264671 Sunrise Resources AR Cover.qxp_262382 Sunrise Resources AR Cover.qxp 19/12/2022 10:57 Page 1
Company No. 05363956
Annual Report and Accounts
For the year ended 30 September 2022
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Contents
Our Performance
3
5
Chairman’s Statement
Strategic Report
5
5
7
13
15
Organisation Overview
Financial & Performance Review
Operating Review
Risks & Uncertainties
Section 172 (1) Statement
Our Responsibilities
17 Directors’ Responsibilities
18 Directors’ Report
20
Board of Directors
21 Corporate Governance
21 Chairman’s Overview
22
Environmental, Social and Governance Statement
23 Corporate Governance Statement
25
26
Audit Committee Report
Remuneration Committee Report
26 Nomination Committee Report
Our Financials
28
Independent Auditor’s Report
32 Consolidated Income Statement
32 Consolidated Statement of Comprehensive Income
33 Consolidated and Company Statements of Financial
Position
34 Consolidated Statement of Changes in Equity
35 Company Statement of Changes in Equity
36 Consolidated and Company Statements of Cash Flows
37 Notes to the Financial Statements
Annual General Meeting
55 Notice of Annual General Meeting
56
57
Annual General Meeting – Explanatory Notes
Voting at the Annual General Meeting, Electronic
Voting, Proxy Notes and Instructions
IBC Company Information
2
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Chairman’s Statement
Dear Shareholders,
I am pleased to present your
Annual Report for 2022 which
covers
financial year
ended 30 September 2022.
the
California and northern Nevada. Approximately 250 tons of natural
pozzolan have been extracted from Hazen at no cost to Sunrise and is
currently being processed. The collaborative partner has the
processing facilities and marketing network to commercialise the Hazen
deposit in the future.
Our strategy continues to be to
advance our
fully mine
permitted CS natural pozzolan
and perlite deposit in Nevada,
whilst new developments
during the year at the Hazen
pozzolan and Pioche sepiolite
the
projects have
Company’s business evolve more broadly in the industrial minerals
space in Nevada.
seen
In the first half of this year, following successful commercial trials of CS
natural pozzolan with a large cement and ready-mix company, our
expectations were high that a joint development agreement would be
reached with that company. However, we terminated negotiations after
they became unnecessarily protracted and have since prioritised
discussions with other potential partners. These companies have all
required further samples for testing with their own cements and
concrete blends. This work has progressed throughout the year and
has now been successfully completed in each case confirming CS
pozzolan’s high quality as a natural pozzolan. The Board is working
hard to capitalise this third-party interest and now that additional funds
have been secured, the Board is working on strategies to maximise the
value of the project and to demonstrate this value to our shareholders.
For example, a significant milestone for the CS Project this year was the
conditional approval of the CS natural pozzolan by the California
Department of Transport (“Caltrans”),
the Government body
responsible for the award of State funded infrastructure construction
projects in California. Caltrans mandates the use of supplementary
cementitious materials (“SCMs”) such as natural pozzolan in order to
improve the durability and sustainability of their projects and many
concrete specifiers also look to this list as an independent endorsement
when specifying for a wider range of non-Caltrans projects.
We also continue to advance the testing of the perlite from our CS
Project and further details are provided in the Operating Review starting
on page 7. Previous testwork has identified a number of potential
customers and others are in the process of testing our material
including, most recently, one of the largest consumers of raw perlite in
the US.
In October I was pleased to announce the start of a collaborative
arrangement with an existing processor of natural pozzolan for mining
and commercial scale test grinding of a bulk sample from our second
pozzolan project at Hazen, Nevada. The CS Project is targeting the
cement and concrete markets of southern California and southern
Nevada-Las Vegas, whilst our newer Hazen Pozzolan Project is more
favourably located for the cement and concrete markets in northern
In May this year we issued an article through RNS Reach that
highlighted the key role that natural pozzolan has in cement
decarbonisation in the western USA and within multiple CO2 net-zero
strategies in the cement and concrete industries, as well as its function
in building more durable and sustainable concrete structures. More
detail on this can be found on pages 11 and 12. The energy crisis this
year has served to reduce the rate of decline of fly ash availability as
some coal-fired power stations due to close have been temporarily kept
open, but this declining trend is set to continue and our pozzolans are
a natural replacement.
The depth of the Company’s project portfolio of industrial mineral and
precious metal projects was underlined this year with agreements
signed with major companies at our Pioche and Jackson’s Wash
projects.
The Pioche Sepiolite Project has quickly risen to prominence after the
world’s largest sepiolite producer, the Spanish company Tolsa S.A., took
an option to purchase the project. Sepiolite is a rare and valuable clay
with unique absorptive and gelling properties and only a handful of
commercial deposits around the world.
We have been very encouraged by the rapid start Tolsa has made in
its evaluation of the Pioche Project. In the summer, Tolsa completed a
thorough programme of surface mapping and evaluation, identifying
multiple horizons of sepiolite below our original discovery level and this
autumn has completed a programme of trenching to provide further
exposures of the mineralisation to enable a better evaluation of the
thicknesses and quality of the Pioche sepiolite deposits. Sepiolite
samples from the trenching are being tested in Spain and results are
eagerly awaited. Tolsa must make an election to continue its option by
the end of this December 2022.
Earlier this year we granted a lease/option to purchase our Jackson’s
Wash claims to global gold producer Kinross Gold U.S.A. Inc. who is
actively exploring in the vicinity of our Jackson’s Wash claims. If Kinross
elect to purchase the claims, we will hold a 2.5% Net Smelter Royalty
on production. We continue to hold royalty interests in the Garfield and
Stonewall projects in Nevada held by AIM aspirant Golden Metal
Resources Ltd, and in the Junction Copper Project held by TSX-V listed
VR Resources Limited.
The Company is progressing its mining lease application at the Bakers
Gold Project in Western Australia where the mining law requires that
the Company reach agreement with the regional Native Title holder for
its application to be granted. The Company could face high legal costs
to progress this application but is considering options to defer those
costs until such time as the project is more advanced. Whilst the
Company has yet to progress discussions with the Native Title holder,
in view of these potential costs, it has taken the prudent step to impair
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Chairman’s Statement continued
the value for this project in the Company’s accounts until such time as
the position is clearer when the impairment could be reversed. Similarly,
the value of the Myrtle Project was impaired following the receipt of
drilling results from a prior explorer which downgraded the prospectivity
of the Company’s claim block.
Our activities this year have been funded out of existing cash
resources, a modest fund raise of £100,000 in July and the sale of the
majority of our shares in Power Metal Resources. After the year end,
we closed an up to £480,000 two-year convertible note financing facility
with Net Zero Strategies LLC, a US investment fund focused on the
green economy. This provides options on the amount we drawdown and
the number of shares that may need to be issued under the
arrangement will, by-and-large, be based on our future share price
performance which was preferable to the prospect of a placing at a
discount to the current price.
At our next Annual General Meeting, to be held in London on
17 February 2023, we will be proposing Mr Murphy for re-election and
seeking approval for resolutions to allow for the issue of new shares.
I urge shareholders to support these resolutions as, without their
approval, the Company cannot raise the funds it needs to continue as
a going concern. For those who cannot attend the AGM 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).
With the CS Project, Hazen and Pioche, we now have three key projects
moving forward as well as a strong portfolio of royalty interests and
wholly owned projects available for joint venture or disposal. There are
several potential value catalysts within the Company’s project portfolio
and your Board believes we can look forward to productive
developments in 2023. I look forward to reporting further progress.
Patrick Cheetham
Executive Chairman
9 December 2022
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Sunrise Resources plc Annual Report & Accounts 2022
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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 2022.
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 and
other key projects 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, retaining royalty interests
where possible.
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 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, starting on page 7.
The Company’s activities are financed by periodic capital
raisings, through private share placings and the issue of other
financial instruments. 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 offtake 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 agreement with Kinross Gold on the Jacksons Wash
Project and the agreement with Tolsa USA Inc. on the Pioche
Sepiolite Project as detailed in the Operating Review on
pages 8 and 9 respectively, both of which include retained
royalty interests.
The Group’s exploration activity in Nevada, USA, is undertaken
through
Inc. and
two
Westgold Inc.
local subsidiaries, SR Minerals
In Australia the Company operates through an Australian
subsidiary, Sunrise Minerals Australia Pty Ltd.
The Board of Directors comprises
independent
non-executive directors and the Executive Chairman. Their
profiles are provided on page 20. 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.
two
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 realise the value of its
exploration and development projects.
The financial statements for the Group are set out in detail on
pages 32 to 54. The Group reports a loss of £478,223 for the
year (2021: £335,252) after administration costs of £291,860
(2021: £318,630). The loss includes expensed pre-licence and
reconnaissance exploration costs of £5,638 (2021: £17,320),
impairment of exploration assets of £194,247 (2021: £30,021)
and other income of £13,474. Administration costs include a
charge of £1,087 (2021: £19,663) relating to the value of
certain share warrants held by employees of Tertiary Minerals
Plc and by third parties calculated in accordance with IFRS 2.
Cash administration costs were £290,773 (2021: £298,967).
The Financial Statements show that, at 30 September 2022, the
Group had net current assets of £155,776 (2021: £399,384).
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 33 and are also components of the Net assets of the
Group. Net assets also include various “intangible” assets of
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Strategic Report continued
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 £2,503,812 (2021: £2,133,137) and a
breakdown by project is shown in Note 2 to the financial
statements starting on page 40. Sterling weakness at the end
of the reporting period has had a positive effect on the value
of intangible assets denominated in US Dollars in the
Company’s US subsidiaries.
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 for capitalisation
as exploration and evaluation costs according to 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.
An impairment review of the carrying values of exploration and
development projects (and in the Company, the associated
intercompany loans) as at 30 September 2022 was undertaken
by the Directors under IFRS 6 and IAS 36. As a result of the
year-end review it was judged that the Bakers Project and
Myrtle Project expenditure were impaired. In the Company, the
Sunrise Mineral Australia Pty Ltd loan was also fully provided
against. Further information on the reasons for impairment can
be found in the Operating Review on page 10. Projects which
are held for sale or joint venture 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 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.
Company does seek to reduce overhead costs, where
practicable, and is reporting administrative costs this financial
year of £291,860 (2021: 318,630).
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.
Fundraising
The Directors prepare annual budgets and cash flow
projections that extend beyond 12 months from the date of
approval of this report. Given the Group’s cash position at year
end (£96,126), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the
Group’s overheads and planned discretionary project
expenditure. The successful raising of finance is required
based on projections to enable the Group and Company to
meet their liabilities as they fall due and continue to operate on
a going concern basis.
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Operating Review
The Company has continued its operations in Nevada, USA and
Western Australia with progress made on three key projects
during the year.
Our focus continues to be the development of the CS
Pozzolan-Perlite Project but progress has also been made on
our Hazen Pozzolan Project and our Pioche Sepiolite Project,
and the Company continues to unlock its valuable portfolio of
precious and base metal projects that can provide potential
additional growth and value accretion opportunities in future.
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
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.
The project is “mine ready” with the key permits required to
operate the CS Project in place and with no time constraints on
when mining must start, save for periodic renewals of the air
quality permit and payment of annual claim fees.
Natural Pozzolan
Natural pozzolan is a cementitious material that is used to
partially replace and reduce the use of Portland cement in
concrete and mortars, a major source of greenhouse gas.
Natural pozzolan takes the place of coal fly ash pozzolans, the
supply of which is rapidly declining in the western world due
to the closure of coal-fired power stations.
Further details of the role of natural pozzolan in CO2 Net Zero
Strategies is given on page 11.
The use of natural pozzolan in cement and concrete mixes
requires that the pozzolan be ground to a fine size before use
and so the production options being considered by the
Company are:
l
l
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.
Perlite
Perlite is a glassy raw material which expands on heating by
up to 20 times in volume into a white or pale coloured
low-density material. Expanded perlite is used in various
industrial and household applications such as insulation, paint
texturing, plaster and concrete fillers, building materials fillers,
formed insulation and fire proofing. It also has application as
filter aids, insulating industrial cryogenic storage vessels and
as a potting medium in gardening and horticulture to aid water
retention and aeration of the soil. One of the largest areas of
growing demand is for large scale hydroponic farming resultant
of the legalisation of cannabis in many states. Perlite is also a
natural pozzolan.
According to the United States Geological Survey (“USGS”),
860,000 tons of raw perlite was mined in the USA in 2021, up
by 2% on 2020. The consumers of raw perlite are split between
integrated
independent expanders and downstream
mining-perlite expanding companies.
Two production options have been considered for perlite:
l
l
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 first of these two options is attractive as 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. The Company’s air quality
permit, which primarily applies to an on-site process plant, is
based on the first of these options.
Different grinding technologies, plant capital and operating
costs have been considered for the second option of a
stand-alone perlite grinding plant.
The Company has permission to construct the onsite fixed
perlite processing plant set out in the second option. This option
has already been designed and costed. However, it may be
preferable to construct this at a more suitable, rail-linked site
elsewhere in Nevada.
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Strategic Report continued
Customer Trials and Discussions with Potential
Customers
Natural pozzolan
The value of the market for pozzolan is substantially larger than
that for perlite and so the Company’s focus to date has been
on securing a partner from within the cement and concrete
industry that has existing grinding capacity such that raw
pozzolan can be supplied as direct mined ore.
During the first half of the reporting period, and for a protracted
period last year, the Company had been working with a large
cement and ready-mix company (“CRMC”) in providing
samples for industrial-scale application testing, holding regular
negotiations and discussing terms for a joint development of
the CS Natural Pozzolan-Perlite Project. However, in March this
year the Company terminated further negotiations with that
CRMC as the already extended discussions had failed to reach
a satisfactory conclusion.
The Company has since been prioritising discussions with other
potential partners for the CS Project including other cement and
ready-mix companies, fly ash distributers, building materials
companies and a new cement clean-tech company.
Invariably these companies all need to test CS natural pozzolan
with their own specific in-house cements, blends and concrete
mixes. These tests have been time consuming but are now largely
complete and, in all cases, have been successful, confirming CS
natural pozzolan as a versatile high quality pozzolan.
Perlite
Due to the focus on natural pozzolan and limited budgets, the
Company’s work on the perlite side of the business has been
more limited. Customer trials of horticultural grade perlite from
the CS Project continue and, following interest from a very large
consumer of raw perlite, a specific, tailored, finer grade of raw
perlite was produced at SGS Lakefield in Canada from the
Company’s horticultural fines and supplied to that consumer for
testing. Results are awaited.
California Department of Transport (“Caltrans”)
Certification
A significant development during the year was the conditional
approval by the California Department of Transport (“Caltrans”)
of the use of CS natural pozzolan in California State
infrastructure projects after successfully passing Caltrans’s own
independent compliance testing. As a result, CS natural
pozzolan is now listed on the Caltrans List of Approved
Materials for Cementitious Materials for use in Concrete.
Caltrans is the Government body responsible for the award of
State funded infrastructure construction projects in California.
Caltrans Standard Specifications for concrete mandate the use
of supplementary cementitious materials (“SCMs”) such as
natural pozzolan in order to improve the durability and
sustainability of its concrete structures.
It has only recently become possible for new sources of
construction materials to be approved on a conditional basis.
Full approval is conditional until six monthly test results from
production runs have been submitted by the Company showing
compliance with specifications.
This is good news for the CS Project as California State
Infrastructure projects usually specify the use of material from
the Approved Materials List and many concrete specifiers look
to this list as an independent endorsement when specifying for
a wider range of non-Caltrans projects.
Other Developments
The Company’s claims at the CS Project include a number of
claims that were not a part of the permitted Mine Plan of
Operations but which were staked on a speculative basis to
cover a deposit of diatomite.
The Company has been approached by an industrial producer
of diatomite to sell these claims. If an agreement for sale is
reached, it will not affect the existing permits or the ability of
the Company to extract and process pozzolan and perlite at the
CS Project.
The Company notes that Allegiant Gold Limited is continuing
exploration for gold on its claim block that lies immediately
south of the Company’s CS Project claims and has so far
defined a deposit containing resource of 1.1 million ounces and
8.8 million ounces of silver just 380m away from the southern
boundary of the Company’s CS Project claim block.
NEWPERL PERLITE PROJECT, NEVADA
The NewPerl Project is located approximately 85km from the
CS Project in Nevada, USA and contains a number of areas
where surface samples have shown excellent test results for
production of 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 is scheduled for 2023.
JACKSON WASH PERLITE PROJECT, NEVADA
The Jackson Wash Project is located 16km from the NewPerl
Project in Nevada and is also a target for horticultural grade
perlite.
Earlier in the reporting period the Company granted Kinross
Gold U.S.A Inc. 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.
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) on a global basis.
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HAZEN POZZOLAN PROJECT, NEVADA
The Hazen Pozzolan Project is located in Churchill County in
Northern Nevada, 20 miles by road from the town of Fernley
and 24 miles by road from the County town of Fallon. Situated
9km from a rail siding on the arterial east-west Union Pacific
line, it is well positioned for rail transport to the regional markets
of northern California, points east, as well as the local markets
around Reno and northern Nevada.
The Hazen Project is therefore targeting different regional
markets to the CS Project.
The Company’s mining claims were staked in June 2021 to
cover a deposit of glassy pumice targeted as a natural
pozzolan. Pumice is currently mined elsewhere in the US as
natural pozzolan and at Hazen was mined as a lightweight
aggregate from a shallow open pit some decades ago. Further
work is required to determine the extent of the Hazen deposit
although indications are that the pumice extends several
hundred meters beyond the limits of the existing open pit.
are no significant sepiolite deposits known in the USA, so a large
potential market would exist for any new US producer of sepiolite.
The Pioche claims were staked to cover a historically
documented occurrence of sepiolite which was subsequently
confirmed by the Company’s initial prospecting work. Following
a field visit in December 2021, the Company reached an
agreement with Spanish company Tolsa S.A., the world’s largest
producer of sepiolite, granting Tolsa an up to 18-month option
to purchase the Pioche Project for $1.25 million and an ongoing
payment to Sunrise of a 3% royalty. This option expires in
December 2023, but Tolsa must make a payment to Sunrise of
$50,000 by 28 December 2022 to continue the exploration
beyond this payment date.
Tolsa has completed a detailed mapping and sampling
programme at Pioche which has defined multiple beds of
sepiolite and this has guided a follow up trenching programme
which was recently completed. Samples are now being tested
in Spain and results are awaited.
Whilst the Hazen Project is less advanced than the CS Project,
the Company’s laboratory testwork to date has shown that the
material present in the pit is of similar high quality to the CS
Project pozzolan. It exceeds the specifications of ASTM
standard C618 and mitigates the deleterious alkali silica reaction
that occurs when concrete is made using reactive aggregates.
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.
During the year a number of companies made field visits and
tested samples from Hazen. As a result the Company recently
entered into a collaborative arrangement with an existing
processor of natural pozzolan for mining and test grinding of a
bulk sample from Hazen. Approximately 250 tons of natural
pozzolan was extracted and is being processed at no cost to
the Company. The owner of the process plant has the
processing facilities and marketing network in those regions
targeted by the Hazen Project to commercialise the Hazen
deposit in the future. Results are awaited.
PIOCHE SEPIOLITE PROJECT, NEVADA
Despite being a relatively new project for the Company, the
Pioche Project is progressing quickly.
Sepiolite is a non-swelling, lightweight, porous clay with
outstanding sorption capacity. The largest market globally for
sepiolite is for use in lightweight non-clumping pet litters, where
it has superior properties compared to other clays used in this
application. It is also used extensively in agriculture as a
slow-release absorbent and adsorbent carrier for chemicals
and pesticides, in animal feeds as a binder and carrier for
nutrients and growth promoter. It is also used as a suspending
agent in paints, medicines, pharmaceuticals and cosmetics,
and in high temperature drilling muds.
Sepiolite is a very uncommon clay and there are very few
commercial deposits in the world, and, with one exception, there
An agreement was reached with the underlying owners of the
Bay State Silver Project claims to reduce the annual lease
payments to a nominal amount for the next three years.
SR Minerals Inc. also holds a 2% NSR royalty interest from
Golden Metal Resources plc (“GMR”) on GMR’s Garfield
Copper-Gold Project. This is a key project for GMR in its plans
to list on AIM. The Garfield Project is considered to be
prospective for sediment hosted skarn and porphyry-style
copper-gold mineralisation.
SR Minerals Inc. also holds a 3% NSR 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.
WESTGOLD INC.
Westgold Inc. was set up under the project generator model
and currently holds interests in four projects in Nevada –
Clayton, Myrtle, Newark and Stonewall.
CLAYTON SILVER-GOLD PROJECT, NEVADA
The property lies in the Walker Lane Mineral Belt. It is some
19 miles southeast of the producing Mineral Ridge Gold Mine
and 19 miles southwest of the major historic mining centre of
Goldfield, where a number of large gold-silver deposits are
currently under development.
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Strategic Report continued
The mineralisation at the Clayton Project was discovered in the
1980s when drilling programmes were conducted by
Freeport-McMoRan Gold and Coeur Exploration. Wide intervals
of low-grade silver mineralisation were intersected and it was
postulated that gold-silver values were under-reporting due to
loss of fines from the reverse circulation drilling method.
The most promising intersections were not followed up.
This historical drilling loss of silver was corroborated by the
Company when a twin diamond drill hole delivered an 84%
increase in the silver grade compared to an original Freeport hole.
The Clayton Project is available for joint venture although the
Company will consider follow up drilling as resources become
available. No exploration was conducted at the Clayton Project
in the reporting period.
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 21 million ounces gold at a
grade of 6.9 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. No exploration was conducted at the Newark Project
in the reporting period.
MYRTLE GOLD PROJECT, NEVADA
The Myrtle Gold-Silver Project (the “Project”) is located 25km
northwest of Hawthorne, the administrative centre for Mineral
County, Nevada.
The Project was acquired by claim staking in 2021. Promising
assay results have been obtained from reconnaissance field
mapping and sampling but recently obtained drill logs from
exploration by a previous operator downgraded the potential
of Company’s claims.
The Company has retained its claims but the carrying value for
the Myrtle Project has been fully impaired in this year’s accounts.
STONEWALL GOLD PROJECT, NEVADA
Westgold Inc. holds a 2% Net Smelter Return Royalty from GMR
in the Stonewall project, also a key project for GMR’s AIM listing.
Stonewall is prospective for epithermal-style gold-silver
mineralisation.
SUNRISE MINERALS AUSTRALIA PTY LTD
BAKER’S GOLD PROJECT
The Baker’s Gold Project comprises two adjacent prospecting
licences P51/2837 and P51/2884 located 25km southeast of
Meekatharra in the Murchison Goldfield of Western Australia.
Since acquiring the Project the Company has carried out soil
sampling and a preliminary programme of drilling with
significant mineralisation being intersected in drill hole
21SBRC002 (2m interval from 64m down hole grading 14.4 g/t
gold including 1m grading 26.5 g/t gold). The Company has
recently applied for mining Leases M51/903 and M51/904 to
cover this mineralisation and ensure the continuity of tenure
before the expiry of the Company’s prospecting licences.
Since the Company completed its drill programme the
Australian Federal Court determined
the
Yugunga-Nya Aboriginal People (“YN PBC”) Part A native title
claim. The determination of Native Title grants the claimants
official title and rights to the land along with government funding
to support the right to defend title.
favour of
in
The Company is required by law to reach agreement with
YN PBC on compensation for any loss of native title rights that
might result from future mining activities.
YN PBC provided the Company with a Draft Standard
Negotiation Protocol. It is open ended with respect of costs to
be met by Sunrise with Sunrise having to pay all of YN PBC’s
fees relating to legal advice, its 10-man negotiating team, in-
person negotiations, environmental and technical consultants,
etc.
The Company is currently considering if the possible costs of
negotiating a Native Title agreement can be justified by the
exploration results obtained to date or if these negotiations can
be deferred whilst further exploration is carried out.
No discussions have yet been held with YN PBC but as a
prudent measure, until the position becomes clearer, the
Company has impaired in full the carrying value of the Bakers
Project in this year’s accounts. This impairment can be reversed
if justified by future developments.
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The Role Of Natural Pozzolan In CO2 Net-Zero
Strategies
The development of the Company’s natural pozzolan projects
is taking place against a background of fundamental change
in the cement and concrete industries; a change which is
being driven by climate change targets to achieve net-zero
CO2 emissions.
After water, concrete is the most used substance on Earth.
Whilst 14 billion cubic metres of concrete were poured
globally in 2020, this is forecast to increase to 20 billion
cubic metres annually by 2050 with continuing global
urbanisation and population growth. This activity is currently
responsible for 8% of the world’s man-made emissions, half
of which comes from the burning of fuel and the other half
by direct release of CO2 from burning limestone in the
cement clinker making process.
Net-zero CO2 targets are therefore a major challenge for the
cement and concrete industries but one they must meet. In
the US, as elsewhere around the world, these targets are
enshrined in State legislation, industry-body commitments
and are increasingly driven by cement and concrete
customers and specifiers.
the
Implementation Priorities in US President Biden’s November
2021 Executive Order “Implementation of the $1.2 trillion
Infrastructure Investment and Jobs Act” is “building
infrastructure that is resilient and that helps combat the
crisis of climate change”. It seems likely then that priority
will be given to greener and more sustainable building
materials in contracts awarded under the Infrastructure Bill.
In addition, one of
Another significant development which advances the
potential of natural pozzolan was the enactment of The
Inflation Reduction Act of 2022. This act includes a
$5.8 billion package of grants, rebates and loans for
decarbonisation of heavy industries like steel and cement.
A key element for the transition of large cement companies
to a lower carbon footprint is to incorporate SRMs into their
cement formulations. The packages introduced by The
Inflation Reduction Act of 2022 specifically provide funding
for manufacturers that install equipment capable of slashing
greenhouse gas emissions.
Southern California is a major target market for the
Company’s CS Project and California has the largest
economy of all the US States. In September 2021, in the first
law of its kind in the US, California’s Carbon Cap-and-Trade
scheme was signed into legislation and directly targets
greenhouse gas emissions associated with the cement
industry. This Cement Decarbonization legislation is focused
on achieving net-zero emissions from the industry by the end
of 2045. It works by putting a periodically declining limit on
carbon emissions for a given entity, allows those entities to
trade unused allowances but imposes fines on any entity
exceeding its allowance. 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
the use of
cement and concrete mixes
supplementary cementitious materials (“SCMs”) such as
natural pozzolan.
through
It is important to understand how the cement industry is
addressing net-zero carbon targets and how natural
pozzolan can play a key role. There are a number of
strategies currently being employed in the cement industry,
including:
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Use of alternative clean(er) fuels. e.g. biomass,
chemical and hazardous waste, and petroleum-based
fuels but also natural gas; wind energy; hydroelectric
power; solar energy; hydrogen; and nuclear energy.
Carbon capture and storage. In its most basic form
CO2 is captured from the cement kiln where the fuel
is burned and where CO2 is released from burnt
limestone. The captured CO2 is stored in underground
geological reservoirs such as spent oil or gas fields.
Carbon curing. CO2 is captured at the cement plant
then liquified and transported with cement to the
concrete ready-mix plant where it is reinjected into the
concrete mix in the mixing truck. Here it combines
with the concrete mix and becomes locked into the
concrete mix and assists in concrete curing.
Manufacture of so-called “clean-tech” cements.
These cement technologies do not produce Ordinary
Portland Cement (“OPC”) but produce alternative
cements by innovative carbon-neutral methods rather
than OPC. These cements can be used in partial or
full replacement of OPC.
Production of 1L
(limestone) cement. C.10%
limestone blended with OPC with clinker. 10%
reduction in CO2 emission per ton of cement
produced. An easy win for the cement companies as
limestone is always available locally as the main
source of cement clinker.
Production of cements containing natural pozzolan or
slag, e.g.
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Strategic Report continued
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1P (pozzolan) cement. Up to 30% natural pozzolan
blended with OPC. Up to 30% reduction in CO2 emission
per ton of cement. Natural pozzolan can replace fly ash
pozzolan in cement or concrete. Fly ash supply is
declining due to the ongoing closure of coal-fired power
stations.
1S (slag) cement. Up to 30% blast furnace slag
pozzolan blended with OPC. Up to 30% reduction in
CO2 emission per ton of cement. Blast furnace slag is
restricted in production quantities and locations.
The Role Of Natural Pozzolan In Sustainable
Development
In addition to building greener structures, a key part of
sustainability in the concrete industry is the building of more
durable structures with longer life.
Whereas “Roman concrete” structures made with natural
pozzolan have survived for millennia, some concrete
structures from parts of the 20th century made with OPC are
susceptible to “concrete cancer”. This is due to reaction of
alkalis in OPC with “reactive” silica in concrete aggregates
and results in expansion, cracking and spalling of the
concrete (Alkali Silica Reaction or “ASR”).
As high-quality aggregate supplies for concrete become
scarcer, the concrete industry is having to use more reactive
aggregates that can severely impact the quality of the
resulting concrete.
The use of high quality SCMs such as natural pozzolan will
mitigate ASR by tying up and immobilising the alkalis in
cement, preventing their reaction with silica in the aggregates.
So much so that the use of pozzolans is often mandated by
State Departments of Transport for public infrastructure
construction work to ensure more sustainable structures.
Sustainability, and ASR mitigation in particular, is therefore a
significant factor in choosing the use of natural pozzolan in
net-zero CO2 strategies.
Of all the strategies being adopted by the cement and
concrete industries, only the use of SCMs can mitigate ASR
and so we expect to see natural pozzolan used in
conjunction with other CO2 reduction strategies.
Use Of Natural Pozzolan Is A Win-Win For Cement
Companies
In order for cement companies to reduce the embodied
carbon in their cements it helps if there is a strong business
case for doing so. Cap-and-Trade is a “carrot and stick”
approach and customers and specifiers are increasingly
looking for greener cements.
The use of 1P cement not only provides for more durable and
sustainable concrete with lower embodied carbon but it also
allows the cement company to sell more cement per ton of
OPC clinker capacity. The production of cement clinker in
the cement kiln is often the volume limiting step to cement
production at a cement plant.
This is an important consideration particularly as cement
companies are currently operating at capacity and are all
sold out.
These ongoing developments serve to strengthen the
place of natural pozzolans in future cement formulations
and the CS and Hazen Projects are well placed, being
fully permitted and ready to mine.
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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 maintains a portfolio of exploration
projects, including projects at the drill stage, in order to
spread the risk associated with mineral exploration.
When relevant, 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, Social and
Governance Policy (the “ESG Policy”) and avoids the
acquisition of projects where
legacy
environmental issues might fall upon the Company.
liability
for
The ESG Policy will be updated in future to reflect the
status of the Company’s projects.
Sunrise Resources plc Annual Report & Accounts 2022
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Strategic Report continued
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 52.
Exchange Rate Risk
The value of the Company’s assets held in overseas
subsidiaries will vary with exchange rate fluctuations,
especially in the US Dollar/Pound Sterling exchange rate.
As much of the Company’s exploration costs are incurred
in US Dollars, the Company’s budget costs will be subject
to exchange rate variations when actually incurred.
MITIGATION STRATEGIES
The Company’s strategy restricts its activities to stable,
democratic and mining friendly jurisdictions.
The Company has adopted a strong Bribery &
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 identified on a timely basis and dealt with appropriately.
In carrying out their responsibilities, the directors have put
in place a framework of controls to ensure as far as possible
that ongoing financial performance is monitored in a timely
manner, that corrective action is taken and that risk is
identified as early as practically possible, and they have
reviewed the effectiveness of internal financial control.
The Board, subject to delegated authority, reviews capital
investment, property sales and purchases, additional
borrowing
insurance
facilities, guarantees and
arrangements.
The Company’s project expenditures are discretionary
and subject to constant review and changing priorities.
The Company does not speculate on exchange rates or
hedge its foreign currency exposures but will consider
doing so once expenditures become more predictable
and locked in.
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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 13.
The interests of the Company’s employees:
Other than the Board, the Company has no employees. It relies on the employees of Tertiary Minerals plc who are engaged
through a services agreement, 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.
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 out 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 Environmental, Social and Governance (“ESG”) Statement starting on page 22 and in the Corporate Governance
Statement (Principle 3) on page 23.
Sunrise Resources plc Annual Report & Accounts 2022
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Strategic Report continued
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; ESG Policy; Health and
Safety Policy, and Bribery & Anti-Corruption 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 9 December 2022 and signed on its behalf.
Patrick Cheetham
Executive Chairman
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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 UK
adopted International Accounting Standards. 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:
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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 law and UK adopted International
Accounting Standards, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
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.
Sunrise Resources plc Annual Report & Accounts 2022
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Directors’ Report
The directors are pleased to submit their Annual Report and
audited financial statements for the year ended 30 September
2022.
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.
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
£96,126 (2021: £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. 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
foreseeable future and therefore believe that the going concern
basis is appropriate for the preparation of the financial
statements.
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 13 to 14.
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.
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
Board
Meetings
Nomination
Committee
Audit
Committee
Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
Attended
Held
11
11
11
11
2
2
2
2
3
3
3
3
1
1
1
1
The directors’ shareholdings are shown in Note 16 to the financial statements.
Events After The Year-End
On 29 November 2022 the Company raised £280,000 through a placement of 80,000,000 new ordinary shares and the issue of
a £200,000 convertible security. The agreement, with US institutional investor Towards Net Zero LLC, allows the Company to issue
a further convertible security within 6 months of the Closing Date, 6 December 2022, to raise a further £200,000 subject to certain
conditions precedent.
18
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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 9 December 2022
Interactive Investor Services Nominees Limited SMKTISAS
Barclays Direct Investing Nominees Limited CLIENT1
Interactive Investor Services Nominees Limited SMKTNOMS
Smith & Williamson Nominees Limited
Hargreaves Lansdown (Nominees) Limited VRA
Hargreaves Lansdown (Nominees) Limited 15942
Interactive Investor Services Nominees Limited TDWHSIPP
HSDL Nominees Limited
Hargreaves Lansdown (Nominees) Limited HLNOM
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
Friday 17 February 2023 at 10.00 a.m. is set out on page 55 of
this report. Explanatory Notes giving further information about
the proposed resolutions are set out on page 56.
Number % of share
capital
of shares
381,926,048
354,368,893
337,994,996
292,784,545
259,185,379
248,498,152
177,343,871
145,495,033
139,952,577
9.76
9.05
8.64
7.48
6.62
6.35
4.53
3.72
3.58
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 9 December 2022 and signed on its
behalf.
Patrick Cheetham
Executive Chairman
Sunrise Resources plc Annual Report & Accounts 2022
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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:
l
l
l
Founding director
Mining geologist with 40 years’ experience in mineral exploration
35 years in public company management
l
l
l
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:
l
l
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.
l
l
l
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
20
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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 by the Board on 9 December 2022. The Company has
set out on its website and in its Corporate Governance
Statement, on pages 23 to 25, 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 and expectations whilst delivering long-term
value for shareholders.
The Board recognises that its principal activity, mineral
exploration and development, has potential to impact on the
local environment and communities and consequently has
adopted an Environmental, Social and Governance (“ESG”)
Policy to ensure that the Group’s activities have minimal
environmental and social 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 ESG Policy, have
had only minimal environmental and social impact at present
and this policy is regularly reviewed. Where appropriate, all work
is carried out after advance consultation with affected parties.
the benefits
that social media
The Board recognises
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.
The Board has also adopted a Share Dealing Code for dealings
in shares of the Company by directors and employees and a
Bribery & 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 13 days of
average daily purchases (2021: 4 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
Sunrise Resources plc Annual Report & Accounts 2022
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Corporate Governance continued
responsible exploration as
Environmental, Social and Governance
Statement
Sunrise Resources plc and its subsidiaries (“the Company”)
practice
this
Environmental, Social and Governance (“ESG”) policy
statement and as demonstrated by our actions. By doing so we
reduce project risk, avoid adverse environmental and social
impacts, optimising benefits for all stakeholders while adding
value to our projects.
reflected
in
Our business associates, consultants and contractors
(“Associated Parties”) perform much of our primary activities at
our projects and therefore we require that all Associated Parties
working on our behalf or for our subsidiaries accept and adhere
to the principles set out in this policy. We encourage input from
those with local knowledge and we review this policy on a
regular basis.
Our ESG policy is guided by the Prospectors & Developers
Association of Canada’s (PDAC) Framework for Responsible
Exploration (known as e3 Plus) which encourages mineral
exploration companies to support and improve social,
environmental and health and safety performance across all
exploration activities around the world.
Adopting Responsible Governance and Management
The Company is committed to environmentally and socially
responsible mineral exploration and has developed and
implemented policies and procedures
for corporate
governance and ethics as set out from page 22. We ensure that
all staff and key Associated Parties are familiar with these and
have appropriate level of knowledge of these policies and
procedures.
The Company employs persons and engages contractors with
the required experience and qualifications relevant to their
specific tasks and, where necessary, seeks the advice of
specialists to improve the understanding and management of
social, environmental, human rights and security, health and
safety, and in the application of traditional knowledge.
The Company’s Corporate Governance Statement and Bribery
& Anti-Corruption policies can be viewed on our website here:
https://www.sunriseresourcesplc.com/corporate-governance.
Applying Ethical Business Practices
As well as our shareholders and staff, our stakeholders include
local communities and local leadership, local, regional and
national government and regulatory authorities, suppliers,
contactors and consultants, our local business partners and
other interested parties. Our corporate culture and policies
require honesty, integrity, transparency and accountability in all
aspects of our work and when interacting with all stakeholders.
The Company takes all necessary steps to ensure that activities
in the field minimise or mitigate any adverse impacts on both
the environment and on local communities.
Commitment to Project Due Diligence and Risk
Assessment
We make sure we are informed of the laws, regulations, treaties
and standards that are applicable with respect to our activities.
We ensure that Associated Parties are informed and prepared
before going into the field in order to minimise the risk of
miscommunication, unnecessary costs and conflict, and to
understand the potential for creating opportunities with local
communities where possible.
Engaging Host Communities and Other Affected and
Interested Parties
Sunrise is committed to engaging positively with local
communities, regulatory authorities, suppliers and other
stakeholders in its project locations, and encourages feedback
through this engagement. Through this process the Company
develops and fosters the relationships on which our business
relies for success.
Respecting Human Rights
The exploration activities of Sunrise are carried out in line with
applicable laws on human rights in its home jurisdiction and
those of the countries in which it works. The Company does not
engage in activities that have adverse human rights impacts.
Protecting the Environment
We are committed to ensuring that environmental standards are
met or exceeded in the course of our exploration activities.
Applicable laws and local guidelines in all project jurisdictions
are followed diligently and exploration programmes are only
carried out once relevant permits and approvals have been
secured from the appropriate regulatory bodies.
In Nevada, USA, most of our exploration is carried out on
Federally owned land administered by the Bureau of Land
Management (BLM) which requires the submission of financial
bonds for reclamation of exploration activities and which holds
the Company to account. Provisions are made in the financial
statements for reclamation costs in accordance with calculations
set by the BLM. When operating on private lands the Company
applies the same rigorous standards for reclamation.
In Australia field exploration activity requires prior approval from
the Department of Mines, Industry Regulation and Safety which
imposes environmental reclamation obligations on any such
approvals.
Where our activities create ground disturbance, we ensure that
full rehabilitation is carried out in accordance with regulations
and we take care to minimise the impact of our activities on
local flora and fauna, choosing where possible less impactful
exploration methods.
22
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Safeguarding the Health and Safety of Workers and the
Local Population
Company activities are carried out in accordance with its Health
and Safety Policy which adheres to all applicable laws.
It ensures that its Associated Parties are made aware of and
follow these policies where relevant.
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.
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 13 to 14.
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 to understand their investment requirements and
expectations and to address their enquiries and concerns.
All shareholders are 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. The Board has adopted an Environmental, Social and
Governance (“ESG”) Policy, which can be found on the
Company website and an ESG Statement can be found in this
Annual Report on pages 22 to 23. The Company engages
positively with local communities, 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 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 13 to 14, 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 eleven times during the year to consider such
matters. Further details are provided in the Directors’ Report on
page 18. The Board is supported by the Audit, Remuneration
and Nomination Committees, details of which, together with
attendance records, can also be found on page 18.
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 2022, Patrick Cheetham dedicated
over 62% of his working time to the Company. 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 2022
23
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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 18.
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 20.
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.
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, Social and Governance (“ESG”) Policy; Share
Dealing Policy; Bribery & 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 communities, and as such an ESG Policy was
developed with this in mind and this replaces the previous to
ensure that, wherever they take place, the Group’s activities have
minimal environmental and social 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 ESG Policy have had
only minimal environmental and social 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
the Board’s decision-making, and
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
that
24
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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)
c)
ensure that the Board of Directors has adequate
knowledge of issues discussed with external auditors.
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 audit. It also considers
the cost-effectiveness, independence and objectivity of the
auditors taking account of any non-audit services provided by
them. James Cole is Chair of the Audit Committee.
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 its 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 three times in the last financial year,
on 10 December 2021, 24 May 2022 and 8 August 2022.
Significant reporting issues considered during the year
included the following:
1. Impairments
The Committee has reviewed the carrying values of the Group
projects as at 30 September 2022, and recoverability of loans
from the Parent Company to subsidiary undertakings and
carried out impairment reviews. The project carrying values are
assessed against the IFRS 6 criteria set out in Note 1(n) on
page 39. Loans to subsidiary undertakings are assessed for
impairment under IFRS 9.
As a result of this, it was judged that the Bakers and Myrtle Project
expenditure should be
the Group’s
inter-company loan to Sunrise Minerals Australia Pty Ltd should be
fully impaired. Further details are provided on page 40.
impaired and
that
2. Going Concern
The Committee also considered the Going Concern basis on
which the accounts have been prepared (see Note 1(b) on
page 37). 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 2022
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Corporate Governance continued
Remuneration Committee Report
The Remuneration Committee is a sub-committee of the Board
and comprises the independent non-executive directors.
Mr Murphy is Chairman of the 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 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.
The primary objective of the Nomination Committee is to lead
the formal process of reviewing and making recommendations
as to Board appointments and other Board changes and to
make appropriate recommendations to the Board.
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
to ensure
is appropriately
the executive director
incentivised and rewarded for his services to the Company and
this is considered as part of the Committee’s review of any
Long-Term Incentive Plan.
that
The Committee is required, amongst other things, to:
(a) Review the structure, size and composition (including the
skills, knowledge, experience and diversity) of the Board
and make recommendations to the Board with regard to
Board appointments and any Board changes.
(b) Give full consideration to succession planning for directors
and other senior executives in the course of its work,
taking into account the challenges and opportunities
facing the Company, and the skills and expertise needed
on the Board in the future.
The Remuneration Committee met once during the financial
year under review, on 8 August 2022.
(c) Keep under review the leadership needs of the
organisation to compete effectively in the marketplace.
Roger Murphy
Chair – Remuneration Committee
(d) Review annually the time required from non-executive
directors and non-executive directors. Performance
evaluation should be used to assess whether the
executive directors and non-executive directors are
spending enough time in fulfilling their duties.
(e) Arrange periodic reviews of the Committee’s own
performance and, at least annually, review its constitution
and terms of reference to ensure it is operating at
maximum effectiveness and recommend any changes it
considers necessary to the Board for approval.
(f)
Ensure that prior to the appointment of a director, the
proposed appointee should be required to disclose any
other business interests that may result in a conflict of
interest and be required to report any future business
interests that may result in a conflict of interest.
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The Committee carries out its duties for the Parent Company,
major subsidiary undertakings and the Group as a whole and
met twice during the period under review, on 29 April 2022 and
8 August 2022 to review the Terms of Reference for the
Committee and to consider their continuing suitability.
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
Sunrise Resources plc Annual Report & Accounts 2022
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Independent Auditor’s Report
to the Members of Sunrise Resources plc for the year ended 30 September 2022
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 2022, which comprise:
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the Group
income statement and statement of
comprehensive income for the year ended 30 September
2022;
the Group and Parent Company statements of financial
position as at 30 September 2022;
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 UK adopted International
Accounting Standards.
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 2022 and of the Group’s loss for the
period then ended;
the Group and Parent Company financial statements have
been properly prepared in accordance with applicable
law and UK adopted International Accounting Standards;
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 as applied to listed companies, 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(n) 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 and 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.
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
£72,000, based on asset measures.
Materiality for the Company was based upon the same criteria
and determined at £70,000.
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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
£50,000 for the Group and Company.
We agreed with the Audit and Risk Committee to report to it all
identified errors in excess of £3,600 (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.
Key audit matter
How the scope of our audit addressed the 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.
Together, the CS, Bay State and County Line projects
constitute a significant proportion 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.
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.
Sunrise Resources plc Annual Report & Accounts 2022
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Independent Auditor’s Report continued
to the Members of Sunrise Resources plc for the year ended 30 September 2022
Key audit matter
How the scope of our audit addressed the 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.
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).
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.
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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 strategic report and director’s 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
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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 17, 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
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
to detect
non-compliance and cannot be expected
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
9 December 2022
Sunrise Resources plc Annual Report & Accounts 2022
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Consolidated Income Statement
for the year ended 30 September 2022
Pre-licence exploration costs
Impairment of deferred exploration expenditure
Administration costs
Other income
Operating loss
Gain on sale of exploration assets
Interest receivable
Loss before taxation
Tax on loss
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
2022
£
5,638
194,247
291,860
22
(13,474)
2021
£
17,320
30,021
318,630
–
(478,271)
(365,971)
–
48
30,658
61
(478,223)
(335,252)
–
–
(478,223)
(335,252)
(0.013)
(0.009)
9
3
7
6
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2022
Loss for the year
Items that could be reclassified subsequently to the income statement:
2022
£
2021
£
(478,223)
(335,252)
Foreign exchange translation differences on foreign currency net investments in subsidiaries
441,434
(86,770)
Items that will not be reclassified to the income statement:
Changes in the fair value of equity investments
(22,962)
(9,651)
418,472
(96,421)
Total comprehensive loss for the year attributable to equity holders of the parent
(59,751)
(431,673)
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Consolidated and Company Statements of Financial Position
at 30 September 2022
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
Provisions for liabilities and charges
Net assets
Equity
Called up share capital
Share premium account
Share warrant reserve
Fair value reserve
Foreign currency reserve
Accumulated losses
Group
2022
£
Company
2022
£
Group
2021
£
Company
2021
£
Notes
9
17
8
8
11
12
13
17
17
20
2,503,812
11,147
–
–
2,133,137
13,423
–
–
–
2,609,413
–
2,753,586
20,075
11,250
63,503
45,675
2,535,034
2,620,663
2,210,063
2,799,261
167,425
96,126
49,164
73,644
130,805
371,740
22,701
337,817
263,551
122,808
502,545
360,518
(104,936)
(90,061)
(100,861)
(80,357)
(2,839)
–
(2,300)
–
(107,775)
(90,061)
(103,161)
(80,357)
155,776
32,747
399,384
280,161
(2,874)
(32,079)
(34,953)
–
–
–
(4,715)
(26,665)
(31,380)
–
–
–
2,655,857
2,653,410
2,578,067
3,079,422
14
3,833,559
3,833,559
3,701,805
3,701,805
5,680,316
5,680,316
5,675,616
5,675,616
14
14
40,101
10,140
404,103
40,101
17,500
1,321
40,164
33,102
(37,331)
40,164
28,662
1,321
(7,312,362)
(6,919,387)
(6,835,289)
(6,368,146)
Equity attributable to owners of the parent
2,655,857
2,653,410
2,578,067
3,079,422
The Company reported a loss for the year ended 30 September 2022 of £552,391 (2021: £256,473).
These financial statements were approved and authorised for issue by the Board on 9 December 2022 and were signed on its
behalf.
P L Cheetham
Executive Chairman
J Cole
Director
Sunrise Resources plc Annual Report & Accounts 2022
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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 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
–
–
–
–
–
–
–
–
–
–
–
–
–
(9,651)
–
–
–
(86,770)
(335,252)
–
–
(335,252)
(9,651)
(86,770)
(9,651)
(86,770)
(335,252)
(431,673)
Share issue
Share-based payments expense
Transfer of expired warrants
23,808
–
–
19,835
–
–
–
19,663
(13,392)
–
–
–
–
–
–
–
–
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
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
–
–
–
–
–
–
–
–
–
–
–
–
–
(22,962)
–
–
–
441,434
(478,223)
–
–
(478,223)
(22,962)
441,434
(22,962)
441,434
(478,223)
(59,751)
Share issue
Share-based payments expense
Transfer of expired warrants
131,754
–
–
4,700
–
–
–
1,087
(1,150)
–
–
–
–
–
–
–
–
1,150
136,454
1,087
–
At 30 September 2022
3,833,559
5,680,316
40,101
10,140
404,103
(7,332,550)
2,655,857
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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 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
Loss for the year
Change in fair value
Exchange differences
Total comprehensive loss for the year
–
–
–
–
–
–
–
–
–
–
–
–
–
(11,162)
–
(11,162)
Share issue
Share-based payments expense
Transfer of expired warrants
131,754
–
–
4,700
–
–
–
1,087
(1,150)
–
–
–
–
–
–
–
–
–
–
(552,391)
–
–
(552,391)
(11,162)
–
(552,391)
(563,553)
–
–
1,150
136,454
1,087
–
At 30 September 2022
3,833,559
5,680,316
40,101
17,500
1,321
(6,939,575)
2,653,410
Sunrise Resources plc Annual Report & Accounts 2022
35
264671 Sunrise Resources AR pp32-pp36.qxp_262382 Sunrise Resources AR pp31-pp35.qxp 19/12/2022 10:58 Page 36
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2022
Notes
17,20
9
9
8
20
8
11
13
8
9
17
Operating activity
Operating (loss)/profit before interest
Depreciation/interest charge
Share-based payment charge
Shares issued in lieu of net wages
Impairment charge - deferred exploration expenditure
Gain on disposal of exploration assets after non cash
consideration
Non cash addition to equity investment
Reclamation liability
Increase/(decrease) in provision for impairment of loans
to subsidiaries
(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
Cash receipt from disposal of equity investments
Development expenditures
Loans to subsidiaries
Net cash outflow from investing activity
Financing activity
Issue of share capital (net of expenses)
Lease payments
Shares issued via exercise of warrants
Net cash inflow from financing activity
Net increase/(decrease) in the year
Cash and cash equivalents at start of year
Exchange differences
Cash and cash equivalents at 30 September
12
Group
2022
£
Company
2022
£
Group
2021
£
Company
2021
£
(478,271)
(570,441)
(365,971)
(285,413)
5,595
1,087
31,279
194,247
–
–
–
–
–
1,087
31,279
–
–
–
–
4,744
19,663
30,818
30,021
23,342
–
19,663
30,818
–
–
–
(54,000)
(26,665)
–
–
–
–
–
318,100
–
(36,620)
(26,463)
(78,825)
4,075
(9,704)
10,184
3,969
(429)
(278,608)
(256,142)
(352,689)
(285,392)
48
–
18,003
60
28,941
–
20,000
23,263
23,263
–
(137,490)
–
(391,061)
–
(173,926)
–
(484,038)
(114,179)
(132,660)
(371,001)
(455,097)
104,500
104,500
(2,874)
675
–
675
–
(2,378)
12,825
102,301
105,175
10,447
–
–
12,825
12,825
(290,486)
(283,627)
(713,243)
(727,664)
371,740
337,817
1,089,417
1,065,480
14,872
96,126
19,454
(4,434)
1
73,644
371,740
337,817
36
Sunrise Resources plc Annual Report & Accounts 2022
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 37
Notes to the Financial Statements
for the year ended 30 September 2022
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 UK adopted International Accounting Standards.
(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 (£96,126), 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 the 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 £552,391 (2021: £256,473).
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. Full impairment reviews were carried out in order to assess the carrying values of each project
Sunrise Resources plc Annual Report & Accounts 2022
37
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 38
Notes to the Financial Statements continued
for the year ended 30 September 2022
as at 31 March 2022 and 30 September 2022. This involved consideration of changes in circumstances and evidence including
exploration results, changes in tenure of mineral rights, economic circumstances such as market prices, opportunities for
realisation such as sale or joint ventures and viability, comparing anticipated future costs with expected recoverable value. For
each project, based upon the relevant considerations, the directors formed a view regarding the recoverability of capitalised
expenditure and continued compliance with the IFRS 6 criteria for recognition and deferral.
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.
Trade and other receivables and payables
(e)
Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised
cost.
Cash and cash equivalents
(f)
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.
Leases
(g)
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.
Share warrants and share-based payments
(j)
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 9, 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
38
Sunrise Resources plc Annual Report & Accounts 2022
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 39
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.
Financial assets designated at fair value through OCI
(k)
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.
Reclamation costs
(l)
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.
(m) Standards, amendments and interpretations not yet effective
At the date of authorisation of these financial statements, there are no amended reporting standards and interpretations 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.
Judgements and estimations in applying accounting policies
(n)
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
Sunrise Resources plc Annual Report & Accounts 2022
39
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 40
Notes to the Financial Statements continued
for the year ended 30 September 2022
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 £1,505,188. 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 £497,398), 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 the reporting period on the County Line Project, Nevada (carrying value £168,990),
in the judgement of the directors further evaluation of the production potential is justified in view of its proximity to the CS Project
and project synergies. The mining claims have been renewed for a further 12-month period and the project is not impaired.
Positive drilling results have been obtained from the Clayton Project, Nevada (carrying value of £144,187) and in the opinion of
the directors further drilling is justified and the project is not impaired.
The Bakers Project, Australia is impaired (full impairment value of £170,745), pending a decision on negotiations with the regional
Native Title holder with whom agreement is required in order to progress the Company’s mining lease applications.
The Myrtle Project, Nevada is also impaired (full impairment value of £23,501), as information on historical exploration results has
been found that downgrades the prospectivity of the Company’s Myrtle mining claims.
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 other 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.
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.
40
Sunrise Resources plc Annual Report & Accounts 2022
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 41
2022
Consolidated Income Statement
Pre-licence exploration costs
Share-based payments
Impairment of deferred exploration expenditure
Other expenses
Other income
Operating loss
Interest receivable
Loss before tax
Taxation
Exploration
projects
£
Head
office
£
5,638
–
194,247
–
(13,474)
(186,411)
–
(186,411)
–
–
1,087
–
290,773
–
(291,860)
48
(291,812)
–
Total
£
5,638
1,087
194,247
290,773
(13,474)
(478,271)
48
(478,223)
–
Loss for the year attributable to equity holders of the parent
(186,411)
(291,812)
(478,223)
Non-current assets
Intangible assets:
Deferred exploration costs:
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
Hazen Pozzolan Project, USA
Pioche Sepiolite, 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
168,990
497,398
79,419
36,997
1,505,188
144,187
38,013
18,748
14,872
2,503,812
11,147
–
–
–
–
–
–
–
–
–
–
–
–
20,075
168,990
497,398
79,419
36,997
1,505,188
144,187
38,013
18,748
14,872
2,503,812
11,147
20,075
2,514,959
20,075
2,535,034
110,099
–
110,099
52,835
96,126
162,934
96,126
148,961
259,060
(16,132)
(2,839)
(84,313)
–
(100,445)
(2,839)
91,128
64,648
155,776
(32,079)
(2,874)
–
–
(32,079)
(2,874)
2,571,134
84,723
2,655,857
138,054
427,432
–
–
138,054
427,432
Sunrise Resources plc Annual Report & Accounts 2022
41
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 42
Notes to the Financial Statements continued
for the year ended 30 September 2022
2021
Consolidated Income Statement
Pre-licence exploration costs
Share-based payments
Impairment of deferred exploration expenditure
Other expenses
Operating loss
Gain on disposal of exploration assets
Interest receivable
Loss before tax
Taxation
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
42
Sunrise Resources plc Annual Report & Accounts 2022
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
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
2,146,560
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)
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 43
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
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)
2022
£
2021
£
13,421
8,200
1,200
998
2022
£
16,000
–
16,000
16,000
48,000
1,050
767
2021
£
16,000
10,540
5,523
16,000
48,063
In the year ended 30 September 2022 the cost of Employer’s National Insurance Contributions for directors was £Nil (2021: £Nil).
During the year ended 30 September 2022 the value of non-cash share-based payments in respect of share warrants issued to
the directors was £262 (2021: £17,979).
The directors are also the key management personnel. If all benefits are taken into account, the total key management personnel
compensation would be £48,262 (2021: £66,337).
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
2022
£
2021
£
48,000
48,063
–
–
262
48,262
–
295
17,979
66,337
2022
Number
2021
Number
3
0
3
3
0
3
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 £157 (2021: £1,686).
Company secretarial services are provided by Mr R. Venables through City Group plc.
Sunrise Resources plc Annual Report & Accounts 2022
43
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 44
Notes to the Financial Statements continued
for the year ended 30 September 2022
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.
2022
2021
Loss (£) (478,223)
(335,252)
Weighted average shares in issue (No.) 3,734,454,207
3,693,084,489
Basic and diluted loss per share (pence) (0.013)
(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 (2021: £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% (2021: 19%). The differences are explained below.
2022
Tax reconciliation £
2021
£
Loss before tax (478,223)
(335,252)
Tax at 19% (2021: 19%) (90,862)
(63,698)
Pre-trading expenditure not deductible for tax purposes 17,563
Expenditure not deductible for tax purposes 268
9,624
3,772
Unrelieved losses carried forward (73,031)
(50,302)
Tax charge/credit for year –
–
Total losses carried forward (4,158,554)
(3,774,180)
Factors that may affect future tax charges
The Group has total losses carried forward of £4,158,554 (2021: £3,774,180). 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.
44
Sunrise Resources plc Annual Report & Accounts 2022
264671 Sunrise Resources AR pp37-pp54.qxp_262382 Sunrise Resources AR pp36-pp53.qxp 19/12/2022 10:59 Page 45
8.
Investments
Subsidiary undertakings
Company
Country of
incorporation/
registration
Date of
incorporation/
registration
Type and percentage
of shares held at
30 September 2022
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
Value at start of year
Additions
Movement in provision
At 30 September
Company
2022
£
Company
2021
£
2,753,586
2,269,548
173,927
484,038
(318,100)
–
2,609,413
2,753,586
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 investments in and loans to subsidiary undertakings totalling £2,609,413 has been carried out in
accordance with IFRS 9. This indicated potential credit losses arising in the year which have been provided. Sunrise Minerals
Australia Pty Ltd provision increased by £318,100 to fully impair the loan balance following the impairment of Bakers Project. 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 2022
Canada
0.10% of ordinary shares
Power Metal Resources plc
United Kingdom
0.05% of ordinary shares
Principal activity
Mineral exploration
Mineral exploration
Sunrise Resources plc Annual Report & Accounts 2022
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Notes to the Financial Statements continued
for the year ended 30 September 2022
Investment designated at fair value through OCI
Value at start of year
Additions
Disposals
Movement in valuation
At 30 September
Group
2022
£
63,503
–
Company
2022
£
45,675
–
(23,263)
(23,263)
Group
2021
£
19,765
54,000
–
Company
2021
£
–
54,000
–
(20,165)
(11,162)
(10,262)
(8,325)
20,075
11,250
63,503
45,675
The fair value of each investment is equal to the market value of its shares at 30 September 2022, 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
Disposals during the year
Foreign currency exchange adjustments
At 30 September
Impairment
At start of year
Impairment losses during the year
At 30 September
Net book value
At 30 September
At start of year
Group
2022
£
Company
2022
£
Group
2021
£
Company
2021
£
4,861,613
2,203,594
4,565,673
2,203,594
(564)
138,054
–
427,432
–
–
–
–
26,239
391,061
(40,480)
(80,880)
–
–
–
–
5,426,535
2,203,594
4,861,613
2,203,594
(2,728,476)
(2,203,594)
(2,698,455)
(2,203,594)
(194,247)
–
(30,021)
–
(2,922,723)
(2,203,594)
(2,728,476)
(2,203,594)
2,503,812
2,133,137
–
–
2,133,137
1,867,218
–
–
During the year the directors carried out an impairment review with reference to IFRS 6.20 (a) which resulted in the impairment
of the Bakers and Myrtle Project expenditure. 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 a related undertaking, Tertiary Minerals plc, under a Management Services
Agreement between the two companies.
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11. Receivables
Prepayments
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 related undertaking - Tertiary Minerals plc
Trade creditors
Accruals
Deferred income
Other payables
Other taxation and social security
At 30 September
Group
2022
£
41,052
126,373
Company
2022
£
37,506
11,658
Group
2021
£
13,677
117,128
167,425
49,164
130,805
Company
2021
£
11,037
11,664
22,701
Company
2022
£
Group
2021
£
Company
2021
£
73,644
371,740
337,817
Group
2022
£
96,126
Group
2022
£
46,233
10,450
19,762
4,491
20,116
3,884
Company
2022
£
46,233
9,057
10,771
–
20,116
3,884
Group
2021
£
44,147
6,070
26,434
–
18,147
6,063
104,936
90,061
100,861
Company
2021
£
44,147
2,841
9,159
–
18,147
6,063
80,357
2021
£
14. Share capital and reserves
2022 2022 2021
Number £ Number
Share capital - Allotted, called up and fully paid
Ordinary shares of 0.1p each
Balance at start of year 3,701,804,687 3,701,805 3,677,996,870
3,677,997
Shares issued in the year 131,754,400 131,754 23,807,817
23,808
Balance at 30 September 3,833,559,087 3,833,559 3,701,804,687
3,701,805
During the year to 30 September 2022 the following share issues took place:
An issue of 8,781,779 0.1p ordinary shares at 0.19p per share to three directors, for a total consideration of £16,685, in satisfaction
of directors’ fees (10 January 2022).
An issue of 500,000 0.1p ordinary shares at 0.135p per share, via exercise of warrants for a total of £675 (31 January 2022).
An issue of 100,000,000 0.1p ordinary shares at 0.1p per share, via placing for a total of £100,000 (12 July 2022).
An issue of 9,500,000 0.1p ordinary shares at 0.1p per share, as settlement of broker placing commission and broker quarterly
fee for a total of £9,500 (12 July 2022).
Sunrise Resources plc Annual Report & Accounts 2022
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Notes to the Financial Statements continued
for the year ended 30 September 2022
An issue of 12,972,621 0.1p ordinary shares at 0.113p per share to three directors, for a total consideration of £14,594, in
satisfaction of directors’ fees (8 August 2022).
During the year to 30 September 2021 a total of 23,807,817 0.1p ordinary shares were issued, at an average price of 0.18p per
share, for a total consideration of £43,643 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.
Share premium reserve
The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share premium.
Fair value reserve
Fair value reserve represents the cumulative fair value changes of available-for-sale equity investment assets.
15. Share warrants granted
Warrants not exercised or expired at 30 September 2022
Issue date
Exercise price
31/01/18
21/02/19
21/02/19
06/08/20
05/08/22
18/07/22
18/07/22
Total
0.160p
0.160p
0.110p
0.195p
0.1125p
0.2p
0.2p
Number
3,250,000
4,000,000
4,000,000
35,000,000
8,000,000
109,500,000
5,000,000
168,750,000
Exercisable
Expiry dates
Any time before expiry
Any time before expiry
Any time before expiry
*Any time from 05/08/21
Any time from 05/08/23
Any time before expiry
Any time before expiry
31/01/23
21/02/24
21/02/24
05/08/25
05/08/23
18/01/23
18/07/23
*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.
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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
2022
––––––––––––––––––––––
Weighted
average
exercise
price
(Pence)
Number of
share
warrants
2021
––––––––––––––––––––––
Weighted
average
exercise
price
(Pence)
Number of
share
warrants
92,948,052
0.18
49,500,000
122,500,000
–
0.18
0.19
–
–
–
(500,000)
0.135 (11,090,909)
(2,750,000)
0.135 (32,357,143)
168,750,000
0.19
49,500,000
160,750,000
0.19
49,500,000
–
–
0.12
0.20
0.18
0.18
The share warrants outstanding at 30 September 2022 had a weighted average exercise price of 0.19p (2021: 0.18p), a weighted
average fair value of 0.02p (2021: 0.064p) and a weighted average remaining contractual life of 1.11 years.
In the year ended 30 September 2021 no warrants were granted.
In the year ended 30 September 2022 warrants were granted on 18 July 2022 as part of fundraise and to Peterhouse Capital
Limited as settlement of broker commission and broker quarterly fee with an aggregate estimated fair value of £667.
In the year ended 30 September 2022 warrants were granted on 5 August 2022 to non-executive directors of the Company and
employees of Tertiary Minerals plc with an aggregate estimated fair value of £2,735. Note 5 explains the value recognised in the
reporting period in respect of Tertiary Minerals plc.
In the year to 30 September 2022 the Company recognised expenses of £1,087 (2021: £19,664) 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:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yield
2022
0.11p
0.19p
60%
0.75
0.02%
0%
2021
–
–
–
–
–
–
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 2022 the following share warrants were exercised:
On 31 January 2022 500,000 warrants at an exercise price of 0.135p were exercised for a consideration of £675.
Sunrise Resources plc Annual Report & Accounts 2022
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Notes to the Financial Statements continued
for the year ended 30 September 2022
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*
J Cole
R D Murphy
At 30 September 2022
Warrant
exercise
price
Share
warrants
number
Warrant
expiry
date
At 30 September 2021
Share
warrants
number
Shares
number
Shares
number
247,532,996
30,000,000
6,863,763
2,500,000
65,093,787
2,000,000
2,000,000
2,500,000
0.195p
0.113p
0.160p
0.195p
0.113p
05/08/25 234,293,916
30,000,000
05/08/27
–
–
21/02/24
54,942,230
4,000,000
05/08/25
05/08/27
*Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham
Tertiary Minerals plc
Sunrise Resources plc is treated as an investment in the consolidated accounts of Tertiary Minerals plc, which held 0.57% of the
issued share capital on 30 September 2022 (2021: 0.59%).
Tertiary Minerals plc provides management services to Sunrise Resources plc and consequently during the year the Group
incurred costs of £171,052 (2021: £165,058).
At the balance sheet date an amount of £46,232 (2021: £44,147) was due to Tertiary Minerals plc, included in trade and other
payables (Note 13).
Patrick Cheetham, the Executive Chairman of the Company, is also a director of Tertiary Minerals plc.
At 30 September 2022 and at the date of this report Donald McAlister, a director of Tertiary Minerals plc, held 550,000 shares in
the Company.
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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
2022
£
Group
2021
£
21,010
21,970
–
–
–
–
4,389
(960)
25,399
21,010
(7,587)
(5,080)
–
(1,585)
(3,539)
(4,202)
–
154
(14,252)
(7,587)
11,147
13,423
13,423
18,431
Group
2022
£
7,015
–
Group
2021
£
9,700
–
(2,874)
(2,378)
106
1,466
5,713
117
(424)
7,015
Minimum
lease
payments
£
2,874
2,874
–
Interest
£
(35)
–
–
Present
value
£
2,839
2,874
–
5,713
2,839
2,874
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 £5,186.
Sunrise Resources plc Annual Report & Accounts 2022
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Notes to the Financial Statements continued
for the year ended 30 September 2022
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 2022, 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 2022, 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
2022
£
Company
2022
£
Group
2021
£
Company
2021
£
245,433
108,238
488,868
349,481
20,075
118,728
11,250
66,061
63,503
110,331
45,675
56,146
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 may have a material effect on reported loss or equity.
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Bank balances were held in the following denominations:
United Kingdom Sterling
Australian Dollar
United States Dollar
Other
Group
2022
£
49,959
8,588
37,501
78
Company
2022
£
49,959
4,381
19,226
78
Group
2021
£
Company
2021
£
328,133
328,133
19,544
23,986
77
9,568
39
77
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 liabilities and charges
Group
Reclamation Liability
At start of year
Additions
Reduction/reversal
Interest
Exchange adjustments
At 30 September
2022
£
2021
£
26,665
2,915
(3,479)
409
5,569
–
26,665
–
–
–
32,079
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
in August 2017.
No values have been assigned to these contingent assets on the basis that realisation is uncertain and considered to be
unpredictable.
Sunrise Resources plc Annual Report & Accounts 2022
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Notes to the Financial Statements continued
for the year ended 30 September 2022
22. Other income
Lease Option agreement with Kinross
In October 2021, the Company entered into a lease/option agreement with reserved royalty 2.5% Net Smelter Return Royalty 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, a lease payment was made to the Company of US$5,000 and signing bonus
of $10,000.
23. Events after the year-end
On 29 November 2022, the Company raised £280,000 through a placement of 80,000,000 new ordinary shares and the issue of
a £200,000 convertible security. The agreement, with US institutional investor Towards Net Zero LLC, allows the Company to issue
a further convertible security within 6 months of the Closing Date, 6 December 2022, to raise a further £200,000 subject to certain
conditions precedent.
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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 Friday 17 February 2023 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 2022.
2.
3.
To re-elect Mr R Murphy who is retiring under the Articles of Association as a director of the Company.
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 £1,500,000 (consisting of 1,500,000,000 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 £1,500,000 (consisting of 1,500,000,000 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. Please refer to the Proxy Notes and Instructions on page 57.
By order of the Board.
R G Venables
Company Secretary
9 December 2022
Registered Office:
Sunrise House
Hulley Road
Macclesfield
Cheshire
SK10 2LP
United Kingdom
Sunrise Resources plc Annual Report & Accounts 2022
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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
Friday 17 February 2023 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 2022 which can be found on pages 5 to 36.
Resolution 2
Mr R Murphy will be retiring as a director of the Company in accordance with the Articles of Association. Mr Murphy offers himself
for re-election and the Board recommend that he be re-elected.
Mr Murphy’s biographical details can be found on page 20.
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 27 January 2022, 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 2024.
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 2024.
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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 Wednesday 15 February 2023. 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 Friday 17 February 2023
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 either:
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.
7.
8.
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
Wednesday 15 February 2023.
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 the Meeting) by using the procedures described in the CREST Manual (available
from www.euroclear.com). 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.
Sunrise Resources plc Annual Report & Accounts 2022
57
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Voting at the Annual General Meeting, Electronic Voting, Proxy
Notes and Instructions continued
9.
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 Wednesday 15 February 2023. 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.
10. 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.
11. 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.
12. 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.
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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
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 2022
264671 Sunrise Resources AR Cover.qxp_262382 Sunrise Resources AR Cover.qxp 19/12/2022 10:57 Page 1
Sunrise Resources plc
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838884
Perivan 264671