick Cheetham, in his capacity as Chairman, has overall
responsibility for the corporate governance of the Company
and the Board is responsible for delivering on our well-defined
business strategy having due regard for the associated risks
and opportunities.
The Company’s corporate governance arrangements now in
place are designed to deliver a corporate culture that
understands and meets shareholder and stakeholder needs
for
and expectations whilst delivering
shareholders.
long-term value
The Board recognises that its principal activity, mineral
exploration and development, has potential to impact on the
local environment and consequently has adopted an
Environmental Policy to ensure that the Group’s activities have
minimal environmental impact. Where appropriate the Group’s
contracts with suppliers and contractors legally bind those
suppliers and contractors to do the same. The Group’s
activities, carried out in accordance with the Environmental
Policy, have had only minimal environmental impact at present
and this policy is regularly reviewed. Where appropriate, all
work is carried out after advance consultation with affected
parties.
the benefits
The Board recognises
that social media
engagement can have in helping the Company reach out to
shareholders and other stakeholders, but it also recognises that
misuse or abuse of social media can bring the Company into
disrepute. To facilitate the responsible use of social media the
Company has adopted a Social Media Policy applicable to all
officers and employees of the Company.
The Board has also adopted a Share Dealing Code for dealings
in shares of the Company by directors and employees and an
Anti-corruption Policy and Code of Conduct applicable to
employees, suppliers and contractors.
The Group recognises that the goodwill of its contractors,
consultants and suppliers is important to its business success
and seeks to build and maintain this goodwill through fair
dealings. The Group has a prompt payment policy and seeks
to settle all agreed liabilities within the terms agreed with
suppliers. The amount shown in the Consolidated and
Company Statements of Financial Position in respect of trade
payables at the end of the financial year represents 4 days of
average daily purchases (2020: 5 days). This amount is
calculated by dividing the creditor balance at the year end by
the average daily Group spend in the year.
The Board recognises it has a responsibility to provide strategic
leadership and direction in the development of the Group’s
health and safety strategy in order to protect all of its employees
and other stakeholders. The Company has developed a Health
and Safety Policy to clearly define roles and responsibilities and
in order to identify and manage risk.
Your Board currently comprises three directors of which two
are non-executive and considered by the Board to be
independent of management. We believe that this balance
provides an appropriate level of independent oversight. The
Board has the ability to seek independent advice although none
was deemed necessary in the year under review. The Board is
aware of the need to refresh its membership from time to time
and to match its skill set to those required for the development
of its mineral interests and will consider appointing additional
independent non-executive directors in the future.
Patrick Cheetham
Executive Chairman
22
Sunrise Resources plc Annual Report & Accounts 2021
Corporate Governance Statement
The QCA Code sets out ten principles which should be applied.
The principles are set out below with an explanation of how the
Company applies each principle, and the reasons for any
aspect of non-compliance.
local communities,
engages positively with
regulatory
authorities, suppliers and other stakeholders in its project
locations and encourages feedback through this engagement.
Through this process the Company identifies the key resources
and fosters the relationships on which the business relies.
Principle One: Establish a strategy and business model
which promote long-term value for shareholders.
The Company has a clearly defined strategy and business
model that has been adopted by the Board and is set out in the
Strategic Report starting on page 5. Details of the challenges
to the execution of the Company’s strategy and business model
and how those will be addressed can be found in Risks and
Uncertainties in the Strategic Report set out on pages 14 to 15.
Principle Two: Seek to understand and meet shareholder
needs and expectations.
The Board is committed to maintaining good communication
with its shareholders and investors. The Chairman and
members of the Board from time to time meet with shareholders
and investors directly or through arrangements with the
Company’s brokers
investment
requirements and expectations and to address their enquiries
and concerns.
to understand
their
All shareholders are normally encouraged to attend the
Company’s Annual General Meetings where they can meet and
directly communicate with the Board. After the close of
business at the Annual General Meeting, the Chairman makes
an up-to-date corporate presentation and opens the floor to
questions from shareholders.
Shareholders are also welcome to contact the Company via
email at info@sunriseresourcesplc.com with any specific
queries.
The Company also provides regulatory, financial and business
news updates through the Regulatory News Service (RNS) and
various media channels such as Twitter. Shareholders also have
access to information through the Company’s website,
www.sunriseresourcesplc.com, which is updated on a regular
basis and which includes the latest corporate presentation on
the Group. Contact details are also provided on the website.
Principle Three: Take into account wider stakeholder and
social responsibilities and their implications for long-term
success.
The Board takes regular account of the significance of social,
environmental and ethical matters affecting the business of the
Group. At this stage in the Group’s development, the Board has
not adopted a specific written policy on Corporate Social
Responsibility as it has a limited pool of stakeholders other than
its shareholders. Rather, the Board seeks to protect the interests
of the Group’s stakeholders through individual policies and
through ethical and transparent actions. The Company
Principle Four: Embed effective risk management,
considering both opportunities and threats, throughout
the organisation.
The Board regularly reviews the risks to which the Group is
exposed and ensures through its meetings and regular
reporting that these risks are minimised as far as possible whilst
recognising that its business opportunities carry an inherently
high level of risk. The principal risks and uncertainties facing
the Group at this stage in its development and in the
foreseeable future are detailed in Risks and Uncertainties in the
Strategic Report set out on pages 14 to 15, together with risk
mitigation strategies employed by the Board.
Principle Five: Maintain the board as a well-functioning,
balanced team led by the chair.
The Board’s role is to agree the Group’s long-term direction and
strategy and monitor achievement of its business objectives.
The Board meets formally four times a year for these purposes
and holds additional meetings when necessary to transact
other business. The Board receives regular and timely reports
for consideration on all significant strategic, operational and
financial matters. Relevant information for consideration by the
Board is circulated in advance of its meetings.
The Board met twelve times during the year to consider such
matters. Further details are provided in the Directors’ Report on
page 19. The Board is supported by the Audit, Remuneration
and Nomination Committees, details of which, together with
attendance records, can also be found on page 19.
The Board currently consists of the Executive Chairman (Patrick
Cheetham), and two non-executive directors (Roger Murphy
and James Cole). The current Board’s preference is that
independent non-executive directors comprise the majority of
Board members. Patrick Cheetham is currently the Chairman
and Chief Executive. Patrick Cheetham has a service contract
as Chairman of the Company and his services as Chief
Executive are provided to the Company, at cost, through a
Management Services Agreement with Tertiary Minerals plc
(“Tertiary”), in which he is a shareholder and where he is also
employed as Chairman. In 2021, Patrick Cheetham dedicated
over 51% of his working time to the Company and this is
expected to increase significantly in 2022 due to reduced
responsibilities in Tertiary. The combined role of Chairman and
Chief Executive results in cost savings and is considered
acceptable whilst there is a majority of independent directors
on the Board and having regard to the fact that the Company
is not yet revenue generating.
Sunrise Resources plc Annual Report & Accounts 2021
23
Corporate Governance continued
The non-executive directors have committed the time necessary
to fulfil their roles during the year. The attendance record of the
directors at Board and Board Committee meetings are detailed
in the Directors’ Report on page 19.
The current non-executive directors are considered
independent of management and free from any business or
other relationship which could materially interfere with the
exercise of their independent judgement.
Principle Six: Ensure that between them the directors
have the necessary up to date experience, skills and
capabilities.
The Board considers the current balance of sector, financial
and public market skills and experience of its directors are
relevant to the Company’s business and are appropriate for the
current size and stage of development of the Company and
the Board considers that it has the skills and experience
necessary to execute the Company’s strategy and business
plan and discharge its duties effectively.
The directors maintain their skills through membership of
various professional bodies, attendance at mining conferences
and through their various external appointments. Details of the
current Board of Directors’ biographies are set out on page 21.
All Directors have access to the advice and services of the
Company Secretary who is responsible for ensuring that Board
procedures and applicable rules and regulations are observed.
All directors are able to take independent professional advice,
if required, in relation to their duties and at the Company’s
expense.
Principle Seven: Evaluate board performance based on
clear and relevant objectives, seeking continuous
improvement.
The ultimate measure of the effectiveness of the Board is the
Company’s progress against the long-term strategy and aims
of the business. This progress is reviewed in Board meetings
held at least four times a year. The Executive Chairman’s
performance is regularly reviewed by the rest of the Board.
The Nomination Committee, currently consisting of the
Executive Chairman and the two non-executive directors, meets
once a year to lead the formal process of rigorous and
transparent procedures for Board appointments. During this
meeting the Nomination Committee reviews the structure, size
and composition of
the Board; succession planning;
leadership; key strategic and commercial issues; conflicts of
interest; time required from non-executive directors to execute
their duties effectively; overall effectiveness of the Board and
its own terms of reference. A new non-executive director, James
Cole, was appointed during the year.
Under the Articles of Association, new directors appointed to
the Board must stand for election at the first Annual General
Meeting of the Company following their appointment. Under the
Articles of Association, existing directors retire by rotation and
may offer themselves for re-election.
Principle Eight: Promote a corporate culture that is based
on ethical values and behaviours.
The Board recognises and strives to promote a corporate
culture based on strong ethical and moral values. The Group is
currently managed via a service agreement with Tertiary. It has
no employees but encourages Tertiary’s employees to
understand all aspects of the Group’s business and Tertiary
seeks to remunerate its employees fairly, being flexible where
practicable. In future, the Group will give full and fair
consideration
for employment received
regardless of age, gender, colour, ethnicity, disability, nationality,
religious beliefs, transgender status or sexual orientation. The
Board takes account of Tertiary’s employees’ interests when
making decisions, and suggestions from those employees
aimed at improving the Group’s performance are welcomed.
to applications
The corporate culture of the Company is promoted to Tertiary’s
employees, suppliers and contractors and is underpinned by
the implementation and regular review, enforcement and
documentation of various policies: Health and Safety Policy;
Environmental Policy; Share Dealing Policy; Anti-Corruption
Policy & Code of Conduct; Privacy and Cookies Policy and
Social Media Policy. These procedures enable the Board to
determine that ethical values are recognised and respected.
The Board recognises that its principal activity, mineral
exploration and development, has potential to impact on local
environments and consequently has adopted an Environmental
Policy to ensure that, wherever they take place, the Group’s
activities have minimal environmental
impact. Where
appropriate
the Group’s contracts with suppliers and
contractors legally bind those suppliers and contractors to do
the same. The Group’s activities carried out in accordance with
the Environmental Policy have had only minimal environmental
impact and this policy is regularly reviewed. Where appropriate,
all work is carried out after advance consultation with affected
parties.
Principle Nine: Maintain governance structures and
processes that are fit for purpose and support good
decision-making by the Board.
The Board has overall responsibility for all aspects of the
business. The Chairman is responsible for overseeing the
running of the Board, ensuring that no individual or group
dominates the Board’s decision-making, and that the non-
executive directors are properly briefed on all operational and
financial matters. The Chairman has overall responsibility for
corporate governance matters in the Group and chairs the
Nomination Committee. The Chairman has the responsibility for
implementing the strategy of the Board and managing the day-
to-day business activities of the Group. The Company
24
Sunrise Resources plc Annual Report & Accounts 2021
Secretary is responsible for ensuring that Board procedures are
followed, and applicable rules and regulations are complied
with. Key operational and financial decisions are reserved for
the Board through quarterly project reviews, annual budgets,
and quarterly budget and cash-flow forecasts and on an ad
hoc basis where required.
(b) ensure that the Board of Directors has adequate
knowledge of issues discussed with external auditors.
(c)
ensure the financial information and reports issued by the
Company to AIM, shareholders and other recipients are
accurate and contain proper disclosure at all times.
The two non-executive directors are responsible for bringing
independent and objective judgment to Board decisions. The
Board has established Audit, Remuneration and Nomination
Committees with formally delegated duties and responsibilities.
James Cole currently chairs the Audit Committee, Roger
Murphy chairs the Remuneration Committee and Patrick
Cheetham chairs the Nomination Committee.
This Corporate Governance statement will be reviewed at least
annually to ensure that the Company’s corporate governance
framework evolves in line with the Company’s strategy and
business plan.
Principle Ten: Communicate how the Company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders.
The Company regularly communicates with, and encourages
feedback from, its shareholders who are its key stakeholder
group. The Company’s website is regularly updated and users,
including all stakeholders, can register to be alerted via email
when material announcements are made. The Company’s
contact details are on the website should stakeholders wish to
make enquiries of management.
The Group’s financial reports for at least the past five years can
be found here: https://www.sunriseresourcesplc.com/financial-
reports and contains past Notices of Annual General Meetings.
The results of voting on all resolutions in general meetings are
posted to the Company’s website, including any actions to be
taken as a result of resolutions for which votes against have
been received from at least 20 per cent of independent votes.
Audit Committee Report
The Audit Committee is a sub-committee of the Board,
comprised of the independent non-executive directors and
assists the Board in meeting responsibilities in respect of
external financial reporting and internal controls. The Audit
Committee also keeps under review the scope and results of
the cost-effectiveness,
the audit.
independence and objectivity of the auditors taking account of
any non-audit services provided by them. James Cole is Chair
of the Audit Committee.
It also considers
The specific objectives of the Committee are to:
(a) maintain adequate quality and effective scope of the
external audit of the Group including its branches where
applicable and review the independence and objectivity
of the auditors.
(d) maintain the integrity of the Group’s administrative
operating and accounting controls and internal control
principles.
(e)
ensure proper accounting policies are adhered to by the
Group.
The Committee has unlimited access to the external auditors,
to senior management of the Group and to any external party
deemed necessary for the proper discharge of its duties. The
Committee may consult
it
considers necessary to perform it duties.
independent experts where
The Audit Committee reviews the financial controls of the
Company on a regular basis and is satisfied that the Group’s
financial controls and reporting procedures are robust and
sufficient to ordinarily prevent fraud and ensure that senior
management, the Committee and the Board are fully aware of
the Company’s financial position at all times.
The Audit Committee met twice in the last financial year, on
11 December 2020 and 24 May 2021. Significant reporting
issues considered during the year included the following:
1. Impairments
The Committee has reviewed the carrying values of the Group
projects and the Group inter-company loans and carried out
impairment reviews. The project carrying values are assessed
against the IFRS 6 criteria set out in Note 1(k) on page 38.
Loans to Group undertakings are assessed for impairment
under IFRS 9.
As a result of the year-end review it was judged that the
Sundance Project expenditure should be impaired and that
none of the Group’s inter-company loans should be impaired.
Further details are provided on pages 38 and 39.
2. Going Concern
The Committee also considered the Going Concern basis on
which the accounts have been prepared (see Note 1(b) on
page 36). The directors are satisfied that the Going Concern
basis is appropriate for the preparation of the financial
statements.
James Cole
Chair – Audit Committee
Sunrise Resources plc Annual Report & Accounts 2021
25
Corporate Governance continued
Remuneration Committee Report
The Remuneration Committee is a sub-committee of the Board
and comprises the independent non-executive directors,
Mr Cole having been appointed as a member of the
Remuneration Committee on 27 May 2021. Mr Murphy is
Chairman of the Remuneration Committee.
The primary objective of the Committee is to review the
performance of the executive directors and review the basis of
their service agreements and make recommendations to the
Board regarding the scale and structure of their remuneration.
However, the Company does not currently remunerate any of
the directors other than in their capacity as directors. Whilst the
Chairman of the Board, Patrick Cheetham, does have an
executive role, his technical and managerial services are
provided under a general service agreement with Tertiary
Minerals plc and his remuneration is fixed by Tertiary Minerals
plc. Nonetheless, it is the role of the Remuneration Committee
is appropriately
the executive director
to ensure
incentivised and rewarded for his services to the Company and
this will be considered as part of the Committee’s review of any
Long-Term Incentive Plan.
that
The Remuneration Committee has not met during the financial
year under review.
Roger Murphy
Chair – Remuneration Committee
Nomination Committee Report
The Nomination Committee comprises the Chairman and the
independent non-executive directors. Patrick Cheetham is Chair
of the Nomination Committee.
The Nomination Committee meets at least once per year to lead
the formal process of rigorous and transparent procedures for
Board appointments and to make recommendations to the
Board in accordance with best practice and other applicable
rules and regulations, insofar as they are appropriate to the
Group at this stage in its development.
The Committee is required to:
(a) Review the structure, size and composition of the Board
and make recommendations to the Board with regard to
any changes.
(b) Give full consideration to succession planning for
directors and other senior executives in the course of its
work,
the challenges and
opportunities facing the Company, and the skills and
expertise needed on the Board in the future.
into account
taking
(c) Keep under review the leadership needs of the
organisation to compete effectively in the marketplace.
(d) Review annually the time required from non-executive
directors.
(e) Arrange periodic reviews of its own performance and, at
least annually, review its constitution and terms of
reference
is operating at maximum
effectiveness and recommend any changes it considers
necessary to the Board for approval.
to ensure
it
The Committee carries out its duties for the Parent Company,
major subsidiary undertakings and the Group as a whole and
met once during the period under review, on 27 May 2021 to
consider and recommend to the Board the appointment of Mr.
Cole to the Board. Mr. Cole was subsequently appointed to the
Board and to the Nomination Committee.
The Committee is satisfied that the current Board has a depth
of experience and level and range of skills appropriate to the
Company at this stage in its development. It is however
recognised that the Company is likely to need additional
expertise as it moves forward into commercial production and
so the composition of the Board will be kept under careful
review to ensure that the Board can deliver long-term growth in
shareholder value.
Patrick Cheetham
Chair – Nomination Committee
26
Sunrise Resources plc Annual Report & Accounts 2021
Independent Auditor’s Report
to the Members of Sunrise Resources plc for the year ended 30 September 2021
Opinion
We have audited the financial statements of Sunrise Resources
plc (the “Parent Company”) and its subsidiaries (the “Group”)
for the year ended 30 September 2021, which comprise:
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the Group
income statement and statement of
comprehensive income for the year ended 30 September
2021;
the Group and Parent Company statements of financial
position as at 30 September 2021;
the Group and Parent Company statements of cash flows
for the year then ended;
the Group and Parent Company statements of changes
in equity for the year then ended; and
the notes to the financial statements, including a summary
of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group and Parent Company financial
statements is applicable law and International Accounting
Standards in conformity with the Companies Act 2006.
In our opinion:
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the financial statements give a true and fair view of the
state of the Group’s and of the Parent Company's affairs
as at 30 September 2021 and of the Group’s loss for the
period then ended;
the Group financial statements have been properly
prepared in accordance with applicable law and
International Accounting Standards in conformity with the
Companies Act 2006;
the Parent Company financial statements have been
properly prepared in accordance with applicable law and
International Accounting Standards in conformity with the
Companies Act 2006; and
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
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.
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 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, 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 relating to going concern
We draw attention to Note 1(b) in the financial statements, which
indicates that the Group’s future projections of positive monthly
net cashflows for the foreseeable future, rely upon cash inflows
from successful fundraising at a certain point in time within the
next 12 months. The Group is reliant upon this fundraising in
order to adequately finance overheads, meet its liabilities as
they fall due and maintain planned discretionary project
expenditure necessary to realise the value inherent in
exploration projects. Therefore as stated in Note 1(b), these
events and conditions indicate that a material uncertainty exists
that may cast significant doubt on the ability of the Group (and
Company) to continue as a going concern. In considering the
longer term financial outlook of the Group, the continued
viability of the most significant exploration and evaluation
assets as set out in note 1 (k) is critical to this assessment. The
risks and audit responses are detailed in the Key Audit Matters
below. Our opinion is not modified in respect of these matters.
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate, but there
is a material uncertainty in relation to this matter. Our evaluation
of the directors’ assessment of the Group’s ability to continue
to adopt the going concern basis of accounting included;
Consideration based on historical experience of the accuracy
of forecasting in previous periods by management; review of
forecast expenditure, consideration of management
assumptions and the probability of achieving forecast
expenditure; assessment of the key uncertainties and the
impact upon our reporting.
The key observation from our assessment was the reliance of
the Group upon successful raising of finance to fund projected
expenditure and continue as a going concern for the
foreseeable future. This represents a material uncertainty.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept
of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of
a user of the financial statements. We used the concept of
materiality to both focus our testing and to evaluate the impact
of misstatements identified.
Sunrise Resources plc Annual Report & Accounts 2021
27
Independent Auditor’s Report continued
to the Members of Sunrise Resources plc for the year ended 30 September 2020
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
£65,000, based on combined asset measures (2% of total
assets and 3% of net assets), with a lower level of materiality
for the consolidated Income Statement, £24,000, based on 8%
of the expected loss.
Materiality for the Company was based upon the same criteria
and determined at £65,000, with £20,000 applied to the Income
Statement.
We use a different level of materiality (‘performance materiality’)
to determine the extent of our testing for the audit of the
financial statements. Performance materiality was set at
£46,000 for the Group and Company.
We agreed with the Audit and Risk Committee to report to it all
identified errors in excess of £3,250 (5% of materiality). Errors
below that threshold would also be reported to it if, in our opinion
as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The Group and its subsidiaries are accounted for from one
central operating location, the Group’s registered office. Our
audit was conducted from the main operating location and all
group companies were within the scope of our audit testing.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, 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) that we identified. These matters included
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.
We determined that going concern should be considered a key
audit matter and this is described above in the section “Material
uncertainty relating to going concern.”
The other key matters and responses are summarised below.
This is not a complete list of all risks identified by our audit.
How the scope of our audit addressed the key
audit matter
In respect of all material intangible assets our audit work
included, but was not restricted to:
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Substantive testing on expenditure capitalised in the
year to ensure it was permitted under accounting
standards;
Reviewing progress on exploration and evaluation
activities at each of the licence areas to assess
whether there was evidence which would indicate
a potential impairment trigger;
Reviewing approved budget forecasts and minutes
of board meetings to confirm the intention to
continue exploration work on the licences; and
Review and challenge of the directors’ assessment
of whether there are any indicators of impairment
to capitalised costs and discussion around any key
judgemental areas.
Key audit matter
Potential impairment of capitalised exploration and
evaluation costs.
The Group has intangible assets, comprising exploration
and evaluation project costs, the most significant of which
are the CS Pozzolan, Bay State and County Line projects
within SR Minerals Inc. and Bakers project held in Sunrise
Minerals Australia Pty Ltd.
Together, the CS, Bay State and County Line projects
constitute a significant proportion (81%) of the capitalised
exploration costs in Sunrise Group. Both Bay State and
County Line projects have seen minimal expenditure in
recent years as the Group focuses on the CS Project.
There is a risk that the criteria set out in IFRS 6 associated
with the capitalisation of exploration and evaluation
expenditure may no longer be appropriate and that
capitalised costs to date exceed recoverable amount for
the sites.
The directors are required to assess whether there are any
indicators of impairment of these assets. Any assessment
of value in use requires that accumulated costs be
assessed against the likelihood that such costs will be
recoverable against future exploitation or sale. This requires
management to use their sector experience, apply their
specialist expertise and form a conclusive judgement as
whether or not, on the balance of evidence, further
exploration is justified to determine if an economically
viable mining operation can be established in future.
28
Sunrise Resources plc Annual Report & Accounts 2021
How the scope of our audit addressed the key
audit matter
In conjunction with our work associated with the potential
impairment of the exploration and evaluation assets held
within subsidiaries, critical review of the directors’
assessment of potential impairment of investments in
subsidiaries and recoverability of loans to subsidiaries in
the accounts of Sunrise Resources plc (the Company).
Key audit matter
Potential impairment of investments in subsidiaries
and recoverability of loans to subsidiaries in the
Company financial statements.
The carrying values of investments in and recoverability
of loans to subsidiaries, SR Minerals Inc., Sunrise
Materials Australia Pty Ltd and Westgold Inc., are
dependent upon the future cash flows associated with the
recovery of the exploration and evaluation assets held by
the subsidiaries.
In the event of impairment in the underlying exploration
and evaluation assets, there is a potential impact upon
the realisation of investments and recoverability of loans
in the accounts of Sunrise Resources plc (the Company)
and this assessment would also be required by the
directors.
Our audit procedures in relation to these matters were
designed in the context of our audit opinion as a whole. They
were not designed to enable us to express an opinion on these
matters individually and we express no such opinion.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion based on the work undertaken in the course of
our audit
Other information
The directors are responsible for the other information. The
other information comprises the information included in the
annual report, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
l
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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 directors’ report and strategic report have been
prepared
legal
requirements.
in accordance with applicable
In connection with our audit of the financial statements, 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
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is
a material misstatement in the financial statements or a material
misstatement of the other information. 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.
Matters on which we are required to report by
exception
In light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the
identified material
course of
misstatements in the strategic report or the directors’ report.
the audit, we have not
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
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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
Sunrise Resources plc Annual Report & Accounts 2021
29
Independent Auditor’s Report continued
to the Members of Sunrise Resources plc for the year ended 30 September 2020
determination of material amounts and disclosures in the
financial statements. The laws and regulations we considered
in this context were the Companies Act 2006.
We identified the greatest risk of material impact on the financial
statements from irregularities, including fraud, to be the
override of controls by management. Our audit procedures to
respond to these risks included enquiries of management
about their own identification and assessment of the risks of
irregularities, sample testing on the posting of journal entries
for evidence of
and
management bias.
reviewing accounting estimates
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. We are not responsible for preventing non-
compliance and cannot be expected to detect non-compliance
with all laws and regulations.
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.
Ian Weekes
(Senior Statutory Auditor)
For and on behalf of Crowe U.K. LLP
Statutory Auditor
Manchester, United Kingdom
10 December 2021
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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 the directors for the
financial statements
As explained more fully in the directors’ responsibilities
statement set out on page 18, the directors are responsible for
the preparation of the 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 financial statements, the directors are
responsible for assessing the Group’s and Parent Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or the Parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined above,
to detect material
misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
We identified and assessed the risks of material misstatement
of the financial statements from irregularities, whether due to
fraud or error and discussed these between audit team
members. We then designed and performed audit procedures
in response to those risks, including obtaining audit evidence
sufficient and appropriate to provide a basis for our opinion.
We obtained an understanding of the legal and regulatory
frameworks within which the company operates, focusing on
those laws and regulations which have a direct effect on the
30
Sunrise Resources plc Annual Report & Accounts 2021
Consolidated Income Statement
for the year ended 30 September 2021
Pre-licence exploration costs
Impairment of deferred exploration assets
Administration costs
Operating loss
Gain on sale of exploration assets
Interest receivable
Loss before income tax
Income tax
Loss for the year attributable to equity holders of the parent
Loss per share - basic and diluted (pence)
All amounts relate to continuing activities.
Notes
9
3
7
6
2021
£
17,320
30,021
2020
£
4,183
–
318,630
298,980
(365,971)
(303,163)
30,658
61
–
261
(335,252)
(302,902)
–
–
(335,252)
(302,902)
(0.009)
(0.009)
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2021
Loss for the year
Items that could be reclassified subsequently to the income statement:
2021
£
2020
£
(335,252)
(302,902)
Foreign exchange translation differences on foreign currency net investments in subsidiaries
(86,770)
(75,659)
Items that will not be reclassified to the income statement:
Changes in the fair value of equity investments
(86,770)
(75,659)
(9,651)
(1,660)
(96,421)
(77,319)
Total comprehensive loss for the year attributable to equity holders of the parent
(431,673)
(380,221)
Sunrise Resources plc Annual Report & Accounts 2021
31
Consolidated and Company Statements of Financial Position
at 30 September 2021
Company Registration Number: 05363956
Non-current assets
Intangible assets
Right of use assets
Investment in subsidiaries
Other investments
Current assets
Receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Lease liabilities
Net current assets
Non current liabilities
Lease liabilities
Reclamation
Net assets
Equity
Called up share capital
Share premium account
Share warrant reserve
Fair value reserve
Foreign currency reserve
Accumulated losses
Notes
9
17
8
8
11
12
13
17
17
20
Group
2021
£
2,133,137
13,423
Company
2021
Group
2020
Company
2020
££
–
–
£
1,867,218
18,431
–
–
–
2,753,586
–
2,269,548
63,503
45,675
19,765
–
2,210,063
2,799,261
1,905,414
2,269,548
130,805
371,740
22,701
51,980
26,670
337,817
1,089,417
1,065,480
502,545
360,518
1,141,397
1,092,150
(100,861)
(80,357)
(90,677)
(80,786)
(2,300)
–
(2,364)
–
399,384
280,161
1,048,356
1,011,364
(4,715)
(26,665)
–
–
(7,336)
–
–
–
2,578,067
3,079,422
2,946,434
3,280,912
14
3,701,805
3,701,805
3,677,997
3,677,997
5,675,616
5,675,616
5,655,781
5,655,781
14
14
40,164
33,102
(37,331)
40,164
28,662
1,321
33,893
42,753
49,439
33,893
36,987
1,319
(6,835,289)
(6,368,146)
(6,513,429)
(6,125,065)
Equity attributable to owners of the parent
2,578,067
3,079,422
2,946,434
3,280,912
The Company reported a loss for the year ended 30 September 2021 of £256,473 (2020: £233,598).
These financial statements were approved and authorised for issue by the Board on 10 December 2021 and were signed on its
behalf.
P L Cheetham
Executive Chairman
J Cole
Director
32
Sunrise Resources plc Annual Report & Accounts 2021
Consolidated Statement of Changes in Equity
Group
Share
capital
£
Share
Share
premium warrant
reserve
account
£
£
Fair
value
reserve
£
Foreign
currency Accumulated
losses
£
reserve
£
Total
£
At 30 September 2019
2,749,760
5,059,244
24,476
44,413
125,098
(6,220,042)
1,782,949
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
Share issue
Share–based payments expense
Transfer of expired warrants
–
–
–
–
–
–
–
–
928,237
596,537
–
–
–
–
–
–
–
–
–
18,932
(9,515)
–
(1,660)
–
–
–
(75,659)
(302,902)
(302,902)
–
–
(1,660)
(75,659)
(1,660)
(75,659)
(302,902)
(380,221)
–
–
–
–
–
–
–
–
1,524,774
18,932
9,515
–
At 30 September 2020
3,677,997
5,655,781
33,893
42,753
49,439
(6,513,429)
2,946,434
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
Share issue
Share–based payments expense
Transfer of expired warrants
–
–
–
–
–
–
–
–
23,808
19,835
–
–
–
–
–
–
–
–
–
19,663
(13,392)
–
(9,651)
–
–
–
(86,770)
(335,252)
(335,252)
–
–
(9,651)
(86,770)
(9,651)
(86,770)
(335,252)
(431,673)
–
–
–
–
–
–
–
–
13,392
43,643
19,663
–
At 30 September 2021
3,701,805
5,675,616
40,164
33,102
(37,331)
(6,835,289)
2,578,067
Sunrise Resources plc Annual Report & Accounts 2021
33
Company Statement of Changes in Equity
Company
Share
capital
£
Share
Share
premium warrant
reserve
account
£
£
Fair
value
reserve
£
Foreign
currency Accumulated
losses
£
reserve
£
Total
£
At 30 September 2019
2,749,760
5,059,244
24,476
36,987
1,321
(5,900,982)
1,970,806
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
–
–
–
–
–
–
–
–
–
–
–
–
Share issue
Share–based payments expense
Transfer of expired warrants
928,237
–
–
596,537
–
–
–
18,932
(9,515)
–
–
–
–
–
–
–
–
–
(2)
(2)
–
–
–
(233,598)
–
–
(233,598)
–
(2)
(233,598)
(233,600)
–
–
9,515
1,524,774
18,932
–
At 30 September 2020
3,677,997
5,655,781
33,893
36,987
1,319
(6,125,065)
3,280,912
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
–
–
–
–
–
–
–
–
–
–
–
–
–
(8,325)
–
(8,325)
Share issue
Share–based payments expense
Transfer of expired warrants
23,808
–
–
19,835
–
–
–
19,663
(13,392)
–
–
–
–
–
2
2
–
–
–
(256,473)
–
–
(256,473)
(8,325)
2
(256,473)
(264,796)
–
–
13,392
43,643
19,663
–
At 30 September 2021
3,701,805
5,675,616
40,164
28,662
1,321
(6,368,146)
3,079,422
34
Sunrise Resources plc Annual Report & Accounts 2021
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2021
Operating activity
Operating (loss)/profit
Depreciation/interest charge
Share-based payment charge
Shares issued in lieu of net wages
Shares issued via exercise of warrants
Impairment charge – deferred exploration asset
Disposal of exploration assets
Non cash addition to equity investment
Reclamation liability
(Increase)/decrease in receivables
(Increase)/decrease in trade and other payables
Net cash outflow from operating activity
Investing activity
Interest received
Cash receipt from disposal of exploration assets
Lease payments
Development expenditures
Loans to subsidiaries
Group
2021
£
Company
2021
Group
2020
Company
2020
££
£
Notes
17
9
9
8
20
11
13
17
9
(335,313)
(285,413)
(303,163)
(270,642)
4,744
19,663
30,818
12,825
30,021
40,480
(45,675)
(26,665)
(78,825)
10,184
–
19,663
30,818
12,825
–
–
(45,675)
–
3,969
(429)
3,700
18,932
30,724
17,550
–
–
–
–
–
18,932
30,724
17,550
–
–
–
–
1,761
17,690
(5,382)
32,981
(337,743)
(264,242)
(212,806)
(175,837)
60
28,941
20,000
(2,378)
(391,061)
–
–
–
261
–
(12,431)
(188,587)
37,173
–
–
–
–
(484,038)
–
(293,167)
Net cash outflow from investing activity
(373,379)
(455,097)
(200,757)
(255,994)
Financing activity
Issue of share capital (net of expenses)
–
–
1,476,500
1,476,500
Net cash inflow from financing activity
(711,122)
(719,339)
1,476,500
1,476,500
Net increase/(decrease) in the year
Cash and cash equivalents at start of year
Exchange differences
(711,122)
(719,339)
1,062,937
1,044,669
1,089,417
1,065,480
27,069
20,941
6,555
(8,324)
(589)
(130)
Cash and cash equivalents at 30 September
12
371,740
337,817
1,089,417
1,065,480
Sunrise Resources plc Annual Report & Accounts 2021
35
Notes to the Financial Statements
for the year ended 30 September 2021
Background
Sunrise Resources plc (the “Company”) is a public company incorporated and domiciled in England. It is traded on the AIM
Market of the London Stock Exchange – EPIC: SRES.
The Company is a holding company (together, “the Group”) for one company incorporated in Australia, and two companies
incorporated in Nevada, in the United States of America. The Group’s financial statements are presented in Pounds Sterling (£)
which is also the functional currency of the Company.
The following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the Group’s financial statements.
1.
Accounting policies
(a) Basis of preparation
The financial statements have been prepared on the basis of the recognition and measurement requirements of applicable law
and International Accounting Standards in conformity with the Companies Act 2006.
(b) Going concern
In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete
tranches. Further funding is raised as and when required. When any of the Group’s projects move to the development stage,
specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given
the Group’s cash position at year end (£371,740), these projections include the proceeds of future fundraising necessary within
the next 12 months to meet the Company’s and Group’s overheads and planned discretionary project expenditures and to maintain
the Company and Group as going concerns. Although the Company has been successful in raising finance in the past, there is
no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions
which may cast significant doubt on the Group’s and Company’s ability to continue as going concerns and, therefore, that they
may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the directors have
a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and
exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation
of the financial statements.
(c) Basis of consolidation
Investments, including long-term loans, in the subsidiaries are valued at the lower of cost or recoverable amount, with an ongoing
review for impairment.
The Group’s financial statements consolidate the financial statements of Company and its subsidiary undertakings using the
acquisition method and eliminate intercompany balances and transactions.
In accordance with section 408 of the Companies Act 2006, the Company is exempt from the requirement to present its own
statement of comprehensive income. The amount of the loss for the financial year recorded within the financial statements of the
Company is £256,473 (2020: £233,598).
Intangible assets
(d)
Exploration and evaluation
Accumulated exploration and evaluation costs incurred in relation to separate areas of interest (which may comprise more than
one exploration licence or exploration licence applications) are capitalised and carried forward where:
(1)
(2)
such costs are expected to be recouped through successful exploration and development of the area, or alternatively by its
sale; or
exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to
the areas are continuing.
A biannual review is carried out by the directors to consider whether there are any indications of impairment in capitalised
exploration and development costs. The biannual impairment reviews were conducted in April 2021 and October 2021.
36
Sunrise Resources plc Annual Report & Accounts 2021
Where an indication of impairment is identified, the relevant value is written off to the income statement in the period for which the
impairment was identified. An impairment of exploration and development costs may be subsequently reversed in later periods
should conditions allow.
Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest which
have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred or in
which the area was abandoned.
Development
Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On reaching
a mining development decision, for example, the commitment of capital to mine development, exploration and evaluation costs
are reclassified as development costs and all development costs on a specific area of interest will be amortised over the useful
economic life of the projects, once they become income generating and the costs can be recouped.
(e) Trade and other receivables and payables
Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised
cost.
(f) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or
less.
(g) Leases
IFRS 16 requires the recognition of lease commitments as right of use assets and the recognition of a corresponding liability.
Lease costs are recognised in the income statement in the form of depreciation of the right of use asset over the lease term and
interest charges representing the unwind of the discount on the lease liability.
Short term leases, which fall outside the IFRS 16 requirements, having a duration of 12 months or less, are charged to the income
statement on straight line basis.
(h) Deferred taxation
Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment
of certain items for taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as recoverable.
Foreign currencies
(i)
The Group’s consolidated financial statements are presented in Pounds Sterling (£), being the functional currency of the Company,
and the currency of the primary economic environment in which the Company operates. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.
For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries,
associated undertakings and joint arrangements, that have a functional currency different from the Group’s presentation currency,
are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional currency different
from the Group’s presentation currency, are translated at exchange rates at the date of transaction. Exchange differences arising
on opening reserves are taken to the foreign currency reserve in equity.
(j) Share warrants and share-based payments
The Company issues warrants to employees (including directors) and third parties. The fair value of the warrants is recognised
as a charge measured at fair value on the date of grant and determined in accordance with IFRS 2 or IAS 39, adopting the Black–
Scholes–Merton model. The fair value is recognised on a straight-line basis over the vesting period, with a corresponding
adjustment to equity, based on the management’s estimate of shares that will eventually vest. The expected life of the warrants is
adjusted, based on management’s best estimates, for the effects of non-transferability, exercise restrictions and behavioural
considerations. The details are shown in Note 15.
The Company also issues shares in order to settle certain liabilities, including payment of fees to directors. The fair value of shares
issued is based on the closing mid-market price of the shares traded on the AIM market on the day prior to the date of settlement
and it is expensed on the date of settlement with a corresponding increase in equity.
Sunrise Resources plc Annual Report & Accounts 2021
37
Notes to the Financial Statements continued
for the year ended 30 September 2021
(k) Judgements and estimations in applying accounting policies
In the process of applying the Group’s accounting policies above, management has identified the judgemental areas that have
the most significant effect on the amounts recognised in the financial statements:
Intangible assets — exploration and evaluation
IFRS 6 “Exploration for and Evaluation of Mineral Resources” requires that exploration and evaluation assets shall be assessed
for impairment when facts and circumstances suggest that the carrying amount may exceed recoverable amount.
In practical terms, this requires that project carrying values are regularly monitored and assessed for recoverability whether from
future exploitation of resources or realised by sale to a third party.
Where activities have not reached a stage, which permits reasonable confirmation of the existence of mineral reserves, the
directors must form a judgement whether future exploration and evaluation should continue. This requires management to use
their sector experience, apply their specialist expertise and form a conclusive judgement whether or not, on the balance of
evidence that further exploration is justified to determine if an economically viable mining operation can be established in future.
Such estimates, judgements and assumptions are likely to change as new information and evidence becomes available. If it
becomes apparent, in the judgement of the directors, that recovery of capitalised expenditure is unlikely, the carrying value should
be considered as impaired and treated as detailed below.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried out on a project by project basis, with each project
representing a potential single cash generating unit. The directors are required to continually monitor and review the carrying
values by reference to new developments, stages in the exploration process and new circumstances. Assessment of the potential
impairment of assets requires an updated judgement of the probability of adequate future cash flows from the relevant project.
It includes consideration of:
(a)
The period for which the entity has the right to explore in the specific area and whether this right will expire in the near future,
and whether the right is expected to be renewed.
(b) Whether substantive expenditure on further exploration for and evaluation of mineral resources for the specific project is
either budgeted or planned.
(c) Whether exploration for and evaluation of mineral resources on the specific project has led to the discovery of commercially
viable quantities of mineral resources and whether the entity has decided to discontinue such activities on the project.
(d) Whether sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the carrying
amount of the exploration and evaluation asset is likely to be recovered in full from successful development of a mine or by
the sale of the project.
The judgements in respect of key projects are as follows;
The CS Project in Nevada is the Group’s lead project with a carrying value of £1,187,000. In the judgement of the directors, this
is justified as, following the successful grant of various mining and production permits, the focus is on the mine start up and
production.
Further exploration at the Bay State Project, Nevada (carrying value £411,000), is budgeted and project leases and claims are
being maintained. In the judgement of the directors further evaluation and exploration is justified as, despite some drilling issues,
positive drilling results have been obtained so far. In the opinion of the directors this asset is not impaired.
Although there has been no exploration during 2021 on the County Line Project, Nevada (carrying value £137,000), in the
judgement of the directors further evaluation of the production potential is justified. The mining claims have been renewed for a
further 12 month period and the project is not impaired.
In relation to the Bakers Project, Australia (carrying value of £144,000), exploration during the year has provided good results
and further exploration has been budgeted. In the judgment of the directors exploration results to-date justify further exploration
and in the opinion of the directors the project is not impaired.
38
Sunrise Resources plc Annual Report & Accounts 2021
Also, in relation to other projects, the exploration rights are being maintained and further exploration and/or drilling is budgeted
therefore the directors have reached the conclusion that no impairments are required.
Going concern
The preparation of financial statements requires an assessment of the validity of the going concern assumption. This in turn is
dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption
that such finance will become available, the directors believe that the going concern basis is appropriate for these accounts.
Share warrants and share-based payments
The estimates of costs recognised in connection with the fair value of share warrants requires that management selects an
appropriate valuation model and make decisions on various inputs into the model including the volatility of its own share price,
the probable life of the warrants before exercise, and behavioural consideration of warrant holders.
Financial assets designated at fair value through OCI
(l)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair
value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not held for
trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds
as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under this category.
(m) Reclamation costs
The Group’s mining and exploration activities are subject to various governmental laws and regulations relating to the protection
of the environment. The Group records a liability for the estimated future rehabilitation costs and decommissioning of its
development projects at the time a constructive obligation is determined.
When provisions for closure and environmental rehabilitation are initially recognised, the corresponding cost is capitalised as an
intangible asset, representing part of the cost of acquiring the future economic benefits of the operation. The capitalised cost of
closure and environmental rehabilitation activities is recognised in mining interests and, from the commencement of commercial
production, is amortised over the expected useful life of the operation to which it relates. Any change in the value of the estimated
expenditure is reflected in an adjustment to the provision and asset.
(n) Standards, amendments and interpretations not yet effective
At the date of authorisation of these financial statements, there are no amended standards and interpretations issued by the IASB
that impact the Group as they are either not relevant to the Group’s activities or require accounting which is consistent with the
current accounting policies.
Segmental analysis
2.
The Chief Operating Decision Maker is the Board of Directors. The Board considers the business has one reportable segment,
the management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental
profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects, no Head
Office cost allocations are made to this segment. The Head Office function recognises all other costs.
Sunrise Resources plc Annual Report & Accounts 2021
39
Notes to the Financial Statements continued
for the year ended 30 September 2021
2021
Consolidated Income Statement
Pre-licence exploration costs
Share-based payments
Impairment of exploration assets
Other expenses
Operating loss
Gain of disposal of exploration assets
Interest receivable
Loss before income tax
Income tax
Exploration
projects
£
Head
office
£
17,320
–
30,021
–
(47,341)
30,658
–
(16,683)
–
–
19,663
–
298,967
(318,630)
–
61
(318,569)
–
Total
£
17,320
19,663
30,021
298,967
(365,971)
30,658
61
(335,252)
–
Loss for the year attributable to equity holders of the parent
(16,683)
(318,569)
(335,252)
Non-current assets
Intangible assets:
Deferred exploration costs:
Baker’s Gold Project, Australia
County Line Diatomite Project, USA
Bay State Silver Project, USA
NewPerl Project/Jackson Wash Project, USA
Ridge Limestone Project, USA
CS Pozzolan-Perlite Project, USA
Clayton Gold Project, USA
Newark Silver-Gold Project, USA
Myrtle Project, USA
Right of use assets
Other investments
Current assets
Receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Lease liabilities
Net current assets
Non-current liabilities
Reclamation liabilities
Lease liabilities
Net assets
Other data
Deferred exploration additions
Exchange rate adjustments to deferred exploration costs
40
Sunrise Resources plc Annual Report & Accounts 2021
144,343
136,665
410,686
66,153
29,262
1,187,489
117,771
31,470
9,298
2,133,137
13,423
–
2,146,560
–
–
–
–
–
–
–
–
–
–
–
63,503
144,343
136,665
410,686
66,153
29,262
1,187,489
117,771
31,470
9,298
2,133,137
13,423
63,503
63,503
2,210,063
105,178
–
105,178
25,627
371,740
397,367
130,805
371,740
502,545
(29,973)
(2,300)
(70,888)
–
(100,861)
(2,300)
72,905
326,479
399,384
(26,665)
(4,715)
–
–
(26,665)
(4,715)
2,188,085
389,982
2,578,067
391,061
(80,880)
–
–
391,061
(80,880)
2020
Consolidated Income Statement
Pre-licence exploration costs
Share-based payments
Other expenses
Operating loss
Interest receivable
Loss before income tax
Income tax
Exploration
projects
£
Head
office
£
4,183
–
–
(4,183)
–
(4,183)
–
–
18,932
280,048
(298,980)
261
(298,719)
–
Total
£
4,183
18,932
280,048
(303,163)
261
(302,902)
–
Loss for the year attributable to equity holders of the parent
(4,183)
(298,719)
(302,902)
Non-current assets
Intangible assets:
Deferred exploration costs:
Baker’s Gold Project, Australia
County Line Diatomite Project, USA
Garfield Silver-Gold-Copper Project, USA
Bay State Silver Project, USA
NewPerl Project/Jackson Wash Project, USA
Ridge Limestone Project, USA
CS Pozzolan-Perlite Project, USA
Clayton Gold Project, USA
Newark Silver-Gold Project, USA
Stonewall Gold Project, USA
Right of use assets
Other investments
Current assets
Receivables
Cash and cash equivalents
Current liabilities
Trade and other payables
Lease liabilities
Net current assets
Non-current liabilities
Lease liabilities
Net assets
Other data
Deferred exploration additions
Exchange rate adjustments to deferred exploration costs
70,451
139,396
28,158
410,965
62,160
25,378
1,066,685
20,087
29,768
14,170
1,867,218
18,431
–
–
–
–
–
–
–
–
–
–
–
–
–
19,765
70,451
139,396
28,158
410,965
62,160
25,378
1,066,685
20,087
29,768
14,170
1,867,218
18,431
19,765
1,885,649
19,765
1,905,414
22,909
–
29,071
1,089,417
51,980
1,089,417
22,909
1,118,488
1,141,397
(20,541)
(2,364)
(70,136)
–
(90,677)
(2,364)
4
1,048,352
1,048,356
(7,336)
–
(7,336)
1,878,317
1,068,117
2,946,434
188,587
(74,419)
–
–
188,587
(74,419)
Sunrise Resources plc Annual Report & Accounts 2021
41
Notes to the Financial Statements continued
for the year ended 30 September 2021
3.
Loss before income tax
The operating loss is stated after charging:
Fees payable to the Company’s auditor for:
The audit of the Company’s annual accounts
Other Services:
Interim review of accounts
Corporation tax fees
Corporation tax review fees
4.
Directors’ emoluments
Remuneration in respect of directors was as follows:
P L Cheetham (salary)
D J Swan (salary)
J Cole (salary)
R D Murphy (salary)
2021
£
2020
£
8,200
7,619
1,050
767
–
2021
£
16,000
10,540
5,524
16,000
48,063
1,020
740
–
2020
£
16,000
16,000
–
16,000
48,000
In the year ended 30 September 2021 the cost of Employer’s National Insurance Contributions for directors was £Nil (2020:
£50.34).
In the year ended 30 September 2021 the value of non-cash share-based payments in respect of share warrants issued to the
directors was £17,979 (2020: £3,600).
Patrick Cheetham is also a director of Tertiary Minerals plc and under the terms of the Management Services Agreement (see
Note 5) a total of £68,174, including Employers National Insurance Contributions, was charged to the Company for his services
during the year (2020: £80,121). These services are provided at cost.
The directors are also the key management personnel. If all benefits are taken into account, the total key management personnel
compensation would be £66,337 (2020: £51,995).
5.
Staff costs
Staff costs for the Group and the Company, including directors, were as follows:
Wages and salaries
Social security costs
Pension
Share-based payments
The average monthly number of employees employed by
the Group and the Company during the year was as follows:
Directors
Other Officers
2021
£
2020
£
48,063
48,000
–
295
17,979
66,337
50
345
3,733
52,128
2021
Number
2020
Number
3
0
3
3
0
3
42
Sunrise Resources plc Annual Report & Accounts 2021
The Company does not employ any staff directly apart from the directors. The services of technical and administrative staff are
provided by Tertiary Minerals plc as part of the Management Services Agreement between the two companies (see Note 16).
The Company issues share warrants to employees of Tertiary Minerals plc from time to time and these non-cash share-based
payments resulted in a charge within the financial statements of £1,686 (2020: £729).
Company secretarial services are provided by Rod Venables through City Group plc.
Loss per share
6.
Loss per share has been calculated using the loss for the year attributable to equity holders of the Company and the weighted
average number of shares in issue during the year.
2021
2020
Loss (£) (335,252)
(302,902)
Weighted average shares in issue (No.) 3,693,084,489
3,237,733,688
Basic and diluted loss per share (pence) (0.009)
(0.009)
The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating
the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the
exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.
Income tax
7.
No liability to corporation tax arises for the year due to the Group recording a taxable loss (2020: £Nil).
The tax credit for the period is lower than the credit resulting from the loss before tax at the standard rate of corporation tax in the
UK – 19% (2020: 19%). The differences are explained below.
2021
Tax reconciliation £
2020
£
Loss before income tax (335,252)
(302,902)
Tax at 19% (2020: 19%) (63,698)
(57,551)
Pre-trading expenditure no longer deductible for tax purposes 50,650
Administration expenditure not deductible for tax purposes 19,851
Tax effect at 19% (2020: 19%) 13,395
44,764
19,372
12,186
Tax credit for the period (50,303)
(45,365)
Tax recognised on loss –
–
Total losses carried forward for tax purposes (3,774,180)
(3,509,429)
Factors that may affect future tax charges
The Group has total losses carried forward of £3,774,180 (2020: £3,509,429). This amount would be charged to tax, thereby
reducing tax liability, if sufficient profits were made in the future capped to £5m per annum allowance. The deferred tax asset has
not been recognised as the future recovery is uncertain given the exploration status of the Group. The carried forward tax loss is
adjusted each year for amounts that can no longer be carried forward.
Sunrise Resources plc Annual Report & Accounts 2021
43
Notes to the Financial Statements continued
for the year ended 30 September 2021
8.
Investments
Subsidiary undertakings
Company
Country of
incorporation
/registration
Date of
incorporation
/registration
Type and percentage
of shares held at
30 September 2021
Principal activity
Sunrise Minerals Australia Pty Ltd
Australia
7 October 2009
100% of ordinary shares
Mineral exploration
SR Minerals Inc.
Westgold Inc.
Nevada, USA
12 January 2014
100% of ordinary shares
Mineral exploration
Nevada, USA
13 April 2016
100% of ordinary shares
Mineral exploration
The registered office of Sunrise Minerals Australia Pty Ltd is Level 4, 35-37 Havelock Street West, Perth, WA 6005.
The registered office of SR Minerals Inc. and Westgold Inc. is 241 Ridge Street, Suite 210, Reno, NV 89501.
Investment in subsidiary undertakings
Ordinary Shares – Sunrise Minerals Australia Pty Ltd
Loan – Sunrise Minerals Australia Pty Ltd
Less – provision for impairment
Ordinary Shares – SR Minerals Inc.
Loan – SR Minerals Inc.
Ordinary Shares – Westgold Inc.
Loan – Westgold Inc.
At 30 September
Company
2021
£
Company
2020
£
61
61
850,747
759,530
(546,541)
(546,541)
1
1
2,216,053
1,937,253
1
1
233,264
119,243
2,753,586
2,269,548
Investments in share capital of subsidiary undertakings
The directors consider that the carrying value of the Company’s investments in shares of subsidiary undertakings totalling £63 is
not material and therefore does not require an impairment review.
Loans to Group undertakings
Amounts owed by subsidiary undertakings are unsecured and payable in cash. Loan interest is charged to US subsidiaries on
intercompany loans with Parent Company.
A review of the recoverability of loans to subsidiary undertakings, totalling £2,753,586 has been carried out in accordance with
IFRS 9. As a result, the directors have concluded that no potential credit losses arose in the year. The assessment has been based
upon a review of the underlying exploration assets held by the subsidiary undertakings.
Other investments – listed investments
Company
VR Resources Ltd
Country of
incorporation
/registration
Type and percentage
of shares held at
30 September 2021
Canada
0.12% of ordinary shares
Power Metal Resources plc
United Kingdom
0.18% of ordinary shares
Principal activity
Mineral exploration
Mineral exploration
44
Sunrise Resources plc Annual Report & Accounts 2021
Investment designated at fair value through OCI
Value at start of year
Additions
Disposals
Movement in valuation
At 30 September
Group
2021
£
19,765
54,000
–
Company
2021
£
Group
2020
£
Company
2020
£
–
22,078
54,000
–
–
–
(10,262)
(8,325)
(2,313)
63,503
45,675
19,765
–
–
–
–
–
The fair value of each investment is equal to the market value of its shares at 30 September 2021, based on the closing mid-
market price of shares on its equity exchange market.
These are level one inputs for the purpose of the IFRS 13 fair value hierarchy.
9.
Intangible assets
Deferred exploration expenditure
Cost
At start of year
Reclamation
Additions
At 30 September
Disposals
At start of year
Impairment losses during the year
Disposals during the year
Foreign currency exchange adjustments
At 30 September
Carrying amounts
At 30 September
At start of year
Group
2021
£
Company
2021
£
Group
2020
£
Company
2020
£
4,565,673
2,203,594
4,377,086
2,203,594
26,239
391,061
–
–
–
188,587
–
–
4,982,973
2,203,594
4,565,673
2,203,594
(2,698,455)
(2,203,594)
(2,624,036)
(2,203,594)
(30,021)
(40,480)
(80,880)
–
–
–
–
–
(74,419)
–
–
–
(2,849,836)
(2,203,594)
(2,698,455)
(2,203,594)
2,133,137
1,867,218
–
–
1,867,218
1,753,050
–
–
During the year the directors carried out an impairment review with reference to IFRS 6.20 (a) which resulted in no impairment
being required. Refer to accounting policy 1(d) and 1(j) for a description of the considerations used in the impairment review.
10. Property, plant and equipment
The Group has the use of tangible assets held by Tertiary Minerals plc as part of the Management Services Agreement between
the two companies.
Sunrise Resources plc Annual Report & Accounts 2021
45
Notes to the Financial Statements continued
for the year ended 30 September 2021
11. Receivables
Prepayments
Accrued income
Other receivables
At 30 September
12. Cash and cash equivalents
Cash at bank and in hand
At 30 September
13. Trade and other payables
Amounts owed to Tertiary Minerals plc
Trade creditors
Accruals
Net pay due in shares
Social security and taxes
At 30 September
Group
2021
£
13,677
–
117,128
130,805
Company
2021
Group
2020
Company
2020
££
£
11,037
18,350
16,272
–
11,664
22,701
–
33,630
51,980
–
10,398
26,670
Group
2021
£
Company
2021
£
Group
2020
£
Company
2020
£
371,740
337,817
1,089,417
1,065,480
Company
2021
Group
2020
Company
2020
££
£
Group
2021
£
44,147
6,070
26,434
18,147
6,063
100,861
44,147
2,841
9,159
18,147
6,063
80,357
43,717
3,753
19,404
16,254
7,549
90,677
43,717
2,647
10,619
16,254
7,549
80,786
2020
£
Issued capital and reserves
14.
2021 2021 2020
Number £ Number
Allotted, called up and fully paid
Ordinary shares of 0.1p each
Balance at start of year 3,677,996,870 3,677,997 2,749,760,308
2,749,760
Shares issued in the year 23,807,817 23,808 928,236,562
928,237
Balance at 30 September 3,701,804,687 3,701,805 3,677,996,870
3,677,997
During the year to 30 September 2021 the following share issues took place:
An issue of 6,772,459 0.1p ordinary shares at 0.24p per share to three directors, for a total consideration of £16,254, in satisfaction
of directors’ fees (30 October 2020).
An issue of 9,090,909 0.1p ordinary shares at 0.1p per share, via exercise of warrants for a total of £10,000 (18 January 2021).
An issue of 500,000 0.1p ordinary shares at 0.16p per share, via exercise of warrants for a total of £800 (27 January 2021).
An issue of 750,000 0.1p ordinary shares at 0.16p per share, via exercise of warrants for a total of £1,200 (3 February 2021).
An issue of 750,000 0.1p ordinary shares at 0.11p per share, via exercise of warrants for a total of £825 (15 February 2021).
46
Sunrise Resources plc Annual Report & Accounts 2021
An issue of 5,944,449 0.1p ordinary shares at 0.245p per share to three directors, for a total consideration of £14,564, in
satisfaction of directors’ fees (27 May 2021).
During the year to 30 September 2020 a total of 928,236,562 0.1p ordinary shares were issued, at an average price of 0.17p per
share, for a total consideration of £1,598,274 net of expenses.
Nature and purpose of reserves
Foreign currency reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations, which relate to subsidiaries
only, from their functional currency into the Parent’s functional currency, being Sterling, are recognised directly in the foreign
currency reserve.
Share warrant reserve
The share warrant reserve is used to recognise the value of equity-settled share warrants provided to employees, including key
management personnel, as part of their remuneration, and to third parties in connection with fundraising. Refer to Note 15 for
further details.
15. Share warrants granted
Warrants not exercised or expired at 30 September 2021
Issue date
Exercise price
01/02/17
31/01/18
21/02/19
21/02/19
06/08/20
Total
0.135p
0.160p
0.160p
0.110p
0.195p
Number
3,250,000
3,250,000
4,000,000
4,000,000
Any time before expiry
Any time before expiry
Any time before expiry
Any time before expiry
35,000,000
*Any time from 05/08/21
49,500,000
01/02/22
31/01/23
21/02/24
21/02/24
05/08/25
Exercisable
Expiry dates
*Of these 15,000,000 warrants cannot be exercised before the Company makes the first sustainable sales of perlite/pozzolan
product from the CS Project.
Share warrants are issued for nil consideration and are exercisable as disclosed above. They are exchangeable on a one for one
basis for each ordinary share of 0.1p at the exercise price on the date of conversion.
Sunrise Resources plc Annual Report & Accounts 2021
47
Notes to the Financial Statements continued
for the year ended 30 September 2021
Share warrant movements:
Outstanding at start of year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at end of year
Exercisable at end of year
2021
––––––––––––––––––––––
Weighted
average
exercise
price
(Pence)
Number of
share
warrants
2020
––––––––––––––––––––––
Weighted
average
exercise
price
(Pence)
Number of
share
warrants
92,948,052
0.18
27,875,000
–
–
(11,090,909)
(32,357,143)
49,500,000
49,500,000
–
–
0.12
0.20
74,448,052
–
–
(9,375,000)
0.18
92,948,052
0.18
57,948,052
0.18
0.19
–
–
0.28
0.18
0.17
The share warrants outstanding at 30 September 2021 had a weighted average exercise price of 0.18p (2020: 0.18p), a weighted
average fair value of 0.064p (2020: 0.056p) and a weighted average remaining contractual life of 3.22 years.
In the year ended 30 September 2021 no warrants were granted.
In the year ended 30 September 2020 warrants were granted on 1 November 2019, 19 February 2020 and 24 August 2020 to
Peterhouse Capital Limited as part of fundraising with an aggregate estimated fair value of £14,469.
In the year ended 30 September 2020 warrants were granted on 6 August 2020 to non-executive director of the Company, a
director and employees of Tertiary Minerals plc with an aggregate estimated fair value of £23,153. Note 5 explains the value
recognised in the reporting period in respect of Tertiary Minerals plc.
In the year to 30 September 2021 the Company recognised expenses of £19,664 (2020: £18,932) related to issuing of share
warrants in connection with equity-settled share-based payment transactions. The fair value is charged to administrative expenses
and where there is a vesting period it is charged on a straight-line basis over the vesting period, together with a corresponding
increase in equity, based on the management’s estimate of shares that will eventually vest.
The fair values of warrants are estimated using a Black-Scholes-Merton Pricing Model and charged to administrative expenses
on a straight-line basis over the vesting period, together with a corresponding increase in equity, based on the management’s
estimate of shares that will eventually vest.
The inputs into the Black-Scholes-Merton Pricing Model were as follows:
2021
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yield
–
–
–
–
–
–
2020
0.20p
0.19p
70%
2.4 years
0.12%
0%
Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous 3 years.
The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions and behavioural considerations.
In the year ended 30 September 2021 the following share warrants were exercised:
On 18 January 2021 9,090,909 warrants at an exercise price of 0.11p were exercised for a consideration of £10,000.
48
Sunrise Resources plc Annual Report & Accounts 2021
On 27 January 2021 500,000 warrants at an exercise price of 0.16p were exercised for a consideration of £800.
On 3 February 2021 750,000 warrants at an exercise price of 0.16p were exercised for a consideration of £1,200.
On 15 February 2021 750,000 warrants at an exercise price of 0.11p were exercised for a consideration of £825.
16. Related party transactions
Key management personnel
The directors holding office at the year end and their warrants held in the share capital of the Company are:
P L Cheetham*
D J Swan** – resigned
J Cole
R D Murphy
At 30 September 2021
Warrant
exercise
price
Share
warrants
number
Warrant
expiry
date
At 30 September 2020
Share
warrants
number
Shares
number
Shares
number
234,293,916
30,000,000
32,759,580
2,000,000
–
–
54,942,230
2,000,000
2,000,000
0.195p
0.160p
–
0.160p
0.195p
05/08/25 231,047,657
30,000,000
21/02/24
29,281,338
2,000,000
–
–
–
21/02/24
48,949,823
4,000,000
05/08/25
*Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham
**D J Swan ceased to be a director of the Company on 27 May 2021
Tertiary Minerals plc
Sunrise Resources plc is treated as an investment in the consolidated accounts of Tertiary Minerals plc, which held 0.59% of the
issued share capital on 30 September 2021 (2020: 0.6%).
Tertiary Minerals plc provides management services to Sunrise Resources plc and consequently during the year the Group
incurred costs of £165,058 (2020: £175,750) recharged at cost from Tertiary Minerals being overheads of £19,700 (2020: £20,369),
costs paid on behalf of the Group of £4,644 (2020: £1,175), Tertiary staff salary costs of £72,540 (2020: £74,085) and Tertiary
directors’ salary costs of £68,174 (2020: £80,121).
At the balance sheet date an amount of £44,147 (2020: £43,717) was due to Tertiary Minerals plc.
Patrick Cheetham, the Executive Chairman of the Company, is also a director of Tertiary Minerals plc.
At 30 September 2021 and at the date of this report Donald McAlister, a director of Tertiary Minerals plc, held 550,000 shares in
the Company.
Sunrise Resources plc Annual Report & Accounts 2021
49
Notes to the Financial Statements continued
for the year ended 30 September 2021
17. Leases
Right of use assets
Cost
At start of year
Additions
Disposals
Foreign currency exchange adjustments
At 30 September
Depreciation
At start of year
Charge for the year
Disposals
Foreign currency exchange adjustments
At 30 September
Carrying amounts
At 30 September
At start of year
Lease liabilities
Cost
At start of year
Additions
Lease payments
Interest charge
Foreign currency exchange adjustments
At 30 September
No later than one year
Later than one year and no later than 5 years
Later than five years
Total lease liabilities
Current liabilities
Non-current liabilities
Group
2021
£
Company
2021
£
Group
2020
£
Company
2020
£
21,970
–
–
(960)
21,010
(3,539)
(4,202)
–
154
(7,587)
13,423
18,431
–
–
–
–
–
–
–
–
–
–
–
–
–
21,970
–
–
21,970
–
(3,539)
–
–
(3,539)
18,431
–
–
–
–
–
–
–
–
–
–
–
–
–
Group
2021
£
Company
2021
£
Group
2020
£
Company
2020
£
9,700
–
(2,378)
117
(424)
7,015
–
–
–
–
–
–
Minimum
lease
payments
£
2,378
4,755
–
–
21,970
(12,431)
161
–
9,700
Interest
£
(78)
(40)
–
–
–
–
–
–
–
Present
value
£
2,300
4,715
–
7,015
2,300
4,715
50
Sunrise Resources plc Annual Report & Accounts 2021
The right of use assets and related lease liabilities are for the lease of water rights for use in conjunction with the CS Project in
Nevada, USA. Total cash flow outflow amount is £4,319.
18. Capital management
The Group’s capital requirements are dictated by its project and overhead funding requirements from time to time. Capital
requirements are reviewed by the Board on a regular basis.
The Group manages its capital to ensure that entities within the Group will be able to continue as going concerns, to increase the
value of the assets of the business and to provide an adequate return to shareholders in the future when exploration assets are
taken into production.
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk
characteristics of its assets. In order to maintain or adjust the capital structure the possibilities open to the Group in future include
issuing new shares, consolidating shares, returning capital to shareholders, taking on debt and selling assets.
19. Financial instruments
At 30 September 2021, the Group’s and Company’s financial assets consisted of receivables due within one year, other investments
and cash and cash equivalents. At the same date, the Group and Company had no financial liabilities other than trade and other
payables due within one year and had no agreed borrowing facilities as at this date. There is no material difference between the
carrying and fair values of the Group’s and Company’s financial assets and liabilities.
The carrying amounts for each category of financial instrument held at 30 September 2021, as defined in IFRS 9, are as follows:
Financial assets at amortised cost
Financial assets at fair value through other comprehensive income
Financial Liabilities at amortised cost
Group
2021
£
488,868
63,503
110,331
Company
2021
Group
2020
Company
2020
££
£
349,481
1,123,277
1,065,480
45,675
56,146
19,765
76,574
–
56,983
Risk management
The principal risks faced by the Group and Company resulting from financial instruments are liquidity risk, foreign currency risk
and, to a lesser extent, interest rate risk and credit risk. The directors review and agree policies for managing each of these risks
as summarised below. The policies have remained unchanged from previous periods as the risks are assessed not to have
changed.
Liquidity risk
The Group holds cash balances in Sterling, US Dollars, Australian Dollars and others to provide funding for exploration and
evaluation activity, whilst the Company holds cash balances in Sterling, US Dollars, Australian Dollars and small amounts in other
currencies.
The Company is dependent on equity fundraising through private placings which the directors regard as the most cost-effective
method of fundraising. The directors monitor cash flow in the context of their expectations for the business to ensure sufficient
liquidity is available to meet foreseeable needs.
Currency risk
The Group’s financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency or
interest rate risks. The Group is exposed to transactional foreign exchange risk and takes profits and losses as they arise as, in
the opinion of the directors, the cost of hedging against fluctuations would be greater than the related benefit from doing so.
Fluctuations in the exchange rate are not expected to have a material effect on reported loss or equity.
Sunrise Resources plc Annual Report & Accounts 2021
51
Notes to the Financial Statements continued
for the year ended 30 September 2021
Bank balances were held in the following denominations:
United Kingdom Sterling
Australian Dollar
United States Dollar
Other
Group
2021
£
Company
2021
Group
2020
Company
2020
££
£
328,133
328,133
1,064,927
1,064,927
19,544
23,986
77
9,568
39
77
9,588
14,823
79
369
105
79
Interest rate risk
The Company finances operations through equity fundraising and therefore does not carry borrowings.
Fluctuating interest rates have the potential to affect the loss and equity of the Group and the Company insofar as they affect the
interest paid on financial instruments held for the benefit of the Group. The directors do not consider the effects to be material to
the reported loss or equity of the Group or the Company presented in the financial statements.
Credit risk
The Company has exposure to credit risk through receivables such as VAT refunds, invoices issued to related parties and its joint
arrangements for management charges. The amounts outstanding from time to time are not material other than for VAT refunds
which are considered by the directors to be low risk.
The Company has exposure to credit risk in respect of its cash deposits with NatWest bank and this exposure is considered by
the directors to be low risk.
20. Provision for other liabilities and charges
Group
Reclamation Liability
At start of year
Additions
At 30 September
2021
£
2020
£
–
26,665
26,665
–
–
–
The Group makes provision for future reclamation costs relating to exploration projects. Provisions are calculated based upon
internal estimates and expected costs based upon past experience and expert guidance where appropriate.
21. Contingent Assets
The Company has the following contingent assets:
Power Metal Resources plc
2.25 million warrants and 2% Net Smelter Return Royalty, received as part of the consideration for the disposal of Stonewall and
Garfield exploration projects in June 2021.
VR Resources
3% Net Smelter Return Royalty received as part of the consideration for the sale of the Junction Gold-Copper exploration project
to in August 2017.
No values have been assigned to these contingent assets on the basis that realisation is uncertain and considered to be
unpredictable.
52
Sunrise Resources plc Annual Report & Accounts 2021
22. Events after the balance sheet date
Lease Option agreement with Kinross
In October 2021, the Company entered into a lease/option agreement with Kinross Gold U.S.A Inc. granting Kinross a Lease and
Option to purchase the Company’s 25 Jackson Wash mining claims in Nevada, USA. Under the terms of the Agreement Kinross
has been granted:
l
l
a 9-year mining lease over the Claims; and
an option (the “Option”) to purchase the Claims at any time during the term of the Lease for US$500,000 and the grant to
the Company of a 2.5% Net Smelter Royalty.
Kinross will make the following payments to the Company until the Lease expires or is terminated or the Option is exercised:
l
l
l
US$5,000 annually in advance in years 1-3;
US$10,000 annually in advance in years 4-6; and
US$15,000 annually in advance in years 7-9.
Kinross has paid a US$10,000 signing bonus, the year 1 lease payment and reimbursed 2021 claim filing fees of US$4,437 (total
payment of US$19,437).
All of the above-mentioned payments will be considered as advance payments of the Royalty, should the Royalty become payable.
Kinross may purchase 60% of the Royalty (1.5% of the 2.5% royalty) for a total of US$1.5 million in increments of US$500,000
per 0.5%.
Sunrise Resources plc Annual Report & Accounts 2021
53
Notice of Annual General Meeting
Sunrise Resources plc
Company No. 05363956
Notice is hereby given that the Annual General Meeting of Sunrise Resources plc will be held at Arundel House, 6 Temple Place,
London WC2R 2PG on Thursday 27 January 2022 at 10.00 a.m. for the following purposes:
Ordinary Business
1.
To receive the Accounts and Reports of the Directors and of the Auditor for the year ended 30 September 2021.
2.
To elect Mr J Cole who, having been appointed to the Board since the last AGM, is subject to election in accordance with
the Articles of Association.
3.
To reappoint Crowe U.K. LLP as Auditor of the Company and to authorise the directors to fix their remuneration.
Special Business
Ordinary Resolution
4.
That, in accordance with section 551 of the Companies Act 2006 (the “2006 Act”), the directors be generally and
unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into
shares in the Company (“Rights”) up to an aggregate nominal amount of £2,000,000 (consisting of 2,000,000,000 ordinary
shares of 0.1p each) provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the end
of the next Annual General Meeting of the Company to be held after the date on which this resolution is passed, save that
the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted or
Rights to be granted and the directors may allot shares or grant Rights in pursuance of such offer or agreement
notwithstanding that the authority conferred by this resolution has expired.
This authority is in substitution for all previous authorities conferred on the directors in accordance with section 551 of the
2006 Act.
Special Resolution
5.
That subject to the passing of resolution 4, the directors be given the general power to allot equity securities (as defined by
section 560 of the 2006 Act) for cash, either pursuant to the authority conferred by resolution 4 or by way of a sale of treasury
shares, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided that this power shall be limited to:
a)
the allotment of equity securities in connection with an offer by way of a rights issue to the holders of ordinary shares
in proportion (as nearly as may be practicable) to their respective holdings but subject to such exclusions or other
arrangements as the Board may deem necessary or expedient in relation to treasury shares, fractional entitlements,
record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory
body or stock exchange; and
b)
the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount
of £2,000,000 (consisting of 2,000,000,000 ordinary shares of 0.1 pence each).
The power granted by this resolution will expire on the conclusion of the Company’s next Annual General Meeting (unless
renewed, varied or revoked by the Company prior to or on such date) save that the Company may, before such expiry, make
offers or agreements which would or might require equity securities to be allotted after such expiry and the directors may
allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution
has expired.
This resolution revokes and replaces all unexercised powers previously granted to the directors to allot equity securities as
if section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or
agreed to be made pursuant to such authorities.
Members of the Company are entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote at a general
meeting of the Company. The attention of members is drawn to the notes on page 55 regarding attendance restrictions.
By order of the Board
R G Venables
Company Secretary
10 December 2021
COVID-19: Attendees, please see information in the Explanatory Notes on page 55.
54
Sunrise Resources plc Annual Report & Accounts 2021
Registered Office:
Sunrise House
Hulley Road
Macclesfield
Cheshire
SK10 2LP
United Kingdom
Annual General Meeting – Explanatory Notes
The Annual General Meeting of Sunrise Resources plc will be held at Arundel House, 6 Temple Place, London WC2R 2PG on
Thursday 27 January 2022 at 10.00 a.m.
The Directors consider that the proposed resolutions contained in the Notice of AGM are in the best interests of the Company
and shareholders as a whole and unanimously recommend that you vote in favour of them, as they intend to do in respect of their
own shareholdings.
The business of the meeting is as follows:
Ordinary Business
Resolution 1
The Board is required to present to the meeting for approval the Accounts and the Reports of the Directors and the Auditor for
the year ended 30 September 2021 which can be found on pages 5 to 35.
Resolution 2
Mr J Cole will be retiring as a director of the Company in accordance with the Articles of Association having been appointed as
a Non-Executive Director on 27 May 2021. Mr Cole offers himself for election and the Board recommend that he be elected.
Mr Cole’s biographical details can be found on page 21.
Resolution 3
The Company’s Auditor Crowe U.K. LLP is offering itself for reappointment and if elected will hold office until the conclusion of
the next Annual General Meeting at which accounts are laid before shareholders. This resolution will also give the directors authority
to fix the remuneration of the Auditor.
Special Business
Resolution 4
This resolution is to give the directors authority to issue shares. The last such authority was put in place by a meeting of
shareholders held on 28 January 2021, but it will expire at the coming Annual General Meeting.
Section 551 of the Companies Act 2006 requires that directors be authorised by shareholders before any share capital can
be issued.
At this stage in its development the Company relies on raising funds through the issue of shares from the equity markets from
time to time and unless this resolution is put in place the Company will not be in a position to continue to raise funds to continue
its activities.
If given, this authority will expire at the conclusion of the Annual General Meeting in 2023.
Resolution 5
This resolution will be proposed as a Special Resolution in the event that Resolution 4 is passed by shareholders. Resolution 5 is
proposed to give the directors authority to exclude certain categories of shareholders in a rights issue where their inclusion would
be impractical or illegal and also to issue shares other than by way of rights issues which are, for regulatory reasons, complex,
expensive, time consuming and impractical for a company the size of Sunrise Resources plc.
A similar authority granted at last year’s Annual General Meeting is due to expire at the coming Annual General Meeting. The
resolution will, if passed, authorise directors to allot shares or grant rights over shares of the Company where they propose to do
so for cash and otherwise than to existing shareholders pro rata to their holdings – for example through a share placing.
If given, this authority will expire at the conclusion of the Annual General Meeting in 2023.
COVID-19
We are keen to welcome shareholders in person to our 2022 Annual General Meeting, particularly given the constraints we faced
in 2021 due to the COVID-19 pandemic. At present, it is possible to allow shareholders to attend the AGM and therefore we are
proposing to welcome shareholders, within safety constraints and in accordance with any applicable government guidelines in
place at that time.
Sunrise Resources plc Annual Report & Accounts 2021
55
Annual General Meeting – Explanatory Notes continued
COVID-19 continued
However, shareholders should inform us by registering their attendance in advance of the AGM by emailing:
info@sunriseresourcesplc.com in order that we have an idea of numbers attending. This will enable us to better manage attendee
safety by having sufficiently large meeting facilities.
Given the constantly evolving nature of the COVID-19 situation, should circumstances change before the time of the AGM we
want to ensure that we are able to adapt arrangements within safety constraints and in accordance with government guidelines.
Should we have to change arrangements, we will issue a further communication via the Regulatory Information Service. As such,
we strongly recommend shareholders monitor such communications, which can also be found on the Company’s website.
Shareholders wishing to appoint a proxy are encouraged to appoint the Chair as their proxy with their voting instructions.
56
Sunrise Resources plc Annual Report & Accounts 2021
Voting at the Annual General Meeting, Electronic Voting, Proxy
Notes and Instructions
The following notes explain your general rights as a shareholder and your right to attend and vote at the Annual General Meeting or to appoint
someone else to vote on your behalf.
1.
2.
3.
4.
5.
To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the number of votes they may
cast), shareholders must be registered in the Register of Members of the Company at close of trading on Tuesday 25 January 2021.
Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and
vote at the Meeting.
Shareholders, or their proxies, intending to attend the Meeting in person are requested, if possible, to arrive at the Meeting venue at least
15 minutes prior to the commencement of the Meeting at 10.00 a.m. (UK time) on Thursday 27 January 2022 so that their shareholding
may be checked against the Company’s Register of Members and attendances recorded.
Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to attend and to speak and vote on their
behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided that each proxy is appointed to
exercise the rights attached to a different ordinary share or ordinary shares held by that shareholder. A proxy need not be a shareholder of
the Company.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the
most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s
Register of Members in respect of the joint holding (the first named being the most senior).
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If
no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting)
as he or she thinks fit in relation to any other matter which is put before the Meeting.
6.
Shareholders can vote:
7.
8.
9.
10.
l
l
l
l
by logging on to www.signalshares.com and following the instructions to appoint one or more proxies and direct your votes.
by hard copy Form of Proxy. You may request a hard copy Form of Proxy directly from the Registrars, Link Group, on Tel: 0371 664
0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged
at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England
and Wales.
in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set
out below.
by attending the meeting and voting in person (please see COVID-19 information in the Explanatory Notes on page 55).
In order for a proxy appointment to be valid a form of proxy must be completed. In each case the Form of Proxy must be received by the
Registrars, Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL by 10.00 a.m. on Tuesday 25 January 2022.
If you return more than one proxy appointment, either by paper or electronic communication, the appointment received last by the Registrars
before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use carefully.
Electronic communication facilities are open to all shareholders and those who use them will not be disadvantaged.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Meeting
(and any adjournment of
from
www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who have
appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate
action on their behalf.
the procedures described
the Meeting) by using
the CREST Manual
(available
in
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must contain the
information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by
the issuer’s agent (ID RA10) by 10.00 a.m. on Tuesday 25 January 2022. For this purpose, the time of receipt will be taken to mean the
time (as determined by the timestamp applied to the message by the CREST application host) from which the issuer’s agent is able to
retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies
appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited
does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore,
apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST
sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system
providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and
timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.
Sunrise Resources plc Annual Report & Accounts 2021
57
Voting at the Annual General Meeting, Electronic Voting, Proxy
Notes and Instructions continued
11.
12.
Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers
as a shareholder provided that no more than one corporate representative exercises powers in relation to the same shares.
You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this Notice or
any related documents (including the Form of Proxy) to communicate with the Company for any purposes other than those expressly stated.
58
Sunrise Resources plc Annual Report & Accounts 2021
Company Information
Sunrise Resources plc (AIM – EPIC: SRES)
Company No. 05363956
Head Office
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838884
Fax: +44 (0)1625 838559
Nominated Adviser
Beaumont Cornish Limited
Building 3, Chiswick Park
566 Chiswick High Road
London
W4 5YA
United Kingdom
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
United Kingdom
Auditor
Crowe U.K. LLP
3rd Floor
The Lexicon
Mount Street
Manchester
M2 5NT
United Kingdom
Registered Office
Sunrise House
Hulley Road
Macclesfield
Cheshire
SK10 2LP
United Kingdom
Company Website
www.sunriseresourcesplc.com
Broker
Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
United Kingdom
Solicitors
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
United Kingdom
Bankers
National Westminster Bank plc
2 Spring Gardens
Buxton
Derbyshire
SK17 6DJ
United Kingdom
Sunrise Resources plc Annual Report & Accounts 2021
Sunrise Resources plc
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838884
Fax: +44 (0)1625 838559