TIDMTTAU
TECTONIC GOLD PLC
Company Registration No. 05173250
Annual Report and Financial Statements
for the year ended 30 June 2022
CONTENTS
Page
3 Company information
4 Chairman's Statement
5 Chief Executive Officer's Report
6 Strategic report
8 Directors' report
12 Corporate Governance Statement
17 Report of the independent auditor
22 Consolidated Statement of Profit or Loss and
Other Comprehensive Income
23 Statements of Financial Position
24 Consolidated Statement of Changes in Equity
25 Company Statement of Changes in Equity
26 Consolidated Statement of cash flows
27 Company Statement of cash flows
28 Notes forming part of the financial statements
COMPANY INFORMATION
DIRECTORS: Bruce Fulton (Non-Executive Chairman)
Brett Boynton (Chief Executive
Director)
Sam Quinn (Executive Director)
Dennis Edmonds (Non-Executive Director)
SECRETARY: Sam Quinn
REGISTERED OFFICE: 167-169 Great Portland Street
Fifth Floor, London
United Kingdom, W1W 5PF
COMPANY REGISTRATION NUMBER: 05173250
REGISTRAR AND TRANSFER OFFICE: Link Market Services Limited
6th Floor, 65 Gresham Street
London
EC2V 7NQ
SOLICITORS: Mildwaters Consulting LLP
Walton House, 25 Bilton Road, Rugby
Warwickshire
CV22 7AG
INDEPENT AUDITOR: Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
AQSE CORPORATE ADVISER AND VSA Capital
BROKER Park House
16- 18 Finsbury Circus
London
EC2M 7EB
BANKERS: Barclays Bank plc
1 Churchill Place
London
E14 5HP
CHAIRMAN'S STATEMENT
Dear Shareholders,
The year ended 30 June 2022 was a challenging, frustrating, and rewarding time
for Tectonic. We were challenged with severe delays caused by ongoing rain and
flooding as La Nina struck the East Coast of Australia for the second year in a
row, but at the time of writing, the team is finally mobilising to complete an
exciting campaign at Goldsmith's Reef in the Specimen Hill project. We were
forced to suspend diamond drilling below the historic high grade Goldsmth's
Reef mine due to thunderstorms in January 2022. Assays from the last few meters
returned copper and gold and we have been frustrated by ongoing rains and drill
rig availability preventing us from extending that drilling and completing the
program.
Our diamond and heavy minerals investment in South Africa, in partnership with
Kazera Global Plc ("Kazera"), is advancing. Kazera exercised their option to
acquire 60% of Whale Head Pty Ltd ("Whale Head"), which holds the first Mining
Permit in the area for mineral sands and Kazera has announced its plans to
bring that into immediate production.
Deep Blue Minerals Pty Ltd (Deep Blue), which Tectonic has a non-diluting 10%
interest in, holds a diamond mining concession on the South African
Government's alluvial diamond project. In combination, these two entities bring
together for the first time, the ability to mine alluvial ores and process them
simultaneously for both diamonds and co-existent heavy minerals. Historically
the security concerns around diamond mining prevented any non-diamond activity,
so the rich mineral sands in the area have not been commercialised. As
announced, Tectonic now has a 40% economic interest in the mineral sands
alongside the diamond interest and we are working with Kazera to bring both
into production.
Thank you to all of our supportive shareholders and stakeholders who have
patiently supported us over the last year to progress our gold projects. Early
results are positive, and we are looking forward to having the final drilling
done and assayed. We are also excited to finally have the mineral sands mining
permit granted and be into production planning. The year ahead presents
excellent opportunity across the portfolio.
Yours sincerely
Bruce Fulton
Chairman
27 December 2022
CHIEF EXECUTIVE OFFICER'S REPORT
During the year to 30 June 2022 the Company was active with drilling and field
work at the Specimen Hill project, but the project plan was severely disrupted
by rains and regional flooding in South East Queensland, Australia. Despite
this we were able to secure early samples for assay and were again encouraged
by the positive copper and gold results. At the time of this report, we have
the team mobilising to complete the program that was suspended in January and,
subject to no further delays with the weather, will present the results in the
next few weeks.
Tectonic holds a non-diluting 10% interest in Deep Blue which delivered its
first commercial production of diamonds during the period. Deep Blue holds a
concession on the South African Government alluvial diamond operation on the
west coast of South Africa, just south of De Beers' extensive "Nambdeb"
operations. London listed Kazera Global Plc is the operating partner in this
project after Tectonic divested 90% to them.
Tectonic also holds a 40% economic interest in Whale Head, which was granted a
Mining Permit within the same South African Government alluvial diamond
operation. The Mining Permit is for the extraction of heavy minerals. The same
process of erosion that released the diamonds from the Kimberly pipes and
washed them down the Orange River to the Atlantic, generated the marine
alluvial heavy mineral sands or "beach deposits". These have historically been
inaccessible due to security restrictions around the diamond mining activities
on the site. Tectonic and Kazera have unlocked the access to these high-grade
mineral sands by mining the ores through Deep Blue for diamond extraction and
then taking the waste stream from that process directly into Whale Head for
heavy mineral extraction. With the mining permit now in hand, Kazera has
announced its intention to move directly to a combined diamond and heavy
mineral sands operation.
Despite the frustrations with weather related delays, we have made significant
progress this year across the portfolio and look forward to sharing results
from the completion of our Queensland drilling campaign.
Thank you to all the shareholders for your continued support over the past
year.
Brett Boynton
Chief Executive Officer
27 December 2022
STRATEGIC REPORT
For the year ended 30 June 2022
The Directors present their strategic report for Tectonic Gold Plc ("Tectonic
Gold" and/or "the Company") and its controlled entities ("the Group") for the
year ended 30 June 2022 ("the reporting period").
REVIEW OF THE BUSINESS
The team progressed the Specimen Hill project, where we conducted a number of
field campaigns including drilling, mapping and sampling. Weather events and
ongoing rains prevented the completion of a significant drilling program and at
the time of this report the team is mobilising to complete that work.
The Company supported our diamond and heavy minerals investment partner, Kazera
Global Plc in taking diamond production forward at Deep Blue Minerals Pty Ltd
and Whale Head Pty Ltd in South Africa. Tectonic Gold holds a non-diluting 10%
interest in Deep Blue and a 40% economic interest in Whale Head.
For further details see the Chief Executive Officer's Report on Page 5.
RESULTS AND COMPARATIVE INFORMATION
The Group reports a loss after tax for the reporting period of £153,312 from
continuing operations (2021: £231,564 loss).
On 30 September 2021, Kazeral Global Plc exercised its option to acquire 60% of
Whale Head Pty Ltd. The Company retains a non-diluting 10% shareholding in
Whale Head and a further 30% economic interest via a share sale and loan scheme
under which it sold a 30% interest in Whale Head to a Black Economic
Empowerment (BEE) consortium.
DIVIDS
The Directors do not recommend the payment of a dividend and no amount has been
paid or declared by way of a dividend to the date of this report (2021: £nil).
KEY PERFORMANCE INDICATORS
The key performance indicators are set out below:
STATISTICS 30 June 2022 30 June 2021
Net asset value £3,790,493 £3,715,827
Net asset value per share 0.0040p 0.0039p
Closing share price at the end of the reporting 1.1p 1.2p
period
Market capitalisation £10.421m £11.285m
PRINCIPAL RISKS AND UNCERTAINTIES
Currently the principal risk lies in securing additional funding as and when
necessary to continue with the core research and exploration business. The
Company's projects are in the exploration phase of development and do not
generate revenue. If the Company is unsuccessful in monetising its research
developments or its exploration projects by attracting development partners or
divesting assets it may need to raise additional capital as other junior
exploration companies do from time to time. This risk is mitigated through the
Company's corporate development efforts and active engagement with a number of
gold mining companies, project funders and other investors for the purpose of
attracting investment in one or more of the Company's projects or acquisition
of one of the assets in line with the business plan.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of the Company's financial risk management objectives and policies are
set out in Note 24 to these financial statements.
ENVIRONMENTAL REGULATIONS
The Group conducts a range of activities in the field which require accessing
remote sites with heavy vehicles and equipment and disturbing the surface with
sample taking to test geological structures. This work is conducted under very
strict regulatory oversight and once completed the test sites are fully
rehabilitated to ensure there is no long-term impact from the Company's
activities on the environment. The Group is subject to environmental
regulations under the laws of the Commonwealth and the State it operates in
Australia. The Board of Directors monitors compliance with environmental
regulations and as at the date of this report the Directors are not aware of
any breach of such regulations during the reporting period.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
The Director's believe they have acted in the way most likely to promote the
success of the Company 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 Company's employees;
* Foster the Company's relationships with suppliers, customers and others;
and
* Consider the impact of the Company's operations on the community and the
environment.
The Company is quoted on the AQUIS Stock Exchange (formerly NEX) and its
members will be fully aware, through detailed announcements, shareholder
meetings and financial communications, of the Board's broad and specific
intentions and the rationale for its decisions.
When selecting investments, issues such as the impact on the community and the
environment have actively been taken into consideration. For example the
economic uplift in Alexander Bay and surrounds from investment into Whale Head,
and the choice to use gravity separation, a chemical free processing
alternative, for the project.
The Group pays its creditors promptly and keeps its costs to a minimum to
protect shareholders funds. Currently, other than the directors, the Group
engages all staff as contractors and has no employees.
The Group acknowledges the Traditional Owners of the land on which it operates
and participates in supporting Native Title.
The Group has interests in projects around the world and supports the basic
rights of all people.For example the ongoing annual reviews on Native Title in
the Group's Queensland, Australia, projects.
The Group adheres to the strictest anti-corruption protocols and does not trade
in any non-compliant or conflict related resources.
The Group utilises its technology platform and expertise to identify and
delineate natural resource projects which it monetises by selling or partnering
to bring into production.
The Group utilises its technology platform and expertise to identify and
delineate natural resource projects which it monetises by selling or partnering
to bring into production. The Group adheres to the 10 principles set out in the
QCA Code which it has adopted. The outcome of adherence to the QCA Code is the
development of a best practice governance structure in the Group to pursue each
of the 10 principles.
The principal risks identified are a failure to meet stakeholder commitments as
a result of the inappropriate behaviour by members of the Group or the
consultants and contractors which it engages. The Group is aware of its impact
in operating in remote locations and the potential damage it can cause to the
environment and property if its operations are not conducted with the utmost
care. With these risks in mind, all contractors and consultants are vetted for
appropriate expertise and experience prior to engagement and upon engagement
are taken through thorough pre site induction training to ensure all standards
are met in execution of their tasks.
This report was approved by the Board of Directors on 21 December 2022 and
signed on its behalf by:
Brett Boynton
Chief Executive Officer
DIRECTORS' REPORT
For the year ended 30 June 2022
The Directors present their report and the audited consolidated financial
statements of Tectonic Gold Plc ("Tectonic Gold" or the "Company") and its
controlled entities ("Consolidated Entity" or "Group") for the year ended 30
June 2022.
DIRECTORS
The Board comprised the following directors who served throughout the year and
up to the date of this report save where disclosed otherwise:
Name Position Date Appointed
Bruce Fulton Non-Executive Appointed 25 June 2018
Chairman
Brett Boynton Chief Executive Appointed 26 May 2015
Officer
Sam Quinn Executive Director Appointed 20 February 2017
Dennis Edmonds Non-Executive Appointed 28 April 2020
Director
PRINCIPAL ACTIVITIES
The principal activity of the Company during the reporting period was gold
exploration.
DIRECTORS' INTERESTS
The Directors' interests in the share capital of the Company at 30 June 2022,
held either directly or through related parties, were as follows:
Name of director Number of % of ordinary share
ordinary shares capital and voting
rights
Bruce Fulton 9,758,185 1.02
Brett Boynton 150,566,780 15.73
Sam Quinn 5,052,250 0.53
Dennis Edmonds 1,399,803 0.15
166,777,018 17.42
Details of the options granted to or held by the Directors at 30 June 2022 are
as follows:
Name of Balance Options Options Balance Number Grant Exercise Date of
director 30 June 2021 exercised lapsed 30 June 2022 vested date price expiry
or former
director
B Fulton
Series 10,000,000 - 10,000,000 - - 25-Jun-18 £0.002 25-Jun-22
(i)*
Series 14,550,000 - - 14,550,000 14,550,000 08-Sep 20 £0.00275 08-Sep 24
(ii)
Total 24,550,000 - 10,000,000 14,550,000 14,550,000
B Boynton
Series 12,000,000 - 12,000,000 - - 25-Jun-18 £0.002 25-Jun-22
(i)*
Series 10,550,000 3,636,363 - 6,913,637 6,913,637 08-Sep 20 £0.00275 08-Sep 24
(ii)
Total 22,550,000 3,636,363 12,000,000 6,913,637 6,913,637
S Quinn
Series 12,000,000 - 12,000,000 - - 25-Jun-18 £0.002 25-Jun-22
(i)*
Series 14,550,000 - - 14,550,000 14,550,000 08-Sep 20 £0.00275 08-Sep 24
(ii)
Total 26,550,000 - 12,000,000 14,550,000 14,550,000
D Edmonds
Series - - - - - - - -
(i)*
Series 7,275,000 - - 7,275,000 7,275,000 08-Sep 20 £0.00275 08-Sep 24
(ii)
Total 7,275,000 - - 7,275,000 7,275,000
* * Series (i): The options vest in three tranches as follows:
* 1/3 of the Options vested on 25 June 2018;
* 1/3 of the Options vested on 25 December 2018 provided that on or after
such date, certain performance conditions have been satisfied; and
* 1/3 of the Options vested on 25 June 2019 provided that on or after such
date certain performance condition have been satisfied.
The Company has made qualifying third-party indemnity provisions for the
benefit of the Directors in the form of Directors' and Officers' Liability
insurance during the year which remain in force at the date of this report.
DONATIONS
The Company did not make any political or charitable donations during the
reporting period (30 June 2021: £nil).
EMPLOYEE CONSULTATION
The Company places considerable value on the involvement of its employees and
has continued to keep them informed on matters affecting them as employees and
on various factors affecting the performance of the Company. This is achieved
through formal and informal meetings. Equal opportunity is given to all
employees regardless of their sex, age, religion or ethnic origin.
POST YEAR EVENTS
A list of post year events has been included in Note 28.
GOING CONCERN
The adoption of the going concern basis by the Directors is following a review
of the current position of the Company and Group and the forecasts for at least
the next 12 months from the date of signing of these financial statements. Cash
on hand and tradable securities together with the funds expected from the
Australian Government R&D Tax Incentive are more than sufficient to enable the
Company to meet its obligations as they fall due and continue to operate for at
least twelve months from the date of signing these financial statements. Thus,
the Directors continue to adopt the going concern basis in preparing the
financial statements. It is beyond the scope of the Directors to predict any
future impact of COVID-19 on any of these funding sources however and if for
any reason it is not possible to sell any tradeable securities or State
Government funding is not secured, this may impact the ability of the Company
to meet its obligations and continue to operate as envisaged. Further details
regarding the going concern basis can be found in Note 2 of these financial
statements.
In keeping with other investment companies, the growth if the Group is
dependent on its ability to invest in current projects and new opportunities.
The ability to raise additional finance is critical to the group's growth
objective. The Directors are confident in their ability to finance future
projects and opportunities by raising funds in the market.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
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 prepared the Group and
Company financial statements in accordance with UK adopted International
Accounting Standards (IFRSs) as adopted by the UK, and as regards the Company
financial statements, as applied in accordance with the provisions of the
Companies Act 2006. Under company law, the directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the profit or loss
of the Group and Company for that period. In preparing these financial
statements, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* state whether applicable IFRSs have been followed, subject to any material
departures disclosed and explained in the financial statements;
* make judgements and accounting estimates that are reasonable and prudent;
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
comply with the Companies Act 2006.
The directors 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.
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 financial statements may differ from legislation in other jurisdictions.
DISCLOSURE OF INFORMATION TO THE AUDITORS
In the case of each of the persons who are directors of the Company at the date
when this report is approved:
* So far as each director is aware, there is no relevant audit information of
which the Company's auditors are unaware; and
* Each of the directors has taken all steps that they ought to have taken as
a director to make themselves aware of any relevant audit information and
to establish that the auditors are aware of the information.
AUDITOR
Moore Kingston Smith LLP have expressed their willingness to continue in
office as auditor and it is expected that a resolution to reappoint them will
be proposed at the next annual general meeting.
The Board as a whole considers the appointment of external auditors, including
their independence, specifically including the nature and scope of non-audit
services provided.
CORPORATE GOVERNANCE
The Company has set out its full Corporate Governance Statement on page 12.
BOARD OF DIRECTORS
The Company supports the concept of an effective Board leading and controlling
the Company. The Board of Directors is responsible for approving Company policy
and strategy. It meets regularly and has a schedule of matters specifically
reserved to it for decision. All Directors have access to advice from
independent professionals at the Company's expense. Training is available for
new and existing Directors, as necessary.
The Board consists of the Non-Executive Chairman, Bruce Fulton, Chief Executive
Officer, Brett Boynton, Executive Director, Sam Quinn and Non-Executive
Director, Dennis Edmonds.
Since Admission to the AQUIS Stock Exchange on 25 June 2018, the Board has
established properly constituted audit, remuneration and AQUIS Stock Exchange
compliance committees with formally delegated duties and responsibilities, a
summary of which is set out below.
AUDIT COMMITTEE
The Audit Committee comprises Bruce Fulton (Non-Executive Chairman), Sam Quinn
and the Chief Financial Officer, Anne Adaley. The Committee meets at least
twice a year and is responsible for ensuring the financial performance of the
Company is properly reported on and monitored. It liaises with the auditor and
reviews the reports from the auditor relating to the financial statements.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Bruce Fulton (Non-Executive Chairman) and
Sam Quinn. The Committee meets at least twice a year and is responsible for
reviewing the performance of Executive Directors and sets the scale and
structure of their remuneration on the basis of their service agreements, with
due regard to the interests of the shareholders and the performance of the
Company.
AQUIS STOCK EXCHANGE COMPLIANCE COMMITTEE
The role of the AQUIS Stock Exchange compliance committee is to ensure that the
Company has in place sufficient procedures, resources and controls to enable it
to comply with the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange
compliance committee make recommendations to the Board and proactively liaise
with the Company's AQUIS Stock Exchange Corporate Adviser on compliance with
the AQUIS Stock Exchange Rules. The AQUIS Stock Exchange compliance committee
also monitors the Company's procedures to approve any share dealings by
directors or employees in accordance with the Company's share dealing code. The
members of the AQUIS Stock Exchange compliance committee are Brett Boynton
(Chairman of this Committee), Sam Quinn and Dennis Edmonds.
SHARE DEALING CODE
The Company has adopted a share dealing code for dealings in securities of the
Company by directors and certain employees which is appropriate for a company
whose shares are traded on the AQUIS Stock Exchange. This will constitute the
Company's share dealing policy for the purpose of compliance with UK
legislation including the Market Abuse Regulation and the relevant part of the
AQUIS Stock Exchange Rules. It should be noted that the insider dealing
legislation set out in the UK Criminal Justice Act 1993, as well as provisions
relating to market abuse, also apply to the Company and dealings in Ordinary
Shares.
COMMUNICATIONS WITH SHAREHOLDERS
Communications with shareholders are given a high priority by the management.
In addition to the publication of an annual report and an interim report, there
is regular dialogue with shareholders and analysts. The Annual General Meeting
is viewed as a forum for communicating with shareholders, particularly private
investors. Shareholders may question the Managing Director and other members
of the Board at the Annual General Meeting.
INTERNAL CONTROL
The Directors acknowledge they are responsible for the Company's system of
internal control and for reviewing the effectiveness of these systems. The risk
management process and systems of internal control are designed to manage
rather than eliminate the risk of the Company failing to achieve its strategic
objectives. It should be recognised that such systems can only provide
reasonable and not absolute assurance against material misstatement or loss.
The Company has well established procedures which are considered adequate given
the size of the business.
REMUNERATION
The remuneration of the directors has been fixed by the Board as a whole. The
Board seeks to provide appropriate reward for the skill and time commitment
required so as to retain the right calibre of director at a cost to the Company
which reflects current market rates.
Details of directors' fees and of payments made to directors for professional
services rendered are set out in Note 7 to the financial statements and details
of the directors' share options are set out in the Directors' Report.
Likely Developments and Future Results
Likely developments in the operations of the Group and the expected results of
those operations in future financial years have not been included in this
report as the directors believe, on reasonable grounds, that the inclusion of
such information would be likely to result in unreasonable prejudice to the
Company.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL
REPORT
We confirm that to the best of our knowledge:
* the financial statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole; and
the Directors' report includes a fair review of the development and performance
of the business and the position of the issuer and the undertakings included in
the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
This information is given and should be interpreted in accordance with the
provisions of Section 418 of the Companies Act 2006.
This report was approved by the Board of Directors on 27 December 2022 and
signed on its behalf by:
Brett Boynton
Chief Executive Officer
CORPORATE GOVERNANCE STATEMENT
The Company is committed to maintaining the highest standards in corporate
governance throughout its operations and to ensure all of its practices are
conducted transparently, ethically and efficiently. The Company believes
scrutinising all aspects of its business and reflecting, analysing and
improving its procedures will result in the continued success of the Company
and deliver value to shareholders. Therefore, and in accordance with the Aquis
Growth Market Apex Rule Book, (the "AQSE Rules"), the Company has chosen to
formalise its governance policies by complying with the UK's Quoted Companies
Alliance Corporate Governance Code 2018 (the "QCA Code").
The Board currently consists of four Directors: a Chief Executive Officer
(Brett Boynton) an Executive Director (Sam Quinn), and two independent
Non-Executive Directors (NEDs) being Bruce Fulton as Non-Executive Chairman and
Dennis Edmonds. The Board considers that appropriate oversight of the Company
is provided by the currently constituted Board.
QCA Code
The 10 principles set out in the QCA Code are listed below, with an explanation
of how the Company applies each of the principles and the reason for any aspect
of non-compliance.
Principle 1 - Establish a strategy and business model which promotes long-term
value for shareholders.
The strategic vision of the Company is to successfully finance, manage and
develop its large-scale Intrusion Related Gold System assets in Central and
Northeast Queensland, Australia.
In addition, the Company makes opportunistic investment in projects it believes
can readily be divested or farmed out, as is the case with the holdings in Deep
Blue Minerals Pty Ltd and Whale Head Minerals Pty Ltd, in South Africa.
The Company's business model and strategy is outlined on a yearly basis in the
Chief Executive Officer's Statement in the Annual Report.
Principle 2 - Seek to understand and meet shareholder needs and expectations.
The Board values the importance of interacting with our shareholders,
explaining strategy and developments in the businesses and seeking shareholder
views and opinions. We also value the input of our advisers, including our
AQSE Growth Market Corporate Adviser and broker and auditors. The Board is
committed to maintaining good communications and having constructive dialogue
with its shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the
Company. As a policy, all shareholders are encouraged to attend the Company's
Annual General Meeting and any other General Meetings that are held throughout
the year, although the Directors recognise that this has not been possible
during the pandemic lockdown.
Investors also have access to current information on the Company through its
website www.tectonicgold.com and through the Chief Executive Officer who is
available to answer investor relations enquiries at: admin@signaturegold.com.au
. The Company provides regulatory, financial and business news updates through
the Regulatory News Service in accordance with AQSE Rules.
Principle 3 - Take into account wider stakeholder and social responsibilities
and their implications for long term success.
There are a number of key relationships and resources that are fundamental to
the Company's success, which include, amongst other things, relationships with,
advisors, consultant suppliers, contractors, employees, potential investors and
local stakeholders in the areas around the Group's various projects. These
relationships are key components to the successful running of the Company's
investments and are reviewed by the Board and management on a regular basis to
ensure that all potential risks are mitigated. To the extent any issues or
concerns come to light following such review, or upon engagement with such
stakeholders, the Company seeks to address matters in an expeditious manner in
order to preserve and strengthen relationships.
The Board recognises that the long-term success of the Company will be enhanced
by good relations with different internal and external groups and to understand
their needs, interest and expectations, the Board has established a range of
processes and systems to ensure that there is ongoing two-way communication,
control and feedback processes in place with to enable appropriate and timely
response.
Principle 4 - Embed effective risk management, considering both opportunities
and threats, throughout the organisation.
The Board regularly reviews the risks to which the Company is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible whilst recognising that its business opportunities
carry an inherently high level of risk. The principal risks and uncertainties
facing the Company are detailed in the Risk Factors report of the Company's
Admission Document and updated in the annual report and accounts, which are
available on the Company's website www.tectonicgold.com.
The Board has established an audit committee with formally delegated duties and
responsibilities, details of which are included below.
Principle 5 - Maintain the Board as a well-functioning, balanced team led by
the Non-Executive Chairman.
The Board's role is to agree the Company's long-term direction and strategy and
monitor achievement of key milestones against its business objectives. The
Board meets formally at least four times a year for these purposes and holds
additional meetings when necessary to transact other business. The Board
receives reports for consideration on all significant strategic, operational
and financial matters.
The Board is comprised of a Chief Executive Officer, an Executive Director and
two independent Non-Executive Directors (NEDs) of which one is Non-Executive
Chairman. Each Director serves on the Board until the Annual General Meeting
following his election or appointment. Each member of the Board is committed to
spending sufficient time to enable them to carry out their duties as a
Director. The Board meets regularly throughout the year as deemed appropriate
formally and informally using video conferencing technology.
The Company constantly keeps under review the constitution of the Board and may
seek to add more members as required as the Company grows and develops.
The Board as a whole considers the NEDs to be independent of management and
free from any business or other relationship which could materially interfere
with the exercise of their independent judgement.
The Board has implemented an effective committee structure to assist in the
discharge of its responsibilities. All committees of the Board have written
terms of reference dealing with their authority and duties. Membership of the
Audit and Remuneration Committees is comprised exclusively of Non-Executive
Directors. The Company Secretary acts as secretary to each of these committees.
The table below sets out the number of Board and Committee meeting held during
the period and each Director's attendance at those meetings.
BOARD AUDIT
REMUNERATION
HELD ATTED HELD ATTED HELD ATTED
B Fulton 6 6 - - 1 1
B Boynton 6 6 2 2 - -
S Quinn 6 6 - - 1 1
D Edmonds 6 6 2 2 - -
Principle 6 - Ensure that between them the Directors have the necessary
up-to-date experience, skills and capabilities.
The Board considers the current balance of sector, financial and public market
skills and experience which it embodies is appropriate for the size and stage
of development of the Company and that the Board has the skills and requisite
experience necessary to execute the Company's strategy and business plan whilst
also enabling each Director to discharge their fiduciary duties effectively.
Biographies for each member of the Board is provided on the Company's website
www.tectonicgold.com.
All Directors, through their involvement in other listed companies as well as
the Company, including attendance at seminars, forums and industry events and
through their memberships of various professional bodies, keep their skill sets
up to date.
The Board reviews annually, and when required, the appropriateness of its mix
of skills and experience to ensure that it meets the changing needs of the
Company.
The Company has a professional Company Secretary in the UK who assists the
Chief Executive Officer in preparing for and running effective Board meetings,
including the timely dissemination of appropriate information. The Company
Secretary provides advice and guidance to the extent required by the Board on
the legal and regulatory environment. In addition, the Board's finance function
is supported by a CFO who is engaged by the Company to provide accounting and
finance services.
Principle 7 - Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.
Review of the Company's progress against the long-term strategy and aims of the
business provides a means to measure the effectiveness of the Board. This
progress is reviewed in Board meetings held at least four times a year. The
Chief Executive
Officer's performance is reviewed once a year by the rest of the Board and
measured against a definitive list of short, medium and long-term strategic
targets set by the Board.
The Company conducts periodic reviews of its Board succession planning
protocols which includes an assessment of the number of Board members and
relative experience of each Board member vis-a-vis the Company's requirements
given its stage of development, with the goal of having in place an adequate
and sufficiently experienced Board at all times.
Principle 8 - Promote a corporate culture that is based on ethical values and
behaviours.
The corporate culture of the Company is promoted throughout its employees and
contractors and is underpinned by compliance with local regulations and the
implementation and regular review and enforcement of various policies including
a Share Dealing Policy and Code, Anti-Corruption and Anti-Bribery and Media and
Communications Policy so that all aspects of the Company are run in a robust
and responsible way.
The Board recognises that its decisions regarding strategy and risk will impact
the corporate culture of the Company and that this will impact performance. The
Board is very aware that the tone and culture set by the Board will greatly
impact all aspects of the Company and the way that employees behave. The
exploration for, and development of, mineral resources can have a significant
impact in the areas where the Company and its investments are active and it is
important that the communities view its activities positively. Therefore, the
importance of sound ethical values and behaviours is crucial to the ability of
the Company to successfully achieve its corporate objectives. The Board places
great importance on this aspect of corporate life and seeks to ensure that this
is reflected in all the Company does.
Principle 9 - Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Board is responsible for setting the vision and strategy for the Company to
deliver value to the Company's shareholders by effectively putting in place its
business model.
The roles and responsibility of the Chief Executive Officer, Non-Executive
Chairman and other Directors are laid out below:
* The Chief Executive Officer's primary responsibilities are to: implement
the Company's strategy in consultation with the Board; take responsibility
for the Company's projects; run the Company on a day-by-day basis;
implement the decisions of the Board; monitor, review and manage key risks;
act as the Company's primary spokesman; communicate with external audiences
such as investors, analysts and media; and be responsible for the
administration of all aspects of the Company.
* The Non-Executive Chairman's primary responsibilities are to: lead the
Board and to ensure the effective working of the Board; in consultation
with the Board, ensure good corporate governance and set clear expectations
with regards to the Company culture, values and behaviour; set the Board's
agenda and ensures that all Directors are encouraged to participate fully
in the decision-making process of the Board and take responsibility for
relationships with the Company's professional advisers and major
shareholders.
* The Company's NED'S participate in all Board level decisions and play a
particular role in the determination and articulation of strategy. The
Company's NED's provide oversight and scrutiny of the performance of the
Executive Directors, whilst both constructively challenging and inspiring
them, thereby ensuring the business develops, communicate and execute the
agreed strategy and operate within the risk management framework.
* The Company Secretary is responsible for ensuring that Board procedures are
followed and applicable rules and regulations are complied with.
The Board is supported by the audit and remuneration committees as described
below.
The Board has not established a Nominations Committee. The Board considers that
a separately established committee is not warranted at this stage of the
Group's development and that the functions of such a committee are being
adequately discharged by the Board as a whole.
Audit Committee
The Audit Committee comprises two non-executive Directors, Bruce Fulton and
Dennis Edmonds and the Chief Executive Officer, Brett Boynton. The Audit
Committee reviews reports from management and from Moore Kingston Smith LLP,
the Company's statutory auditor, relating to the interim and annual accounts
and to the system of internal financial control.
The Audit Committee is responsible for assisting the Board's oversight of the
integrity of the financial statements and other financial reporting, the
independence and performance of the auditor, the regulation and risk profile of
the Company and the review and approval of any related party transactions. The
Audit Committee may hold private sessions with management and the auditor
without management present. Further, the Audit Committee is responsible for
making recommendations to the Board on the
appointment of the auditor and the audit fee and reviews reports from
management and the auditor on the financial accounts and internal control
systems used throughout the Group. The Audit Committee meets at least two
times a year and is responsible for ensuring that the Company's financial
performance is properly monitored, controlled and reported. The Audit Committee
is responsible for the scope and effectiveness of the external audit and
compliance by the Company with statutory and other regulatory requirements.
With respect to the auditor, the Audit Committee:
* monitors in discussion with the auditor the integrity of the financial
statements of the Company, any formal announcements relating to the
Company's financial performance and reviews significant financial reporting
judgments contained in them;
* reviews the Company's internal financial controls and reviews the Company's
internal control and risk management systems;
* considers annually whether there is a need for an internal audit function
and makes a recommendation to the Board;
* makes recommendations to the Board for it to put to the shareholders for
their approval in the general meeting, in relation to the appointment,
re-appointment and removal of the auditor and to approve the remuneration
and terms of engagement of the auditor;
* reviews and monitors the auditor's independence and objectivity and the
effectiveness of the audit process, taking into consideration relevant
professional and regulatory requirements;
* develops and implements policy on the engagement of the auditor to supply
non-audit services, taking into account relevant external guidance
regarding the provision of non-audit services by the auditor; and
* reports to the Board, identifying any matters in respect of which it
considers that action or improvement is needed and making recommendations
as to the steps to be taken.
The Audit Committee also reviews arrangements by which the staff of the Company
and the Company may, in confidence, raise concerns about possible improprieties
in matters of financial reporting or other matters and ensure that arrangements
are in place for the proportionate and independent investigation of such
matters with appropriate follow-up action.
Where necessary, the Audit Committee obtains specialist external advice from
appropriate advisers.
Remuneration Committee
The Remuneration Committee comprises Non-Executive Directors, Sam Quinn and
Bruce Fulton.
The Remuneration Committee is responsible for considering all material elements
of remuneration policy, the remuneration and incentivisation of Executive
Directors and senior management (as appropriate) and to make recommendations to
the Board on the framework for executive remuneration and its cost. The role of
the Remuneration Committee is to keep under review the Company's remuneration
policies to ensure that the Company attracts, retains and motivates the most
qualified talent who will contribute to the long-term success of the Company.
The Remuneration Committee also reviews the performance of the Chief Executive
Officer and sets the scale and structure of his remuneration, including the
implementation of any bonus arrangements, with due regard to the interests of
shareholders.
The Remuneration Committee is also responsible for granting options under the
Company's share option plan and, in particular, the price per share and the
application of the performance standards which may apply to any grant, ensuring
in determining such remuneration packages and arrangements, due regard is given
to any relevant legal requirements, the provisions and recommendations in the
AQSE Rules and The QCA Code.
The Remuneration Committee:
* determines and agrees with the Board the framework or broad policy for the
remuneration of the Chief Executive Officer and senior management;
* determines the remuneration of Executive Directors;
* determines targets for any performance-related pay schemes operated by the
Company;
* ensures that contractual terms on termination and any payments made are
fair to the individual, the Company, that failure is not rewarded and that
the duty to mitigate loss is fully recognised;
* determines the total individual remuneration package of the Chief Executive
Officer and senior management, including bonuses, incentive payments and
share options;
* is aware of and advises on any major changes in employees' benefit
structures throughout the Company
* ensures that provisions regarding disclosure, including pensions, as set
out in the (Directors' Remuneration Policy and Directors' Remuneration
Report) Regulations 2019, are fulfilled; and
* is exclusively responsible for establishing the selection criteria,
selecting, appointing and setting the terms of reference for any
remuneration consultants who advise the Remuneration Committee.
Principle 10 - Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. Institutional shareholders and
analysts have the opportunity to discuss issues and provide feedback at
meetings with the Company.
The Company also provides regular updates on the progress of the Company,
detailing recent business and strategy developments, in news releases which is
available on the Company's website www.tectonicgold.com.
The Company's financial reports can be found on its website
www.tectonicgold.com. The Company has elected to preference hosting its AGMs in
London. The Directors believe hosting the AGM in London will enhance engagement
with the Company's shareholders by making the meeting more accessible, however
given the current requirement for Director's to be directly involved in
technical operations on site and in face to face negotiations with potential
Australian based partners, the AGM will be held in Sydney.
The Company also participates in various investor events including conferences
and presentation evenings, at which shareholders can meet with management in
person to answer queries, provide information on current developments and to
take into consideration shareholder views and suggestions.
The Board is always open to receiving feedback from shareholders. The Chief
Executive Officer has been appointed to manage the relationship between the
Company and its shareholders and will review and report to the Board on any
communications received.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF TECTONIC GOLD PLC
For the year ended 30 June 2022
Opinion
We have audited the financial statements of Tectonic Gold Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 30 June 2022
which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Group and Company Statements of Financial Position,
the Consolidated and Company Statements of Changes in Equity, the Consolidated
and Company Statements 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 UK
adopted International Accounting Standards and as regards the parent company
financial statements, as applied in accordance with the provision of the
Companies Act 2006.
In our opinion:
* the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 30 June 2022 and of the
group's loss for the year then ended;
* the group financial statements have been properly prepared in accordance
with UK adopted International Accounting Standards;
* the parent company financial statements have been properly prepared in
accordance with UK adopted International Accounting Standards and as
applied in accordance with the provisions of the Companies Act 2006; and
* the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor's responsibilities for the audit of the
financial statements section of our report. We are independent of the group and
parent company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
An overview of the scope of our audit
The scope of our audit was influenced by our evaluation of materiality and our
assessment of the risks of material misstatement in the group and parent
company financial statements. In particular, we assessed the areas involving
significant accounting estimates and judgement by the directors as risks for
our audit. This included the carrying value of exploration assets and
investments as well as future events that are inherently uncertain and could
have an impact on the group and parent company's ability to continue as a going
concern. These were judged to be the most significant assessed risks of
material misstatement and therefore reported as key audit matters below.
The significant component based in Australia was audited by a component
auditor. We had oversight of, and regular communication with, the component
auditor who was operating under our instructions. The component auditor
supplied their working papers for our review. This, along with further
discussions with the component auditor, gave us sufficient appropriate evidence
for our audit opinion on the Group financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) 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.
Key audit matter How the scope of our audit responded to
the key audit matter
Going concern (group and parent company) We performed the following procedures
Note 2 of the financial statements sets to address this risk:
out the directors assessment of the Based on the work performed we have
appropriateness of the use of the going gained reasonable assurance as to the
concern basis of preparation. This appropriateness of the use of the going
explains that the group and parent concern basis in preparing the
company expect to receive future funding financial statements.
and support to enable their obligations
to be met and ensure they continue to
operate in the foreseeable future.
There is a risk that the group and parent
company are unable to access that further
funding and support.
Carrying value of mining exploration and Our work in this area included:
evaluation expenditure (group) Based on the work performed we have
As disclosed in note 14 of the financial gained reasonable assurance that the
statements, exploration and evaluation carrying value of exploration and
expenditure capitalised as an asset in evaluation assets are not materially
the statement of financial position as at misstated.
30 June 2022 was £3,379,113.
The recoverability of this asset is
highly judgemental due to the early stage
of the projects and the contingent nature
of obtaining a mining permit.
Recoverability of investments and We performed the following procedures
subsidiary loans (parent company) to address this risk:
The parent company has significant Based on the work performed we consider
investments in its subsidiary entities that management's assessment in respect
which is supported by the underlying of the recoverability of the parent
projects. As at 30 June 2022, and as company investments and loan to one of
shown in note 16, this investment was £ its subsidiaries are not materially
3,605,254. misstated.
Note 11 also discloses a loan of £
2,402,977 provided by the parent company
to its subsidiary, Signature Gold, as at
30 June 2022.
There is a risk that the investment in
the subsidiaries, along with the loan,
are impaired as the subsidiaries are not
currently generating significant
revenues. Therefore, it is necessary to
assess the realizable value of the
holdings at year end. There is also a
risk of material misstatement around the
recoverability of the significant loan
balance with Signature Gold Pty Ltd.
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which
help us to determine the nature, timing and extent of our audit procedures.
When evaluating whether the effects of misstatements, both individually and on
the financial statements as a whole, could reasonably influence the economic
decisions of the users of the financial statements we take into account the
qualitative nature and the size of the misstatements. Based on our professional
judgement, we determined materiality as follows:
Overall materiality
Our overall Group materiality is £75,000 and the Company materiality is £
72,000. Materiality for the significant component, Signature Gold Pty Ltd, was
set at £25,000 based on 0.6% of gross assets.
Basis for determining overall materiality
Our materiality is based upon 1.8% of gross assets. The rationale for our
materiality calculation is that the Group and Company are still in the
exploration stage and therefore no significant revenues are currently being
generated. Current and potential investors will thus be most interested in the
level and recoverability of the gross assets, in particular the exploration and
evaluation assets. Gross assets is thus considered to be the most appropriate
benchmark for determining overall materiality.
Performance materiality
Our Group, Company and significant component performance materiality figures
have been calculated as £37,500, £36,000 and £12,500 respectively which have
been calculated as 50% of overall materiality.
Reporting of misstatements to the Audit Committee
We agreed with the Audit Committee that we would report all individual audit
differences in excess of £3,750 and £3,600 in respect of the Group and Company
respectively. We also agreed to report differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
Conclusions relating to going concern
In auditing the financial statements we have concluded that the directors' use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the directors' assessment of the
group and parent company's ability to continue to adopt the going concern basis
of accounting included included critical assessment of the forecasts for twelve
months from the date of approval of the audit report with appropriate
sensitivity analysis, challenging management as to the assumptions used in the
forecasts and consideration of the post-period end performance of the Group
including a review of the available banking and loan facilities available and
assessment of the likelihood of the receipt of the Research & Development Tax
Incentive Claim rebate.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the group's and company's ability
to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
Our responsibilities and those of the directors with respect to going concern
are described in the relevant sections of this 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 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, based on the work undertaken in the course of the audit:
* the information given in the strategic report and the directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
* the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for
our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities, the
directors are responsible for the preparation of the group and parent company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the group and 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.
A further description of our responsibilities is located on the Financial
Reporting Council's website at: https://www.frc.org.uk/auditors/
auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-fi/
description-of-the-auditor's-responsibilities-for.
This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess
the risks of material misstatement of the financial statements due to fraud; to
obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud, through designing and implementing
appropriate responses to those assessed risks; and to respond appropriately to
instances of fraud or suspected fraud identified during the audit. However, the
primary responsibility for the prevention and detection of fraud rests with
both management and those charged with governance of the company.
Our approach was as follows:
* We obtained an understanding of the legal and regulatory requirements
applicable to the company and considered that the most significant are the
Companies Act 2006, UK adopted International Accounting Standards, the
rules of the Aquis Exchange and UK and Australian taxation legislation.
* We obtained an understanding of how the company complies with these
requirements by discussions with management and those charged with
governance.
* We assessed the risk of material misstatement of the financial statements,
including the risk of material misstatement due to fraud and how it might
occur, by holding discussions with management and those charged with
governance.
* We inquired of management and those charged with governance as to any known
instances of non-compliance or suspected non-compliance with laws and
regulations.
* Based on this understanding, we designed specific appropriate audit
procedures to identify instances of non-compliance with laws and
regulations. This included making enquiries of management and those charged
with governance and obtaining additional corroborative evidence as
required.
There are inherent limitations in the audit procedures described above. We are
less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion.
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.
Matthew Banton (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
21st December
6th Floor
9 Appold Street
London
EC2A 2AP
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2022
NOTE 2022 2021
£ £
Revenue 4 149,677 25,162
Expenses:
Accounting and audit fees (68,766) (65,483)
Administration and office costs (6,218) (3,600)
Corporate costs (150,823) (117,087)
Amortisation and depreciation (1,080) (1,578)
Employee benefits, management fees and on 7 (226,752) (139,962)
costs
Exploration and tenement costs (18,826) (1,451)
Insurance (15,391) (13,013)
Legal expenses - 12,511
Other expenses (2,599) 2,681
Net foreign exchange gain/(loss) 107,624 (49,417)
Net loss on sale of investment (81,246) -
Fair value loss on financial assets at fair (25,000) (80,327)
value through profit and loss
Fair value gain on financial assets at fair 28,429 200,000
value through profit and loss
Loss before income tax (310,971) (231,564)
Income tax benefit 8 157,659 -
Loss for the year from continuing operations (153,312) (231,564)
Discontinued operations
Loss for the year from discontinued - -
operations
Loss for the year attributable to the owners (153,312) (231,564)
of the Company
Other comprehensive income:
Items that may be subsequently reclassified
to profit and loss:
Exchange differences on translation of 60,086 (37,150)
foreign subsidiaries
Total comprehensive loss for the year (93,226) (268,714)
Loss per share attributable to owners of the
company
Basic and diluted (pence per share) 9 (0.02) (0.03)
The accompanying notes form part of these financial statements.
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2022
NOTE 30-Jun-22 30-Jun-21 30-Jun-22 30-Jun-21
GROUP GROUP COMPANY COMPANY
£ £ £ £
ASSETS
NON-CURRENT ASSETS
Property, plant and 13 2,808 2,282
equipment - -
Exploration and evaluation 14 3,379,113 3,016,512
expenditure - -
Investments in controlled 16 3,605,254 3,605,259
entities - -
Financial assets at fair 15 75,003 346,040 75,003 346,040
value through profit and
loss
TOTAL NON-CURRENT ASSETS 3,456,924 3,364,834 3,680,257 3,951,299
CURRENT ASSETS
Cash and cash equivalents 10 403,328 541,835 150,149 430,611
Trade and other receivables 11 21,089 47,411 2,419,139 1,888,688
Other assets 17 380,929 363,375 11,610 14,685
TOTAL CURRENT ASSETS 805,346 952,621 2,580,898 2,333,984
TOTAL ASSETS 4,262,270 4,317,455 6,261,155 6,285,283
EQUITY
Share capital 20 6,126,579 6,124,902 6,126,579 6,124,902
Share premium account 61,323,350 61,157,135 61,323,350 61,157,135
RTO Reserve 22 (57,976,182) (57,976,182)
- -
Warrant reserves 22 588,554 588,554 588,554 588,554
Foreign exchange translation 22 (52,329) (112,415)
reserves - -
Accumulated losses (6,219,479) (6,066,167) (62,059,286) (61,829,974)
TOTAL EQUITY 3,790,493 3,715,827 5,979,197 6,040,617
LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables 18 16,304 15,607 - -
Borrowings 19 170,862 322,124 156,685 156,685
TOTAL NON-CURRENT LIABILITES 187,166 337,731 156,685 156,685
CURRENT LIABILITIES
Trade and other payables 18 284,611 263,897 125,273 87,981
TOTAL CURRENT LIABILITES 284,611 263,897 125,273 87,981
TOTAL LIABILITIES 471,777 601,628 281,958 244,666
TOTAL EQUITY AND LIBAILITIES 4,262,270 4,317,455 6,261,155 6,285,283
As permitted by s408 Companies Act 2006, the Company has not presented its own
profit and loss account and related notes. The Company's loss for the year was
£229,312 (2021: Loss of £214,747).
These financial statements were approved by the Board of Directors on 21
December 2022 and signed on their behalf by:
Brett Boynton
Chief Executive
Officer
Company number: 05173250
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2022
GROUP ISSUED SHARE WARRANT RTO FOREIGN ACCUMULATED TOTAL
FOR THE YEARED 30 CAPITAL PREMIUM RESERVE RESERVE CURRENCY LOSSES
JUNE 2021 RESERVE
£ £ £ £ £ £ £
Balance at 1 July 2020 6,100,615 60,146,216 95,098 (57,976,182) (75,265) (5,480,609) 2,809,873
Total comprehensive - - - - - (231,564) (231,564)
loss for the period
Transactions with
owners, recorded
directly in equity:
Issue of shares 24,287 1,036,219 - - - - 1,060,506
Share issue costs - (25,300) - - - - (25,300)
Foreign Currency - - - - (37,150) - (37,150)
Translation Reserve
Fair value of warrants - - 493,456 - - (353,994) 139,462
issued
Balance at 30 June 6,124,902 61,157,135 588,554 (57,976,182) (112,415) (6,066,167) 3,715,827
2021
The accompanying notes form part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 JUNE 2022
COMPANY SHARE SHARE WARRANT RESERVES ACCUMULATED TOTAL
FOR THE YEARED 30 JUNE 2021 CAPITAL PREMIUM LOSSES EQUITY
£ £ £ £ £
Balance at 1 July 2020 6,100,615 60,146,216 95,098 (61,261,233) 5,080,696
Total comprehensive loss for the (214,747) (214,747)
period - - -
Issue of shares 24,287 1,036,219 - - 1,060,506
Share issue costs - (25,300) - - (25,300)
Fair value of warrants issued - - 493,456 (353,994) 139,462
Balance at 30 June 2021 6,124,902 61,157,135 588,554 (61,829,974) 6,040,617
The accompanying notes form part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2022
30-Jun-22 30-Jun-21
NOTE GROUP GROUP
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments in the course of (269,939) (210,063)
operations
Net cash used in operating activities 23 (269,939) (210,063)
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for exploration and evaluation (229,645) (401,113)
expenditure
Payments for property, plant and (1,487) -
equipment
Payment for security deposit (273) -
Proceeds from sale of shares in VOX 61,957 -
Proceeds from sale of shares in Kazera 218,700 -
Payment for shares in Kazera (100,000) -
Research and Development Tax Incentive Claim 157,659 -
Proceeds from sale of financial asset at - 123,201
fair value through profit and loss
Net cash used in investing activities 106,911 (277,912)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 10,000 380,000
Proceeds from exercise of warrants - 599,669
Net cash provided by financing 10,000 979,669
activities
Net (decrease)/increase in cash held (153,028) 491,694
and cash equivalents
Cash and cash equivalents at the 541,835 52,734
beginning of the period
Effects of exchange rate changes on 14,521 (2,593)
cash and cash equivalents
Cash and cash equivalents at the end of 403,328 541,835
the period
The accompanying notes form part of these financial statements.
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEARED 30 JUNE 2022
30-Jun-22 30-Jun-21
NOTE COMPANY COMPANY
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Cash payments in the course of (171,119) (147,993)
operations
Net cash used in operating activities 23 (171,119) (147,993)
CASH FLOWS USED IN INVESTING ACTIVITIES
Proceeds from sale of investments - 123,201
Proceeds from sale of shares in Kazera 218,700 -
Proceeds from sale of shares in VOX 61,957 -
Payment for shares in Kazera (100,000) -
Loan to Signature Gold Pty Ltd (300,000) (550,681)
Net cash used in investing activities (119,343) (427,480)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 10,000 380,000
Proceeds from exercise of warrants - 599,669
Net cash provided by financing 10,000 979,669
activities
Net (decrease)/increase in cash held (280,462) 404,196
and cash equivalents
Cash and cash equivalents at the 430,611 26,415
beginning of the period
Cash and cash equivalents at the end of 150,149 430,611
the period
The accompanying notes form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2022
1. GENERAL INFORMATION
Tectonic Gold Plc is a company incorporated in England and Wales under the
Companies Act 2006. The nature of the Company's operations and its principal
activities are set out in the Strategic Report and the Directors' Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The consolidated and parent company financial statements have been prepared in
accordance with UK adopted International Accounting Standards (IFRS) applied
in accordance with the provisions of the Companies Act 2006.
The consolidated and parent company financial statements have been prepared
under the historical cost convention, as modified by the revaluation of
financial assets and financial liabilities at fair value through profit or
loss.
IFRS is subject to amendment and interpretation by the International Accounting
Standards Board ("IASB") and the International Financial Standards
Interpretations Committee ("IFRS IC"). The accounts have been prepared on the
basis of the recognition and measurement principles of IFRS that were
applicable at 30 June 2022.
This financial report includes the consolidated financial statement and notes
of Tectonic Gold Plc and its controlled entities.
The principal accounting policies adopted and applied in the preparation of the
Group's financial statements are set out below. These have been consistently
applied to all the years presented unless otherwise stated.
GOING CONCERN
The adoption of the going concern basis of preparation of the financial
statements by the Directors is following a review of the current position of
the Company and Group and the forecasts for the next 12 months from the date of
signing of these financial statements. Cash on hand and tradable securities
together with the funds expected from the Australian Government R&D Tax
Incentive are more than sufficient to enable the Company and Group to meet its
obligations as they fall due and continue to operate for at least twelve months
from the date of signing these financial statements. Thus, the directors
continue to adopt the going concern basis in preparing the financial
statements. It is beyond the scope of the Directors to predict any future
impact of COVID-19 on any of these funding sources however and if for any
reason it is not possible to sell any tradeable securities or State Government
funding is not secured, this may impact the ability of the Group and Company to
meet their obligations and continue to operate as envisaged, although the
Directors consider this scenario to be remote.
Any consideration of the foreseeable future involves making a judgement, at a
particular point in time, about future events which are inherently uncertain.
The ability of the Group and Company to carry out their planned business
objectives is dependent on the continuing ability to raise adequate financing
from equity investors and/or the achievement of profitable operations.
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
New standards, amendments and interpretations adopted by the Group and Company
During the reporting period, the Group adopted all of the new and revised
Standards and Interpretations issued that are relevant to its operations and
effective for reporting periods beginning on 1 July 2021. The Group has not
elected to early adopt any new standards or amendments.
BASIS OF CONSOLIDATION
Where the Group has control over an investee, it is classified as a subsidiary.
The Group controls an investee if all three of the following elements are
present: power over the investee, exposure to variable returns from the
investee, and the ability of the investor to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries as at the end of the reporting period. The
financial statements of the subsidiaries used in the preparation of the
consolidated financial statements are prepared for the same reporting date as
for the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances. All intra-group balances,
balances and unrealised gains and losses resulting from intra-group
transactions and dividends are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on
which the Group obtains control, and continue to be consolidated until the date
that such control ceases.
On 25 June 2018, Tectonic Gold (the legal parent) acquired Signature Gold Pty
Ltd (Signature Gold). Although the transaction was not a business combination,
the acquisition has been accounted for as an asset acquisition with reference
to the guidance for reverse acquisition in IFRS 3 Business Combinations and
IFRS 2 Share-based Payment.
On 17 April 2019, the Company established Deep Blue Minerals Pty Ltd and 90% of
the Company's interest in Deep Blue Minerals Pty Ltd was sold on 17 June 2020.
For reporting purposes, Deep Blue was held as an investment for the period.
On 14 February 2020, the Company established Whale Head Minerals Pty Ltd. This
Company has remained dormant since the date of incorporation to the end of the
reporting period. On 30 September 2021, the Company's joint venture partner
Kazera Global Investments Plc ("Kazera") (AIM:KZG) acquired a 60% interest in
Whale Head Minerals Pty Ltd.
The financial information for the reporting period includes that of Tectonic
Gold Plc and its controlled entities for the whole reporting period.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Investments are initially measured at fair value plus directly attributable
incidental acquisition costs. Subsequently, they are measured at fair value in
accordance with IFRS 9. This is either the bid price or the last traded price,
depending on the convention of the exchange on which the investment is quoted.
Investments are recognised as financial assets at fair value through the profit
or loss. Gains and losses on measurement are recognised in other comprehensive
income except for impairment losses and foreign exchange gains and losses on
monetary items denominated in a foreign currency, until the assets are
derecognised, at which time the cumulative gains and losses previously
recognised in other comprehensive income are recognised in the income
statement.
The Company assesses at each year-end date whether there is any objective
evidence that a financial asset or group of financial assets classified as
available-for-sale has been impaired. An impairment loss is recognised if there
is objective evidence that an event or events since initial recognition of the
asset have adversely affected the amount or timing of future cash flows from
the asset. A significant or prolonged decline in the fair value of a security
below its cost shall be considered in determining whether the asset is
impaired.
INVESTMENTS
In the Company's separate financial statements, investments in subsidiaries are
accounted for at cost less impairment losses.
JOINT VENTURE
A joint venture is an arrangement that the Group controls jointly with one or
more other investors, and over which the Group has rights to a share of the
arrangement's net assets rather than direct rights to underlying assets and
obligations for underlying liabilities. A joint arrangement in which the Group
has direct rights to underlying assets and obligations for underlying
liabilities is classified as a joint operation.
FOREIGN CURRENCIES
The Group and Company's financial statements are presented in the currency of
the primary economic environment in which it operates (its functional
currency). For the purpose of these financial statements, the results and
financial position are expressed in Pounds Sterling, which is the presentation
currency of the Group and Company.
Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period, except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is also
recognised directly in equity.
The Group and Company's financial statements are presented in the currency of
the primary economic environment in which it operates (its functional
currency). For the purpose of these financial statements, the results and
financial position are expressed in Pounds Sterling, which is the presentation
currency of the Group and Company.
Each entity in the Group determines its own functional currency and items
included in the financial statements of each entity are measured using that
functional currency.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in the income statement.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period, except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such
non-monetary items, any exchange component of that gain or loss is also
recognised directly in equity.
When a decline in the fair value of a financial asset has been previously
recognised in other comprehensive income and there is objective evidence that
the asset is impaired, the cumulative loss is removed from other comprehensive
income and recognised in the income statement. The loss is measured as the
difference between the cost of the financial asset and its current fair value
less any previous impairment.
For the purpose of presenting the Group and Company financial statements, the
assets and liabilities of any of the Group and Company's operations that are
overseas are translated at exchange rates prevailing on the year-end date.
Income and expense items are translated at the average exchange rates for the
period.
Any translation differences on consolidation are recognised in Other
Comprehensive Income.
TAXATION
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the year end date.
The research and development tax incentive claim is recognised as income tax
revenue in the period in which it is received.
Deferred tax is the tax expected to be payable or recoverable on temporary
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 liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and where 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.
EXPLORATION AND EVALUATION EXPITURE
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are
only carried forward to the extent that they are expected to be recovered
through the successful development or sale of the area or where activities in
the area have not yet reached a stage which permits reasonable assessment of
the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full
against profit or loss in the year in which the decision to abandon the area is
made. When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
Exploration and evaluation assets are assessed for impairment annually or when
facts and circumstances suggest that the carrying amount of an asset may exceed
its recoverable amount in accordance with IFRS 6.
PROPERTY, PLANT AND EQUIPMENT
Items of property, plant and equipment are recorded at cost and depreciated as
outlined below:
Depreciation of Property, Plant and Equipment
Depreciation is calculated on a straight-line basis to write off the net cost
of each item of property, plant and equipment over its expected useful life for
the entity. Estimates of remaining useful lives are made on a regular basis for
all assets with annual reassessments for major items. The expected useful lives
are as follows: Plant and equipment - 5 years.
IMPAIRMENT OF PROPERTY, PLANT & EQUIPMENT
At each financial year end date, the Company reviews the carrying amounts of
its tangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate cash flows
that are independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
If the recoverable amount of an asset or cash-generating unit is estimated to
be less than its carrying amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable amount and the impairment
loss is recognised as an expense immediately.
When an impairment loss subsequently reverses, the carrying amount of the asset
or cash-generating unit is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset or cash-generating unit in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
NON-CURRENT ASSETS (OR DISPOSAL GROUPS) HELD-FOR-SALE AND DISCONTINUED
OPERATIONS
Non-current assets (or disposal groups) are classified as assets held for sale
when their carrying amount is to be recovered principally through a sale
transaction and a sale is considered highly probable. They are stated at the
lower of carrying amount and fair value less costs to sell. A discontinued
operation is a component of the Group that is classified as held for sale and
that represents a separate line of business or geographical area of operations.
The results of discontinued operations are presented separately in the
Consolidated Income Statement.
TRADE RECEIVABLES, LOANS AND OTHER RECEIVABLES
Trade receivables, loans and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified under 'loans
and receivables. Loans and receivables are measured at amortised cost using the
effective interest method, less any impairment. Interest income is recognised
by applying the effective interest rate, except for short term receivables when
the recognition of interest would be immaterial.
Other receivables, that do not carry any interest, are measured at their
nominal value as reduced by any appropriate allowances for irrecoverable
amounts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and other short-term bank
deposits.
FINANCIAL LIABILITIES
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. Financial liabilities
are classified as either financial liabilities 'at FVTPL' or 'other financial
liabilities'.
All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable
transaction costs. Subsequent measurement is at amortised cost using the
effective interest method. The Group's financial liabilities include trade and
other payables.
A financial liability is held for trading if it meets one of the following
conditions:
* It is incurred principally for the purpose of repurchasing it in the near
term;
* On initial recognition it is part of a portfolio of identified financial
instruments that are managed together and for which there is evidence of a
recent actual pattern of short-term profit-taking; or
* It is a derivative (except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument).
There were no financial liabilities 'at FVTPL' during the current, or
preceding, period.
OTHER FINANCIAL LIABILTIES AND SHORT-TERM BORROWINGS
Interest-bearing loans and overdrafts are recorded at the proceeds received,
net of direct issue costs. Finance charges are accounted for on an accruals
basis in profit or loss using the effective interest rate method and are added
to the carrying amount of the instrument to the extent that they are not
settled in the period in which they arise. Other short-term borrowings being
intercompany loans and unsecured convertible loan notes issued in the year are
recognised at amortised cost net of any financing or arrangement fees.
TRADE PAYABLES
Trade payables are initially measured at fair value and subsequently measured
at amortised cost using the effective interest method, less provision for
impairment.
SHARE-BASED PAYMENTS
The Company has applied the requirements of IFRS 2 Share-based Payment.
The Company operates an equity-settled share-based payment scheme under which
share options are issued to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non-market-based
vesting conditions) at the date of grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed on a
straight-line basis over the vesting period, based on the Company's estimate of
shares that will eventually vest and adjusted for the effect of
non-market-based vesting conditions.
Fair value is measured by use of the Black Scholes model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions, and behavioural
considerations.
EQUITY INSTRUMENTS INCLUDING SHARE CAPITAL
Equity instruments issued by the Company are recorded at the proceeds received,
net of incremental costs attributable to the issue of new shares.
An equity instrument is any contract that evidences a residual interest in the
assets of a company after deducting all of its liabilities. Equity instruments
issued by the Company are recorded at the proceeds received net of direct issue
costs.
Share capital represents the amount subscribed for shares at nominal value.
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.
Any bonus issues are also deducted from share premium.
The reverse takeover reserve represents the adjustment to reflect the reverse
takeover of Signature Gold Pty Ltd.
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries on consolidation.
The warrant reserve represents the fair value of warrants granted to employees
and suppliers for services provided to the Group. The fair value of warrants is
expensed over the vesting period or during the period in which the services are
received.
Accumulated losses include all current and prior period results as disclosed in
the Statement of Profit and Loss and Other Comprehensive Income.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATIONS
In the application of the Company's accounting policies, the Directors are
required to make judgements, estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period. Judgements and
estimates that may affect future periods are as follows:
SHARE BASED PAYMENTS
The calculation of the fair value of equity-settled share-based awards and the
resulting charge to the Statement of Profit and Loss and Other Comprehensive
Income requires assumptions to be made regarding future events and market
conditions. These assumptions include the future volatility of the Company's
share price. These assumptions are then applied to a recognised valuation model
in order to calculate the fair value of the awards. The charge to the Statement
of Profit and Loss and Other Comprehensive Income for the reporting period is £
Nil (2021:£139,462 ).
TREATMENT OF EXPLORATION AND EVALUATION COSTS
Exploration expenditure incurred is accumulated in respect of each identifiable
area of interest, net of any related grant income received. These costs are
only carried forward to the extent that they are expected to be recovered
through the successful development or sale of the area or where activities in
the area have not yet reached a stage which permits reasonable assessment of
the existence of economically recoverable reserves. The carrying value carried
forward at 30 June 2022 is £3,379,113 (2021: £3,016,512).
Accumulated costs in relation to an abandoned area are written off in full
against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves. A regular review is
undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to the area of interest.
The value of the Group's exploration and evaluation expenditure will be
dependent upon the success of the Group in discovering economic and recoverable
mineral resources. It is also dependent on the Group successfully renewing its
licences.
The future revenue flows relating to these assets is uncertain and will also be
affected by competition, relative exchange rates and potential new legislation
and related environmental requirements.
3. SEGMENTAL INFORMATION
The Chief Operating Decision Maker of the Group is the Board of Directors. The
Group operates in
one industry segment being mineral exploration. Information is therefore shown
for geographical segments.
2022 AUSTRALIA UNALLOCATED TOTAL
£ £ £
Revenue
Gain on sale of investment - 149,677 149,677
Total segment revenue - 149,677 149,677
Segment net loss before tax and (80,577) (231,891) (312,468)
other items
Depreciation and amortisation (1,080) - (1,080)
Net loss before income tax (81,657) (231,891) (313,548)
Income tax benefit 157,659 - 157,659
Net profit/(loss) after income tax 76,002 (229,314) (153,312)
Segment non-current assets at 30 3,381,921 75,003 3,456,924
June 2022
Segment total assets at 30 June 4,009,347 252,923 4,262,270
2022
Segment total liabilities at 30 189,821 281,956 471,777
June 2022
All additions to intangible assets occurred in the Australian reporting
segment.
2021 AUSTRALIA UNALLOCATED TOTAL
£ £ £
Revenue
Gain on sale of investment - 25,162 25,162
Total segment revenue - 25,162 25,162
Segment net loss before tax (15,240) (214,746) (229,986)
and other items
Depreciation and amortisation (1,578) - (1,578)
Net loss before income tax (16,818) (214,746) (231,564)
Income tax benefit - - -
Net loss after income tax (16,818) (214,746) (231,564)
Segment non-current assets at 3,018,794 346,040 3,364,834
30 June 2021
Segment total assets at 30 3,483,104 834,351 4,317,455
June 2021
Segment total liabilities at 356,970 244,658 601,628
30 June 2021
All additions to intangible assets occurred in the Australian reporting
segment.
4. REVENUE
CONSOLIDATED
2022 2021
£ £
Gain on sale of investment in VOX - 25,162
Gain on sale of 60% interest in Whale 149,677 -
Head Minerals
149,677 25,162
5. OPERATING (LOSS)/PROFIT
CONSOLIDATED
2022 2021
£ £
Operating loss is stated after
(charging)/crediting:
Staff costs as per Note 7 (226,752) (500)
Fair value of warrants issued and - (139,462)
vested
Depreciation of property plant and (1,080) (1,578)
equipment
Impairment of property, plant and - (1,130)
equipment
Share based payment (30,000) -
Net foreign exchange gain/(loss) 107,624 (49,417)
6. AUDITORS' REMUNERATION
CONSOLIDATED
2022 2021
£ £
The analysis of auditors' remuneration is
as follows:
Fees paid to Moore Kingston Smith LLP for
* Audit-related assurance services 28,000 25,000
Fees paid to PKF Littlejohn for:
* Audit-related assurance services - 6,500
* Taxation compliance services - 11,050
Fees paid to auditor of Signature Gold
Pty Ltd, MNSA for:
* Audit-related assurance services 13,043 12,756
* Taxation compliance services 2,268 -
Fees paid to former auditor of Signature
Gold Pty Ltd, HKB Mann Judd for:
* Audit-related assurance services - -
* Taxation compliance services - 1,386
43,311 56,692
7. STAFF COSTS
CONSOLIDATED
2022 2021
£ £
The average monthly number of
employees (including directors) for
the continuing operations was:
Total staff 4 4
Director's fees accrued for the year 80,000 -
ended 30 June 2022(i)
Directors' fees settled in equity for 143,333 -
the year ended 30 June 2020 and 2021
(ii)
NIC employer contributions 3,419
Fair value of warrants issued and - 139,462
vested
Superannuation - 500
226,752 139,962
i. Pursuant to letters of engagement, each of the directors of the company are
eligible to receive director fees of £20,000 each per annum, however such
fees were not paid during the reporting period. Accordingly, the Company
has accrued these fees amounting to £80,000.
ii. On 10 February 2022, the Company issued 10,521,707 fully paid shares to
Directors in total in lieu of cash payments for fees amounting to £143,333
for the period 1 July 2019 to 30 June 2021. Details are set out below and
in Note 25.
Details of Directors' remuneration
Details of the nature and amount of each element of the emoluments of each of
the key management personnel of the Group for the reporting period ended 30
June 2022 are set out in the table below.
SHORT-TERM POST-EMPLOYMENT
BENEFITS BENEFITS
NAME FEES ACCRUED EQUITY PENSION TOTAL
£ £ £ £
DIRECTORS
B Fulton 20,000 40,000 - 60,000
B Boynton 20,000 40,000 - 60,000
S Quinn 20,000 40,000 - 60,000
D Edmonds 20,000 23,333* - 43,333
Total 80,000 143,333 - 223,333
*D Edmonds was appointed a Director of the Company on 20 May 2020. Fees settled
in equity amounting to £23,333 are for the period 20 May 2020 to 30 June 2021.
8. TAXATION
2022 2021
£ £
Tectonic Gold PLC
Analysis of tax expense
Current tax expense/(credit) - -
Total tax expense (income) - -
Loss before tax (229,312) (214,746)
Tax charge - -
Total tax expense/(income) - -
Signature Gold Pty Ltd
Analysis of tax expense
Current tax expense/(credit) - -
Research and Development tax credit (157,659) -
Total tax income (157,659) -
Loss before tax (81,659) (16,818)
Tax at the Australian corporation tax (21,223) (4,280)
rate of 26% (2021: 27.5%)
Effects of:
* S.40-800 'Black hole' deductions (9,667) (18,722)
* Other non-allowable items 210 371
* Deferred tax asset on temporary (964) 927
differences
* Tax effect of tax losses not 31,644 21,704
recognized as benefits including
tax effect of differences in the
standard rate of tax in different
jurisdictions
- Research and Development Tax 157,659 -
Incentive credit
Total tax income 157,659 -
Consolidated
Current tax expense/(credit) - -
Research and Development tax credit (157,659) -
Total tax income (157,659) -
Loss before tax (310,971) (231,564)
Tax charge at the standard tax rate of (21,223) (4,280)
19% (2021:19%)
S.40-800 'Black hole' deductions (9,667) (18,722)
Other non-allowable items 210 371
Deferred tax asset on temporary (964) 927
differences
Tax effect of tax losses not 31,644 21,704
recognised as benefits including tax
effect of differences in the standard
rate of tax in different jurisdictions
Research and Development Tax Incentive 157,659 -
credit
Total tax expense/(income) 157,659 -
No deferred tax asset has been recognised in respect of the losses. At
the end of the reporting period the Group had unused tax losses of £
41,519,004 (2021: £38,929,647). Where it is anticipated that future
taxable profits will be available against which these losses will be
utilised, a deferred tax asset is recognised. The total taxation charge
in future periods will be affected by any changes to the corporation tax
rates in force in the countries in which the Group operates.
9. LOSS PER SHARE
The basic loss per share is based on the loss for the year divided by the
weighted average number of shares in issue during the reporting period. The
weighted average number of ordinary shares for the reporting period assumes
that all shares have been included in the computation based on the weighted
average number of days since issue.
2022 2021
£ £
Loss for the year attributable to (153,312) (231,564)
owners of the Company
Weighted average number of ordinary shares in 947,318,146 697,562,746
issue for basic earnings
Weighted average number of ordinary shares in 947,318,146 710,562,746
issue for fully diluted earnings
Loss per share (pence per share)
Basic (0.02) (0.03)
Diluted (0.02) (0.03)
As detailed in note 21 there are 141,524,999 share options/warrants which are
anti-dilutive in the year ended 30 June 2022 (2021:148,161,362).
10. CASH AND CASH EQUIVALENTS
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Cash and cash equivalents 403,328 541,835 150,149 430,611
The Directors consider the carrying amount of cash and cash equivalents
approximates to their fair value.
11. TRADE AND OTHER RECEIVABLES
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Current
Other receivables 15,080 291 12,512 -
Loan to subsidiary undertaking - - 2,402,977 1,845,673
GST and VAT receivable 6,009 47,120 3,650 43,015
21,089 47,411 2,419,139 1,888,688
No receivables were past due or provided for at the year-end or at the previous
year end. The Directors consider the carrying amount of trade and other
receivables approximates to their fair value.
The loan to subsidiary undertaking is unsecured, interest free and repayable on
demand.
12. NON-CURRENT ASSETS HELD FOR SALE
On 30 September 2021, the Company's joint venture partner Kazera Global
Investments Plc ("Kazera") (AIM:KZG) exercised its option under the 4 June 2020
agreement, to acquire a 60% interest in its controlled entity at the time,
Whale Head Minerals Pty Ltd ("Whale Head"). The Kazera equity issued which in
total was worth USD $250,000 as consideration was assigned to Consolidated
Minerals Pte in full settlement of the loan of AUD279,732 owing by Signature
Gold Pty Ltd.
For accounting and reporting purposes, Whale Head has remained dormant since
the date of incorporation being 14 February 2020 to the end of the reporting
period. Accordingly, there was no impact on the results for the Group nor the
Group's cash flows due to the discontinued operation of Whale Head. However,
the sale of Whale Head resulted in a profit to the Group of £149,677.
Subsequent to the reporting date, Whale Head Minerals Pty Ltd was granted a
Mining Permit as reported on 31 August 2022. This initiated the sale of a
further 30% of Whale Head to a consortium of Black Economic Empowerment
partners, in order to comply with South African mining regulations.
13. PROPERTY, PLANT AND EQUIPMENT
CONSOLIDATED
2022 2021
£ £
Property, Plant and Equipment
* At cost 11,917 9,928
* Less accumulated (9,109) (7,646)
depreciation
2,808 2,282
PLANT AND PLANT AND
EQUIPMENT EQUIPMENT
2022 2021
£ £
Carrying amount at the 2,282 5,075
beginning of the period
Additions 1,546 -
Impairment of plant and - (1,130)
equipment
Depreciation (1,080) (1,578)
Foreign exchange 60 (85)
Carrying amount at the end of 2,808 2,282
the period
14. EXPLORATION AND EVALUATION EXPITURE
CONSOLIDATED
2021
2022
£ £
Non-producing properties
Balance at the beginning of 3,016,512 2,695,681
the period
Exploration and evaluation 228,140 396,595
expenditure
Foreign exchange 134,461 (75,764)
Balance at the end of the 3,379,113 3,016,512
period
The ultimate recoupment of balances carried forward in relation to areas of
interest still in the exploration or valuation phase is dependent on successful
development, and commercial exploitation, or alternatively sale of the
respective areas.
15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Investment in VOX Royalty Corp Plc - 46,040 - 46,040
Investment in Kazera Global Plc 75,000 300,000 75,000 300,000
Investment in Deep Blue Minerals 1 - 1 -
Pty Ltd
Investment in Whale Head Minerals 2 - 2 -
Pty Ltd
75,003 346,040 75,003 346,040
Investment in VOX Royalty Corp Plc
On 2 September 2019, the Company announced the sale of its 2.5% royalty
interest in Bass Metals' Graphmada graphite mine to Silverstream SEZC for a
consideration of up to A$550,000 in cash and convertible notes. The Company
received a CAD $250,000 one year 5% unsecured convertible note maturing on 27
August 2020 with the balance of the consideration due in cash subject to
performance milestones.
The Convertible Note of CAD $250,000 was settled on 25 May 2020 with the issue
of 98,039 shares in VOX Royalty Corp (VOX) (formerly Silverstream SEZC) at a
price of CAD $3.00 per share less 15% discount which amounts to CAD $2.55 per
share.
On 1 March 2021, the Company sold 65,539 shares held in VOX at CAD $3.23 per
share raising CAD $211,777 (£123,622). As at 30 June 2021, the Company held
32,500 shares in VOX. The closing price as at 30 June 2021 was CAD $2.43 (2020:
CAD $3.85).
On 16 October 2021, the Company sold 27,400 shares held in VOX at CAD3.896 and
on 21 October 2021 the Company sold the balance of 5,100 shares held in VOX at
CAD3.8641, raising £74,469 of which £69,957 was received on 20 October 2021 and
£12,512 that was held in a trust account by the Company's broker was received
on 25 July 2022.
Investment in Kazera Global Plc
On 31 August 2020, the Company acquired 20 million shares in Kazera Global Plc
priced at 0.5p per share, under the terms of the transaction for the sale of
Deep Blue Minerals Pty Ltd announced on 4 June 2020. Funds for the share
purchase were provided by way of a Director's Loan from B Boynton. The loan is
unsecured, interest free and repayable on demand. The closing price as at 30
June 2021 was 1.5p per share.
On 20 October 2021, the Company sold 20 million shares held in in Kazera Global
Plc at £0.011 per share raising £218,700 after costs.
On 19 October 2021, the Company acquired 10 million shares in Kazera Global Plc
priced at £0.01 per share, The closing price as at 30 June 2022 was £0.00775
per share.
The investments in Deep Blue Minerals Pty Ltd and Whale Head Minerals Pty Ltd
are being carried at cost until it is demonstrated by the joint venture partner
that they can be brought into production as planned. At that point they will be
reassessed and adjusted to fair value.
Measurement of fair value of financial instruments
The management team of Tectonic Gold perform valuations of financial items for
financial reporting purposes, with everything being a Level 1 listed
investment. Valuation techniques are selected based on the characteristics of
each instrument, with the overall objective of maximising the use of
market-based information.
16. CONTROLLED ENTITIES
Details of controlled entities are as follows:
PARENT ENTITY COUNTRY OF
INCORPORATION
Tectonic Gold Plc England and
167-169 Great Portland Street, Wales
Fifth Floor, London
United Kingdom, W1W 5PF
CONTROLLED ENTITIES PRINCIPAL COUNTRY OF PERCENTAGE OF EQUITY INVESTMENT INVESTMENT
ACTIVITIES INCORPORATION HELD BY THE COMPANY HELD BY HELD BY THE
THE COMPANY
COMPANY
2022 2021 2022 2021
% % £ £
Signature Gold Pty Mineral Australia 100 100
Ltd exploration 3,605,254 3,605,254
13/20 Bridge
Street, Sydney NSW,
Australia 2001
i. Signature Gold Pty Ltd was converted from a Public Limited Company to a
Private Limited Company on 3 June 2019.
ii. Whale Head Minerals Pty Ltd was incorporated on 14 February 2020 and 60% of
the Company's interest in Whale Head Minerals Pty Ltd was sold on 30
September 2021. Details as follows:
On 30 September 2021, Kazeral Global Plc exercised its option to acquire 60% of
Whale Head Pty Ltd. The Company retains a non-diluting 10% shareholding in
Whale Head and a further 30% economic interest via a share sale and loan scheme
under which it sold a 30% interest in Whale Head to a Black Economic
Empowerment (BEE) consortium.
i. Deep Blue Minerals Pty Ltd was incorporated on 17 April 2019 and 90% of the
Company's interest in Deep Blue Minerals Pty Ltd was sold on 17 June 2020.
The Company retains an interest of 10% in the Company as at 30 June 2022.
17. OTHER ASSETS
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Prepayments (i) 354,656 339,522 - -
Other prepayments 22,587 20,596 11,610 14,685
Security deposits 3,686 3,257 - -
380,929 363,375 11,610 14,685
i. In 2018 the Company paid Titeline Drilling Pty Ltd ACN 096 640 201
(Titeline) for future drilling services in accordance with the heads of
agreement dated 28 March 2018 between Titeline, Signature Gold and Tectonic
Gold. Titeline has been engaged to complete 10,000 meters of diamond
drilling to produce core samples for analysis, assay and metallogenic
studies from the Company's Biloela Project site. A review to be completed
after 2,500 metres of drilling has been completed. However, as at the date
of this report the completion program required to be mutually agreed prior
to the credit being applicable to the remaining 7,500 metres has not been
produced and until such time as this program has been produced, this credit
may not be utilised. As at 30 June 2022, the balance of the prepayment to
Titeline is £354,656 (A$625,386) (2021: £339,522) (A$625,386).
18. TRADE AND OTHER PAYABLES
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Current
Trade payables 145,440 199,176 5,434 45,598
Other payables 4,016 3,844 - -
Accrued expenses 135,156 60,877 119,839 42,383
284,612 263,897 125,273 87,981
Non-Current
Other payables 16,304 15,608 - -
16,304 15,608 - -
The Directors consider the carrying amount of trade payables approximates to
their fair value.
19. BORROWINGS
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Non-Current
Loan payable to director related 170,862 170,257 156,685 156,685
entities(i)
Loan payable to Consolidated - 151,867 - -
Minerals Pte Ltd(ii)
170,862 322,124 156,685 156,685
i. The loans from 33rd Degree Pty Ltd, a company of which Brett Boynton is a
director and majority shareholder, outstanding at the end of the reporting
period and comparative periods do not accrue interest and are not due to be
repaid on or before 12 months after the end of each reporting period.
i. Signature Gold and shareholder Consolidated Minerals Pte Ltd, a resources
and infrastructure investment fund based in Singapore, are evaluating
international IRGS assets as cooperative opportunities.
On 30 September 2021, the loan of $279,732 from Consolidated Minerals to
Signature Gold was settled by Tectonic Gold Plc through the sale of 60% of
Tectonic's interest in Whale Head Minerals Pty Ltd to Kazera Global Plc. As
part of this transaction, Consolidated Minerals was issued with US$250,000
worth of Kazera Global Plc equity in full settlement of the loan of $279,732.
The Directors consider the carrying amount of short-term
borrowings approximates to their fair value.
20. ISSUED CAPITAL
2022 2021
£ £
957,188,591 fully paid ordinary shares (2021: 940,421,826 6,126,579 6,124,902
fully paid ordinary shares)
Fully Paid Ordinary Shares
Reconciliation of share issued during the reporting period is set out below:
2022 NUMBER ISSUE 2022 2021 NUMBER ISSUE 2021
PRICE PRICE £
£
Balance at the beginning of the 940,421,826 6,124,902 697,562,746 6,100,615
period
Shares issued during the reporting
period:
22 Sep 2021: Share based payment 2,608,695 £ 0.0115 30,000
(i)
10 Feb 2022: Share based payment 10,521,707 £ 127,892
(ii) 0.012155
07 Apr 2022: Exercise of Warrants 3,636,363 £ 10,000
0.00275
17 Sep 2020: Placement 146,472,721 £0.00275 402,800
05 Jan 2021: Exercise of Warrants 1,818,181 £0.007 12,727
12 Mar 2021: Exercise of Warrants 1,818,181 £0.007 12,727
23 Mar 2021: Exercise of Warrants 4,000,000 £0.00275 11,000
29 Mar 2021: Exercise of Warrants 22,836,361 £0.007 159,854
14 Apr 2021: Exercise of Warrants 65,913,636 £0.007 461,397
Total shares issued during the 16,766,765 167,892 242,859,080 1,060,505
reporting period
Less: amount allocated to share (166,215) (1,036,218)
premium account
Balance at the end of the period 957,188,591 6,126,579 940,421,826 6,124,902
(par value)
i. On 22 September 2021, the Company has issued 2,608,695 ordinary shares at a
price of 1.15p per share to professional advisors for services rendered to
the Company.
ii. On 10 February 2022, the Company issued 10,521,707 to Directors in total in
lieu of cash payments for fees for the period 30 June 2019 to 30 June 2021.
For further detail, refer to note 25.
Each ordinary share carries the right to be one vote at shareholders' meetings
and is entitled to participate in any dividends or other distributions of the
Company.
21. SHARE BASED PAYMENTS
The following share-based payment arrangements were in existence during the
reporting periods ended 30 June 2022 and 30 June 2021:
WARANTS/OPTIONS 2022 2021
NUMBER NUMBER
Balance at the beginning of the 145,161,362 -
period
Granted
Warrants Expired - 230,159,083
Warrants Expired - (146,472,721)
Options Granted - 65,475,000
Options Exercised (3,636,363) (4,000,000)
Outstanding at the end of the 141,524,999 145,161,362
period
Exercisable at year end 141,524,999 145,161,362
WARRANTS/ NUMBER NUMBER NUMBER NUMBER GRANT EXPIRY VESTING EXERCISE
OPTIONS SERIES GRANTED VESTED EXERCISED AVAILABLE DATE DATE DATE PRICE
Series (i) 146,472,721 146,472,721 - - 9-Sep-20 * 9-Sep-20 7p
Series (ii) 65,475,000 65,475,000 7,636,363 57,838,637 8-Sep-20 8-Sep-24 8-Sep-20 2.75p
Series (iii) 83,686,362 83,686,362 - 83,686,362 9-Apr-21 9-Sep-24 9-Apr-21 1.4p
*Drill Warrants expired 30 days after the Company published the results of
its drilling programme.
The weighted average remaining contractual life of warrants and share
options outstanding at the end of the reporting period is 2.2 years.
INPUTS INTO THE SERIES (i) SERIES (ii) SERIES
MODEL WARRANTS OPTIONS (iii)
OPTIONS
Grant date share 3p 3p 1.35p
price
Exercise price 7p 2.75p 1.4p
Expected 100% 100% 87.34%
volatility*
Dividends Nil Nil Nil
Warrant/Option 6 months 4 years 3.42 years
life
Risk-free 1% 2% 2%
interest rate
*Expected volatility was based on the standard deviation of historic
closing prices from September 2020 to April 2021.
22.
RESERVES
COMPANY
CONSOLIDATED
2022 2021 2022 2021
£ £ £ £
Foreign Currency Translation Reserve
Opening balance (112,415) (75,265) - -
Foreign currency translation 60,086 (37,150) - -
Closing balance (52,329) (112,415) - -
Warrant Reserve
Opening balance 588,554 95,098 588,554 95,098
Additions - 493,456 - 493,456
Closing balance 588,554 588,554 588,554 588,554
Reverse Takeover Reserve
Opening balance (57,976,182) (57,976,182) - -
Additions - - - -
Closing balance (57,976,182) (57,976,182) - -
The Foreign Currency Translation Reserve is used to record exchange differences
arising from the translation of the financial statements of foreign
subsidiaries on consolidation.
The Option Reserve represents the fair value of options granted to employees
and suppliers for services provided to the Group. The fair value of options is
expensed over the vesting period or during the period in which the services are
received.
The Reverse Takeover Reserve represents the adjustment needed to reflect the
reverse takeover of Signature Gold which was completed on 25 June 2018.
23. CASH FLOW INFORMATION
For the purpose of presentation in the statement of cash flows, cash and cash
equivalents includes cash on hand, deposits held at call with financial
institutions, other short?term, highly liquid investments with original
maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in
value.
Cash and cash equivalents at the end of the financial year as shown in the
statement of cash flows is reconciled to the related items in the statement of
financial position as follows:
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Loss for the reporting period before (310,971) (231,564) (229,312) (214,747)
taxation
Add/(deduct): Non-cash items
Depreciation and amortisation 1,080 1,578 - -
Profit on sale of 60% equity in (149,677) - (149,677) -
Whale Head Minerals Pty Ltd
Gain on sale of VOX shares (28,429) (25,162) (28,429) (25,162)
Gain on sales of Kazera shares (118,700) (118,700)
Impairment of property, plant and 1,130 -
equipment
Share based payment 157,891 194,998 157,891 194,998
Foreign exchange (107,624) 49,418 (107,624) 49,417
Fair value gain on financial assets 200,000 (200,000) 200,000 (200,000)
sold at fair value though profit and
loss
Fair value loss on financial assets 25,000 80,327 25,000 80,327
at fair value through profit and
loss
Change in assets and liabilities net
of the effect of acquisitions and
disposals associated with business
combinations:
(Increase)/decrease in trade and 39,043 (43,016) 39,366 (43,016)
other receivables
(Decrease)/Increase in other assets (1,544) (18,263) 3,075 (9,584)
(Decrease)/Increase in trade 23,992 (19,509) 37,291 19,774
payables and accruals
Net cash used in operating (269,939) (210,063) (171,119) (147,993)
activities
Non-cash financing and investing activities
There were no non-cash financing and investing activities during the year.
24. FINANCIAL INSTRUMENTS
Financial assets by category
The IFRS 9 categories of financial assets included in the Statement of
Financial Position and the headings in which they are included are as follows:
COMPANY
CONSOLIDATED
2022 2021 2022 2021
£ £ £ £
Financial assets at fair value 75,003 346,040 75,003 346,040
through profit and loss
Financial assets at amortised cost:
Cash and cash equivalents 403,328 541,835 150,149 430,611
Trade and other receivables 21,089 47,411 16,162 43,015
499,420 935,286 241,314 819,666
Financial liabilities by category
The IFRS 9 categories of financial liability included in the Statement of
Financial Position and the headings in which they are included are as follows:
CONSOLIDATED COMPANY
2022 2021 2022 2021
£ £ £ £
Financial liabilities at amortised
cost:
Trade and other payables 300,916 279,504 125,273 87,981
Borrowings 170,862 322,124 156,685 156,685
471,778 601,628 281,958 246,666
The following are the Group's contractual maturities of financial
liabilities, including estimated interest payments:
TOTAL LESS THAN BETWEEN ONE MORE THAN
CARRYING ONE YEAR AND FIVE FIVE YEARS
AMOUNT £ YEARS £
£ £
30 June 2022
Trade and other payables 300,916 16,304 284,612 -
Borrowings 170,862 - 170,862 -
30 June 2021
Trade and other payables 279,504 263,897 15,607 -
Borrowings 322,124 - 322,124 -
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a
going concern while maximising the return to stakeholders through the
optimisation of the debt and equity balance. The capital structure of the Group
consists of debt, (previously includes the borrowings) cash and cash
equivalents and equity attributable to equity holders of the Company,
comprising issued capital, reserves and accumulated losses, all as disclosed in
the Statement of Financial Position.
Financial risk management objectives
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 risks the Group is exposed to through its financial instruments are
credit risk, liquidity risk and market price risk.
Foreign currency risk management
The Company undertakes transactions denominated in foreign currencies. Hence,
exposures to exchange rate fluctuations arise. Since 25 June 2018. the
Company's major activity is now investment in Australia through its subsidiary
Signature Gold Pty Ltd, bringing exposure to the exchange rate fluctuations of
GBP/£ Sterling with Australian Dollars.
Exchange rate exposures are managed within approved policy parameters. The
Company does not enter into forward exchange contracts to mitigate the exposure
to foreign currency risk as amounts paid and received in specific currencies
are expected to largely offset one another and the currencies most widely
traded are relatively stable.
The Directors consider the balances most susceptible to foreign currency
movements to be the net assets of Signature Gold Pty Ltd for the Group.
CONSOLIDATED 2022 2021
AUD AUD
Net Assets of Signature Gold Pty Ltd 2,497,881 2,358,557
COMPANY 2022 2021
£ £
Financial assets at fair value 75,003 346,040
through profit and loss
The following table illustrates the sensitivity of the value of the foreign
currency denominated assets in regard to the change in AUD exchange rates.
It assumes a +/- 15% change in the AUD/GBP exchange rate for the year ended 30
June 2022 (2021:15%).
Impact of exchange rate fluctuations
AUD AUD
IMPACT IMPACT
2022 2021
£ £
Average movement in exchange rate 15% 15%
Change in equity
Increase in GBP value 212,482 192,069
Decrease in GBP value 212,482 192,069
Result for the period
Increase in GBP value 11,400 (2,523)
Decrease in GBP value 11,400 (2,523)
Exposure to foreign exchange rates varies during the year depending on the
volume and nature of foreign transactions. Nonetheless, the analysis above is
considered to be representative of the Group's exposure to currency risk.
Interest rate risk management
The Group's exposure to interest rates on financial assets and financial
liabilities is detailed in the liquidity risk management section of this note.
There are no long-term loans or short-term loans that carry any interest and
thus
sensitivity analyses have not been provided on the exposure to interest rates
for both derivatives and non-derivative instruments during the year. There
would have been no effect on amounts recognised directly in equity.
Credit risk management
The Group's financial instruments, which are subject to credit risk, are
considered to be cash and cash equivalents and trade and other receivables, and
its exposure to credit risk is not material. The credit risk for cash and cash
equivalents is considered negligible since the counterparties are reputable
banks.
The Group's maximum exposure to credit risk is £424,417 (2021: £589,246)
comprising other receivables, investments and cash.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which monitors the Group's short, medium and long-term funding and
liquidity management requirements on an appropriate basis. The Group manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities. The Group's liquidity risk arises in supporting the
trading operations in the subsidiaries, which hopefully will start to generate
profits and positive cash-flows in the short term. However, as referred to in
Note 3 the Group is currently exposed to significant liquidity risk and needs
to obtain external funding to support the Group going forwards.
25. RELATED PARTY DISCLOSURES
Group and the Company
2022
i. The remuneration of the Directors, who are the key management personnel of
the Group, is set out in Note 7.
ii. Loans from the related parties are disclosed in Note 19.
iii. On 10 February 2022, the Company issued 10,521,707 fully paid shares to
Directors in total in lieu of cash payments for fees for the period 1 July
2019 to 30 June 2021. The award of director shares for the 2020 and 2021
year is set out below:
* Bruce Fulton 3,290,827 shares
* Brett Boynton 3,290,827 shares
* Sam Quinn 2,540,250 shares
* Dennis Edmonds 1,399,803 shares
i. On 7 April 2022, B Boynton exercised 3,636,363 options at £0.00275 per
option raising £10,000.
2021
i. The remuneration of the Directors, who are the key management personnel of
the Group, is set out in Note 7.
ii. Loans from the related parties are disclosed in Note 19.
iii. On 31 August 2020, the Company acquired 20 million shares in Kazera Global
Plc priced at 0.5p per share, under the terms of the transaction for the
sale of Deep Blue Minerals Pty Ltd announced on 4 June 2020. Funds for the
share purchase totalling £100,000 were provided by way of a Director's Loan
from B Boynton. The loan does not accrue interest. For further detail,
refer to Note 16.
iv. As at 30 June 2021, 33rd Degree Pty Ltd had advanced £156,685 (2020: £
56,685) to the Group as detailed in note 19. These loans are interest free
and is not required to be repaid on or before 30 June 2022.
26. CAPITAL COMMITMENTS
Exploration Lease Expenditure Commitments
In order to maintain the Company's tenements in good standing with Queensland
Mines and Energy, the Company will be required to incur exploration expenditure
under the terms of each licence. It is likely that the granting of new licences
and changes in the terms of each licence will change the expenditure commitment
from time to time.
2022 2021
£ £
Payable:
- within one year 257,717 183,573
- later than one year but not later than five years 798,649 582,702
1,056,366 766,275
27. CONTINGENT ASSETS AND LIABILITIES
There are no contingent assets or liabilities noted by the Group at 30
June 2022.
28. EVENTS AFTER THE REPORTING PERIOD
As reported, on 31 August 2022, Whale Head Minerals Pty Ltd was granted a
Mining Permit for the mining of Heavy Mineral Sands on an area within the
boundaries of the South African Government's "Alexkor/PSJV" diamond mine. This
initiated the sale of 30% of Whale Head by Tectonic to a consortium of Black
Economic Empowerment partners.
During December 2022, 10M shares held in Kazera Global PLC were sold on market
at a price of 1.005p. GBP100,464.25 was received on 7 Dec 2022.
Other than as stated elsewhere in this report, the Directors are not aware of
any other matters or circumstances at the date of this report that have
significantly affected or may significantly affect the operations, the results
of the operations or the state of affairs of the Company in subsequent
financial years.
END
(END) Dow Jones Newswires
December 28, 2022 02:00 ET (07:00 GMT)
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