Annual Report
for the period ended 31 December 2019
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Table of contents
Company Information .............................................................................................................................. 3
Chairman’s & CEO Statement ................................................................................................................. 4
Strategic Report ....................................................................................................................................... 7
Board of Directors .................................................................................................................................. 10
Directors’ Report .................................................................................................................................... 11
Directors’ Remuneration Report ............................................................................................................ 14
Risk Management Report ...................................................................................................................... 17
Corporate Governance Statement ........................................................................................................ 19
Directors’ Responsibility Statement ....................................................................................................... 21
Independent auditor’s report to the members of Trident Resources plc ............................................... 22
Consolidated Statement of Comprehensive Income ............................................................................. 26
Consolidated Statement of Financial Position ....................................................................................... 27
Consolidated Statement of Changes in Equity ...................................................................................... 28
Consolidated Statement of Cash Flows ................................................................................................ 29
Company Statement of Financial Position ............................................................................................ 30
Company Statement of Changes in Equity ........................................................................................... 31
Company Statement of Cash Flows ...................................................................................................... 32
Notes to the financial statements .......................................................................................................... 33
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Company Information
Directors
James Kelly
Adam Davidson
Mark Potter
Non-Executive Chairman
Chief Executive Officer (appointed 10 October 2019)
Non-Executive Director (appointed 4 November 2019)
Company Secretary
Sam Quinn, Silvertree Partners LLP
Registered address
2 Stone Buildings
Lincoln’s Inn
London
England
WC2A 3TH
Independent auditors
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Company solicitors (UK)
Bryan Cave Leighton Paisner
Adelaide House
London Bridge
London
EC4R 9HA
Joint brokers and advisors
Tamesis Partners LLP
125 Old Broad Street
London EC2N 1AR
Azure Capital Limited
Level 34 Exchange Tower
2 Esplanade
Perth
Western Australia 6000
Ashanti Capital Pty Ltd
Level 2
44A Kings Park Road West
Perth
Western Australia 6005
Registrars
Neville Registrars
Neville House
Steelpark Road
Halesowen
B62 8HD
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Chairman’s & CEO Statement
The Company has transformed since our last annual report and has achieved a number of important
milestones during the period. Notable highlights include the appointment of a high calibre, experienced
management team, announcing our proposed royalty and streaming strategy and the execution of our first
acquisition. The Company has incorporated subsidiaries in the USA and Australia and accordingly has
prepared consolidated financial statements for the first time, hereafter referred to as “the Group”.
Trident started the period seeking to acquire a controlling interest in an asset or business in the mining sector.
However, whilst evaluating numerous asset opportunities it became evident to the Board that there is a
significant, attractive opportunity to rapidly establish Trident as a diversified mining royalty and streaming
company. The Company, together with its advisers, undertook an in-depth review of the potential of this
revised strategy which strengthened the Board’s conviction to pursue a royalty and streaming strategy.
Royalty and streaming strategy
The highlights of the royalty and streaming strategy are:
- Construct a royalty and streaming portfolio which broadly mirrors the commodity exposure of the global
mining sector (excluding thermal coal) with a bias towards production or near-production assets,
thereby differentiating Trident from the majority of peers which are exclusively, or heavily weighted, to
precious metals;
- Aggregate existing royalties to deliver strong returns for shareholders as assets are acquired on terms
reflective of single asset risk compared with the lower risk profile of a diversified, larger scale portfolio;
- Acquire royalties and streams in resources-friendly jurisdictions worldwide, while most competitors
have portfolios focused on North and South America;
- Target attractive small-to-mid size transactions which are often ignored in a sector dominated by large
players;
- Active deal-source which, in addition to writing new royalties and streams, will focus on the acquisition
of assets held by natural sellers such as: closed-end funds, prospect generators, junior and mid-tier
miners holding royalties as non-core assets, and counterparties seeking to monetise packages of
royalties and streams which are otherwise undervalued by the market;
- Maintain a low-overhead model which is capable of supporting a larger scale business without a
-
commensurate increase in operating costs; and
Leverage the experience of management, the board of directors, and Trident’s adviser team, all of
whom have deep industry connections and strong transactional experience across multiple
commodities and jurisdictions.
Benefits of royalty and streaming assets
Trident believes that royalty and streaming assets represent a highly attractive investment opportunity.
Royalties and streams typically earn a percentage of turnover from the production of commodities, providing
direct exposure to commodity prices without direct exposure to operating and other expenses, and therefore
have a lower risk profile than mining equities.
Furthermore, capital and exploration expenditure by operators often benefit a royalty or stream holder by
extending mine lives, increasing production rates and progressing development assets towards production
without cost or dilution to the royalty holder.
Producing royalties and streams also tend to deliver strong cash returns which can be leveraged through
relatively lower cost debt and can underpin dividend returns to shareholder.
Acquisition of Koolyanobbing iron ore royalty
On 25 March 2020, we launched the new strategy together with the announcement that Trident had entered
into a binding sale and purchase agreement to acquire a 1.5% free on board revenue royalty covering part of
the producing Koolyanobbing Iron Ore Operation in Western Australia for a total consideration of A$7.0 million.
The consideration payable in two tranches: A$4.0 million payable upon the transaction completion and a further
A$3.0 million payable on the twelve-month anniversary plus one day of the first tranche. The tranche two
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
payment will be secured against the royalty. Under the terms of the agreement, cashflow attributable to the
royalty from 1 January 2020 will be for the benefit of Trident.
The mine is operated by Mineral Resources, a well-established iron ore producer, and provides Trident with
exposure and immediate cash flow from a significant and growing iron ore asset, operated by an innovative
operator with a strong balance sheet and in an attractive jurisdiction.
The Koolyanobbing Royalty Acquisition as varied on 30 April 2020 remains conditional on Australian foreign
investment approval, Fe Limited (the vendor) obtaining any required shareholder approvals and, unless such
condition is waived by Trident, admission to AIM. The Koolyanobbing Royalty Acquisition is not conditional
upon any fundraising and is not subject to approval by Trident’s Shareholders.
Upon the announcement of the acquisition, the Company also outlined the change of strategy to establish
Trident as a growth-focused diversified mining royalty and streaming company and the intent to change its
name to Trident Royalties Plc.
Pipeline of attractive opportunities
In line with the strategy to rapidly establish Trident as a diversified royalty and streaming company, Trident is
currently progressing discussions with multiple parties with regards to the potential acquisition of additional
royalties and streams. These opportunities span various geographies, commodities in the precious, base,
battery and bulk sectors and across the asset lifecycle. We are extremely heartened by the breadth and depth
of opportunities that we are seeing; this bodes well for successfully executing our strategy. Indeed, since
publicly announcing our royalty and streaming strategy the level of deal flow has increased even further. The
turmoil in the financial and capital markets precipitated by the Covid-19 pandemic has, the Board believes, laid
the foundations for an extended period of time during which the Company can successfully execute on its
strategy. At a time when there is a contraction of capital to the mining sector, Trident should be well positioned
to act as both an acquirer and writer of royalties and streams.
Readmission to AIM and proposed fundraising
Trident will seek the cancellation of the admission of its Ordinary Shares from the Official List of the FCA
(Standard Segment) and their trading on the LSE’s main market, and seek admission to trading on the AIM
Market of the LSE (“AIM”), which the Directors consider to be a more suitable market and regulatory
environment for a growth-focused royalty and streaming company.
Concurrent with the proposed admission to AIM, Trident intends to conduct a financing to support the execution
of the strategy. The Board has been pleased with the reaction of investors to the transaction to date and the
re-admission process is progressing well. It is expected that admission to trading on AIM will complete in the
first half of 2020.
Management team and strengthening the Board
In order to successfully execute on the strategy, Trident strengthened the Board and management team with
the addition of Adam Davidson as Chief Executive Officer and Director in October 2019. Adam has over 10
years’ experience in the natural resources sector, most recently with Resource Capital Funds (“RCF”), a
leading mining focused private equity firm. Prior to RCF, he held positions with BMO Capital Markets and with
Orica Mining Services. In the same month, Tyron Rees was appointed as Vice President, Corporate
Development. Tyron also joined us from RCF and previously held senior technical positions with Sandfire
Resources and Newmont Goldcorp.
In November 2019, we welcomed Mark Potter to the Board. Mark is an experienced natural resources
investment professional who previously served as Chief Investment Officer of Anglo Pacific Plc, a natural
resources royalty company listed on the London Stock Exchange. He currently serves as Chief Investment
Officer for Metal Tiger Plc, a natural resources investment company quoted on AIM. Mark brings a wealth of
experience to the Board and has already made a valuable contribution to Board level discussions.
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
We would like to take this opportunity to thank our shareholders for their continued support during this time of
transition and look forward to reporting on our progress during 2020.
Low cost operating model
At 31 December 2019, the Group’s cash balance was US$4.1 million reflecting the Group’s disciplined
approach to expenditure and maintaining a low overhead model. The Board believes that one of the
advantages of the royalty and streaming strategy is that it can be scaled very efficiently, with limited additional
operating expenses required in order to deliver significantly higher revenues.
Trident’s existing cash balance will be partly utilised to pay the first tranche of the Koolyanobbing royalty
acquisition.
We would like to take this opportunity to thank our shareholders for their continued support and look forward
to reporting on our progress during 2020 as we deliver on our royalty and streaming strategy.
James Kelly
Non-Executive Chairman
30 April 2020
Adam Davidson
Chief Executive Officer
30 April 2020
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Strategic Report
The Directors present the Strategic Report of the Group for the period ended 31 December 2019. During the
period the Company changed its accounting reference date to 31 December and accordingly these financial
statements cover the 8-month period ended 31 December 2019. The comparative period is the date of
incorporation, 25 April 2018 to 30 April 2019. The Company has incorporated two subsidiaries during the period
and has prepared consolidated financial statements for the first time to 31 December 2019. The Directors have
chosen to present the Group financial statements in USD and have also changed the Company’s presentational
currency from GBP to USD. As a result of this change the comparatives have been restated, further details of
which can be found in note 1 to these financial statements.
Review of business and future developments
As noted in the Chairman’s and CEO Statement on pages 4 – 6 the Group has achieved several key milestones
during the period including the appointments to the Board of Adam Davidson and Mark Potter, as well as Tyron
Rees as Vice President of Corporate Development. The progress made by the Group has laid the groundwork
for the announcement after the period end of its proposed royalty and streaming strategy and that it had entered
into a definitive purchase agreement to acquire a cash generative mining royalty.
The acquisition will initiate the establishment of the Group as a new, growth-focused diversified mining royalty
and streaming company. On completion of the acquisition, the Company intends to seek the cancellation of the
admission of its Ordinary Shares from the Official List of the FCA (Standard Segment) and their trading on the
main market of the London Stock Exchange (“LSE”) and seek admission to trading on the AIM Market of the
LSE (“AIM”), which the Directors consider to be a more suitable market and regulatory environment for a growth-
focused royalty and streaming company. Concurrent with the proposed admission to AIM, the Company intends
to conduct a financing and change its corporate name to Trident Royalties Plc.
Key performance indicators
During the reporting period, the Group was focused on the evaluation of various opportunities in the mining
sector. When the Group completes an acquisition, financial, operational, health, safety, and environmental KPIs
will become more relevant and reported upon as appropriate. As a result, the Directors are of the opinion that,
other than the maintenance of cash and cash equivalents, analysis using KPI’s is not appropriate for an
understanding of the business at this time.
31 December
2019
30 April
2019
Cash and cash equivalents
US$4,134,842
US$4,821,093
Advisers
The Company has engaged the following advisers to assist the Directors in executing the Group’s strategy:
Tamesis Partners
Tamesis Partners was founded in June 2016 as a specialist equity capital markets and advisory house with a
focus on the mining sector. Collectively, the Tamesis Partners team have decades of shared experience in
mining finance from market leading firms, including GMP Securities, Barclays Capital, Cazenove, J.P. Morgan,
Ambrian Partners and Dundee Securities.
Azure Capital
Azure Capital is a leading Australian corporate advisory firm with offices in Perth and Brisbane. Established in
2004, Azure Capital provides a range of advisory services, including M&A, capital markets, debt financing, and
growth capital for earlier-stage clients. Azure Capital is ranked in the top 10 Australian mining & metals advisers
in terms of deal volume.
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Ashanti Capital
Ashanti Capital is an institutional stockbroking and advisory firm with offices in Perth and Hong Kong. Ashanti
services the institutional and wholesale investment markets, both in Australia and across Asia. Its strength lies
in their extensive distribution networks in these markets.
Principal risks and uncertainties
The Directors consider the key risk for the Group to be the maintenance of its reserves of cash and cash
equivalents whilst it aims to complete the proposed change of strategy and the acquisition of a cash generative
mining royalty.
The principal risks and uncertainties currently faced by the Group are set out further in the Risk Management
Report.
Gender analysis
A split of our directors, senior managers and employees by gender at the end of the financial period is as follows:
Male – 5
Female – 0
Whilst the Company has no female members on the Board, it recognises the need to operate a gender diverse
business, and it will revisit this area following an acquisition to consider its appropriateness. The Board will also
ensure any future employment takes into account the necessary diversity requirements and compliance with all
employment law. The Board has experience and sufficient training/qualifications in dealing with such issues to
ensure they would meet all requirements. More detail will be disclosed in the future annual reports once the
Company complete an acquisition.
Corporate social responsibility
This will become more relevant once the Group completes an acquisition.
The Group aims to conduct its business with honesty, integrity and openness, respecting human rights and the
interests of shareholders and employees. The Group aims to provide timely, regular and reliable information on
the business to all its shareholders and conduct its operations to the highest standards.
The Group strives to create a safe and healthy working environment for the wellbeing of its staff and to create
a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the
reputation and performance of the Group.
The Group aims to establish a diverse and dynamic workforce with team players who have the experience and
knowledge of the business operations and markets in which we operate. Through maintaining good
communications, members of staff are encouraged to realise the objectives of the Group and their own potential.
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Corporate environmental responsibility
This will become more relevant once the Group completes an acquisition. The Board contains personnel with a
good history of running businesses that have been compliant with all relevant laws and regulations and there
have been no instances of non-compliance in respect of environment matters.
The Group’s policy is to minimize the risk of any adverse effect on the environment associated with its activities
with a thoughtful consideration of such key areas as energy use, pollution, transport, renewable resources,
health and wellbeing. The Group also aims to ensure that its suppliers and advisers meet with their legislative
and regulatory requirements and that codes of best practice are met and exceeded.
Section 172(1) Statement - Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Group for the
benefit of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
• Consider the likely consequences of any decision in the long term,
• Act fairly between the members of the Company,
• Maintain a reputation for high standards of business conduct,
• Consider the interests of the Group’s employees,
• Foster the Group’s relationships with suppliers, customers and others, and
• Consider the impact of the Group’s operations on the community and the environment.
The Group is not currently trading while it continues to work towards completing the announced change in
strategy and acquisition. The pre-revenue nature of the business is important to the understanding of the Group
by its members, employees and suppliers, and the Directors are as transparent about the cash position and
funding requirements as is allowed under LSE regulations.
The application of the s172 requirements can be demonstrated in relation to the some of the key decisions
made during 2019 and after the period end:
• Appointment of a high calibre, experienced management team;
• Announcing our proposed royalty and streaming strategy; and
• The execution of our first acquisition.
The Board takes seriously its corporate social responsibilities to the environment in which it works which will
become more relevant once the Group completes an acquisition.
James Kelly
Non-Executive Chairman
30 April 2020
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Board of Directors
James Edward Kelly (aged 43) – Non-Executive Chairman
James Kelly has close to 20 years’ experience in the mining and natural resource industry, with extensive
experience in corporate finance, strategy and capital allocation. Mr Kelly was a senior member of the Xstrata
plc group business development team and, following the merger with Glencore plc, was part of the team which
founded Greenstone Resources LP, a mining private equity fund focused on post-exploration development
assets.
Mr Kelly served as an Executive Director of ASX listed Cradle Resources Limited from May 2016 to July 2017
having been appointed a Non-Executive Director in February 2016. Mr Kelly is a Fellow of the Institute of
Chartered Accountants of England and Wales and holds a BA (Hons) from University College London.
Adam Forrest Davidson (aged 38) – Director & Chief Executive Officer
Adam Davidson has over 10 years' experience in the natural resources sector, most recently with Resource
Capital Funds ("RCF"), a leading mining focused private equity firm.
Adam has been a member of RCF's investment team since 2014. Prior to RCF, he held positions with BMO
Capital Markets in Metals & Mining Equity Research and with Orica Mining Services in Strategic Planning. He
has extensive mining capital markets experience across a breadth of jurisdictions and commodities. Adam
began his career with T. Rowe Price and also served in the U.S. Marine Corps.
Adam is a graduate of the Australian Institute of Company Directors and previously served as a Non-Executive
Director of private gold producer RG Gold. He earned his MBA from the College of William & Mary and
completed a post-graduate in Mining Studies from the University of Arizona.
Mark Roderick Potter (aged 43) – Non-Executive Director
Mark Potter is a Director and Chief Investment Officer of AIM listed Metal Tiger Plc, a listed investment company
for exploration and development stage mining companies. In addition, Mark is Non-Executive Chairman of ASX
listed Artemis Resources Ltd, Non-Executive Director of AIM listed Thor Mining plc, and is the Founder and
Partner of Sita Capital Partners LLP, an investment advisory firm specialising in investments in the mining
industry.
Mark was formerly a Director and Chief Investment Officer of Anglo Pacific Group plc, a London listed natural
resources royalty company, where he successfully led a turnaround of the business through acquisitions,
disposals of non-core assets, and successful equity and debt fundraisings. Prior to Anglo Pacific, Mark was a
founding member and Investment Principal for Audley Capital Advisors LLP, a London based activist hedge
fund, where he was responsible for managing its natural resources investments. Mark invested over US$300
million during the period 2005 to 2012 in the mining sector, realising proceeds of over US$900 million. The
Audley European Opportunities Fund was nominated by Eurohedge as a top performing hedge fund in the
event-driven space for 2006, 2007 and 2010.
Prior to Audley Capital, Mark worked in corporate finance for Salomon Smith Barney (Citigroup) and Dawnay,
Day, a private equity and corporate finance advisory boutique during which time he completed over US$2 billion
of M&A, equity and debt transactions. Mark holds an MA degree in Engineering and Management Studies from
Trinity College, University of Cambridge.
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Directors’ Report
The Directors present their annual report together with the financial statements and Auditor’s Report for the
period ended 31 December 2019. During the period the Company changed its accounting reference date to 31
December and accordingly these financial statements cover the 8-month period ended 31 December 2019. The
comparative period is the date of incorporation, 25 April 2018 to 30 April 2019. The Company has incorporated
two subsidiaries during the period and has prepared consolidated financial statements for the first time to 31
December 2019. The Directors have chosen to present the Group financial statements in USD and have also
changed the Company’s presentational currency from GBP to USD. As a result of this change the comparatives
have been restated, further details of which can be found in note 1 to these financial statements.
Results and dividends
The results of the Group for the period ended 31 December 2019 are set out in the Consolidated Statement of
Comprehensive Income. The Directors do not recommend the payment of a dividend for the period.
Directors and Directors’ interests
The Directors who served during the period to date are as follows:
James Kelly
Adam Davidson (appointed 10 October 2019)
Mark Potter (appointed 4 November 2019)
Sam Quinn (resigned 4 November 2019)
Carmichael Olowoyo (resigned 10 October 2019)
The direct and beneficial shareholdings of the Board in the Company as at 31 December 2019 were as follows:
Number of ordinary shares
Direct
Beneficial
J Kelly
A Davidson
M Potter
140,000
65,000
-
-
-
-
Substantial shareholders
Total
140,000
65,000
-
% of issued
Share capital
0.64%
0.30%
0%
As at 30 April 2020, the total number of issued Ordinary Shares with voting rights in the Company was
22,000,000. The Company has been notified of the following interests of 3 per cent or more in its issued share
capital as at the date of this report.
Shareholder
Number of ordinary shares
LIM Asia Special Situations Master Fund Ltd
Jamie Phillip Boyton
Rob Hamilton*
Albert C Gourley
Ilwella Pty Ltd
Richard Greenfield
3,500,000
2,800,000
1,827,145
1,300,000
1,250,000
719,117
% of issued
share capital
15.91%
12.73%
8.31%
5.9%
5.68%
3.2%
*Rob Hamilton’s holding includes (i) 600,000 Ordinary Shares held by Ashanti Capital of which Rob Hamilton is a 68% shareholder (ii)
1,120,000 Ordinary Shares held by Ashanti Investment Fund, which is an unregulated managed investment scheme of which Ashanti
Capital is the sole shareholder of the Trustee (Ashanti Investment Fund Pty Ltd), which has the power to make investment decisions; and
(iii) 107,145 Ordinary Shares held directly.
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Corporate governance
The Group has set out its full Corporate Governance Statement. The Corporate Governance Statement forms
part of this Directors’ report and is incorporated into it by cross reference.
Greenhouse gas disclosures
The Group is not trading, with no head office or employees other than its directors, and therefore has minimal
carbon emissions below 40,000 kWh. It is not practical to obtain emissions data and as such none is disclosed.
This disclosure will become more relevant once the Group completes an acquisition.
Supplier payment policy
The Group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code
(copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The Group's current policy concerning the payment of trade creditors is to:
•
•
•
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in
contracts; and
pay in accordance with the Group's contractual and other legal obligations.
Financial instruments and risk management
The Group is exposed to a variety of financial risks and the impact on the Group’s financial instruments are
summarised in the Risk Management Report. Details of the Group’s financial instruments are disclosed in note
17 to these financial statements.
Directors’ insurance
The Group has implemented Directors and Officers Liability Indemnity Insurance.
COVID-19
In the light of COVID-19, we take this opportunity to confirm our commitment to the health and safety of our
employees, consultants and advisors. Non-essential travel has been eliminated and the appropriate social
distancing protocols are being observed.
Brexit
In March 2017, the UK officially triggered Article 50 and notified the EU of its intention of leaving the EU following
the UK’s June 2016 referendum vote to leave the EU (commonly known as Brexit). The UK ratified its withdrawal
from the EU effective 31 January 2020 with a transitional period scheduled to end 1 January 2021. The effect
of the withdrawal remain unknown until further information is available on the nature of the UK-EU relationship
after the completion of the transitional period.
Events after the reporting period
On 25 March 2020 the Group announced that it has entered into a definitive purchase agreement to acquire a
significant, cash generative mining royalty to acquire a 1.5% free on board revenue royalty covering part of the
producing Koolyanobbing Iron Ore Operation in Western Australia for a total consideration of A$7.0 million,
which was amended on 30 April 2020. The consideration is payable in two tranches: A$4.0 million payable
upon the transaction completion and a further A$3.0 million payable on the twelve-month anniversary plus one
day of the first tranche. The tranche two payment will be secured against the royalty. (the “Acquisition”). Under
the terms of the Acquisition, cashflow attributable to the royalty from 1 January 2020 will be for the benefit of
Trident. The Acquisition will initiate the establishment of Trident as a new, growth-focused diversified mining
royalty and streaming company.
12
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
The outbreak of the coronavirus pandemic in the months after the reporting date is considered to be a non-
adjusting event. As outlined in note 2, the Group and Company are continuing to report on a going concern
basis. The Group’s and Company’s response to the outbreak is described in the Strategic Report. The unknown
length of the outbreak is a source of uncertainty and the Board will continue to monitor events and to provide
updates as the situation develops.
Going concern
The Group’s assets are comprised almost entirely of cash. The Directors have outlined their proposed new
strategy for the Group in the Chairman’s and CEO Statement on pages 4-6. As part of their assessment of going
concern, the Directors have prepared cash forecasts that show that the Group and Company has sufficient cash
resources in order to complete the acquisition executed after the period end and adopt the new strategy.
In order for the Group to be successful in its new strategy to establish Trident as a diversified royalty and
streaming company it will likely need to raise funds in order to acquire additional royalties and streams. As part
of the transition, the Directors plan to cancel its listing on the standard segment of the LSE, readmit on AIM and
to raise the required funds. The Directors are reasonably confident that funds will be forthcoming if and when
they are required. Should additional funding not be forthcoming or the acquisition and move to AIM be delayed
for any reason, the Group has US$4.1m of cash and cash equivalents at 31 December 2019 which is sufficient
to cover the contractual and committed expenditure of the Group for at least 12 months from the date of approval
of these financial statements. The Directors have a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the foreseeable future.
The turmoil in the financial and capital markets precipitated by the Covid-19 pandemic has, the Directors believe,
laid the foundations for an extended period of time during which the Company can successfully execute on its
strategy. At a time when there is a contraction of capital to the mining sector, Trident should be well positioned
to act as both an acquirer and writer of royalties and streams.
Accordingly, the directors believe that as at the date of this report it is appropriate to continue to adopt the going
concern basis in preparing the financial statements.
Disclosure of information to Auditors
The directors confirm that:
• So far as each director is aware, there is no relevant audit information of which the company’s auditor
is unaware; and
• The directors have taken all steps that they ought to have taken as directors in order to make
themselves aware of any relevant audit information and to establish that the auditors are aware of that
information.
Auditor
A resolution proposing the re-appointment of PKF Littlejohn LLP as auditor is contained in the Notice of Annual
General Meeting and will be put to shareholders at the Annual General Meeting.
This Directors’ Report has been approved by the Board and signed on its behalf by:
James Kelly
Non-Executive Chairman
30 April 2020
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TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Directors’ Remuneration Report
Until an acquisition is completed the Group will not have a separate remuneration committee. The Board will
instead periodically review the quantum of Directors’ fees, taking into account the interests of shareholders and
the performance of the Group and the Directors. Following the completion of an acquisition, the Board intends
to put in place a remuneration committee.
The items included in this report are unaudited unless otherwise stated.
The Directors who held office at 31 December 2019 are summarised as follows:
Name of Director
Position
J Kelly
A Davidson
M Potter
Non-Executive Chairman
Chief-Executive Officer
Non-Executive Director
Directors’ Letters of appointment
Letter of Appointment – James Kelly
Pursuant to a letter of appointment dated 17 July 2018 between the Company and James Kelly, Mr Kelly is
engaged as a Non-Executive Chairman with fees of £18,000 per annum in relation to a time commitment of 2
days per month. Additional consultancy fees may be payable to James Kelly for the provision of services in
connection with the evaluation of and execution of acquisition opportunities outside of his agreed time
commitment at a rate of up to £1,000 per day, depending on the nature and extent of his involvement. Such
additional consultancy fees may be payable to James Kelly or an associated company for the provision of his
services.
James’ appointment is for an initial term of 12 months. The appointment can be terminated by either party on
three months written notice. If there is a change of control, Mr Kelly will be entitled to 200% of his annual fee as
a lump sum payment if the Company terminates his appointment, or if Mr Kelly chooses to terminate his
appointment within 12 months following a Change of Control.
Executive Employment Agreement and Letter of Appointment – Adam Davidson
Pursuant to an Executive Employment Agreement dated 10 October 2019 between the Company and Adam
Davidson, Mr Davidson is employed as Chief Executive Officer of the Company with fees of US$215,000 per
annum. The appointment is for an initial term of 6 months and thereafter can be terminated by either party on
three months written notice. Mr Davidson is entitled to a discretionary bonus and is subject to certain restrictive
covenants following the termination of his employment.
Pursuant to a letter of appointment dated 10 October 2019 between the Company and Adam Davidson, Mr
Davidson is engaged as a Director with fees of US$15,000 per annum. The appointment can be terminated by
either party on six months written notice.
Letter of Appointment – Mark Potter
Pursuant to a letter of appointment dated 4 November 2019 between the Company and Mark Potter, Mr Potter
is engaged as a Non-Executive Director with fees of £12,000 per annum, for an initial term of 12 months. The
appointment can be terminated by either party on three months written notice.
14
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Terms of appointment
The services of the Directors are provided under the terms of letters of appointments, as follows:
Director
Year of appointment
Number of periods
completed
Date of current
engagement letter
J Kelly
A Davidson
M Potter
2018
2019
2019
2
1
1
18 July 2018
10 October 2019
4 November 2019
Consideration of shareholder views
The Board considers shareholder feedback received. This feedback, plus any additional feedback received
from time to time, is considered as part of the Group’s annual policy on remuneration.
Policy for salary reviews
The Group may from time to time seek to review salary levels of Directors, taking into account performance,
time spent in the role and market data for the relevant role. It is not intended that there will be any salary review
prior to completion of an acquisition.
Policy for new appointments
It is not intended that there will be any new appointments to the Board until an acquisition is completed.
Following completion of an acquisition, it is intended that a full review of the Board will take place.
Directors’ emoluments and compensation (audited)
Remuneration paid to the Directors’ during the period ended 31 December 2019 (comparative period 30 April
2019) was as follows (all figures are stated in US$):
Director
J Kelly
31 Dec 2019
30 Apr 2019
A
Davidson*
31 Dec 2019
30 Apr 2019
M Potter**
S Quinn***
C Olowoyo
Total
31 Dec 2019
30 Apr 2019
31 Dec 2019
30 Apr 2019
31 Dec 2019
30 Apr 2019
31 Dec 2019
30 Apr 2019
Directors fees
Salary/Consulti
ng fees
Payments for
loss of office
Total
remuneration
35,437
32,815
3,359
-
2,434
-
7,710
9,188
8,860
9,188
-
-
49,064
-
-
-
-
-
-
57,800
51,191
49,064
-
-
-
-
-
-
-
3,797
-
1,650
-
5,447
-
35,437
32,815
52,423
-
2,434
-
11,507
9,188
10,510
9,188
112,311
51,191
* A Davidson was appointed as a Director on 10 October 2019 ** M Potter was appointed as a Director on 4 November 2019
*** S Quinn resigned as a director on 4 November 2019 **** C Olowoyo resigned as a director on 10 October 2019
15
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Directors’ Remuneration Policy
Pursuant to the Directors’ letters of appointment, as described above, Mr Kelly is entitled to receive £18,000 per
annum, Mr Davidson is entitled to receive US$15,000 per annum and Mr Potter is entitled to receive £12,000
per annum, as Directors fees, all payable monthly in arrears. If there is a Change of Control, Mr Kelly will be
entitled to 200% of his annual fee as a lump sum payment if the Company terminates his employment, or if Mr
Kelly chooses to terminate his appointment within 12 months following a change of control. Mr Davidson is also
entitled to receive a salary of US$215,000 as per the terms of his employment agreement as set out above.
There is currently no bonus or long-term incentive plan in operation for the Directors. It is not intended that any
changes will be made to Directors’ remuneration prior to completion of an acquisition.
Based on the foregoing, the remuneration policy of the Company, prior to completion of any acquisition, can be
summarised as follows:
How the element supports
our strategic objectives
Operation of the
element
Maximum potential
payout and payment
at threshold
Performance measures
used, weighting and time
period applicable
Base Pay
Recognises the role and the
responsibility for the delivery
of strategy and results
Paid in 12
monthly
instalments
Contractual sum
None
Pensions
None
Short term incentives
None
n/a
n/a
n/a
n/a
n/a
n/a
This policy was approved by shareholders at the previous Annual General Meeting of the Company and will
continue in force for the next two financial years.
A Remuneration Committee is expected to be appointed upon completion of an acquisition by the Company to
consider an appropriate level of Directors’ remuneration.
Although there is no formal Director shareholding policy in place, the Board believe that share ownership by
Directors strengthens the link between their personal interests and those of shareholders.
No views were expressed by shareholders during the period on the remuneration policy of the Company.
Other matters
The Company does not currently have any annual or long-term incentive schemes in place for any of the
Directors.
The Company does not have any pension plans for any of the Directors and does not pay pension amounts in
relation to their remuneration.
This Directors’ Remuneration Report has been approved by the Board and signed on its behalf by:
James Kelly
Non-Executive Chairman
30 April 2020
16
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Risk Management Report
The Group has undertaken an evaluation of the risks it is exposed to which are summarised as follows:
Business Strategy
The Group is recently formed with no operating history and during the reporting period had not yet completed
its proposed change in strategy and acquisition.
The Group is dependent on the Directors to execute the acquisition and the loss of the services of the Directors
could materially adversely affect it.
There is no basis on which to evaluate the Group’s ability to achieve its objective of identifying, acquiring and
operating a target business or company in accordance with its business strategy.
The Group may acquire either less than whole voting control of, or less than a controlling equity interest in, a
target, which may limit its operational strategies.
The Group may be unable to complete the acquisition in a timely manner or at all or to fund the operations of
the target business if it does not obtain additional funding following completion of the acquisition.
The Company may issue ordinary shares and may use cash as consideration for the acquisition. There is no
guarantee that consideration shares will be an attractive offer for the shareholders of any company or business
which the Company identifies as a suitable acquisition opportunity.
The Group may face significant competition for acquisition opportunities from other strategic buyers, corporate
entities, sovereign wealth funds, other special purpose acquisition companies and public and private investment
funds.
Although the Group and the Directors will evaluate the risks inherent in a particular target, they cannot offer any
assurance that a proper discovery or assessment of all the significant risk factors can be made.
The Directors may allocate a portion of their time to other businesses leading to the potential for conflicts of
interest in their determination as to how much time to devote to the Group’s affairs.
The Mining Sector
The Group’s new strategy is to invest in royalties and streams within the mining sector. The nature of the mining
industry attracts a high level of risk including but not limited to the following:
The estimating of reserves and resources is a subjective process and there is significant uncertainty in any
reserve or resource estimate.
The exploration for and production in the mining sector is speculative and involves a high degree of risk, in
particular a company’s operations may be disrupted by a variety of risks and hazards which are beyond its
control such as environmental regulation, governmental regulations or delays, nationalisation, expropriation or
confiscation of assets, changes of legislation relating to foreign ownership, increase in costs and the availability
of equipment or services.
There is no assurance that exploration will lead to commercial discoveries, or if there is a commercial discovery,
that any reserves discovered will be realisable.
The Group will evaluate the risks of potential investments extensively and will continue to do so after acquisition
to ensure that the portfolio reflects an acceptable risk profile.
17
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Liquidity Risk
The proposed acquisition by the Group is considered a reverse takeover and has led to the UKLA suspending
the listing of the Company’s Ordinary Shares on the London Stock Exchange and subsequent cancellation of
the listing. Following the proposed acquisition, the Company intends to seek re-admission of the enlarged group
to listing on the AIM Market of the LSE.
The suspension of the Company’s Ordinary Shares, as a result of the FCA determining that there is insufficient
information in the market about the acquisition or the target, would materially reduce liquidity in such shares,
which may affect an Investor’s ability to realise some or all of its investment and/or the price at which such
Investor can affect such realisation. In the event of such suspension, the value of the Investors’ shareholdings
may be materially reduced.
A cancellation of the listing of the Company’s Ordinary Shares by the FCA may prevent the Group from raising
equity finance on the public market, or carrying out a further acquisition using share consideration, restricting
its business activities and resulting in incurring unnecessary costs.
Investors may lose the value of their entire investment or part of it, as the case may be.
Financing Risk
The Board acknowledge that future financing could depend upon the Company’s ability to obtain financing
primarily through a further raising of new equity capital. The Company’s ability to raise further funds maybe be
affected by the success of its acquired investments. The Company may not be successful in procuring the
requisite funds on terms which are acceptable to it (or at all) and, if such funding is unavailable, the Company
may be required to reduce the scope of its intended acquisition. Further, Shareholders’ holdings of Ordinary
Shares may be materially diluted if debt financing is not available.
COVID-19
The outbreak of the recent global COVID-19 virus has resulted in business disruption and stockmarket volatility.
The extent of the effect of the virus, including its long-term impact, remains uncertain. The Group has
implemented extensive business continuity procedures and contingency arrangements to ensure that they are
able to continue to operate.
This Risk Management Report has been approved by the Board and signed on its behalf by:
James Kelly
Non-Executive Chairman
30 April 2020
18
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Corporate Governance Statement
As a Company listed on the standard segment of the Official UK Listing Authority, the Group is not required to
comply with the provisions of the UK Corporate Governance Code.
However, the Group is committed to maintaining appropriate standards of corporate governance and observes
the requirements of the UK Corporate Governance Code, where it is deemed applicable to the Group given its
size and stage of development.
Until an acquisition is completed, the Company will not have nomination, remuneration, audit or risk committees.
The Board as a whole will instead review its size, structure and composition, the scale and structure of the
Directors’ fees (taking into account the interests of Shareholders and the performance of the Company), take
responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of
the Company’s financial statements and take responsibility for any formal announcements on the Company’s
financial performance.
The UK Corporate Governance Code recommends the submission of all Directors for re-election at annual
intervals. None of the Directors will be required to be submitted for re-election until the first AGM following a
transaction. The Board also do not consider an internal audit function to be necessary for the Company at this
time due to the limited number of transactions.
Following the proposed acquisition, the Board intends to put in place nomination, remuneration, audit and risk
committees and the Company will seek to transfer from a Standard Listing to AIM (although there can be no
guarantee that the Company will fulfil the relevant eligibility criteria at the time and that a transfer to AIM will be
achieved). If the Company is successful in obtaining admission to AIM, rules will apply to the Company under
the AIM Rules and the Company will be obliged to comply with a Corporate Governance code and be required
to explain any departures from it.
The Company has adopted a share dealing code that complies with the requirements of the Market Abuse
Regulations. All persons discharging management responsibilities (which comprises the Directors) comply with
the share dealing code from the date of Admission.
The Directors are responsible for internal control in the Group and reviewing effectiveness. Due to the size of
the Group, all key decisions are made by the Board. The Directors have reviewed the effectiveness of the
Group’s systems during the period under review and consider that there have been no material losses,
contingencies or uncertainties due to weaknesses in the controls.
Carbon emissions
The Group currently has no trade, and one employee other than the Directors and have no office. Therefore,
the Group has minimal carbon emissions and it is not practical to obtain emissions data at this stage.
Board of directors
The Company has a Board it believes is well suited for the purposes of implementing its business strategy,
combining skill sets for the assessment of investment and acquisition of royalties and streams in the mining
sector.
The Directors are responsible for carrying out the Group’s objectives, implementing its business strategy and
conducting its overall supervision. Acquisition, divestment and other strategic decisions will all be considered
and determined by the Board.
The Board will provide leadership within a framework of prudent and effective controls. The Board will establish
the corporate governance values of the Group and will have overall responsibility for setting the Group’s
strategic aims, defining the business plan and strategy and managing the financial and operational resources
of the Group. Prior to completing an acquisition, the Group will not have any full-time employees.
The Board aims to hold meetings on a quarterly basis and is regularly in contact to discuss prospective
acquisition opportunities.
The Articles of the Company contain express provisions relating to conflicts of interest in line with the Companies
Act 2006.
19
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Shareholder communications
The Group uses its corporate website (www.tridentresources.co.uk) to ensure that the latest announcements,
press releases and published financial information are available to all shareholders and other interested parties.
The AGM is used to communicate with both institutional shareholders and private investors and all shareholders
are encouraged to participate. Separate resolutions are proposed on each issue so that they can be given
proper consideration and there is a resolution to approve the Annual Report and Accounts. Notice of the AGM
is sent to shareholders at least 21 days before the meeting and the results are announced to the London Stock
Exchange and are published on the Group’s website.
James Kelly
Non-Executive Chairman
30 April 2020
20
TRIDENT RESOURCES PLC
Annual Report for the period ended 31 December 2019
Directors’ Responsibility Statement
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (“IFRS”) as adopted by the European Union. 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
Company and of the profit or loss for that period.
In preparing these financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable IFRSs as adopted by the European Union have been followed, subject to any
material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group and Company’s transactions and disclose with reasonable accuracy at any time the financial position
of the Group and Company, and enable them to ensure that the Financial Statements and the Directors
Remuneration Report comply with the Companies Act 2006 and, as regards the Group Financial Statements,
Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Group and
Company, and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
They are also responsible to make a statement that they consider that the Annual Report and Financial
Statements, taken as a whole, is fair, balanced, and understandable and provides the information necessary
for the shareholders to assess the Group and Company’s position and performance, business model and
strategy.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of the Financial Statements may differ from legislation in other jurisdictions.
Directors’ responsibility statement pursuant to disclosure and Transparency Rule
Each of the Directors, whose names and functions are listed within the Board of Directors confirm that, to the
best of their knowledge:
•
•
the financial statements are prepared in accordance with IFRS as adopted by the European Union, give
a true and fair view of the assets, liabilities, financial position and loss of the Group and Company; and
the Annual Report and financial statements, including the Strategic Report, includes a fair review of the
development and performance of the business and the position of the Group and Company, together
with a description of the principal risks and uncertainties that they face.
Approved by the Board on 30 April 2020
James Kelly
Non-Executive Chairman
21
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Independent auditor’s report to the members of Trident Resources plc
Opinion
We have audited the financial statements of Trident Resources plc (the ‘company’) and its subsidiaries (together
the ‘group’) for the period ended 31 December 2019 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Consolidated Statement of Cash Flows, the Company Statement of Financial Position,
the Company Statement of Changes in Equity, the Company Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union and as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006..
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the company’s affairs
as at 31 December 2019 and of the group’s and company’s loss for the period then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by
the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006; and, as regards the group financial statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the group and parent company in
accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw your attention to note 2 of the financial statements, which describes the group’s and company’s
assessment of the COVID-19 impact on its ability to continue as a going concern. The group and company have
explained that the events arising from the COVID-19 outbreak do not impact its use of the going concern basis
of preparation nor do they cast significant doubt about the group’s and company’s ability to continue as a going
concern for a period of at least twelve months from the date when the financial statements are authorised for
issue.
Our opinion is not modified in this respect.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements
is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the group or the parent company’s ability to continue to adopt the
22
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
going concern basis of accounting for a period of at least twelve months from the date when the financial
statements are authorised for issue.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative
thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit
procedures. The materiality applied to the group financial statements as a whole was set at US$14,200, with
performance materiality set at US$11,360.
Materiality has been calculated as 2% of the benchmark of expenses, which we have determined, in our
professional judgement, to be one of the principal benchmarks within the financial statements relevant to
members of the group in assessing financial performance. As the group has yet to begin trading, the key focus
of the group is to restrict expenditure in order to use the resources to carry out a future acquisition.
The materiality applied to the parent company financial statements was US$12,600, based on 2% of expenses.
The performance materiality was US$10,080. For each component in the scope of our Group audit, we allocated
a materiality that was less than our overall Group materiality.
We agreed that we would report to the directors’ all misstatements we identified through our audit with a value
in excess of US$710, in addition to other audit misstatements below that threshold that we believe warrant
reporting on qualitative grounds.
An overview of the scope of our audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial
statements. In particular, we looked at areas involving significant accounting estimates and judgement by the
directors and considered future events that are inherently uncertain. We also addressed the risk of management
override of internal controls, including among other matters consideration of whether there was evidence of bias
that represented a risk of material misstatement due to fraud.
Trident Resources plc, which is a company listed on the Standard segment of the London Stock Exchange, has
incorporated two subsidiaries in the period to form the group. The nature of the subsidiaries is not different from
that of the parent company and they were not assessed as significant components of the group. We performed
a full scope audit on the parent company and consolidation and specified procedures on certain balances in the
subsidiaries.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the
overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion
on the group and parent company financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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
23
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report or the
directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our
•
audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing
the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
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.
24
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
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.
Other matters which we are required to address
We were appointed by the directors’ on 11 January 2019 to audit the financial statements for the period ended
30 April 2019. Our total uninterrupted period of engagement is 2 years.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the company in conducting our audit.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the
financial statements from our sector experience and through discussions with the directors. We considered the
extent of compliance with those laws and regulations as part of our audit procedures on the related financial
statement items. We communicated identified laws and regulations throughout our audit team and remained
alert to any indications of non-compliance throughout the audit. As with any audit, there remained a higher risk
of non-detection of
intentional omissions,
these may
misrepresentations, or the override of internal controls.
involve collusion,
irregularities, as
forgery,
Our audit opinion is consistent with the additional report to directors’.
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.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
30 April 2020
15 Westferry Circus
Canary Wharf
London E14 4HD
25
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Consolidated Statement of Comprehensive Income
for the period ended 31 December 2019
Continuing operations
Administrative expenses
Listing expenses
Loss before taxation
Income tax
Loss for the period attributable to owners
of the parent
Other comprehensive income
Items that may be subsequently reclassified to
profit or loss:
Exchange gains arising on translation of
foreign operations
Other comprehensive income for the
period, net of tax
Total Comprehensive income for the period
attributable to the owners of the parent
Earnings per share:
Basic and diluted earnings per share (U.S.
cents)
Notes
4
4
7
Period to
31 December
2019
US$
Re-stated*
Period to
30 April
2019
US$
(688,963)
(157,013)
-
(144,699)
(688,963)
(301,712)
-
-
(688,963)
(301,712)
5,435
5,435
2,019
2,019
(683,528)
(299,693)
8
(3.13)
(2.27)
*The comparative shown for the Group is that of the parent Company which is re-stated for the change in
presentation currency. Further details are included in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
26
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Consolidated Statement of Financial Position
As at 31 December 2019
Notes
12
13
14
15
15
Current assets
Trade and other receivables
Cash and cash equivalents
Current and Total Assets
Current Liabilities
Trade and other payables
Net Assets
Equity attributable to owners of the parent
Share Capital
Share Premium
Foreign exchange reserve
Retained Earnings
Total Equity
31 December
2019
Re-stated*
30 April
2019
US$
US$
10,872
10,198
4,134,842
4,821,093
4,145,714
4,831,291
(44,107)
(46,156)
4,101,607
4,785,135
327,850
325,950
4,786,618
4,758,878
(22,458)
2,019
(990,403)
(301,712)
4,101,607
4,785,135
*The comparative shown for the Group is that of the parent Company which is re-stated for the change in
presentation currency. Further details are included in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 30 April 2020.
James Kelly
Director
Trident Resources plc Registered No. 11328666
27
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Consolidated Statement of Changes in Equity
For the period ended 31 December 2019
Share
capital
Share
Premium
Foreign
exchange
reserve
On incorporation (re-stated*)
Loss for the period
Other Comprehensive income for the
period
Total Comprehensive income for the
period
Transactions with owners:
Issue of share capital
Share capitalisation
Share issue expenses
Total transactions with owners,
recognised directly in equity
US$
US$
Retained
Earnings
US$
-
Total
US$
1
(301,712)
(301,712)
-
-
2,019
-
2,019
2,019
(301,712)
(299,693)
-
-
-
-
US$
1
-
-
-
286,835
5,058,744
39,114
(39,114)
-
(260,752)
325,949
4,758,878
-
-
-
-
-
-
-
-
5,345,579
-
(260,752)
5,084,827
Balance at 30 April 2019 (re-stated*)
325,950
4,758,878
2,019
(301,712)
4,785,135
Loss for the period
Other Comprehensive income for the
period
Total Comprehensive loss for the
period
-
-
-
(688,963)
(688,963)
1,900
27,740
(24,477)
272
5,435
1,900
27,740
(24,477)
(688,691)
(683,528)
Balance at 31 December 2019
327,850
4,786,618
(22,458)
(990,403)
4,101,607
*The comparative shown for the Group is that of the parent Company, which is re-stated for the change in
presentation currency. Further details are included in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
28
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Consolidated Statement of Cash Flows
for the period ended 31 December 2019
Notes
Period to
31 December
2019
Re-stated
Period to
30 April
2019
US$
US$
Cash flows from Operating Activities
Loss before taxation
(Decrease)/increase in payables
Increase in receivables
Net cash used in operating activities
Cash flows from financing activities
Issue of shares (net of share issue expenses)
Net cash generated from financing activities
Net (decrease)/increase in cash and cash
equivalents during the period
Cash at the beginning of period
Effect of exchange rate changes on re-translation
of cash
Cash and cash equivalents at the end of the
period
13
(688,963)
(301,712)
(2,318)
(615)
46,156
(10,197)
(691,896)
(265,753)
-
-
5,084,827
5,084,827
(691,896)
4,819,074
4,821,093
-
5,645
2,019
4,134,842
4,821,093
*Re-stated for the change in presentation currency. Further details are included in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
29
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Company Statement of Financial Position
As at 31 December 2019
Notes
31 December
2019
Re-stated*
30 April
2019
US$
US$
Non-current assets
Investment in subsidiaries
Amount due from subsidiary undertakings
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Current and Total Assets
Current Liabilities
Trade and other payables
Net Assets
Equity
Share Capital
Share Premium
Foreign exchange reserve
Retained Earnings
Total Equity
10
11
12
13
14
15
15
1
87,792
87,793
-
-
-
10,846
10,198
4,120,223
4,821,093
4,131,069
4,831,291
(36,761)
(46,156)
4,182,101
4,785,135
327,850
325,950
4,786,618
4,758,878
(22,035)
2,019
(910,332)
(301,712)
4,182,101
4,785,135
*Re-stated for the change in presentation currency. Further details are included in note 1.
The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present
the Parent Company Statement of Comprehensive Income. The loss for the Parent Company for the year was
US$608,892 (30 April 2019: US$301,712).
The notes on pages 33 to 45 are an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board on 30 April 2020.
James Kelly
Director
Trident Resources plc Registered No. 11328666
30
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Company Statement of Changes in Equity
For the period ended 31 December 2019
Share capital
Share
Premium
Foreign
exchange
reserve
US$
US$
US$
On incorporation (re-stated*)
Loss for the period
Other Comprehensive income for the
period
Total Comprehensive income for the
period
Transactions with owners:
Issue of share capital
Share capitalisation
Share issue expenses
Total transactions with owners,
recognised directly in equity
Retained
Earnings
US$
-
Total
US$
1
(301,712)
(301,712)
-
-
2,019
-
2,019
2,019
(301,712)
(299,693)
1
-
-
-
-
-
-
-
286,835
5,058,744
39,114
(39,114)
-
(260,752)
325,949
4,758,878
-
-
-
-
-
-
-
-
5,345,579
-
(260,752)
5,084,827
Balance at 30 April 2019 (re-stated*)
325,950
4,758,878
2,019
(301,712)
4,785,135
Loss for the period
Other Comprehensive income for the
period
Total Comprehensive loss for the
period
-
-
-
(608,892)
(608,892)
1,900
27,740
(24,054)
272
5,858
1,900
27,740
(24,054)
(608,620)
(603,034)
Balance at 31 December 2019
327,850
4,786,618
(22,035)
(910,332)
4,182,101
*Re-stated for the change in presentation currency, more details in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
31
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Company Statement of Cash Flows
for the period ended 31 December 2019
Notes
Cash flows from Operating Activities
Loss before tax
(Decrease)/increase in payables
Increase in receivables
Net cash used in operating activities
Cash flows from financing activities
Issue of shares (net of share issue expenses)
Amounts loaned to subsidiaries
Net cash (used in)/generated from financing
activities
Net (decrease)/increase in cash and cash
equivalents during the period
Cash at the beginning of period
Effect of exchange rate changes on re-translation
of cash
Cash and cash equivalents at the end of the
period
13
Period to
31 December
2019
Re-stated*
Period to
30 April
2019
US$
US$
(608,892)
(301,712)
(9,664)
(589)
46,156
(10,197)
(619,145)
(265,753)
-
5,084,827
(87,793)
-
(87,793)
5,084,827
(706,938)
4,819,074
4,821,093
-
6,068
2,019
4,120,223
4,821,093
*Re-stated for the change in presentation currency. Further details are included in note 1.
The notes on pages 33 to 45 are an integral part of these financial statements.
32
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements
1. GENERAL INFORMATION
Trident Resources Plc is a company incorporated and domiciled in the United Kingdom. The Company is a
public limited company, which is listed on the London Stock Exchange. The address of the registered office is
2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH.
The Company was initially formed to undertake an acquisition of a controlling interest in a company or business
with the objective of operating the acquired business and implementing an operating strategy to generate value
for its shareholders through operational improvements as well as potentially through additional complementary
acquisitions following the acquisition.
On 25 March 2020, the Group launched its new strategy as a diversified mining royalty and streaming company
together with the announcement that it had entered into a binding sale and purchase agreement to acquire a
1.5% free on-board revenue royalty.
Formation of Group and change of accounting reference date and presentational currency
The Company incorporated two subsidiaries during the period ended 31 December 2019 and the Directors are
required to and have prepared consolidated financial statements which include the results of the subsidiaries
from the date of incorporation. As this is the first period that the Group was formed, the comparative financial
information for the Group financial statements is that of the parent Company.
The Directors have chosen to present the Group financial statements in US$ which is considered most
appropriate for the new strategy as a mining royalty and streaming company. The Company financial statements
for the period from incorporation 25 April 2018 to 30 April 2019 were presented in British Pounds Sterling (“£”)
which is also the functional currency of the Company. The Company has changed its presentational currency
to align with that of the Group with effect from 1 May 2019 from GBP to US$. The change in presentational
currency is a change in the Company’s accounting policies and has therefore been accounted for retrospectively
as though the presentational currency of the Company was always US$. Opening equity at incorporation has
been translated at the closing rate at 30 April 2019, the Statement of Financial Position has been translated at
the closing rate at 30 April 2019 and the Statement of Comprehensive Income has been translated at the
average rate.
Following the change in strategy the Company has also taken the decision to change its financial year end to
31 December to align itself with many other companies operating within this sector who also have a 31
December year end. These financial statements for the Group and the Company are therefore prepared for the
reporting period from 1 May 2019 to 31 December 2019. The amounts presented in the financial statements
are therefore not entirely comparable.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial statements are set out below. The
policies have been consistently applied throughout the period, unless otherwise stated.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs) and IFRIC interpretations as adopted by the European Union applicable to companies reporting under
IFRSs.
The financial statements have been prepared under the historical cost convention. The principal accounting
policies adopted are set out below.
33
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
Going Concern
The Group’s assets are comprised almost entirely of cash. The Directors have outlined their proposed new
strategy for the Group in the Chairman’s and CEO Statement on pages 4-6. As part of their assessment of going
concern, the Directors have prepared cash forecasts that show that the group and company have sufficient
cash resources in order to complete the acquisition executed after the period end and adopt the new strategy.
In order for the Group to be successful in its new strategy to establish Trident as a diversified royalty and
streaming company it will likely need to raise funds in order to acquire additional royalties and streams. As part
of the transition, the Directors plan to cancel its listing on the standard segment of the LSE, readmit on AIM and
to raise the required funds. The Directors are reasonably confident that funds will be forthcoming if and when
they are required. Should additional funding not be forthcoming or the acquisition and move to AIM be delayed
for any reason, the Group has US$4.1m of cash and cash equivalents at 31 December 2019 which is sufficient
to cover the contractual and committed expenditure of the Group and Company for at least 12months from the
date of approval of these financial statements. The Directors have a reasonable expectation that the Group and
Company have adequate resources to continue in operational existence for the foreseeable future.
The turmoil in the financial and capital markets precipitated by the Covid-19 pandemic has, the Directors believe,
laid the foundations for an extended period of time during which the Company can successfully execute on its
strategy. At a time when there is a contraction of capital to the mining sector, Trident should be well positioned
to act as both an acquirer and writer of royalties and streams.
Accordingly, the directors believe that as at the date of this report it is appropriate to continue to adopt the going
concern basis in preparing the financial statements.
Basis of consolidation
The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as
if they formed a single entity. Intercompany transactions and balances between group companies are therefore
eliminated in full.
At 31 December 2019, the consolidated financial statements combine those of the Company with those of its
subsidiaries, TRR Services LLC and TRR Services Australia Pty Ltd. Subsidiaries are entities over which the
Group has control. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangements; and
• The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets,
liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the
Group Financial Statements from the date the Group gains control until the date the Group ceases to control
the subsidiary.
Investments in subsidiaries are accounted for at cost less impairment within the Company Financial Statements.
Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting
policies used in line with those used by other members of the Group
34
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic
environment in which they operate (their "functional currency") are recorded at the rates ruling when the
transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the
reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities
are recognised immediately in profit or loss.
Exchange gains and losses arising on the retranslation of monetary financial assets are treated as a separate
component of the change in fair value and recognised in profit or loss. Exchange gains and losses on non-
monetary OCI financial assets form part of the overall gain or loss in OCI recognised in respect of that financial
instrument.
Translation into presentation currency
The Company’s functional currency is British pound (£) and the Group and Company’s presentation currency
is US$. The functional currency of TRR Services LLC and TRR Services Australia Pty Ltd is US$ and AU$
respectively. The Group and Company’s results and financial position is translated from its functional currency
(£) into its presentation currency (US$) using the following procedures:
• Assets and liabilities for each financial reporting date presented (including comparatives) are translated
•
at the closing rate of that financial reporting period.
Income and expenses for each income statement (including comparatives) is translated at exchange
rates at the dates of transactions. For practical reasons, the Company applies average exchange rates
for the period.
• All resulting changes are recognised as a separate component of equity.
• Equity items are translated at the closing rate of that financial reporting period. The resulting exchange
rate differences are recognised in equity.
The following exchange rates were used in the retranslation of these financial statements.
At 31 December 2019
At 30 April 2019
US$/GBP closing rate at financial reporting date
US$/GBP average exchange rate during the reporting period
US$/AUD closing rate at financial reporting date
US$/AUD average exchange rate during the reporting period
1.3114
1.2656
0.6948
0.6839
1.3038
1.3126
n/a
n/a
New standards, interpretations and amendments effective from 1 May 2019
There were no new standards or interpretations effective for the first time for periods beginning on or after 1
January 2019 that had a significant effect on the Group’s or Company’s financial statements. The Group and
Company adopted IFRS 16 Leases, Amendments to IFRS 2 – classification and measurement of share-based
payments transactions, Annual improvements to IFRS Standards 2015-2017 cycle and IFRIC 23 Uncertainty
over Income Tax Treatments from 1 May 2019. Other new and amended standards and Interpretations issued
by the IASB did not impact the Group or Company as they are either not relevant to the Group’s or Company’s
activities or require accounting which is consistent with the Group’s and Company’s current accounting policies.
35
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
New standards, interpretations and amendments not yet effective
Standards, amendments and interpretations that are not yet effective and have not been early adopted are as
follows:
Standard
IFRS 3 (Amendments)
IAS 1 and IAS 8
(Amendments)
IAS 1 (Amendments)
Amendments
Impact on initial application
Business Combinations
Definition of material
Classification of Liabilities as Current or Non-
Current.
Amendments to reference to the conceptual
framework in IFRS
Effective date
1 January 2020
1 January 2020
1 January 2022
1 January 2020
None are expected to have a material effect on the Group or Company Financial Statements.
Taxation
Current taxation is the taxation currently payable on taxable profit or loss for the period.
Current tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the
Statement of Financial Position date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to
items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred
tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
Risk Management Objectives and Policies
The main risks arising from the Group’s activities are capital risk management and credit risk. Further details
are disclosed in Note 16.
Financial assets
Amortised cost
These assets arise principally from the provision of loans to subsidiaries, but also incorporate other types of
financial assets where the objective is to hold these assets in order to collect contractual cash flows and the
contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value
plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at
amortised cost using the effective interest rate method, less provision for impairment.
36
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
Impairment provisions for current trade and other receivables are recognised based on the simplified approach
within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this
process the probability of the non-payment of the trade and other receivables is assessed. This probability is
then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit
loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a
separate provision account with the loss being recognised within cost of sales in the consolidated statement of
comprehensive income. On confirmation that the trade and other receivables will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on
a forward-looking expected credit loss model.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and current and deposit balances at banks, together with
other short-term, highly liquid investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
Financial liabilities
Financial liabilities are recognised in the statement of financial position when the Group becomes a party to the
contractual provisions of the instrument.
The Group's financial liabilities comprise trade and other payables.
Trade payables are recognised initially at their fair value and subsequently measured at amortised cost using
the effective interest method.
Equity instruments and reserves description
An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received
net of direct issue costs.
Ordinary shares are classified as equity.
Deferred shares are classified as equity but have restricted rights such that they have no economic value.
Share capital account represents the nominal value of the ordinary and deferred shares issued.
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, net of any related
income tax benefits.
Foreign exchange reserve represents
• differences arising on the opening net assets retranslation at a closing rate that differs from opening
rate; and
• differences arising from retranslating the income statement at exchange rates at the date s of
transactions at average rates and assets and liabilities at the closing rate.
Retained earnings include all current and prior period results as disclosed in the Statement of Comprehensive
Income.
37
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
Critical accounting judgments and estimations
The preparation of the financial statements in conformity with IFRS requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of expenses during the reporting period. Although these estimates are based on
management’s best knowledge of the amounts, events or actions, actual results ultimately may differ from these
estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
Going concern
The Group and Company financial statements have been prepared on a going concern basis as the Directors
have assessed the Group’s and Company’s ability to continue in operational existence for the foreseeable
future. The operations are currently being funded through existing cash reserves.
The financial statements do not include the adjustments that would result if the Group or Company were not to
continue as a going concern. See Going Concern section on page 34 for more details.
Loans to subsidiaries
Loans to subsidiaries have a carrying value at 31 December 2019 of US$87,792 (30 April 2019: US$nil). The
Directors have assessed the carrying value to be equal to fair value on the basis that the loans will be
recovered once the subsidiaries have completed a future acquisition and are trading. In the event that that an
acquisition is not completed, and the loans are not considered to be recoverable, an impairment charge will
then be recognised in the Statement of Comprehensive Income.
3. BUSINESS AND GEOGRAPHICAL REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the board of directors that makes
strategic decisions.
The accounting policy for identifying segments is based on internal management reporting information that is
regularly reviewed by the chief operating decision maker, which is identified as the Board of Directors.
At this point, identifying and assessing investment projects is the only activity the Group is involved in and is
therefore considered as the only operating/reportable segment.
Therefore, the financial information of the single segment is the same as that set out in the Consolidated
Statement of Comprehensive Income, Consolidated Statement of Financial Position, the Consolidated
Statement of Changes to Equity and the Consolidated Statement of Cashflows.
38
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
4. EXPENSES BY NATURE
Employee benefit expense (note 6)
Advertising and Marketing
Stock Exchange fees
Audit and tax
Legal fees
Other professional fees
Foreign exchange losses
Other operating expenses
Total administrative expenses
5. AUDITOR REMUNERATION
Period ending
31 December 2019
US$
Restated
Period ending 30
April 2019
US$
144,367
10,213
8,080
49,110
19,878
84,206
308,547
64,562
688,963
51,985
7,190
8,626
24,808
1,575
53,626
-
9,203
157,013
During the year the Company obtained the following services from the auditor:
Fees payable to the auditor for the audit of the Company
Total auditor’s remuneration
6. EMPLOYEE BENEFIT EXPENSE
Directors’ and consulting fees
Senior management
Social security
Total employee benefit expense
Period ending
31 December 2019
US$
25,312
25,312
Restated
Period ending
30 April 2019
US$
23,627
23,627
Period ending
31 December 2019
US$
Restated
Period ending
30 April 2019
US$
112,311
23,988
8,068
144,367
51,191
-
794
51,985
All the wages and salaries were paid to the directors and senior management. There were no employees in the
period other than the directors and senior management. Further disclosures in respect of directors’ remuneration
are included within the Directors’ Remuneration Report.
39
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
7. INCOME TAX
Current tax
Loss on ordinary activities before taxation
UK Corporation tax at 19.00% (30 April 2019: 19%)
Effects of:
Expenses not deductible for tax purposes
Differences in overseas tax rates
Tax losses carried forward on which no deferred tax asset is
recognised
Income tax
Period ending
31 December
2019
US$
Restated
Period ending
30 April 2019
US$
-
-
(688,963)
(301,712)
(130,903)
(57,325)
(213)
(3,326)
134,443
-
29,926
-
27,399
-
Tax losses totalling approximately US$856,000 (Period ended 30 April 2019: US$143,000) have been carried
forward for use against future taxable profits.
8. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the period.
Period ending
31 December 2019
US$
Restated
Period ending
30 April 2019
US$
Loss from continuing operations attributable to equity holders of
the company
Weighted average number of ordinary shares in issue
Basic and fully diluted loss per share from continuing operations
(688,963)
(301,712)
22,000,000
13,216,229
US cents
(3.13)
US cents
(2.27)
9. DIVIDENDS
There were no dividends paid or proposed by the Company in either period.
40
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
10. INVESTMENTS IN SUBSIDIARIES
Company
Cost
On incorporation and at 30 April 2019
Investment in subsidiary
At 31 December 2019
US$
-
1
1
As at 31 December 2019 the Company held interests in the following subsidiary companies:
Company
TRR Services LLC
TRR Services
Australia Pty Limited
Country of
registration
USA
Australia
Registered office address
7233 S.Kellerman Way, Aurora, CO
80016
Floor 2, 44A Kings Park Road, West
Perth, WA 6005
Proportion
held
100%
Nature of business
Service company
100%
Service company
11. AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS
Company
Loans to subsidiaries
At 31 December
2019
US$
87,792
87,792
At 30 April
2019
US$
-
-
During the period ended 31 December 2019 the maximum amount owed by the Group to the Company was
US$87,792. The related party loans are unsecured and are repayable upon demand. The fair value of loans to
subsidiaries is the same as their carrying values stated above.
12. TRADE AND OTHER RECEIVABLES
Prepayments
Indirect taxes recoverable
Company
At 31 December
2019
US$
Group
At 31 December
2019
US$
10,823
23
10,846
10,823
49
10,872
Company
At 30 April
2019
US$
10,198
-
10,198
Due to the short-term nature of the current receivables, their carrying amount is considered to be an approximate
of their fair value.
41
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
13. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Company
At 31 December
2019
US$
Group
At 31 December
2019
US$
4,120,223
4,120,223
4,134,842
4,134,842
Company
At 30 April
2019
US$
4,821,093
4,821,093
All of the Company’s cash and cash equivalents are held in accounts which bear interest at floating rates and
the Directors consider their carrying amount approximates to their fair value. Details of the credit risk associated
with cash and cash equivalents is set out in note 16.
14. TRADE AND OTHER PAYABLES
Trade payables
Other taxation & social security
Accrued expenses
Company
At 31 December
2019
US$
Group
At 31 December
2019
US$
4,632
-
32,129
36,761
4,632
7,346
32,129
44,107
Company
At 30 April
2019
US$
11,605
-
34,551
46,156
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
The Company has financial risk management policies in place to ensure that all payables are paid within the
pre-agreed credit terms. The Directors consider that the carrying amount of trade payables approximates to their
fair value.
15. SHARE CAPITAL AND SHARE PREMIUM
Company
At 25 April 2018
Share issues
Share issue expenses
Capitalisation issue
At 30 April 2019
Number of
ordinary shares
of 1p
Number of
deferred shares
of 1p
Share capital
US$
Share
premium
US$
1
21,999,999
-
-
1
-
-
-
286,835 5,058,744
-
(260,752)
3,000,000
39,114
(39,114)
22,000,000
3,000,000
325,950 4,758,878
Difference arising on re-translation of opening
balances at period end rate
1,900
27,740
At 31 December 2019
22,000,000
3,000,000
327,850 4,786,618
The deferred shares have restricted rights such that they have no economic value.
42
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
Share issues in period:
On 25 April and 18 May 2018, the Company issued 1 ordinary shares of £1 for cash.
On 30 May 2018, the 2 ordinary shares were subdivided into 200 shares of 1p and 1,999,800 ordinary shares
were issued for cash at 5p per share, raising US$130,367.
On 3 September 2018, US$39,114 of the share premium account was capitalised by the issue of 3,000,000
deferred shares of 1p each.
On 1 October 2018, 20,000,000 ordinary shares were issued for cash at 20p per share, raising US$5,215,200
before expenses of US$260,752.
16. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to a variety of financial risks which result from both its operating and investing activities.
The Group’s risk management is coordinated by the Board of Directors and focuses on actively securing the
Group’s short to medium term cash flows by minimising the exposure to financial markets.
The main risk the Group is exposed to through its financial instruments is credit risk.
Capital risk management
The Group’s objectives when managing capital are:
to safeguard the Group’s ability to continue as a going concern, so that it continues to provide returns
to support the Group’s growth; and
to provide capital for the purpose of strengthening the Group’s risk management capability.
•
and benefits for shareholders;
•
•
The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure
and equity holder returns, taking into consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures
and projected strategic investment opportunities. Management regards total equity as capital and reserves, for
capital management purposes. The Group is not subject to externally imposed capital requirements.
Credit risk
The Group’s financial instruments that are subject to credit risk are cash and cash equivalents. The credit risk
for cash and cash equivalents is considered negligible since the counterparties are reputable financial
institutions.
The Group’s maximum exposure to credit risk is US$4,134,842 comprising cash and cash equivalents.
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the
United States Dollar (“US$”) and Great British Pound (“GBP”). Foreign exchange risk arises from future
commercial transactions and recognised monetary assets and liabilities. Net assets denominated in US$ and
GBP at the period end amounted to US$3,512,849 and US$588,758.
At 31 December 2019, had the exchange rate between the US$ and GBP increased or decreased by 20% with
all other variables held constant, the increase or decrease respectively in net assets would amount to
approximately US$117,752 or US$28,920 (30 April 2019: US$nil).
The Group does not hedge against foreign exchange movements.
43
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
Notes to the financial statements (continued)
17. FINANCIAL INSTRUMENTS
Company
At 31 December
2019
US$
Group
At 31 December
2019
US$
FINANCIAL ASSETS AT AMORTISED COST:
Amounts due from subsidiary
undertakings
Trade and other receivables
Cash and cash equivalents
87,792
10,846
4,120,223
4,218,861
-
10,872
4,134,842
4,145,714
Company
At 31 December
2019
US$
Group
At 31 December
2019
US$
FINANCIAL LIABILITIES AT AMORTISED COST:
Trade and other payables
4,632
4,632
11,978
11,978
Company
At 30 April
2019
US$
-
10,198
4,821,093
4,831,291
Company
At 30 April
2019
US$
11.605
11,605
18. RELATED PARTY TRANSACTIONS
The compensation payable to the Board of Directors and Senior Management (‘Key Management’) comprised
US$136,299 (30 April 2019: US$51,191) and was in respect of services provided to the Group. Full details of
the compensation for each Director are provided in the Directors’ Remuneration Report.
Sam Quinn is a partner in Silvertree Partners LLP who received US$46,827 (30 April 2019: US$32,679) during
the period for the provision of administration, bookkeeping and secretarial services. At the period end, an
amount of US$Nil (30 April 2019: US$Nil) was due to Silvertree Partners LLP.
19. POST PERIOD-END EVENTS
On 25 March 2020 the Group announced that it has entered into a definitive purchase agreement to acquire a
significant, cash generative mining royalty to acquire a 1.5% free on board revenue royalty covering part of the
producing Koolyanobbing Iron Ore Operation in Western Australia for a total consideration of A$7.0 million,
which was amended on 30 April 2020. The consideration is payable in two tranches: A$4.0 million payable
upon the transaction completion and a further A$3.0 million payable on the twelve-month anniversary plus one
day of the first tranche. The tranche two payment will be secured against the royalty. (the “Acquisition”). Under
the terms of the Acquisition, cashflow attributable to the royalty from 1 January 2020 will be for the benefit of
Trident. The Acquisition will initiate the establishment of Trident as a new, growth-focused diversified mining
royalty and streaming company.
44
TRIDENT RESOURCES PLC
Financial Report for the period ended 31 December 2019
The outbreak of the coronavirus pandemic in the months after the reporting date is considered to be a non-
adjusting event. As outlined in note 2, the Group and Company are continuing to report on a going concern
basis. The Group’s and Company’s response to the outbreak is described in the Strategic Report. The unknown
length of the outbreak is a source of uncertainty and the Board will continue to monitor events and to provide
updates as the situation develops.
20. ULTIMATE CONTROLLING PARTY
The Directors do not consider there to be a single ultimate controlling party.
21. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments as at 31 December 2019 (30 April 2019: none).
45