31 December 2024
Tungsten West Plc
("Tungsten West", the
"Company" or the "Group")
Half Year Results for the
six months ended 30 September 2024
Tungsten West (LON:TUN), the
mining company focused on restarting production at the Hemerdon
tungsten and tin mine in Devon, UK ("Hemerdon" or the "Project"),
is pleased to announce its half year results for the six months
ended 30 September 2024 (the "Period").
Period and Post Period Overview:
• Environment
Agency ("EA") granted permit to operate Mineral Processing Facility
("MPF")
•
ADP Marine & Modular ("ADP") appointed to undertake engineering on MPF
• Mining Plus
appointed to complete select sections of the updated re-start
economic assessment Feasibility Study
• £4.90
million convertible loan notes issued over two
tranches
• Provisional
agreement to place approximately an additional £2.8 million tranche
of convertible loan notes
• The Company
had cash reserves of £0.04 million at 30 September 2024
• Loss for
the Period of £13.9 million
• In the post
period, Jeff Court was appointed as CEO and Stephen Harrison was
appointed as Non-Executive Chairman
Jeff Court, CEO of Tungsten West, commented:
"I was delighted to formally join Tungsten West in early
October. The Company's primary focus, following the major milestone
of the Environment Agency granting the permit to operate the MPF,
has been the updating of the Project's re-start economic
assessment, focusing on further de-risking the core project and
making it more robust against a range of key external
scenarios.
"We remain grateful to those key supporters who have kept the
Company funded and have enabled us to progress the studies and
engineering work required to update the
MPF. The current national and international
dialogue surrounding the essential nature of critical minerals
supply chain security has highlighted the importance of Hemerdon to
governments and other key stakeholders. This has given us
confidence that the funding capital needed to bring Hemerdon back
into production will be available to us following the completion of
the Feasibility Study.
"Hemerdon will provide a globally significant and secure
tungsten supply through a critical mineral resource that is
strategically located in a highly developed country and
geographically positioned for European and North American markets."
Management
After the Period end, Jeff Court
was appointed CEO on 8 October 2024. Jeff has over 30 years'
experience in the international mining sector, covering numerous
roles from project feasibility and start-up, major Engineering,
Procurement and Construction ("EPC") and EPC Management ("EPCM")
and product mineral processing plant projects, mining operations
and contract mining services, operational and business
management.
On 4 December, David Cather
stepped down from his role as Non-Executive Chairman, but continues
to serves as a Non-Executive Director of the Company. Stephen
Harrison was appointed as Non-Executive Chairman and brings
significant experience with AIM listed and Main Market
companies.
Funding
The convertible loan note facility
("CLN") has, to date, raised £15.3 million. Post-Period, on 17
October 2024, the Company announced that it has raised £ 2.9
million under Tranche F to existing CLN holders. The core group of
stakeholders, who have supported the Company over the past 18
months, have provisionally committed to provide a further £2.8
million by way of a Tranche G of the CLN. Tranche G is expected to
be issued in two parts. The first part, of approximately £1.9
million, is expected to close in early January and the second part,
of approximately £0.9 million, which will be subject to further
conditions precedent, is expected to close in early February. These
conditions precedent relating to the second part are expected to
include the completion of the updated feasibility study, project
economics and the preparation for a major capital raise from the
beginning of Q2 2025. The CLN holders have further provisionally
agreed to extend the conversion date of the CLN until 31 December
2025. This funding will allow the Company to complete its full
Feasibility Study. The Tranche G funding is expected to complete
before the calendar year end 2025. The Group previously notified
CLN holders of multiple defaults of on the terms of the CLN
agreement. A waiver was subsequently agreed and has been extended
until 31 March 2025, in respect of all defaults.
The Company is pursuing several
routes to allow it to move directly to front end engineering and
design ("FEED"), including prior grant applications to the Defence
Industrial Base Consortium.
As set out in Note 2 Going
Concern, there remains uncertainty regarding further funding which
would have an impact on the Group's ability to continue as a going
concern. At the Period end, the Group had £0.04 million in cash
reserves and £0.4 million at the end of November 2024 (which
included the funds received under Tranche F of the CLN).
At the date of this report, there
is not currently any formal commitment from the existing or new
noteholders to purchase any Tranche G notes. If the Group fails to
find purchases for the Tranche G notes, then, in absence of other
new sources of finance, it is anticipated it would no longer be
able to meet its liabilities as they fall due from January
2025.
Outlook
The Board remains positive for the
long-term prospects for the Hemerdon mine and the commodities it
will produce and is committed to delivering the Project and
recommencing operations.
The principal risks and
uncertainties are outlined in the Company's most recent audited
annual report and accounts which can be found at
www.tungstenwest.com.
Jeff Court
Chief Executive Officer
Cautionary statement
This document contains certain
forward-looking statements in respect of the financial condition,
results, operations, and business of the Group. Whilst these
statements are made in good faith based on information available at
the time of approval, these statements and forecasts inherently
involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are
several factors that could cause the actual results of developments
to differ materially from those expressed or implied by these
forward-looking statements and forecasts. Nothing in this document
should be construed as a profit forecast.
Enquiries
|
Tungsten West
Jeff Court
Tel: +44 (0) 1752
278500
|
Strand Hanson
(Nominated Adviser and Financial
Adviser)
James Spinney / James Dance /
Abigail Wennington
Tel: +44 (0) 207 409
3494
|
|
BlytheRay
(Financial PR)
Tim Blythe / Megan Ray
Tel: +44(0) 20 7138
3204
Email: tungstenwest@blytheray.com
Hannam & Partners
(Broker)
Andrew Chubb / Matt Hasson / Jay
Ashfield
Tel: +44 (0)20 7907
8500
|
|
Further information on Tungsten
West Limited can be found at www.tungstenwest.com
Overview of Tungsten West
Tungsten West is the 100 per cent
owner and operator of the past producing Hemerdon tungsten and tin
mine, located near Plymouth in southern Devon, England. The
Hemerdon mine is currently the world's third largest tungsten
resource, with a JORC (2012) compliant Mineral Resource Estimate of
approximately 325Mt at 0.12 per cent. WQ3. The Company acquired the
mine out of a receivership process in 2019 after its most recent
operators, Wolf Minerals, stopped production in 2018. While it was
operator, Wolf Minerals invested over £170 million into the
development of the site, the development of significant
infrastructure and processing facilities. Hemerdon was producing
tungsten and tin materials, under Wolf Minerals, between 2015 and
2018, before the Company entered administration and placed the mine
into receivership due to a number of issues that have since been
identified and rectified by Tungsten West.
Consolidated Income Statement
|
|
Unaudited
Six month to 30-Sep-24 |
|
Unaudited
Six month to 30-Sep-23
|
|
Audited Year
ended 31-Mar-24
|
|
|
Note
|
|
|
Revenue
|
4
|
£
-
|
|
£
722,036
|
|
£
722,036
|
|
Cost of sales
|
|
(1,137,426)
|
|
(780,649)
|
|
(2,099,895)
|
|
Gross loss
|
|
(1,137,426)
|
|
(58,613)
|
|
(1,377,859)
|
|
Administrative expenses
|
|
(4,291,391)
|
|
(8,037,199)
|
|
(8,966,124)
|
|
Other operating income
|
|
1,800
|
|
130
|
|
14,424
|
|
Other gains/(losses)
|
|
-
|
|
(117,953)
|
|
3,079,384
|
|
Operating loss
|
5
|
(5,427,017)
|
|
(8,213,635)
|
|
(7,250,175)
|
|
Finance income
|
|
269,257
|
|
102,004
|
|
200,175
|
|
Finance costs
|
|
(8,766,277)
|
|
(1,020,782)
|
|
(2,844,319)
|
|
Net finance cost
|
|
(8,497,020)
|
|
(918,778)
|
|
(2,644,144)
|
|
Loss before tax
|
|
(13,924,037)
|
|
(9,132,413)
|
|
(9,894,319)
|
|
Income tax credit
|
|
-
|
|
-
|
|
194,403
|
|
Loss for the Period
|
|
(13,924,037)
|
|
(9,132,413)
|
|
(9,699,916)
|
|
Loss attributable to:
|
|
|
|
|
|
|
|
Owners of the Company
|
|
(13,924,037)
|
|
(9,132,413)
|
|
(9,699,916)
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
£
|
|
£
|
|
£
|
|
Basic and diluted loss per
share
|
12
|
(0.074)
|
|
(0.050)
|
|
(0.050)
|
|
|
There were no items of other
comprehensive income in
any period presented.
Consolidated Statement of
Financial Position
|
Unaudited
Six months to
30-Sep-24
Note
£
|
Unaudited Six months to 30-Sep-23
£
|
Audited Year ended 31-Mar-24
£
|
|
Non-current assets
|
|
|
|
|
|
|
|
Property, plant and equipment
|
6
|
19,080,121
|
|
19,811,546
|
|
19,266,279
|
|
Right-of-use assets
|
7
|
1,781,187
|
|
1,955,412
|
|
1,895,584
|
|
Intangible assets
|
8
|
5,022,067
|
|
5,096,005
|
|
5,058,686
|
|
Deferred tax assets
|
|
1,390,346
|
|
1,390,346
|
|
1,382,901
|
|
Escrow funds receivable
|
9
|
11,329,495
|
|
4,107,892
|
|
11,059,151
|
|
|
|
38,603,216
|
|
32,361,201
|
|
38,662,601
|
|
Current assets
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
3,350,737
|
|
4,788,186
|
|
2,809,893
|
|
Inventories
|
|
29,850
|
|
29,850
|
|
29,850
|
|
Cash and cash equivalents
|
|
43,357
|
|
1,416,765
|
|
1,581,535
|
|
|
|
3,423,944
|
|
6,234,801
|
|
4,421,278
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
42,027,160
|
|
38,596,002
|
|
43,083,879
|
|
Equity and liabilities
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Share capital
|
13
|
1,887,313
|
|
1,870,741
|
|
1,870,741
|
|
Share premium account
|
|
51,949,078
|
|
51,949,078
|
|
51,949,078
|
|
Share option reserve
|
|
219,413
|
|
412,831
|
|
256,278
|
|
Warrant reserve
|
|
-
|
|
740,867
|
|
-
|
|
Convertible loan note reserve
|
|
-
|
|
165,408
|
|
-
|
|
Retained earnings
|
|
(46,688,104)
|
|
(32,937,431)
|
|
(32,764,067)
|
|
Equity attributable to the owners of the
parent
|
|
7,367,700
|
|
22,201,494
|
|
21,312,030
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
Loans and borrowings
|
11
|
1,806,049
|
|
1,927,165
|
|
1,803,533
|
|
Provisions
|
10
|
5,299,502
|
|
4,799,194
|
|
5,137,646
|
|
Deferred tax liabilities
|
|
1,390,346
|
|
1,390,346
|
|
1,382,901
|
|
|
|
8,495,897
|
|
8,116,705
|
|
8,324,080
|
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other payables
|
|
3,038,618
|
|
1,519,343
|
|
1,754,903
|
|
Loans and borrowings
|
11
|
23,124,945
|
|
6,758,460
|
|
11,692,866
|
|
|
|
26,163,563
|
|
8,277,803
|
|
13,447,769
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
34,659,460
|
|
16,394,508
|
|
21,771,849
|
|
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
42,027,160
|
|
38,596,002
|
|
43,083,879
|
|
Consolidated Statement of Cash Flows
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
30-Sep
|
|
30-Sep
|
|
31-Mar
|
|
|
Note
|
2024
£
|
|
2023
£
|
|
2024
£
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Loss for the Period
|
|
(13,924,037)
|
|
(9,132,413)
|
|
(9,699,916)
|
|
Adjustments to cash flows from
non-cash items
|
|
|
|
|
|
|
|
Depreciation and amortisation
|
6,7
|
332,743
|
|
265,675
|
|
522,898
|
|
Loss on disposal of right-of-use
asset
|
|
-
|
|
-
|
|
6,807
|
|
Loss on disposal of tangible
asset
|
|
-
|
|
-
|
|
3,137
|
|
Loss on disposal of intangible
asset
|
|
-
|
|
-
|
|
-
|
|
Impairment of asset under
construction
|
6
|
-
|
|
1,841,039
|
|
2,157,923
|
|
Fair value (gains) losses on escrow account
|
|
-
|
|
1,133,447
|
|
(5,721,727)
|
|
Fair value gains on restoration
provision
|
|
-
|
|
(1,015,494)
|
|
(889,126)
|
|
Finance income
|
|
(269,257)
|
|
(102,004)
|
|
(200,175)
|
|
Finance costs
|
|
8,766,277
|
|
1,020,782
|
|
2,844,319
|
|
Share based payment transactions
|
|
(36,865)
|
|
55,465
|
|
(101,088)
|
|
Impact of foreign exchange
|
|
(7,453)
|
|
(42,593)
|
|
(49,551)
|
|
Income tax credit
|
|
-
|
|
-
|
|
(194,403)
|
|
|
|
(5,138,592)
|
|
(5,976,096)
|
|
(11,320,902)
|
|
Working capital adjustments
|
|
|
|
|
|
|
|
Income tax received
|
|
-
|
|
-
|
|
458,975
|
|
(lncrease)/decrease in trade and
other receivables
|
|
(540,843)
|
|
1,375,407
|
|
3,353,698
|
|
lncrease/(decrease) in trade and
other payables
|
|
1,283,718
|
|
(811,260)
|
|
(840,270)
|
|
(lncrease)/decrease in
inventories
|
|
-
|
|
84,323
|
|
84,323
|
|
Net cash outflow from operating activities
|
|
(4,395,717)
|
|
(5,327,626)
|
|
(8,264,176)
|
|
Cash flows from investing activities
Interest received
|
|
(1,088)
|
|
5,204
|
|
9,713
|
|
Acquisitions of property plant and
equipment
|
|
-
|
|
(2,764,261)
|
|
(2,703,810)
|
|
Proceeds from disposals
|
|
-
|
|
2,088
|
|
-
|
|
Acquisitions of intangibles
|
|
(750)
|
|
(39,952)
|
|
(39,952)
|
|
Net cash outflow from investing activities
|
|
(1,838)
|
|
(2,796,921)
|
|
(2,734,049)
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Interest paid
|
|
(938)
|
|
(2,971)
|
|
(9,793)
|
|
Proceeds from exercise of
warrants
|
|
-
|
|
131,542
|
|
-
|
|
Proceeds from the issue of
Ordinary Shares, net of issue costs
|
|
16,572
|
|
-
|
|
131,542
|
|
Proceeds from exercise of share
options
|
|
-
|
|
-
|
|
-
|
|
Proceeds from convertible
debt
|
|
2,901,000
|
|
6,038,428
|
|
9,241,830
|
|
Payments to hire purchase
|
|
(14,757)
|
|
(14,398)
|
|
(20,302)
|
|
New leases
|
|
-
|
|
-
|
|
-
|
|
Payment of lease liabilities
|
|
(42,500)
|
|
(49,307)
|
|
(201,535)
|
|
Net cash inflow (outflows) from financing activities
|
|
2,859,377
|
|
6,103,294
|
|
9,141,742
|
|
Net (decrease) in cash and cash
equivalents
|
|
(1,538,178)
|
|
(2,021,253)
|
|
(1,856,483)
|
|
Opening cash and cash equivalents
|
|
1,581,535
|
|
3,438,018
|
|
3,438,018
|
|
Closing cash and cash equivalents c/f
|
|
43,357
|
|
1,416,765
|
|
1,581,535
|
Consolidated Statement of Changes in Equity
|
|
|
Audited
|
Share
capital
|
Share premium account
|
|
Share option reserve
|
|
Warrant
reserve
|
|
Convertible loan note
reserve
|
|
Retained
earnings
|
|
Total
|
|
|
|
£
|
|
£
|
|
£
|
|
£
|
|
£
|
|
£
|
|
£
|
|
|
At 1 April 2023
|
1,805,516
|
|
51,882,761
|
|
357,366
|
|
740,867
|
|
-
|
|
(23,805,018)
|
|
30,981,492
|
|
|
Loss for the year
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(9,699,916)
|
|
(9,699,916)
|
|
|
New shares subscribed
|
65,225
|
|
66,317
|
|
-
|
|
-
|
|
-
|
|
-
|
|
131,542
|
|
|
Expired warrants
|
-
|
|
-
|
|
-
|
|
(740,867)
|
|
-
|
|
740,867
|
|
-
|
|
|
Share options charge
|
-
|
|
-
|
|
85,138
|
|
-
|
|
-
|
|
-
|
|
85,138
|
|
|
Forfeiture of share options
|
-
|
|
-
|
|
(186,226)
|
|
-
|
|
-
|
|
-
|
|
(186,226)
|
|
|
|
|
|
|
|
At 31 March 2024
|
1,870,741
|
|
51,949,078
|
|
256,278
|
|
-
|
|
-
|
|
(32,764,067)
|
|
21,312,030
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2023
|
1,805,516
|
|
51,882,761
|
|
357,366
|
|
740,867
|
|
-
|
|
(23,805,018)
|
|
30,981,492
|
|
|
Loss for the Period
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(9,132,413)
|
|
(9,132,413)
|
|
|
New shares subscribed
|
65,225
|
|
66,317
|
|
-
|
|
-
|
|
-
|
|
-
|
|
131,542
|
|
|
Issue of convertible loan
|
-
|
|
-
|
|
-
|
|
-
|
|
165,408
|
|
-
|
|
165,408
|
|
|
Share options charge
|
-
|
|
-
|
|
55,465
|
|
-
|
|
-
|
|
-
|
|
55,465
|
|
|
At 30 September 2023
|
1,870,741
|
|
51,949,078
|
|
412,831
|
|
740,867
|
|
165,408
|
|
(32,937,431)
|
|
22,201,494
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2024
|
1,870,741
|
51,949,078
|
256,278
|
-
|
-
|
|
(32,764,067)
|
21,312,030
|
|
|
Loss for the Period
|
-
|
-
|
-
|
-
|
-
|
|
(13,924,037)
|
(13,924,037)
|
|
|
New shares subscribed
|
16,572
|
-
|
-
|
-
|
-
|
|
-
|
16,572
|
|
|
Forfeiture of share
options
Share options charge
|
-
-
|
-
-
|
(46,573)
9,708
|
-
-
|
-
-
|
|
-
-
|
(46,573)
9,708
|
|
|
At 30 September 2024
|
1,887,313
|
|
51,949,078
|
|
219,413
|
|
-
|
|
-
|
|
(46,688,104)
|
|
7,367,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the interim accounts
1. Basis of Preparation
These unaudited condensed
consolidated interim accounts have been prepared in accordance with
the recognition and measurement principles of International
Accounting Standards as adopted in the United Kingdom ("UK-adopted
IAS") using the accounting policies that are expected to apply in
the Company's next annual report.
The accounting policies applied
are consistent with those disclosed in the Company's last statutory
financial statements.
The interim accounts are in
compliance with IAS 34, Interim Financial Reporting.
The interim accounts do not
comprise the Company's statutory accounts. The information for the
year ended 31 March 2024 is not the Company's statutory accounts.
The Company's financial statements for that year have been filed
with the registrar of companies.
The independent auditor's report on those
financial statements was unqualified but drew attention to a
material uncertainty relating to going concern. The independent
auditor's report did not contain statements under s498(2) or
s498(3) of the Companies Act 2006.
2.
Going concern
The Group is still in the
pre-production phase of operations and meets its day-to-day working
capital requirements by utilising cash reserves from investment
made in the Group. Over the last year this has been dependent on
raising funds via issues of CLNs. There is no signed commitment
from investors to provide further funds under the existing CLN
agreement. The Group previously notified CLN holders of multiple
defaults of on the terms of the CLN agreement. A waiver has been
agreed in respect of all defaults and remains in place until 31
March 2025. For the Group to remain a going concern, it is reliant
on the continued support of the CLN holders by not exercising their
rights under the defaults.
At the Period end, the Group had
£0.04 million in cash reserves and £0.4 million at the end of
November 2024. The Group is in the process of finalising the
documentation in respect of approximately £2.8 million Tranche G
funding round with its existing CLN holders. The Group has
very limited cash reserves and is reliant upon this Tranche G
funding being received. If the Group did not receive the
Tranche G funding or it was delayed, these limited cash reserves
are forecast to be exhausted in January 2025.
In addition to the expected issue
of Tranche G, going concern is also reliant on further funding
being secured by the end of June 2025, without which the Group
would be unable to pay its liabilities as they fall due beyond this
point.
In addition to short-term
financing via the CLNs, the Group still requires additional funding
to complete the MPF rebuild and is in discussions with financing
partners to provide the additional capital. The quantum of
financing will be determined at the completion of front end
engineering and design ("FEED").
These conditions indicate that a
material uncertainty exists that may cast significant doubt on the
Group's ability to continue as a going concern.
Until the additional capital is
secured, the Group will continue to proceed by utilising existing
cash reserves and drawing on the CLN facility. The Board will not
commit to significant further capital expenditure until the full
finance package is in place to complete the rebuild.
Model 1 - Funding to Complete
Feasibility Study and Obtain Financing
This scenario models management's
expectation of cash required to complete the ongoing feasibility
study and general and administrative expenses, including
maintaining the existing mine permits. This does not include any
expenses related to FEED, or capital expenditures to restart
operations. The Company is in discussion with a number of parties
regarding financing of operations to complete FEED and capital
raising operations.
As a result, the Board intends
that the Group is able to operate as a going concern for the
foreseeable future. Consequently, the Board continue to adopt the
going concern basis in preparing these financial statements despite
the material uncertainty referred to above.
3.
Asset and liabilities held at fair value Escrow
funds
These funds are held with a third
party to be released to the Group as it settles its obligation to
restore the mining site once operations cease. The debtor has been
discounted to present value assuming the funds will be receivable
in 27 years' time which assumes one year of set up and a 27-year
useful life of mining operations. The key assumptions that would
lead to significant changes in the escrow account fair value are
the discount rate and the useful life of the mine.
Provisions
Provisions are recognised when the
Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that the Group will be required to
settle that obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are measured at the
Directors' best estimate of the expenditure required to settle the
obligation at the reporting date and are discounted to present
value where the effect is material. This includes a provision for
the obligation to restore the mining site once mining
ceases.
The restoration provision is the
contractual obligation to restore the mining site back to its
original state once mining ceases. The provision is equal to the
expected outflows that will be incurred at the end of the mine's
useful life discounted to present value. As the restoration work
will predominantly be completed at the end of the mine's useful
life, these calculations are subject to a high degree of estimation
uncertainty. The key assumptions that would lead to significant
changes in the provision are the discount rate, useful life of the
mine and the estimate of the restoration costs.
Convertible loan notes
Convertible loan notes which
entitle the holder to convert into a fixed number of shares for a
fixed amount of cash contain both the features of a financial
liability and an equity instrument. The initial fair value amount
of the liability is calculated as the present value of all future
payments and interest (at the rate determined by the instrument)
all being discounted at a market rate of interest for a similar
loan without a conversion option. The amount of the equity
component is residual balance after deducting the initial fair
value amount of the liability from the proceeds of the convertible
loan issue. Issue costs are assigned to the liability
component.
Subsequently, interest is
calculated on the liability component under the effective interest
method.
The present value of the liability
cash-flows has been estimated with reference to management's
judgement of the most likely cash-flows, as permitted under
IFRS9. Under the
terms of the convertible loan notes, if the Group breaches the
terms of the agreement or an exit event occurs, the initial capital
can be called in for repayment at a premium of 100%. As management
judge this unlikely, it has not been accounted for in the fair
value of the liability at Period end. Were this clause to be
enacted, the capital repayment due, on loan notes drawn to Period
end, would be increased from £13 million to £26 million.
4.
Revenue
Revenue by product comprised the
following:
|
|
Unaudited
Six months
to
30 September
|
Unaudited Six months to 30 September
|
Audited Year ended
31
March
|
|
|
2024
|
2023
|
2024
|
|
|
£
|
£
|
£
|
|
Tungsten
|
-
|
286,964
|
497,388
|
|
|
|
|
|
|
Tin
|
-
|
435,072
|
224,648
|
|
|
|
|
|
|
|
-
|
722,036
|
722,036
|
|
5. Operating loss
|
|
|
|
Operating loss is stated after the
following:
|
|
|
|
|
Unaudited
Six months
to
30 September
|
Unaudited Six months to 30
September
|
Audited Year ended
31
March
|
|
|
2024
|
2023
|
2024
|
|
|
£
|
£
|
£
|
|
Depreciation of property, plant
and equipment
|
180,977
|
164,452
|
331,335
|
|
Depreciation of right of use
assets
|
114,397
|
67,260
|
120,281
|
|
Loss on disposal of ROU
asset
|
-
|
-
|
6,807
|
|
Loss on disposal of tangible fixed
assets
|
5,181
|
-
|
3,137
|
|
Impairments of assets under
construction and deposits
|
-
|
3,388,284
|
3,531,469
|
|
Amortisation of
intangibles
|
37,369
|
33,963
|
71,282
|
|
Staff costs
|
1,181,481
|
1,950,849
|
3,352,821
|
|
|
|
|
|
|
7. Right-of-use asset
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months to
|
Six
months to
|
Year
ended
|
|
|
30 September
|
30
September
|
31
March
|
|
|
2024
|
2023
|
2024
|
|
Opening net book value
|
£
1,895,584
|
£
2,022,672
|
£ 2,022,672
|
|
Additions
|
-
|
-
|
-
|
|
Write off
|
-
|
-
|
(6,807)
|
|
Depreciation
|
(114,397)
|
(67,260)
|
(120,281)
|
|
Net disposals
|
-
|
|
|
|
Closing net book value
|
1,781,187
|
1,955,412
|
1,895,584
|
|
8. Intangible assets (net book
value)
|
|
|
|
|
|
Unaudited Six months to
|
Unaudited Six months to
|
Audited Year ended
|
|
|
30 September
2024
|
30
September
2023
|
31
March
2024
|
|
Goodwill
|
£
1,075,520
|
£
1,075,520
|
£ 1,075,520
|
|
Mining rights
|
3,844,333
|
3,844,333
|
3,844,333
|
|
Software
|
102,214
|
176,152
|
138,833
|
|
Closing net book value
|
5,022,067
|
5,096,005
|
5,058,686
|
|
9. Escrow Funds
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months to
|
Six
months to
|
Year
ended
|
|
Escrow Funds
|
30 September
|
30
September
|
31
March
|
|
|
2024
|
2023
|
2024
|
|
Carrying amount
|
£
11,329,495
|
£ 4,107,892
|
£11,059,151
|
The funds held in escrow with a
third party will be released back to the Company on the cessation
of mining once restoration works have been
completed. The
amounts have been discounted to present value over the expected
useful life of the mine. During the Period, there was no gain in
the discount rate of 4.4% (30 September 2023: 4.7%) (31 March 2024:
4.4%) resulting in a gain of £0.2 million in the six months to
September 2024 (loss in Period to 30 September 2023: £1.0 million)
(Gain in year to 31 March 2024: £5.7 million). The actual funds held in escrow at
the Period end were £14,067,911 (30 September 2023: £13,468,004)
(31 March 2024: £13,740,012).
|
10. Provisions
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months to
|
Six
months to
|
Year
ended
|
|
Restoration provision
|
30 September
|
30
September
|
31
March
|
|
|
2024
|
2023
|
2024
|
|
|
£
|
£
|
£
|
|
Carrying amount brought
forward
|
5,137,646
|
5,701,771
|
5,701,771
|
|
Change in inflation and discount
rate
|
-
|
(1,015,494)
|
(889,126)
|
|
Unwinding of discount
|
161,856
|
112,917
|
325,001
|
|
Closing net book value
|
5,299,502
|
4,799,194
|
5,137,646
|
This provision is for the
obligation to restore the mine to its original state once mining
operations cease, discounted back to present value based on the
estimated life of the mine. Prior to discounting, the Directors
estimate the provision at current costs to be £13.2 million (30
September 2023: £13.2 million) (31 March 2024: £13.2
million).
The provision has been discounted
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset. The ultimate costs to restore the mine are uncertain,
and cost estimates can vary in response to many factors, including
estimates of the extent and costs of rehabilitation activities,
technological changes, regulatory changes, cost increases as
compared to the inflation rates and changes in discount
rates.
Management has considered these
risks and used a discount rate of 6.4% (30 September 2023: 6.7%)
(31 March 2024: 6.4%), an inflation rate of 2% to 7.5% over the life of the
Project (30 September 2023: 2.5% to 7%)
(31 March 2024: 2% to 7.5%) and an estimated mining period of
27 years (30 September 2023: 27 years) (31
March 2024: 27 years).
11. Borrowings
Borrowings comprised:
|
|
Unaudited
Six months to 30 September
|
Unaudited Six months to
30 September
|
Audited Year ended
31
March
|
|
2024
|
2023
|
2024
|
|
£
|
£
|
£
|
|
Current
|
|
|
|
|
Lease liabilities
|
103,031
|
82,665
|
105,645
|
|
Convertible debt
|
23,021,914
|
6,675,795
|
11,587,221
|
|
|
23,124,945
|
6,758,460
|
11,692,866
|
|
Non-current
|
|
|
|
|
Lease liabilities
|
1,806,049
|
1,927,165
|
1,803,533
|
|
|
1,806,049
|
1,927,165
|
1,803,533
|
The Group issued convertible loan
notes in two tranches as follows:
On 23 July 2024 - £2.975 million
of Tranche E notes
After the end of the Period, on 17
October 2024, the Company issued a further tranche of the CLN -
£2.9 million of Tranche F notes
IFRS 13 requires the provision of
information about how the Company establishes the fair values of
financial instruments. Valuation techniques are divided into three
levels based on the quality of inputs:
Level 1 inputs are quoted prices
(unadjusted) in active markets for identical assets or
liabilities.
Level 2 inputs are inputs other
than quoted prices included in level 1 that are observable,
directly or indirectly.
Level 3 inputs are
unobservable.
The Group's convertible loan notes
are measured at fair value of £23,021,914 (Sept 2023: £6,675,795)
(March 2024: £11,587,221). These are classified as level 3. They
are valued based on a scenario pricing model. A number of inputs,
such as the market value of shares, are observable inputs but there
are also significant unobservable inputs such as the discount rate
and the probabilities assessed for each scenario.
Interest on the convertible loan
notes in the form of payment in kind notes (PIK notes) is 20%. The
final termination date of the convertible loan notes is 31 January
2025. The normal conversion price of the loan notes is £0.03 per
share however under an equity raise (excluding equity raised to
certain qualifying shareholders, on a normal conversion of the loan
notes or on an issue of shares in relation to warrants and share
options) the conversion price is equal to the issue price on the
equity raise less a discount of 50%.
Under the terms of the convertible
loan notes, if the Company breaches the terms of the agreement or
an exit event occurs, the initial capital can be called in for
repayment at a premium of 100%.
The Company was at Period end and
remains in breach of the terms of the CLN Agreement. In each case
the Note Holders waived the breaches such that the Company was not
in breach of the Agreement.
Fair value of financial assets and
financial liabilities that are measured at fair value on a
recurring basis.
|
12. Basic and diluted loss per share
|
|
|
|
|
|
Unaudited
|
Unaudited
|
Audited
|
|
|
Six months to
|
Six months to
|
Year ended
|
|
|
30 September
2024
|
30
September
2023
|
31
March
2024
|
|
|
£
|
£
|
£
|
|
Loss for the year
|
(13,924,037)
|
(9,132,413)
|
(9,699,916)
|
|
|
Number
|
Number
|
Number
|
|
Weighted average number of ordinary
shares in issue
|
188,266,298
|
184,472,241
|
185,755,355
|
|
Basic and diluted loss per
share
|
(0.074)
|
(0.050)
|
(0.050)
|
The diluted loss per share
calculations excludes the effects of share options, warrants and
convertible debt on the basis that such future potential share
transactions are anti-dilutive.
Were the Company's options and
warrants to be converted, a potential further 23,956,451 ordinary
shares of between £0.01 to £0.60 would be issued. Information on
share options and warrants is disclosed in Note 14. This figure
excludes the conversion of any CLN's in Note 11.
There were no shares issued
subsequent to the end of the interim period.
13. Share capital
Share issues during the Period
During the Period ended 30
September 2024 the following share transactions took place:
• The
Company issued 1,657,196 ordinary shares of £0.01 each for consideration of
£0.01 per
share. These shares
were issued under the Founder Share agreement disclosed in the
Company's AIM Admission Documentation.
14. Share options and warrants Founder share
incentives
The founder shareholders have a
right to receive shares at a nominal value once certain milestones
are met.
The movements in the number of
incentives during the year were as follows:
|
Unaudited
Six months
to
|
Unaudited Six months
to
|
Audited
Year ended
|
|
30
September
|
30
September
|
31
March
|
|
2024
|
2023
|
2024
|
|
Number
|
Number
|
Number
|
|
18,229,148
|
18,229,148
|
18,229,148
|
|
|
Outstanding at beginning of
Period
|
Granted during the Period
Terminated on admission
to
|
-
|
-
|
-
|
|
AIM
Replacement share awards
|
-
|
-
|
-
|
|
following admission to
AIM
Exercised during the
year
|
(1,657,196)
|
-
|
-
|
|
Outstanding at end of Period
|
16,571,952
|
18,229,148
18,229,148
|
|
|
|
|
|
|
The founder options meet the
definition of equity in the financial statements of the Company on
the basis that the 'fixed for fixed' condition is met. No
consideration was received for the founder options at grant date,
therefore no accounting for the issue of the equity instruments is
required under IFRS. On exercise, the shares are recognised at the
fair value of consideration received, being the option price of
£0.01.
Share Options - Employees
EMI and ESOP
Share options have been issued to
key employees as an incentive to stay with the Company. These options
can be exercised within one and ten years following the grant date
once the option has vested.
The movement on the number of
share options issued by the Company during each period presented
was as follows.
The exercise price of share
options outstanding is £0.45 (30 September
2023: between £0.30 and £0.45) (31 March
2024: between £0.01 and £0.45) and their
remaining contractual life was 15 months (30 September 2023: 9
years) (31 March 2024: 10 months to 30 months).
CSOP share options
Share options have been issued to
key employees as an incentive to stay with the Company. These
options can be exercised within three and ten years following the
grant date once the option has vested.
The exercise price of share
options outstanding at 30 September 2024 was £0.275 and their
remaining contractual life was 1 year.
The exercise price of share
options outstanding at 31 March 2024 was £0.275 and their remaining
contractual life was 1 year and 6 months.
Warrants
Warrants have been issued to
certain shareholders and intermediaries as commission for
introducing capital to the Company. Warrants can be exercised at
any point before the expiry date for a fixed number of
shares.
The movement on the number of
warrants issued by the Company during each period presented was as
follows.
Unaudited
Unaudited
Audited
Six
months
Six months
Year
ended
to
to
to
30
30
31
September
September
March
2024
2023
2024
Number
Number
Number
Outstanding at beginning
of
-
2,170,740
2,170,740
Period
Granted during the Period
|
|
|
|
|
|
Exercised during the Period
|
|
|
|
|
Expired during the Period
|
|
(126,760)
|
(2,170,740)
|
|
Outstanding at end of Period
|
-
|
2,043,980
|
-
|
At 30 September 2024, the exercise
price of warrants was Nil and their remaining contractual life Nil
months.
At 31 March 2024, the exercise
price of warrants was Nil and their remaining contractual life Nil
months.
15. Commitments
Capital commitments
As at 30 September 2024, the Group
had contracted to purchase property, plant and machinery amounting
to £1,746,455. (30 September 2023: £2,329,060). (31 March 2024:
£1,746,455). An
amount of Nil (31 March 2024: Nil)
(30 September 2023: £123,320) is contingent on the commencement of
mining operations.
Other financial
commitments
The total amount of other
financial commitments not provided in the financial statements
was
£8,329,000 (30 September 2023:
£9,329,000) (31 March 2024: £9,329,000) payable on the commencement
of mining operations and represented contractual amounts due to the
mining contractor and further committed payments to the funds held
in the escrow account under the escrow agreement.
Included within other financial
commitments is £3,000,000 (30 September 2023: £4,000,000) (31 March
2024: £4,000,000) which is considered to be payable
annually.
16. Events after the end of
the interim reporting period
On 17 October 2024, the Company
announced that it had raised a further £2.0 million by way of
Tranche F of the CLN. In addition, the CLN holders waived any and
all breaches of the CLN such that the Company was not in breach of
the terms of the CLN.
Jeff Court was appointed as CEO on
8 October 2024, and Stephen Harrison was appointed as Chairman on 3
December 2024 following the Company's Annual General
Meeting.
