XLON:CMRS ESEF Annual Report
Critical Mineral Resources Plc (XLON:CMRS)
ESEF Annual Report
2023-07-18
For: 2022-12-31
View Original
Added on
September 22, 2026
Company number: 11043077
CAERUS MINERAL RESOURCES PLC
ANNUAL REPORT AND CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2022
CAERUS MINERAL RESOURCES PLC COMPANY INFORMATION
2
Contents
Company Information 3
Chairman’s Report 4
Strategic and Corporate Governance Report 6
Environment, Social and Governance Statement 15
Report Of The Directors 20
Directors’ Remuneration Report 24
Independent Auditor’s Report To The Members Of Caerus Mineral Resources Plc 29
Consolidated Statement of Profit or Loss and Other Comprehensive Income 37
Consolidated Statement of Financial Position 38
Parent Company Statement of Financial Position 39
Consolidated Statement of Changes in Equity 40
Parent Company Statement of Changes in Equity 41
Consolidated Statement of Cash Flows 42
Parent Company Statement of Cash Flows 43
Notes to the Consolidated Financial Statements 44
CAERUS MINERAL RESOURCES PLC COMPANY INFORMATION
3
Company Information
Directors Adrian Charles England
Christopher Lambert
Charles Oliver Long
Russell Thomson
Dominic Traynor
Company Secretary Orana Corporate LLP
Registered Office Eccleston Yards
25 Eccleston Place
London SW1W 9NF
Company Number 11043077
Independent Auditor PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
Registrars Share Registrars Limited
3 Millennium Centre
Crosby Way
Farnham
Surrey GU9 7XX
Brokers Novum Securities Limited
8-10 Grosvenor Gardens
Belgravia
London SW1W 0DH
Legal Druces LLP
Salisbury House
London Wall
London EC2M 5PS
CAERUS MINERAL RESOURCES PLC CHAIRMAN’S REPORT
4
Chairman’s Report
2022 was a tumultuous year for Caerus Mineral Resources ("CMR"). The composition of the Board
changed significantly, the Company agreed to divest its portfolio of assets, new corporate governance
structures and protocols were implemented, and, critically, the Company's strategy was refined.
Following my appointment in May, my primary objective was to ensure that shareholder value was
being created. It quickly became apparent that the Company's portfolio of assets faced significant
challenges. Accordingly, we initiated an operational and strategic review of the business.
The Company had previously reported positive operational developments regarding the Troulli and
Kalavasos assets. However, it was soon clear that these projects faced fundamental and likely
unresolvable challenges. The Troulli project, whilst offering good long-term potential, was destined to
require extensive capital expenditure and significant management time, which outweighed the potential
upside the asset provided. Following a thorough review, it was decided that Troulli was unlikely to be
large enough to be sufficiently economically attractive.
The Company’s previous management believed there was significant scope to build a copper resource
in the Kalavasos Project, where the Company held four licences. These licenses required approvals
from the Cyprus Ministry of Defence (the MOD) to develop the assets, approvals the former
management believed would be granted. At the request of the new Board, meetings with the Cypriot
Mines Service Department were conducted over the summer of 2022, during which it became apparent
the approvals would not be forthcoming as the MOD required the land for long-term purposes.
Further headwinds were experienced as the new management evaluated the governance structures and
specific contracts relating to the Company's joint Cypriot venture with Bezant Resources Plc. The
Company also reviewed the structure of its arrangement with BMG Resources Limited, a minority
shareholder in CMR's subsidiary company TDL. TDL was responsible for maintaining and progressing
several Cypriot projects. Evidently, the structure of those agreements, as signed, did not uphold
shareholders’ best interests and further justified the need for action regarding the Company’s Cypriot
strategy and assets.
The immediate outcome of these investigations was twofold. Firstly, the Company decided to make a
strategic change of focus away from its Cyprus assets. This resulted in agreeing to the disposal of the
assets in September, with the Company maintaining exposure to potential upside from the development
of the Troulli project. Secondly, CMR enhanced its corporate governance and implemented new
structures to ensure the Company always operates to high standards with all stakeholders. Reflecting
this, and following CMR's investigation into certain actions and commercial decisions made by the
previous management, the Company achieved settlement terms with former directors. The outcome of
this was the return of most of their CMR shares to the Company for no consideration and the termination
of their warrants.
When CMR took ownership with the gifting of the former director's shares, their market value was
approximately £600,000. However, IFRS accounting rules do not appear to have conceived of this
scenario, so we cannot report a profit on these shares. Similarly, the warrant cancellations, under IFRS
2, must be initially fully recognised in the current year P&L as a charge and, despite being cancelled,
cannot be reversed in the current year. The total charge of £167,485, in relation to cancelled warrants,
was recycled through the profit and loss reserve account and is shown in the ‘Statement of Changes In
Equity’. The warrant cancellation also has the advantage of reducing the shareholder's dilution.
Corporate governance has been further enhanced with the recent appointment of Adrian England as our
Non-Executive Independent Director and new legal advisors.
CAERUS MINERAL RESOURCES PLC CHAIRMAN’S REPORT
5
Outlook
The Board believes considerable shareholder value can be delivered if the Company remains focused
on its strategy of taking opportunities arising from and aligned to supporting the European electric
vehicle supply chain and its compliance with increasing global legislation.
CMR is committed to supplying the clean energy sector and will look to maximise opportunities created
through the Company's alliance with EV Metals Group plc ("EVM"). However, in addition to the EVM
alliance, the board is able to draw on its significant experience within the mining sector and the
management's extensive network and deep understanding of the industry’s dynamics. Accordingly,
alongside opportunities that emerge from the EVM alliance, the board has been evaluating opportunities
from its own network that fit its strategy. As the market recognises the long-term production deficit for
commodities required to supply the EV transition, not all vendor valuation expectations meet CMR’s
high hurdle of delivering long-term sustainable value. We continue to ensure rigorous financial
discipline when evaluating opportunities, and several opportunities in recent months have not
progressed. However, in the first six months of the year, the Company has built several new and
exciting relationships with owners of high-quality upstream and midstream assets where discussions
regarding partnership and investment are ongoing.
In recent weeks, CMR has decided to enter Morocco, which stands out as an extremely attractive
jurisdiction for upstream and potentially midstream battery materials projects. With deposits of copper,
manganese, nickel and potentially other clean technology metals and minerals, Morocco has proven
well-mineralised geology yet is largely under-explored. Morocco’s main trading partner is the European
Union, and its modern infrastructure, proximity to Europe and political stability make it an excellent
country for CMR to operate in. For a modest sum, CMR has agreed to acquire 80% of a local Moroccan
exploration company, led by a highly regarded geologist with extensive knowledge of the region. This
will enable CMR to enter into strategic upstream joint ventures in addition to creating its own portfolio
of 100% owned projects. I look forward to updating you as our Moroccan portfolio and partnerships
progress.
In December, we announced the payment of a deposit of £500,000 to secure the exclusivity of RIWAQ
and its portfolio of 146 exploration licences in Saudi Arabia. In May, we completed our review of the
RIWAQ portfolio and took the difficult decision not to pursue the opportunity. This was due to several
factors, including the early stage of the projects and the very large size of the portfolio, which our Board
decided would be too large a drain on CMR’s resources. This deposit was received back post the year
end. The Company is not currently planning to draw down on the existing CLN facility which is in
place with EVM.
I want to thank the Department of International Trade (DIT) for its help in the U.K. and overseas
territories, where we continue to evaluate opportunities. Our success will enable the U.K. market to
benefit from the essential commodities we can deliver for the security of a critical supply chain. 2022
was a year of turmoil, though significant progress was made to stabilise the Company and ensure
governance failings are not repeated. Beyond the Board and I would like to thank the FCA for assisting
us in steering our way through a very difficult path for the Company. I am pleased to report all these
issues are behind us now. The Company is now focused on developing excellent opportunities aligned
with its clear strategy. Importantly, we are making meaningful progress. I look forward to providing
our investors with updates over the next six months that return the Company to growth and value
creation for all stakeholders.
Christopher Lambert
Executive Chairman
11 July 2023
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
6
Strategic and Corporate Governance Report
The Directors present their Strategic Report and Corporate Governance Report of Caerus Mineral Resources
plc for the year ended 31 December 2022.
Principal Activity
The principal activity of the Group is the exploration for, and development of mineral resources and the
identification of future acquisition targets in the same industry.
Review of Business and Operations
A review of the Group’s Business and Operations is as detailed in the Chairman’s Report on pages 4 to 5.
Financial Review and Key Performance Indicators (“KPI”)
Loss for the year
The group loss for the year before taxation amounted to £5,526,529 (2021: loss of £987,970). This includes
the loss attributable to discontinued operations of £1,439,812 (2021: loss of £335,280) and a one-off
impairment charge of £2,918,303 relating to an agreed sale of the Group’s assets in Cyprus.
Cashflow and financing
During the year net cash outflow from operating activities was £889,114 (2019: £938,199). The decreased
outflow is primarily attributable to the write off of the debt from the Joint Venture and option agreements
with Bezant and Jubilee, costs which the Group had to meet without the budgeted partner. Cashflow
forecasts are reported to the Board on a monthly basis to ensure progress is in line with budget. Long term
forecasts are also provided to ensure that the strategy of the business can be adequately funded.
The Group did not receive any funding from shareholders during the year (2021: £4,050,000) and used its
cash reserves to fund both its operations in Cyprus and the deposit of £500,000 to secure the option to acquire
the assets from RIWAQ.
As a result, the Group had a £2.4m net decrease in cash and cash equivalents at year end.
Balance Sheet
During 2022, non-current assets decreased to £83,902 (2021: £2,599,329). This was due to the
reclassification of assets from non-current to current following the agreed sale of the Group’s assets in
Cyprus.
Current assets decreased to £1,158,857 (2021: £2,940,347), this was also due to the sale of the Cyprus assets
and the impairment charge related to this sale.
The total liabilities increased to £1,399,319 (2021: £588,359). This includes a liability of £1,126,589 which
relates to a clause in an amended SPA arising in one of the subsidiaries that is being sold in 2023. More
information is provided in note 25 to these financial statements. Management are disputing this liability.
This liability has been included on the balance sheet under ‘liabilities directly associated with assets
classified as held for sale’.
The three main financial KPIs for the Group are as follows. These would normally allow the Group to
monitor costs and plan future exploration and development activities, however due to the change of the
strategic direction of the Company are only provided for reference purposes:
Continuing and discontinued activities: 2022 2021
Cash and cash equivalents £142,018 £2,508,018
Administrative expenses as a percentage of total assets 93.9% 13.6%
Exploration costs capitalised during the yea
r
£1,003,612 £444,625
Cash has been used to fund the Group’s operations and facilitate its acquisition of future targets.
Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to
ensure they can perform their operational commitments. Exploration costs capitalised during the year consist
of exploration expenditure on the Group’s exploration licences.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
7
Section 172(1) statement and stakeholder engagement
The Directors have acted to promote the success of the Company for the benefit of its members as a whole.
Members are the shareholders of the Company as listed in its shareholder register as well as underlying
shareholders that hold shares through dematerialised nominee accounts. The success of the Company is
dependent on strategy and decision making of the Directors, behaviour and actions of its employees and the
support of a wide range of stakeholders notably citizens and government departments of the countries in
which it operates. Strong relationships with its suppliers and the ability of those suppliers to deliver services
as required is also important to long term success.
The Directors also believe the long-term interests of its members is closely aligned to the Company making
a positive impact on local communities and minimising the impact on the environment. The Directors are
firmly of the belief that, above all else, the quality of its employees including management and contractors
defines the Company's interaction with all stakeholders and contributes greatly to success. As a result, the
character and core values of its Directors, employees and contractors is paramount to the success of the
Company.
Long term decision making
The Company has had a transformative year as it sought to divest its Cyprus assets and align its strategy to
the clean technology sector, positioning itself as an upstream supplier of mined raw materials for battery
chemical plants and Europe’s electric vehicle market. The potential Cyprus Asset sale has nearly completed
and the Directors continue to operate the Cyprus subsidiaries until completion, which is currently expected
at the end of September 2023. The decision to focus on larger scale battery metals upstream development
projects was informed by the growth in demand expected from clean energy technologies such as wind
turbines, electric vehicles and battery storage. Rising deployment of these technologies is expected to drive
exceptional demand growth especially in certain rare earth metals, nickel and lithium. Copper is also metal
of interest although strategically the Directors believe larger scale deposits are more likely to generate long-
term member value than small scale projects such as those discovered on its licenses in Cyprus.
Shareholders
The Company publishes regular announcements to ensure shareholders are kept up to
date with developments within the Group. Going forward the Directors expect to
increase the number of face-to-face meetings with its shareholders and potential
investors.
Employees and contractors
During the period under review the Company directly employed geologists and when
required engaged contractors to provide specialist technical services. Management and
the Company's Directors maintain regular direct contact with employees to ensure any
concerns they have are considered and action taken if necessary.
Suppliers
Procurement of technical services such as drilling, geophysics, geological and assaying
relies on the expertise of management and the availability of those services at the time
(both geographically and the supplier’s capacity). Relations with suppliers is maintained
through regular contact, prompt payment and where necessary ensuring high standards
of health and safety are maintained or implemented. Health and safety management by
the Company is most important during supplied drilling and geophysics work.
Local community
At the subsidiary level, management and the Company's employees maintain excellent
relationships with the local communities where they operate. During the year under
review, the Company used local businesses for the provision of certain services,
specifically for water supply, earth works and drilling support. This created and will
continue to create increased economic activity in the areas in which the Company
operates. Local management also maintains regular dialogue with the local population
and mayors to ensure support for and an informed view o
f
its activities.
Environment
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
8
The Company's current activities are restricted to exploration related activities with
drilling the most environmentally impactful due to the small-scale earth works required
- development of drill pads, water sumps and access roads in some cases. Considerations
include right sizing the drill-pads and sumps, managing runoff and post-drilling
rehabilitation. As part of Troulli’s development, baseline environmental studies were
undertaken at Troulli by an independent Cypriot consultancy.
Business Conduct Standards
The Company has established a range of policies and procedures and continues to develop these as it
grows. During the period under review, several policies were updated including its policies and process
relating to the Market Abuse Regulation, how and when to maintain insider lists and which software to use
as a management and disclosure tool. It has expanded its Board to ensure independence and stable corporate
governance. It also follows the QCA rules on corporate governance as disclosed in the Corporate Governance
Report which is included in this set of report and financial statements.
Principal Risks and Uncertainties
The principal risks and uncertainties lie in the future investment opportunities being available to the Group
to meet its strategy to acquire larger upstream development opportunities in the battery metals sector, aligned
to its strategy of supplying the battery chemicals industry. The Directors also consider the key risk for the
Group to be the maintenance of its reserves of cash and cash equivalents to meet this strategy.
The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors
consider the following risk factors are of particular relevance to the Group’s activities and to any investment
in the Group. It should be noted that the list is not exhaustive and that other risk factors not presently known
or currently deemed immaterial may apply.
The risk factors are summarised in the table below:
Description
Impact Mitigation
Strategic risks
• Successful acquisition of future opportunities
to build shareholder value, the generation of
future income streams or net asset growth
may not materialise.
•
Competitors with significantly greater
financial and technical resources will be able
to outbid the Company on future upstream
opportunities.
•
Over reliance on a small number of key
individuals, in particular the Directors. The
Company may be negatively affected by the
departure of these individuals.
High
• Board actively seeking to diversify current
portfolio risk by acquiring further exploration
assets.
•
Although actively engaged with EVM and
pursuing this strategy, the Company is also able
to pursue other strategic partners and projects.
•
The Company has a steady shareholder base
and will look to raise further finance as and
when new opportunities present themselves.
The Company will be able to initially place the
10,685,313 gifted ordinary shares to raise
finance.
•
The Company has issued share option grants to
its non-independent directors to incentivise and
retain these directors who are considered key to
enhancing the future market value of the
Company. The premium of the exercise price
relative to the share price on the date of issue
was added to ensure the directors are only
rewarded in line with the creation of
shareholder value.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
9
Commodity prices
• The value of further opportunities, assets and
potential earnings, will be affected by
fluctuation in metals and minerals prices (e.g.
Copper, Lithium, Nickel).
•
High inflation including of talent are
significantly increasing mining costs and this
could affect valuations of future acquisitions.
Medium
• The Company monitors commodity pricing
trends to ensure new opportunities are regularly
reassessed in light of expected price
movements to ensure these opportunities
continue to offer good value.
•
Demand for certain commodities is set to
increase as sustainability and clean
technologies are becoming a bigger focus. The
Company will continue to focus on those
commodities exposed to renewable energy
themes in its strategic plan.
Financial risks
• Difficulty raising external funding for new
investment opportunities and exploration
activities in volatile capital markets. The
future availability of such financing is
uncertain.
High
• Regular review of cashflow, working capital
and funding options are performed by the Board
to ensure the Company remains a Going
Concern.
•
Build strong and sustainable relationships with
key shareholders. Place the gifted shares to
avoid unnecessary dilution of the share base.
•
Prudent approach to budgeting and strong
financial stewardship - managing commitments
and liquidity to ensure the Group has sufficient
capital to meet spending commitments.
Environmental, social and governance risks
• ESG reporting is constantly evolving and is a
risk for the majority of mining and metal
companies. The Company must seek to
improve diversity, equity and inclusion as
well as be aware of the urgent priorities to
address climate change. All stakeholders
have increased expectations of the
Company’s ESG reporting and the Company
must meet these demands.
Medium
• ESG is part of the Company’s longer-term,
more strategic view and the Board will consider
ESG at each board meeting and understand how
their decisions will meet the various
stakeholder demands.
•
Policies and processes are being further
enhanced to ensure there is a more rigorous
reporting cycle in which requirements are
identified and met before giving rise to any
issues.
Legal and compliance risks
• Bribery and corruption.
• London Stock Exchange or the Financial
Conduct Authority Rule breaches
Medium
• The Company follows the QCA code of
corporate governance and this is set out in this
annual report and accounts. The Company also
has the various policies in place which are
overseen by the Audit Committee and reviewed
on a regular basis:
o Anti Bribery and Corruption
Policy
o Whistle Blowing Policy
o Anti Money Laundering Policy
• There have been board changes in the current
year and now contains Directors with
professional qualifications in law and
accounting. It is also able to consult with
outside advisers to ensure full compliance.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
10
CORPORATE GOVERNANCE
Introduction:
The Directors recognise the importance of sound corporate governance and seek to apply The Quoted
Company Alliance Corporate Governance Code for Small and Medium size Companies (2018) (the ‘QCA
Code’), which they believe is the most appropriate recognised governance code for a company of the
Company’s size and with a Standard Listing on the London Stock Exchange. The Directors believe that the
QCA Code will provide the Company with the framework to help ensure that a strong level of governance
is developed and maintained, enabling the Company to embed a governance culture into its organisation.
The QCA code can be found on our website: https://www.caerusmineralresources.com
The QCA Code has ten principles of corporate governance that the Company has committed to
apply within the foundations of the business. These principles are:
1. Establish a strategy and business model which promote long-term value for shareholders;
2. Seek to understand and meet shareholder needs and expectations;
3. Take into account wider stakeholder and social responsibilities and their implications for long term
success;
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation;
5. Maintain the board as a well-functioning balanced team led by the Chair;
6. Ensure that between them the Directors have the necessary up to date experience, skills and capabilities;
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
8. Promote a corporate culture that is based on ethical values and behaviours;
9. Maintain governance structures and processes that are fit for purpose and support good decision-making
by the Board; and
10. Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders.
Here follows a short explanation of how the Company applies each of the principles, including where
applicable any deviation from those principles.
Principle One
Business Model and Strategy
The Board believes that considerable shareholder value can be delivered if the Company remains focused
on its strategy of taking opportunities aligned to the European Electric Vehicle supply chain and its
compliance with increasing global legislation. As a result of this focus, the Company is in early-stage
discussions with several key projects that offer exposure to clean energy commodities. In our efforts to
enhance the supply chain for the ever-growing demand for electric vehicles and drawing on the expertise of
the Board, we have also established a solid network of key strategic partners to assist us in achieving our
goals.
Principle Two
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its
shareholders. Virtual roadshows have been held during the year and the Directors have met with shareholders
to discuss issues and provide feedback over the Group’s evolving strategy. In addition, all shareholders were
invited to attend the annual AGM that was held in 2022 and are again encouraged to attend the next AGM
that will be held in June 2023. Investors also have access to current information on the Group through its
website, www.caerusmineralresources.com
Principle Three
Considering wider stakeholder and social responsibilities
The Board recognises that the long-term success of the Group is reliant upon open communication with its
internal and external stakeholders: employees, investee companies, shareholders, contractors, suppliers,
regulators and other stakeholders. The Group has an ongoing relationship with a broad range of its
stakeholders and has regular and direct interaction where it provides these stakeholders with opportunities
to raise issues and provide feedback to the Group.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
11
Principle Four
Risk Management
The Board is responsible for ensuring that procedures are in place and being implemented effectively to
identify, evaluate and manage the significant risks faced by the Group. It has an established framework of
internal financial controls to address financial risk and is regularly reviewing the non-financial risks to ensure
all exposures are adequately managed. The Group maintains appropriate insurance cover in respect of legal
actions against the Directors as well as against material loss or claims against the Group. The principal risks
and uncertainties are as set out in the Strategic Report. An internal audit function is not considered necessary
or practical due to the size of the Group and the close control exercised by the Board as a whole.
Principle Five
A Well Functioning Board of Directors
The Board currently comprises of the Executive Chair, Chris Lambert, the Chief Executive, Charlie Long,
and three non-executive Directors, Russell Thomson, Dominic Traynor and Adrian England. Adrian England
is considered to be a fully independent director. Further information about the directors can be found on the
company website at www.caerusmineralresources.com.
The Chairman, Chris Lambert has a background in financial services and commodity trading in London over
a career spanning 25 years. He was head of global trading operations for a number of major banks and
commodity houses. He has extensive experience in non-executive and executive Chairman roles for public
companies and of asset identification and acquisition in the natural resources sector.
Charlie Long is a mining specialist with industry and financial services experience. He started his career in
mining over 20 years ago as the founder of a building materials quarrying company in China. He has worked
as a sell-side mining analyst for over 10 years, including at Singer Capital Markets, Sanlam Securities and
finnCap. Charlie was business development manager for AIM-listed Avesoro Resources and more recently
CFO for Audere Solutions, a UK based risk management advisory group.
Russell Thomson is a professional accountant (CPA) with over 30 years working experience in the
construction, engineering, railway, energy, natural resources and mining industries in Australia, SE Asia,
USA and South Africa. He has been a Director and CFO of EV Metals Group plc since 2014 and is a director
of all EV Metal subsidiaries. Russell was formerly the CFO and Director of ASX-listed Podium Minerals
Limited.
Dominic Traynor is a capital markets solicitor and company director with extensive experience in the public
markets and corporate governance. He is a partner at City law firm, Druces LLP and was a founding director
of both EV Metals Group plc and EV Metals UK Ltd. His other corporate positions include director of Prism
Group AG, an investment firm focussed on Fintech and money services and MAST Energy Developments
plc where he is a non-executive director and chairman of the audit committee. He was also a founding
director of AIM-listed SigmaRoc plc.
Adrian England has been in practice since 1982 when he started his professional life as a solicitor. His areas
of expertise include commercial litigation, property litigation, employment and business law. Over the
course of over 20 years, Adrian has represented numerous public limited companies in substantial
commercial litigation matters and undertakes most of his client’s advocacy in court.
All Directors are subject to re-election in accordance with both the requirements of the UK Companies Act
and the Company’s articles of association (“Articles”). The Company’s Articles state that Directors are
subject to re-election at intervals of no more than three years. The letters of appointment for all Directors
stipulate the time commitment that each Director is expected to provide to the Company. The executive
Directors are contracted to provide these services on an exclusive basis, though board approval may be given
to engage in outside paid work. The non-executive Directors acknowledge in their letter of appointment that
the nature of the role makes it impossible to be specific on maximum time commitment, but that there will
be a minimum of 2-3 days a month, which will include preparation for and attendance at monthly board
meetings. The Board Chairman serves as chair of every meeting of the Board of Directors.
The Board is expected to meet at least 6 times per year. It has established an Audit Committee and a
Remuneration Committee, particulars of which appear hereafter. The Board has agreed that decisions on
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
12
appointments to the Board are made by the Board as a whole and so has not created a Nominations
Committee. The Board considers that this is appropriate given the Group’s current stage of operations. It
shall continue to monitor the need to match resources to its operational performance and costs and the matter
will be kept under review going forward.
Attendance at Board and Committee Meetings
The Group will report annually in the Directors’ Report on the number of Board and committee meetings
held during the year and the attendance record of individual Directors. Directors meet formally and
informally both in person and by telephone. To date there have been at least bi-monthly informal meetings
of the Board and 17 formal meetings during 2022/3, and the volume and frequency of such meetings is
expected to continue at this rate.
Director Number of formal board meetings with possible attendance record in 2022/3
Adrian England
Christopher Lambert
Charles Long
Russell Thomson
Dominic Traynor
Mart
y
n Churchouse
1/1 (and 1/1 Audit Committee Meeting)
8/8
9/9
4/8 (and 2/2 Remuneration Committee Meetings and 2/2 Audit Committee Meetings)
7/8 (and 2/2 Remuneration Committee Meetings and 2/2 Audit Committee Meetings)
4/4
And
r
ew Daniels 4/4 (and 1/1 Remuneration Committee Meetin
g
)
Michael Johnson 4/4 (and 1/1 Remuneration Committee Meetin
g
)
Principle Six
Appropriate Skills and Experience of the Directors
The Board currently consists of five Directors and, in addition, the Company has employed the outsourced
services of Orana Corporate LLP to act as the Company Secretary. The Company believes that the Directors
have wide ranging experience working for, and, or advising businesses operating within the natural resources
sector. They also have an extensive network of relationships to reach key decision-makers to help achieve
their strategy.
The Board recognises that it currently has a limited, all male, Board and does not have a Finance Director.
This will form a part of any future recruitment consideration if the Board concludes that replacement or
additional Directors are required. The Board is aware, that as it grows, it will look to recruit and develop a
diverse and gender-balanced team.
There is no formal process to keep Directors’ skill sets up-to-date given their wealth of experience. However,
the Company’s lawyers, auditors and broker provide regular updates on governance, financial reporting and
Listing rules and the Board is able to obtain advice from other external bodies when necessary.
Hill Dickinson LLP, a commercial law firm, were engaged during the year to support the Board into an
investigation into the former Board and various corporate governance issues. The outcome of which was a
settlement with the former directors resulting in the cancellation of 1.1 million warrants and the gifting of
10.7 million shares back to the Company.
Principle Seven
Evaluation of Board Performance
Internal evaluation of the Board, the Committees and individual Directors will be undertaken on an annual
basis in the form of peer appraisal and discussions to determine the effectiveness and performance against
targets and objectives. As a part of the appraisal the appropriateness and opportunity for continuing
professional development whether formal or informal is discussed and assessed.
Principle Eight
Corporate Culture
The Board recognises that their decisions regarding strategy and risk will impact the corporate culture of the
Group as a whole which in turn will impact the Group’s performance. The Directors are very aware that the
tone and culture set by the Board will greatly impact all aspects of the Group and the way that consultants
or other representatives behave. The corporate governance arrangements that the Board has adopted are
designed to instil a firm ethical code to be followed by Directors, consultants and representatives alike
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
13
throughout the entire organisation. The Group strives to achieve and maintain an open and respectful
dialogue with representatives, regulators, suppliers and other stakeholders. Therefore, the importance of
sound ethical values and behaviours is crucial to the ability of the Group to successfully achieve its corporate
objectives. The Board places great importance on this aspect of corporate life and seeks to ensure that this
flows through all that the Group does. The Directors consider that at present the Group has an open culture
facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge. The
Group has adopted, with effect from the date on which its shares were admitted to the LSE’s main market
for listed securities, a code for Directors' dealings in securities which is appropriate for a company whose
securities are traded on this main market and is in accordance with the requirements of the Market Abuse
Regulation which came into effect in 2016.
Issues of bribery and corruption are taken seriously. The Group has a zero-tolerance approach to bribery and
corruption and has an anti-bribery and corruption policy in place to protect the Group, its employees and
those third parties to which the business engages with. The policy is provided to staff upon joining the
business and training is provided to ensure that all employees within the business are aware of the importance
of preventing bribery and corruption. Each employment contract specifies that the employee will comply
with the policies. There are strong financial controls across the business to ensure on going monitoring and
early detection.
Principle Nine
Maintenance of Governance Structures and Processes
The Group’s governance structures are appropriate for a company of its size. The Board also meets regularly
and the Directors continuously maintain an informal dialogue between themselves. The Chairman is
responsible for the effectiveness of the Board as well as primary contact with shareholders, while the
execution of the Group’s investment strategy is a matter reserved for the Chief Executive. The current
Governance structure is outlined below:
Audit committee – This is led by Adrian England (Chair). Russell Thomson and Dominic Traynor are also
on the committee. This committee has primary responsibility for monitoring the quality of internal controls
and ensuring that the financial performance of the Group is properly measured and reported. It receives
reports from the executive management and auditors relating to the interim and annual accounts and the
accounting and internal control systems in use throughout the Group. The Audit Committee meets at least
twice in each financial year and it has unrestricted access to the Company’s auditors.
Remuneration committee – This is led by Russell Thomson (Chair). Adrian England and Dominic Traynor
are also on the committee. The Remuneration Committee reviews the performance of the executive directors
and employees and makes recommendations to the Board on matters relating to their remuneration and terms
of employment. The Remuneration Committee also considers and approves the granting of share
options/warrants pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the
Company’s Remuneration Policy.
Principle Ten
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its
shareholders in compliance with regulations applicable to companies quoted on the LSE’s Main Market. All
shareholders are encouraged to attend the Company's Annual General Meeting where they will be given the
opportunity to interact with the Directors.
Investors also have access to current information on the Company through its website,
www.caerusmineralresources.com, and via Chris Lambert, Executive Chairman, who is available to answer
investor relations enquiries.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
14
Report of the Audit Committee
This report is prepared in accordance with the Quoted Companies Alliance (QCA) corporate governance
code for small and mid-sized quoted companies, revised in April 2018. A summary of the Committee’s role
and membership can be found in the Governance section of this Annual Report. Committee meetings are
held at least twice a year, and the external accountant is invited to attend together with the external auditor.
During the 2022, two meetings of the Committee were held during the year, and the following significant
issues were considered:
Significant issue Summary of significant issue Actions and Conclusion
Going concern Assessment of the Group’s ability to
continue as a going concern as part
of the preparation of the financial
statements.
This assessment of going concern
covers a period of at least 12 months
from the date of signing the financial
statements.
On 30 September 2022, the Board announced the
renewal of the EV Metals Strategic Alliance.
Although this strategy has not progressed as expected
the Company is still expecting to receive a total of
£312,300 in commission from the placing of EVM
shares as part of the Settlement Agreement with
previous Directors. The Directors are confident that
various fund raising opportunities are available in the
coming months and therefore the Committee, whilst
they draw attention to the material uncertainty that
exists at the date of these accounts, nevertheless
consider it appropriate to continue to adopt the going
concern basis of accounting in preparing the financial
statements. The going concern statement is detailed
in full in note 3 of the consolidated financial
statements.
Fair value of the
assets held for
resale
The assets held for resale as per the
Sales and Purchase Agreement
signed on 25 January 2023 were
assessed under the requirements of
IFRS 5.
Management concluded the fair value of the assets
held for resale should be recorded as £424,328. This
resulted in an impairment as set out in note 13 to the
consolidated financial statements.
Treasury shares 10,685,313 shares were gifted back
to the Company following the
settlement with the former Board.
There is no specific accounting
treatment for gifted shares.
Management concluded that the accounting treatment
in IAS 32 for Treasury Shares should be followed as
set out in note 20 to the consolidated financial
statements.
Share-based
payments
The Company issued share option
grants to its non independent
Directors. These were assessed in
accordance with IFRS 2 and the
charge will be calculated using
market based conditions
including
share price volatility, risk free rate,
and expected life.
Management used inputs from impartial external
sources in order to appropriately calculate share-
based payments reserve postings and share based
payments expense during the year. Calculations are
set out in note 23 to the consolidated financial
statements.
External Auditor's Fees
There was no significant non-audit work carried out by PKF subsequent to their appointment. Full details of
fees paid during the year may be found in note 6 to the financial statements.
Objectivity and Independence
The Committee continues to monitor the Auditor’s objectivity and independence and is satisfied that PKF
and the Company have appropriate policies and procedures in place to ensure that these requirements are
not compromised.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
15
Re-appointment of External Auditor
The Committee recommends to the Board the re-appointment of PKF Littlejohn LLP as Auditor at the
forthcoming 2023 annual general meeting (AGM), and PKF Littlejohn LLP has expressed its willingness to
continue in office.
Internal controls/audit
The Directors acknowledge their responsibility for the Groups’ system of internal control and for reviewing
their effectiveness. These internal controls are designed to safeguard the assets of the Group and ensure the
reliability of financial information for both internal use and external publication. Whilst the Directors are
aware no system can provide absolute assurance against material misstatement or loss, regular review or
internal controls are undertaken to ensure that they are adequate and effective.
The Group does not currently have an internal audit function due to the small size of the Group and limited
resources available. To date, the Committee has decided that an internal audit function is not required but
will continue to assess the situation on a regular basis.
Going Concern
The Directors, whilst they draw attention to the material uncertainty that exists at the date of these financial
statements, nevertheless consider it appropriate to continue to adopt the going concern basis of accounting
in preparing the financial statements. The going concern statement is detailed in full in note 2 of the
consolidated financial statements.
Environment, Social and Governance Statement
The Group is committed to providing a safe working environment for all its employees and to responsibly
manage all of the environmental interactions of its business. Its objective is to perform and achieve at a level
notably in excess of the regulatory minima required by the host countries in which it does business.
To meet these objectives, the Group has defined and adopted a Health, Safety, Environment, and Community
(“HSEC”) policy that applies to all Group activities in Cyprus and elsewhere.
The Group is committed to the implementation of a high standard of HSEC management and delivery from
exploration through production to eventual mine closure. Its field staff are accountable for delivery of the
HSEC policy and its Directors, Officers and Employees are responsible for compliance with the expected
high standards of HSEC performance.
The following specific commitments are made as regards HSEC matters:
Health & Safety
• Provision of health and safety training to all employees;
• All necessary measures are taken to minimise workplace injuries, and
• Establishment of management and advisory programmes for the prevention of transmissible diseases.
Environment
The Group prides itself on being a skilled and responsible developer. It functions with the clear mandate of
being in full compliance with corporate standards, applicable environmental laws, regulations and permit
requirements. It has an internal monitoring programme in place that plays a critical role in continuously
improving its environmental performance. This is reported to the Board annually.
The Group strives to minimise its environmental effects wherever and to:
• Comply with applicable laws, regulations and commitments wherever it operates;
• Ensure it has the necessary resources, procedures, training programmes and responsibilities in place to
achieve its environmental objectives;
• Strive to protect air and water quality, minimise consumption of water and energy, and protect natural
habitats and biodiversity;
• Promote an ongoing environmental dialogue with its stakeholders in the communities where it conducts
business;
• Collaborate with stakeholders to define environmental priorities and to protect the environment, and
• Consider the requirement for environmental protection in all aspects of exploration and development.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
16
Communities
As well as recognising the need to protect the natural environment the Group will follow best practices in:
• its interactions with local communities,
• respecting customs and cultural practices, and
• minimising intrusion upon lifestyles and traditions.
The Group will not violate human rights and will, wherever possible, favour employment for local people
when it recruits. It will strive to be recognised as a socially aware and responsible business.
Climate-Related Financial Disclosures
The Group recognises that climate change represents one of the most significant challenges facing the
world today. Under the Listing Rules compliance with the Task Force on Climate-Related Financial
Disclosures (TCFD) is required for premium and standard listed companies on a comply or disclose basis.
These new listing rules came into effect on 1st January 2021 for UK premium listed companies and 1st
January 2022 for those on the standard list.
TCFD Purpose
In contrast to the Streamlined Energy and Carbon Reporting disclosures which requires listed companies
to disclose their greenhouse gases emissions, CO
2
and energy usage, TCFD is primarily designed to
protect shareholders from the impacts of climate change by ensuring companies adapt to the risks and
opportunities that climate change presents. In the mining industry an example would be a brown thermal
coal exploration company presented with reduced market demand over the next 25 years.
TCFD adherence requires disclosure of greenhouse gas emissions as part of the Metrics and Targets
section. This creates a degree of overlap with SECR requirements, however TCFD’s focus is
understanding how GHG emissions may expose a company to future changes in law, regulation or market
dynamics which penalise higher polluting industry sectors, sub sectors or companies.
Climate change risks and opportunities
The following table includes our TCFD disclosures and where necessary explanations why the Company
has not fully met and the board’s plans to implement these in future.
Caerus Mineral Resources’ Governance, Strategy, Risk Management, Metrics and Targets
Governance
Board of director’s oversight The company does not currently have a risk or climate risk
committee although climate risk is discussed at board meetings
when relevant. A climate risk committee will be implemented
when deemed necessary, most likely once a development project
reaches the Bankable Feasibility Stage.
Since our strategy and business plan are to capitalise on climate
change by investing in Clean Technology raw materials, climate
change opportunity is embedded in our activity.
Assessment and management Climate related issues identified and discussed during the period
include the availability of water for a potential mining operation in
Cyprus (risk) and the availability of improved solar technology for
mine power (opportunity).
The environmental consultant engaged in Cyprus reports to the
subsidiary level director who reports directly to the board. A
Director has also met the environmental consultant.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
17
Strategy
Risks and opportunities Climate related issues identified and discussed include:
1. the availability of water due to changes in precipitation patterns
for a potential mining operation in Cyprus (risk) and;
2. the improving technology and lower cost of renewable solar
energy to power a mining operation (opportunity).
In the medium term, the directors believe that demand for Clean
Technologies will increase demand for a range of metals and
minerals including copper, nickel, aluminium and lithium. This
provides an opportunity which is the basis for the Company’s
strategy.
Strategy The company’s strategy is to acquire and develop mining projects
directly exposed to the Clean Technology economy of the future.
The company’s historical and future acquisitions, investments and
operating costs are intended to deliver the strategy of developing
Clean Technology metals and minerals.
Under all climate change scenarios, the board anticipates an
increase in Clean Technology demand and therefore the metals and
minerals that make these technologies possible.
Risk Management
Risk identification The company has identified key climate change related risks as
follows:
1. Supplier disruption.
2. Competition for clean technology related metals and
minerals projects.
3. Competition for equity capital between similar upstream
companies in the clean technology metals sub sector.
4. Climate change physical impacts on jurisdiction and
regions where metals and minerals deposits are located.
5. Potential for higher input costs, notably for fossil fuels
and building materials such as cement and steel.
6. Reduced demand for metal concentrates which have been
produced using higher than average GHG emissions
energy such as coal fired power.
Processes and management The company’s strategy is to acquire and develop mining projects
directly exposed to Clean Technology industries.
A key part of the mine development process are the Pre-Feasibility
and Bankable Feasibility studies, both of which include
investigations into mine emissions (gases and fluids) and waste
(including tailings). The PFS and BFS studies also include:
1. Investigations into the use of new technologies (especially
renewable sources of energy such as solar).
2. Environmental baseline studies.
3. Water supply studies, rainfall pattern change, and regional
hydrogeology.
4. Climate and weather patterns including average monthly
temperatures.
The PFS and BFS studies are authored by independent technical
experts and managed by senior management and board members.
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
18
For new project acquisitions, the company’s due diligence
processes include a desktop review which cover all the above
potential risks and opportunities.
Metrics and Targets
GHG metrics The company’s greenhouse gas emissions are currently low due to
the nature of operations. During the period under review the main
GHG emitters were:
1. Short distance travel in Cyprus.
2. Employee / contractor accommodation and associated
energy use.
3. Exploration drilling and associated logistics.
As noted in the Company’s SECR disclosure below, energy usage
was below 40,000 kWh and as a result complete Scope 1, 2 and 3
GHG data was not collected. During 2023 the Company will
implement improved GHG data collection methodology at the
Company and subsidiary levels although it expects GHG
emissions and energy usage to remain relatively low.
Climate related physical risks The Company’s exposure to physical risk relates to changes to the
environment where its development operations are based. The
principal physical risk identified in Cyprus is the potential for
reduced rainfall and how this impacts water supply at a future
operation. The Company is working on a metric which fairly
quantifies this and other physical risks.
At the UK Company level, the directors ensure that climate change risks and opportunities are embedded
in strategy. The directors are of the view that the successful acquisition and development of Clean
Technology metals projects is aligned to TCFD opportunities and will result in share price appreciation.
As a result, at this stage through an option scheme, the executive directors are incentivised to deliver
share price appreciation which is the only KPI for Directors.
Where it works with host communities, the Company aims to help build their understanding of how to
minimise greenhouse gas and other emissions.
The Board will ensure that in its strategic plans climate related risks and opportunities are identified over
the short, medium and long term and the impact of these risks are included in financial and scenario
planning. This will principally be achieved through understanding how risks and opportunities are likely
to affect the company’s development projects and planning accordingly.
Governance will be strengthened to ensure reporting on these climate related risks is meaningful and
transparent. Risk Management will include a process for identifying, assessing, and managing climate-
related risks and the Group will establish various metrics and targets to assess climate-related risks and
opportunities.
Streamlined Energy and Carbon Reporting
The Group’s current operations are limited to exploration activities in Cyprus and due diligence activities
in various other jurisdictions where it has and will continue to assess potential development projects for
investment. During 2022 the Company estimated journey distance in miles based on average daily
mileage at the Cyprus operations, this was used to estimate fuel consumption. A similar approach was
used to estimate the energy use in the rented accommodation. The Cyprus operations employed three
geologists who shared accommodation and a vehicle. Other significant GHG emissions related to
contractor drilling activity which consisted of one drill rig for two relatively short periods during FY23.
One of the requirements of the Streamlined Energy and Carbon Reporting (SECR) initiative is to report
energy use that is used to calculate the GHG emissions reported in the Directors’ Report. This needs to
be provided in kilowatt hours (kWh). However, only quoted companies and large unquoted companies
that have consumed more than 40,000 kilowatt-hours (kWh) of energy in the reporting period must
CAERUS MINERAL RESOURCES PLC STRATEGIC AND GOVERNANCE REPORT
19
include energy and carbon information within their directors’ report. The Group does not currently
exceed this threshold and is therefore presently exempt from the SECR reporting requirements.
The Group works to minimise its contribution to greenhouse gas emissions in Cyprus and will maintain
this focus at all future operations. The Group intends to publish GHG and energy emissions data in line
with the SECR regulations as the Group’s projects develop. As explained in the TCFD disclosure the
company will be implementing improved GHG data collection processes throughout the Group during
2023.
Whistleblowing
The Group has adopted a formal whistleblowing policy which aims to promote a very open dialogue with
all its employees which gives every opportunity for employees to raise concerns about possible
improprieties in financial reporting or other matters.
Diversity
The Board are aware of its lack of diversity in its Board and senior management. It has an all-white, male
Board and therefore do not meet any of the board diversity targets as detailed out in Policy Statement PS
22/3 of the Listing Rules and DTR requirements, on gender or ethnicity. The Board will address these
issues going forward, however, the Board is conscious that the Group is small, with no employees except
Directors and the recruitment of a diverse Board in the immediate future may not be feasible owing to the
necessary expertise required.
Events after the reporting date
Events after the reporting date are as described in the Chairman’s Report and Note 28 to the financial
statements.
Market Abuse Regulations
The Group is required to comply with article 18(2) of the Market Abuse Regulation (“MAR”) with
reference to insider dealing and unlawful disclosure of inside information. The LSE requires traded
companies to maintain insider lists as set out in the MAR. The Board has put in place a MAR compliance
process and this and the Company’s regulatory announcements are overseen by the Board of Directors.
This report was approved by the Board on 11 July 2023 and signed on its behalf by:
Charlie Long
Director
CAERUS MINERAL RESOURCES PLC REPORT OF THE DIRECTORS
20
Report Of The Directors
The Directors present their report, together with audited consolidated financial statements for the year ended
31 December 2022 (with comparative figures for the twelve month period ended 31 December 2021).
Caerus Mineral Resources plc (“the Company”) is incorporated and domiciled in England and Wales, with
Registered Number 11043077, under the Companies Act 2006. The Company was incorporated on 1
November 2017 under the name Leopard Mineral Investments Limited as a private limited company and
subsequently re-registered as a public limited company on 9 January 2018; and changed its name to Caerus
Mineral Resources plc on 18 September 2018.
The Company’s registered office is at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF.
Principal Activities
The principal activity of the Group is the exploration for, and development of mineral resources, including
in Cyprus, and the identification of future acquisition targets in the same industry.
Results and Dividends
The total loss for the Group for the year ended 31 December 2022 was £5,526,529 (2021: loss of £987,970)
which included a one-off impairment of £2,918,303 which was incurred due to the proposed sale of the assets
in Cyprus. Cash held by the Group as at 31 December 2022 was £142,018 (2021: £2,508,108).
The Directors do not recommend the payment of a dividend (2021: £Nil). The nature of the Group's business
means that it is unlikely that the Directors will recommend a dividend in the coming years. The Directors
believe the Group should seek to generate capital growth for its Shareholders. The Group may recommend
distributions at some future date when it becomes commercially prudent to do so, having regard to the
availability of the Group's distributable profits and the retention of funds required to finance future growth.
Directors’ and Officers’ Indemnity Insurance
During the financial year, the Group maintained insurance cover for its Directors and Officers under a
Directors’ and Officers’ liability insurance policy. The Group has not provided any qualifying indemnity
cover for the Directors.
Business Review, Future Developments and Key Performance Indicators
A review of the business, future developments and key performance indicators are outlined in the Chairman’s
Report and the Strategic and Corporate Governance Report.
Directors
The Directors who held office during the year under review, and as at the date of this report, were as follows:
Adrian Charles England (appointed 1 December 2022)
Christopher Lambert (appointed 25 May 2022)
Charles Oliver Long (appointed 16 May 2022)
Russell Thomson (appointed 25 May 2022)
Dominic Traynor (appointed 25 May 2022)
Martyn John Churchouse (resigned 16 May 2022)
Prof Michael Stephen Johnson (resigned 16 May 2022)
Harold Andrew Daniels (resigned 11 July 2022)
Richard Hawken (appointed 16 May 2022, resigned 25 May 2022)
Brian Rowbotham (appointed 16 May 2022, resigned 25 May 2022)
CAERUS MINERAL RESOURCES PLC REPORT OF THE DIRECTORS
21
Directors’ interests
The beneficial interests of the Directors who held office at 31 December 2022 and their connected parties
in the share capital of the Company is included in the Remuneration report on pages 24-28.
Substantial shareholders
The Company has been notified of the following interests of 3 per cent. or more in its issued share capital
as at 17 May 2023 (as calculated using the TVR holding):
Number of
Ordinary shares
Percentage of
TVR** holding
Percentage of
overall holding
Caerus Mineral Resources Plc* 10,685,313 N/A 17.5%
EV Metals Group Plc 10,000,000 19.8% 16.3%
Hargreaves Lansdown (Nominees) Limited 7,511,318 14.9% 12.3%
Interactive Investor Service Nominees Limited 6,425,440 12.7% 10.5%
Jason Croppe
r
7,220,000 14.3% 11.8%
Indo European Mining PR Ltd 4,240,987 8.4% 6.9%
*Purchase of own shares
During the year the Company were gifted 10,685,313 Ordinary Shares (“Returned Shares”) with a nominal
value of £0.01. Nil consideration was paid by the Company for these shares as they were gifted back to the
Company by former directors as part of a settlement negotiated for the loss of value in the Company due to
previous management decisions.
**Total Voting Rights (“TVR”)
The Returned Shares are registered in the name of the Company and are non-voting shares, they are not
capable of being voted on by the Company in respect of any resolutions put forward at any future General
Meeting or Annual General Meeting. Therefore the TVR in the Company has been reduced to 50,525,945
Ordinary Shares carrying one vote per share and each shareholders voting rights will be increased on a pro-
rata basis. The Company's issued share capital, inclusive of the gifted shares held by the Company, will
remain at 61,211,258.
Directors’ remuneration
Directors’ remuneration is disclosed in the Directors’ Remuneration Report on pages 24-28.
Going concern
The financial statements have been prepared under the going concern assumption. Under the going concern
assumption, an entity is ordinarily viewed as continuing in business for at least the 12 month period from
the date of Board approval of the financial statements, with neither the intention nor the necessity of
liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. The Group
is not currently generating revenues and therefore an operating loss has been reported and is expected in the
12 months subsequent to the date of these financial statements.
On 10 May 2023, the Company received the return of a £500,000 deposit relating to the decision not to
pursue a potential acquisition. The Company is in addition expecting a receipt of £312,300 in relation to
commission payments received from EV Metals Group for the placing of their shares as part of the settlement
terms agreed with a former director.
The Company has the ability to place the approximately 10.7 million shares held by itself to raise additional
finance without dilution to the current shareholders.
The Company has performed a review of its financial resources taking into account, the cash currently
available to the Company which includes the following sources of funding, which though not available at
the date of the signing of these consolidated financial statements are expected to be available in the
immediate future.
CAERUS MINERAL RESOURCES PLC REPORT OF THE DIRECTORS
22
• The Company announced the sale of the Cyprus Assets and is expecting to receive a further
$428,001 in final payment by 30 September 2023.
• The Company has agreed to acquire 80% of a Moroccan company ‘Atlantic Research Minerals’ and
will be seeking to raise finance in the short term to fund the building of its exploration portfolio.
The Company has included these funds in its cash flow projections for the twelve month period from the
date of this report, and based on this review, and after considering reasonably possible operational downside
sensitivities and uncertainties, the Board, whilst acknowledging this material uncertainty, remains confident
of raising finance and therefore have concluded that there is a reasonable expectation that the Company has
access to adequate resources to continue in operational existence for the foreseeable future. For this reason,
the Directors have adopted the going concern basis in preparing the financial statements.
Post Balance Sheet Events
These are detailed out in note 28 to the financial statements.
Financial Risk Management
These are detailed out in note 26 to the financial statements.
Provision of Information to Auditors
The Directors who held office at the date of approval of this Report of the Directors confirm that, so far as
they are individually aware, there is no relevant audit information of which the Group’s auditor is unaware;
and each Director has taken all the steps that they ought to have taken as Director to make themselves aware
of any relevant audit information and to establish that the Group’s auditor is aware of that information.
PKF Littlejohn LLP have expressed their willingness to continue in office and a resolution to re-appoint
them will be proposed at the annual general meeting.
Corporate Governance
A report on Corporate Governance is set out in the Strategic Report.
Annual General Meeting
The Company will hold its Annual General Meeting for 2022 on 29 June 2023.
Listing
The Company’s ordinary shares have been traded on the standard segment of the Main market Listing of the
LSE since 19 March 2021. Novum Securities Limited is the Company’s broker.
Streamlined Energy and Carbon Reporting
This is referred to in the Strategic and Governance Report on pages 18-19.
Political and charitable contributions
The Company made a charitable donation of £100 in 2022 (2020 £575). No political donations were made
in either year.
Statement of Directors Responsibilities
The Directors are responsible for preparing the Annual Report, Report of the Directors, Remuneration Report
and the financial statements in accordance with applicable law and regulations.
CAERUS MINERAL RESOURCES PLC REPORT OF THE DIRECTORS
23
Company law requires the Directors to prepare consolidated financial statements for each financial year.
Under that law the Directors have elected to prepare the Group and Parent financial statements in accordance
with UK-adopted international accounting standards. Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of
the Group and the Company and of the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable UK adopted international accounting standards have been followed,
subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the financial statements and the Directors’
Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and the Group 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 the financial statements may differ from legislation in other jurisdictions.
Directors’ Responsibility Statement Pursuant to Disclosure and Transparent Rules
Each of the Directors, whose names and functions are listed on page 3 confirm that, to the best of their
knowledge and belief:
• The Financial Statements prepared in accordance with UK adopted international accounting standards
and give a true and fair view of the assets, liabilities, financial position and loss of the Group and
Company; and
• the Annual Report and Financial Statements, including the Business review, includes a fair review of
the development and performance of the business and the position of the Group and Company, together
with a description of the principal risks and uncertainties that they face.
This report was approved and authorised for issue by the Board on 11 July 2023 and signed on its behalf by:
Charlie Long
Director
CAERUS MINERAL RESOURCES PLC REMUNERATION REPORT
24
Directors’ Remuneration Report
The Company has an established Remuneration Committee. The Committee reviews the scale and structure
of the Directors’ fees, taking into account the interests of shareholders and the performance of the Group
and Directors.
The Company’s auditors, PKF Littlejohn LLP are required by law to audit certain disclosures and where
disclosures have been audited, they are indicated as such.
Statement of Caerus Mineral Resources Plc’s policy on directors’ remuneration by the chair of the
Remuneration Committee
As chair of the Remuneration Committee I am pleased to introduce our Directors’ Remuneration Report.
One of the Remuneration Committee’s aims is to provide clear, transparent remuneration reporting for our
shareholders which adheres to the best practice corporate governance principles that are required for listed
organisations.
The Directors’ Remuneration Policy, is set out below.
Directors’ remuneration packages are designed to motivate and retain Directors, as well as have regard for
similar jobs in comparable companies. They also take into consideration reward for individual performance
and enhancing value to shareholders. The performance of the Directors will be reviewed annually and an
increase in salary is awarded in line with this evaluation. The current Board of Directors are all newly
appointed in the year and therefore no annual review has taken place.
The executive Directors’ remuneration package includes a basic annual salary, a minimum contribution to
the Company’s stakeholder pension plan, an award of options in line with individual performances.
The key activities of the Remuneration Committee are:
• to determine and agree with the Board the framework or broad policy for the remuneration of the
Company's chair, chief executive, and such other members of the executive management as it is designated
to consider;
• in determining such policy, take into account all factors which it deems necessary including relevant legal
and regulatory requirements;
• recommend and monitor the level and structure of remuneration for senior management;
• when setting remuneration policy for directors, review and have regard to the remuneration trends across
the Company, and review the on-going appropriateness and relevance of the remuneration policy;
• obtain reliable, up-to-date information about remuneration in other companies;
• approve the design of, and determine targets for, any performance related pay schemes operated by the
Company and approve the total annual payments made under such schemes;
• ensure that contractual terms on termination, and any payments made, are fair to the individual, and the
Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised; and
• oversee any major changes in employee benefits structures throughout the Company.
The Remuneration Committee comprises all three non-executive directors, with the Chair being Russell
Thomson.
Remuneration Components
The Company remunerates directors in line with best market practice in the industry in which it operates.
The components of Director remuneration that are considered by the Board for the remuneration of directors
in future years are likely to consist of:
• Base salaries
• Pension and other benefits
• Share incentive arrangements
The Remuneration Committee do not consider it necessary to have maximum amounts of each remuneration
component.
CAERUS MINERAL RESOURCES PLC REMUNERATION REPORT
25
The executive Chair’s remuneration package includes a basic annual salary, a car allowance and an award
of share options in line with individual performance. No other payments are made for compensation for loss
of office.
The Company has previously established a workplace pension scheme, however, there are currently no active
members of this scheme. The Company has not paid out any excess retirement benefits to any Directors or
past Directors. The Company has not paid any compensation to past Directors. Amounts paid by the Group
in respect of Directors’ services and options issued for performance are shown in note 23 to the financial
statements.
Recruitment Policy
Base salary levels will take into account market data for the relevant role, internal relativities, their individual
experience and their current base salary. For external and internal appointments, the Board may agree that
the Company will meet certain relocation and/or incidental expenses as appropriate.
Payment for loss of Office
The Committee will honour the Executive Director’s contractual entitlements. Service contracts do not
contain liquidated damages clauses. If a contract is to be terminated, the Committee will determine such
mitigation as it considers fair and reasonable in each case. There is no agreement between the Company and
its Executive Director or employees, providing for compensation for loss of office or employment that occurs
because of a takeover bid.
The Committee reserves the right to make additional payments where such payments are made in good faith
in discharge of an existing legal obligation (or by way of damages for breach of such an obligation); or by
way of settlement or compromise of any claim arising in connection with the termination of an Executive
Director’s office or employment.
Service Agreements and letters of appointment
The Executive Chairman’s (Chris Lambert) service agreement , dated 22 August 2022, is not for a fixed term
and may be terminated by the Company or the Executive Director by giving 6 months’ notice. The current
salary is set at £144,000 per annum.
The Executive Director’s (Charlie Long) service agreement , dated 22 October 2022, is not for a fixed term
and may be terminated by the Company or the Executive Director by giving 6 months’ notice. The current
salary is set at £125,000 per annum.
The Non-Executive Directors (Russell Thomson, Dominic Traynor and Adrian England), have service
agreements, dated 10 October 2022, 10 October 2022 and 1 December 2022, respectively, with an
appointment period of minimum three years, and thereafter until terminated by either party not giving less
than one months’ prior written notice. The current salary is set at £40,000 per annum.
The terms of all Directors’ appointments are subject to their re-election by the Company’s shareholders at
any Annual General Meeting at which the all Directors stand for re-election.
CAERUS MINERAL RESOURCES PLC REMUNERATION REPORT
26
Director’s remuneration - (audited)
The table below sets out the remuneration received by the Directors for the year ended 31 December 2022
and 31 December 2021:
Year ended 31 December 2022
Year
ended 31
December
2021
Salary/Fees
£
Pensions
£
Share-based
payments
£
Total
£
Fees
£
Executive directors:
Chris Lambert 86,727 - 9,521 96,248 -
Charlie Long 78,536 - 7,141 85,677 -
Martyn Churchouse
1
48,125 1,027 314
3
49,466 116,005
213,388 1,027 16,976 231,391 116,005
Non-executive directors:
Adrian England
3,333 - - 3,333 -
Russell Thomson 24,091 - 2,142 26,233 -
Dominic Trayno
r
24,088 - 2,142 26,230 -
Professor Michael Johnson
1
- - 116,013
3
116,013 10,593
Harold Andrew Daniels
2
38,727 - - 38,727 70,701
90,239 - 120,297 210,536 81,294
TOTAL
4
303,627 1,027 137,273 441,927 197,299
1
Resigned as a Director on 16 May 2022
2
Resigned as a Director on 11 July2022
3
The warrants associated with these charges were cancelled in the year, there was no cashflow associated with this cost.
4
Richard Hawken and Brian Rowbotham received nil consideration for their directors’ services during either year.
No percentage change from the preceding financial year in respect of each Director or in respect of the
employees has been shown as none of the Directors have remained in position for a consistent period to
permit a meaningful comparison.
Statement of Directors’ shareholding and share interests (audited)
The beneficial interests of the Directors who held office at any time during the year and their connected
parties in the share capital of the Company is shown below:
2022
number of
Ordinary
shares
2021
number of
Ordinary
shares
2022
number of
share
options
2021
number of
share
options
2022
number of
warrants
2021
number of
warrants
Adrian Charles
England
-
-
-
-
-
-
Christopher
Lambert
- - 2,000,000 - - -
Charles Oliver Long - - 1,500,000 - - -
Russell Thomson - - 450,000 - - -
Dominic Trayno
r
650,000 650,000 450,000 - 250,000 250,000
Martyn Churchouse - 850,000 - - - 2,350,000
Professor Michael
Johnson
1
1,430,000
3,413,306
- - -
7,750,000
Harold Andrew
Daniels
1
656,695
6,422,007
-
-
-
-
1
these shares and warrants include those held through a connected person or Company
CAERUS MINERAL RESOURCES PLC REMUNERATION REPORT
27
Share options
On 25 November 2022, the Company granted options over a total of 4,400,000 Ordinary shares of 1 pence
each in the capital of the Company with an exercise price of 7.5 pence per Ordinary share.
The Options will vest in three instalments and will have an exercise period of five years. The first tranche
will vest when the closing mid-market share price reaches 7.5 pence or above for three consecutive trading
days. The second tranche will vest when the share price reaches 12.5 pence. The third tranche will vest when
the share price reaches 17.5 pence.
The Remuneration Committee approved the issuance of these share option grants to incentivise and retain
the Directors, who are considered key to enhancing the future market value of the Company and notes the
premium of the exercise price relative to the current share price.
Relative importance of spend on pay
The table below illustrates the year-on-year change in total remuneration compared to distributions to
shareholders and operational cash flow for the financial periods ended 31 December 2022 and 2021:
Distributions to
shareholders
Total directors and
employee pay
Operational cash
outflow
£ £ £
Year ended 31
December 2022
Nil 527,285 1,107,750
Year ended 31
December 2021
Nil 213,126 938,199
Total employee pay includes wages and salaries, social security costs and pension cost for employees in
continuing operations. Further details on Employee remuneration are provided in note 8. Operational cash
outflow has been shown in the table above as cash flow monitoring and forecasting is an important
consideration for the Remuneration Committee and Board of Directors when determining cash-based
remuneration for directors and employees.
Historical Share Price Performance Comparison
The Directors have considered the requirement for a UK performance graph comparing the Company’s
relative shareholder return with that of a comparable indicator. The comparable indicator chosen is a peer
group index compiled by the Company, consisting of companies in the same industry classification on
London’s AIM and Standard Main Market lists.
The peer group index has the following constituents: Mkango Resources LTD, Condor Gold PLC, Kore
Potash PLC, Xtract Resources PLC, Beowulf Mining PLC, Chesterfield Resources PLC, Power Metal
Resources PLC, Keras Resources PLC and Harvest Minerals Limited, all mining exploration and
development companies under £30m market value.
The chart below illustrates the Company’s share price performance since its listing on 19 March 2021,
compared to this relevant small cap mining peer group index. The adjusted peer group index excludes
Harvest Minerals PLC which performed exceptionally well during this period. Note that Harvest Minerals
PLC and Keras Resources PLC are the only two producers in the peer group.
CAERUS MINERAL RESOURCES PLC REMUNERATION REPORT
28
Consideration of shareholder views
The Board considers shareholder feedback received and guidance from shareholder bodies. This feedback,
plus any additional feedback received from time to time, is considered as part of the Company’s annual
policy on remuneration.
Approved on behalf of the Board of Directors.
Russell Thomson
Chair of Remuneration Committee
11 July 2023
CAERUS MINERAL RESOURCES PLC
29
Independent Auditor’s Report To The Members Of Caerus Mineral Resources Plc
Opinion
We have audited the financial statements of Caerus Mineral Resources PLC (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2022 which comprise the Consolidated Statement
of Profit or Loss and Other Comprehensive Income, the Consolidated and Parent Company Statements of
Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated
and Parent Company Statements of Cash Flows and notes to the financial statements, including 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 provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 31 December 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 public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material uncertainty related to going concern
We draw attention to note 3 in the financial statements, which indicates that the group’s current cash
resources are insufficient to enable the group to meet its recurring outgoings for the twelve months from the
date of approval of the financial statements. The group incurred a net loss of £5.5m during the year ended
31 December 2022. As stated in note 3, these events or conditions, along with the other matters as set forth
in note 3, indicate that a material uncertainty exists that may cast significant doubt on the group’s and parent
company’s ability to continue as a going concern. The group is reliant on a commission receivable from EV
Metals Group, an external fundraise, and the proceeds from the sale of its Cypriot assets to fund its recurring
outgoings for the twelve months from the date that the financial statements are approved. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s 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’s and parent company’s ability to continue to adopt the going concern basis of
accounting included:
• reviewing the cashflow forecast and budgets for the period to 30 November 2024 and the corresponding
assumptions used. This included the expected cash receipt in relation to the sale of Cypriot assets,
commission received on the placing of shares in a related party;
CAERUS MINERAL RESOURCES PLC
30
• reviewing advice received by the parent company confirming that the possible liability of AU$2 million
to BMG, which the directors do not believe to be enforceable in any event, should not affect the liabilities
payable of the parent company;
• vouching the return of the £500,000 deposit previously paid to RIWAQ for due diligence access;
• discussions with management regarding the future plans of the group; and
• challenging management’s assumptions of forecast income and committed costs as well as the reduction
in forecast costs.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect
of misstatements. At the planning stage materiality is used to determine the financial statement areas that are
included within the scope of our audit. Materiality applied to the group financial statements was £94,000
(2021: £110,000) with performance materiality set at £65,800 (2021: £77,000). This amount has been
determined by using a blended rate of 5% net assets and 10% loss before tax. Our determination was
considered appropriate given that the net assets represents the shareholder's equity and the loss before tax is
important to measure the operating cash flows on the areas of significant audit risk identified, including the
exploration and evaluation assets and cash and cash equivalents.
We agreed with the audit committee that we would report to them all audit differences identified during the
course of our audit in excess of £4,700 (2021: £6,100) for the group. We also agreed to report any other audit
misstatements below that threshold that we believe warranted reporting on qualitative grounds.
Materiality applied to the parent company’s financial statements was £89,000 (2021: £105,000), with
performance materiality set at £62,300 (2021: £73,500). This amount has been determined by using a
blended rate of 5% net assets and 10% loss before tax. Our determination was considered appropriate given
that the net assets represents the shareholder's equity and the loss before tax is important to measure the
operating cash flows on the areas of significant audit risk identified, including the investment in subsidiaries
and cash and cash equivalents. We agreed with the audit committee that we would report all individual audit
differences identified during the course of our audit in excess of £4,450 (2021: £5,520) together with any
other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.
The audits of New Cyprus Copper Limited, Treasure Development Limited and Gold Mines Cyprus Ltd
were performed by component auditors, with materiality set by us at £19,000 (2021: £70,000), £45,000
(2021: £44,000) and £35,000 respectively. In the prior year group performance materiality was used for Gold
Mines Cyprus Ltd.
A benchmark of 70% for performance materiality during our audit of the group and parent company was
applied as we believe that this would provide sufficient coverage of significant and residual risks.
Our approach to the audit
In designing our audit approach, we determined materiality and assessed the risk of material misstatement
in the financial statements. In particular, we assessed the areas requiring the directors to make subjective
judgements, for example in respect of significant accounting estimates and judgements including the
carrying value of evaluation and exploration assets, intra-group balances and investments in subsidiaries and
the consideration of future events that are inherently uncertain. We also addressed the risk of management
override of internal controls, including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
An audit was performed on the financial information of the grou
p’s material operating components which,
for the period ended 31 December 2022, were located in the United Kingdom and Cyprus. The components
in Cyprus were audited by a firm within our PKF network operating under our instruction. We interacted
regularly with the component audit team during all stages of the audit and we were responsible for the scope
CAERUS MINERAL RESOURCES PLC
31
and direction of the audit process. This, in conjunction with additional procedures performed, gave us
appropriate evidence for our opinion on the group and parent company financial statements.
New Cyprus Copper Limited and Treasure Development Limited have been assessed as significant
components of the group and therefore we designed procedures focused on exploration cost capitalisation
and valuation of the exploration assets in accordance with IFRS 6 Exploration for and Evaluation of Mineral
Resources. This work was significant in addressing our key audit matter in respect of capitalised exploration
costs and valuation of explorations assets in which the group’s exploration costs are recorded.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section we have
determined the matters described below to be the key audit matters to be communicated in our report.
Key Audit Matter How our scope addressed this matter
Management override of controls
Under ISA (UK) 240 “The Auditor’s
responsibilities relating to fraud in an audit
of financial statements”, there is a presumed
significant fraud risk of management
override of controls.
In addition, following the parent company’s
RNS announcement on 5 September 2022
and others during the year we noted that
there was a possibility of an instance
whereby controls and governance
procedures in respect of disclosure to
auditors and the market may have been
lacking in 2021. There was therefore
deemed to be an enhanced risk in relation to
management override of controls. We
needed to consider whether this would have
affected the previously published results of
the prior financial year. Refer to notes 11,
21 and 25.
Our work in this area included:
• Testing the appropriateness of manual or automated
journals processed during the period, including those
made at the end of the period and post-closing entries,
to determine whether these were appropriate. This also
included inquiries of individuals with different levels of
responsibility involved in the financial reporting process
about inappropriate or unusual activity relating to the
processing of journals.
• Reviewing accounting estimates, judgements, and
assumptions within the financial statements for
evidence of management bias, and agreeing to
appropriate supporting documentation. In this context
we viewed the key estimates as being the carrying value
of intangibles, the valuation of investments and
recoverability of intragroup loans, valuation of share-
based payments and the valuation of the BMG liability.
• Evaluating whether there is a clear business rationale to
support any significant cash transactions outside the
normal course of the business of the entity, or
transactions which otherwise appear to be unusual.
• Evaluating the judgements made in the prior year by
previous governance, with emphasis on the valuation of
intangibles, completeness of liabilities, and
recoverability of amounts from Bezant, to assess
whether any misstatements arose and therefore the need
for any prior year adjustments;
• Reviewing and assessing the third party documentation
with respect to Corporate Governance; and
CAERUS MINERAL RESOURCES PLC
32
• Assessment of the potential liability from the disputed
SPA agreement with BMG Resources as documented
below in a separate Key Audit Matter.
Based on the audit procedure performed, nothing has come
to our attention that would indicate the existence of
management override of controls.
Fair value of investments and intragroup
balances (parent company)
The parent company has material
investments of £424k in its statement of
financial position relating to its subsidiary
undertakings. During the year, the group
decided to change its strategy and signed
terms of agreement to sell the Cypriot
assets.
Therefore, there is a risk that the
investments in subsidiaries (where the
intangibles are the main asset) could be
overstated. Refer to note 13.
Our work in this area included:
• Verifying the ownership of the investment in
subsidiaries as at 31 December 2022;
• Obtaining and reviewing the key terms of the sales
purchase agreements in relation to the sale of
subsidiaries;
• Vouching cash receipts received post year end to bank
statements with respect to payment terms of the agreed
sales prices post year end;
• Obtaining, reviewing and assessing the assessment
performed by management to ensure it is in line with the
requirements of IFRS 5 Non-current Assets Held for
Sale and Discontinued Operations, with specific
reference to the sales price and deferred consideration
dependent on a new JORC resource at Troulli;
• Reviewing the component’s auditor’s response in
relation to the subsidiaries and ensuring there are no
other factors which impact on the sales price;
• Reviewing management’s assessment of the write off of
intragroup loans in the year;
• Reviewing post year end correspondence between the
Company and purchaser regarding the timing of
payment of the Consideration; and
• Assessing the appropriateness of the accounting policies
and disclosures included in the financial statements.
Based on the audit procedures performed, we consider
management's judgements in its assessment of impairment
to be reasonable and there was no indication at year end that
the remaining balance will not be received from the
purchaser. Should this not be paid there could be a further
impairment to the investment carrying value. The contingent
asset in relation to the deferred consideration on sale of the
Cypriot asset has not been included in the investment
valuation at 31 December 2022 in accordance with IAS 37
Provisions, Contingent Liabilities and Contingent Assets
and IFRS 9 Financial Instruments, but has been
appropriately disclosed.
Classification and valuation of Cypriot
intangible assets
CAERUS MINERAL RESOURCES PLC
33
The group has material intangible assets of
£411k in relation to capitalised exploration
costs in respect of mining activities in
Cyprus. During the year the group decided
to change its strategy and signed terms of
agreement to sell the Cypriot assets.
Therefore, there is a risk that the carrying
value of the intangible assets is overstated,
above the agreed sales price, less direct costs
to sell. There is also a risk that costs have
been incorrectly capitalised in accordance
with IFRS 6 during the year, prior to the
decision to sell. There is also a risk that the
intangible assets at year end, being
classified as held for sale, have not been
accounted for or disclosed in accordance
with IFRS 5.
Refer to note 11.
Our work in this area included:
• Obtaining and reviewing the key terms of the sales
purchase agreements in relation to the sale of
subsidiaries;
• Vouching post year end cash receipts to bank
statements with respect to the sales consideration
as set out in the Share Purchase Agreement;
• Obtaining, reviewing and assessing the assessment
performed by management to ensure it is in line
with the requirements of IFRS 5, with specific
reference to the sales price and deferred
consideration dependent on a new JORC resource
at Troulli;
• Reviewing component auditor’s work over
capitalised costs during the year relating to the
licences of the Cyprus subsidiaries. This includes
considerations in respect of the recognition criteria
within IFRS 6;
• Reviewing post year end correspondence between
the Company and purchaser regarding the timing of
payment of the Consideration;
• Confirming through review of the component
auditor’s files that the subsidiaries hold good title to
its exploration licences as one of the key terms in
determining the valuation of the exploration and
evaluation assets as required by IFRS 6 prior to
classification as an asset held for sale; and
• Assessing the appropriateness of the accounting
policies and disclosures included in the financial
statements.
Based on the audit procedures performed, we consider
management's judgements in its assessment of impairment
to be reasonable and there was no indication at year end that
the remaining balance will not be received from the
purchaser. Should this not be paid there could be a further
impairment to the investment carrying value. The contingent
asset in relation to the deferred consideration on sale of the
Cypriot asset has not been included in the investment
valuation at 31 December 2022 in accordance with IAS 37
Provisions, Contingent Liabilities and Contingent Assets
and IFRS 9 Financial Instruments, but has been
appropriately disclosed.
Completeness of liabilities recognised and
disclosed
During the year, there has been disclosure
of a potential liability within New Cyprus
Copper Limited of AU$2m with respect to
an amended clause in dispute with BMG
Resources (“BMG”). This relates to the
Our work in this area included:
• Obtaining and reviewing the amendment to the
original share purchase agreement of NCC;
CAERUS MINERAL RESOURCES PLC
34
amendment to the original share purchase
agreement between NCC and BMG.
There is a risk that the exercised option is
not disclosed or accounted for correctly.
Refer to notes 21 and 25.
• Obtaining management’s assessment of the
amendment and whether they believe a liability
arises as a result of the exercised put option;
• Reviewing the third-party documentation prepared
by the parent company’s lawyers;
• Reviewing latest financial statements of BMG to
assess whether they believe a liability exists;
• Reviewing the component auditor’s work over the
liability, including communication with the
subsidiaries’ local lawyers; and
• Assessing the appropriateness of the accounting
policies and disclosures included in the financial
statements.
Notwithstanding that the directors of the group have queries
as to whether the put option should be enforceable, it was
noted that BMG exercised their put option in March 2022 in
accordance with the amended share purchase agreement and
therefore the AU$2m became a recognised liability under
IFRS during the current financial year.
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 contained
within the annual report. 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. 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 course of 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 this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and 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:
CAERUS MINERAL RESOURCES PLC
35
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the group and parent company financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing
the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate
to identify laws and regulations that could reasonably be expected to have a direct effect on the financial
statements. We obtained our understanding in this regard through detailed discussions with
management about and potential instances of non-compliance with laws and regulations both in the UK
and in overseas subsidiaries. We also selected a specific audit team based on experience with auditing
entities within this industry of a similar size.
We determined the principal laws and regulations relevant to the group and parent company in this
regard to be those arising from:
- Listing Rules as applicable to Standard Segment of the LSE;
- Disclosure Guidance and Transparency Rules (“DTR”);
- Local industry regulations in Cyprus where exploration activity took place in the year;
- Local tax and employment law in the UK and Cyprus;
- Anti-Bribery and Money Laundering Regulations; and
- QCA Corporate Governance Code.
We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group and parent company with those laws and regulations. These
procedures included, but were not limited to:
- Making enquiries of management;
- Review of legal and professional fees to understand the nature of the costs and the existence of any
non-compliance with laws and regulations;
- Review of minutes of meetings of those charged with governance and RNS announcements; and
CAERUS MINERAL RESOURCES PLC
36
- Review of accounting ledgers for any unusual journal entries which may indicate non-compliance.
• We also identified the risks of material misstatement of the financial statements due to fraud. We
considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management
override of controls, that the potential for management bias was identified in relation to the carrying
value of the intangible assets and the investments in subsidiaries and the accounting for the contingent
liability as described in the Key Audit Matters section above. We addressed this by challenging the
assumptions and judgements made by management when auditing these significant accounting
estimates.
• As in all of our audits, we addressed the risk of fraud arising from management override of controls by
performing audit procedures which included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business; and reviewing transactions
through the banks statements to identify potentially large or unusual transactions that do not appear to
be in line with our understanding of business operations.
• As part of the group audit, we have communicated with component auditor the risks associated with
the components of the group, including the risk of fraud as a result of management override of controls.
To ensure that this has been completed, we have reviewed component auditor working papers in this
area and obtained responses to our group instructions from the component auditors.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the events
and transactions reflected in the financial statements, as we will be less likely to become aware of instances
of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error,
as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
auditor’s report.
Other matters which we are required to address
We were appointed by the directors of Caerus Mineral Resources PLC on 9 February 2021 to audit the
financial statements for the period ending 30 November 2018 and subsequent financial periods. Our total
uninterrupted period of engagement is 5 years, covering the periods ending 30 November 2018 to 31
December 2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
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.
Alistair Roberts (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
11 July 2023
CAERUS MINERAL RESOURCES PLC
37
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Year ended
31 December
2022
Year ended
31 December
2021*
Notes £ £
Continuing operations:
Administrative expenses 6 (1,168,034 ) (640,427 )
Net impairment losses on disposal of assets 11 (2,918,303 ) -
Finance costs 7 (380 ) (12,263 )
Operating loss and loss before income tax (4,086,717 ) (652,690 )
Income tax expense 9 - -
Loss after taxation (4,086,717 ) (652,690 )
Total loss from continuing operations (4,086,717 ) (652,690 )
Loss from discontinued operations 21 (1,439,812 ) (335,280 )
Loss for the year (5,526,529 ) (987,970 )
Total loss is attributable to:
Owners of Caerus Mineral Resources plc (5,511,542 ) (821,801 )
Non-controlling interests (14,987 ) (166,169 )
(5,526,529 ) (987,970 )
Other comprehensive income:
Items that may be reclassified to profit and loss:
Exchange differences on translation of
discontinued operations
22
(14,264 )
Other comprehensive profit (loss) for the period
arising from discontinued operations 232,772 (14,264 )
Total comprehensive loss for the year (5,293,757 ) (1,002,234 )
Total comprehensive loss is attributable to:
Owners of Caerus Mineral Resources plc (5,279,620 ) (827,235 )
Non-controlling interests (14,137 ) (174,999 )
(5,293,757 ) (1,002,234 )
Total comprehensive loss attributable to
Owners of Caerus Mineral Resources plc:
Continuing operations (1,153,427 ) (652,690 )
Discontinued operations (4,126,193 ) (174,545 )
(5,279,620 ) (827,235 )
Earnings per share:
Total basic and diluted loss per share (£):
Continuing operations 10 (0.019 ) (0.013 )
Continued and discontinued operations 10 (0.092 ) (0.020 )
*Restated to show discontinued operations as comparative
The accounting policies and notes on pages 44 to 68 form part of these consolidated financial statements.
CAERUS MINERAL RESOURCES PLC
38
Consolidated Statement of Financial Position
As at
31 December
As at
31 December
2022 2021
ASSETS Notes £ £
N
on-current assets
Intangible fixed assets 11 - 2,578,529
Tangible fixed assets 12 83,902 20,800
Total non-current assets 83,902 2,599,329
Current assets
Other receivables 14 527,237 432,239
Cash and cash equivalents 115,824 2,508,108
Assets classified as held for sale 21 515,796 -
Total current assets 1,158,857 2,940,347
Total assets 1,242,759 5,539,676
LIABILITIES
N
on-current liabilities
Borrowings - (504 )
Deferred tax liabilities 18 - (246,840 )
Lease liabilities 17 (23,717 ) -
Financial liability – contingent consideration 15 - (186,916 )
Total non-current liabilities (23,717 ) (434,260 )
Current liabilities
Trade and other payables 16 (95,826 ) (154,099 )
Lease liabilities 12 (61,718 ) -
Deferred tax liabilities 18 - -
(157,544 ) (154,099 )
Liabilities directly associated with assets classified
as held for sale 21 (1,218,058 ) -
Total current liabilities (1,375,602 ) (154,099 )
Total liabilities (1,399,319 ) (588,359 )
Net (liabilities)/assets (156,560 ) 4,951,317
EQUITY
Share capital 19 612,113 612,113
Share premium 19 5,840,002 5,840,002
Other equity 20 - -
Share-
b
ased payments reserve 68,706 98,917
Foreign exchange reserve 22 212,323 (19,599 )
Retained earnings (6,856,948 ) (1,512,891 )
Capital and reserves attributable to owners of
Caerus Mineral Resources plc (123,804 ) 5,018,542
Non-controlling interests (32,756 ) (67,225 )
Total equity (156,560 ) 4,951,317
The accounting policies and notes on pages 44 to 68 form part of these consolidated financial statements.
The Financial Statements were approved and authorised for issue by the Board on 11 July 2023 and were signed
on its behalf by:
Charlie Long, Director
CAERUS MINERAL RESOURCES PLC
39
Parent Company Statement of Financial Position
Company number: 11043077
As at
31 December
As at
31 December
2022 2021
Notes £ £
ASSETS
Non-current assets
Tangible fixed assets 12 83,902 -
Investments in subsidiary 13 - 1,458,923
Loans to subsidiaries 14 - 1,057,750
Total non-current assets 83,902 2,516,673
Current assets
Other receivables 14 527,237 378,656
Cash and cash equivalents 115,824 2,426,498
643,061 2,805,154
Assets classified as held for sale 13 424,328 -
Total current assets 1,067,389 2,805,154
Total assets 1,151,291 5,321,827
LIABILITIES
Non-current liabilities
Lease liabilities 17 (23,717) -
Financial liability – contingent consideration 15 - (186,916)
Total non-current liabilities (23,717) (186,916)
Current liabilities
Trade and other payables 16 (95,826) (125,139)
Lease liabilities 12 (61,718) -
Total current liabilities (157,544) (125,139)
Total liabilities (181,261) (312,055)
Net assets 970,030 5,009,772
EQUITY
Share capital 19 612,113 612,113
Share premium 19 5,840,002 5,840,002
Other equity 20 - -
Share-
b
ased payments reserve 68,706 98,917
Retained earnings (5,550,791) (1,541,260)
Capital and reserves attributable to owners of
Caerus Mineral Resources plc 970,030 5,009,772
Total equity 970,030 5,009,772
The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 by choosing
not to present its individual Statement of Comprehensive Income and related notes that form part of these
approved financial statements.
The Company’s loss for the period from operations is £4,177,016 (2021: loss of £895,438).
The accounting policies and notes on pages 44 to 68 form part of these financial statements.
The Financial Statements were approved and authorised for issue by the Board on 11 July 2023 and were signed
on its behalf by:
Charlie Long, Director
CAERUS MINERAL RESOURCES PLC
40
Consolidated Statement of Changes in Equity
Share
capital
Share
premium
Share-
based
payment
reserve
Shares
paid not
issued
Retained
earnings
Foreign
exchange
reserve
Non-
controlling
interests Total
£ £ £
£ £ £ £
£
Balance at 1 January
2021 239,000 1,627,665 -
Comprehensive
income
Loss for the period - - - - (821,801 ) - (166,169 ) (987,970 )
Exchange differences
on translation of
foreign operations - - -
(8,830 ) (14,264 )
Total comprehensive
income for the period - - -
(174,999 ) (1,002,234 )
Transactions with
owners in their
capacity as owners
Issue of shares 373,113 4,526,887 (100,000 ) - - - 4,800,000
Cost of shares issued - (314,550 ) 29,530 - - - - (285,020 )
Share-
b
ased payments - - 69,387 - - - - 69,387
Total transactions
with owners
recognised directly in
equity 373,113 4,212,337 98,917
(100,000 )
Balance as at 31
December 2021 612,113 5,840,002 98,917
(67,225 ) 4,951,317
Comprehensive
income
Loss for the yea
r
Exchange differences
on translation of
foreign operations - - -
Total comprehensive
income for the year - - -
Transactions with
owners in their
capacity as owners
Transactions with NCI - - - - - - 48,606 48,606
Share-
b
ased payments - - 137,274 - - - - 137,274
Cancelled warrants - - (167,485 ) - 167,485 - - -
Total transactions
with owners
recognised directly in
equity - - (30,211 )
Balance as at 31
December 2022 612,113 5,840,002 68,706
CAERUS MINERAL RESOURCES PLC
41
Parent Company Statement of Changes in Equity
Share
capital
Share
premium
Share-
based
payment
reserve
Shares
paid not
issued
Retained
earnings Total
£ £ £
£ £
£
Balance at 1 January 2021
239,000
1,627,665
-
100,000
(645,822)
1,320,843
Comprehensive income
Loss for the yea
r
- - - - (895,438) (895,438)
Total comprehensive income for
the year - - -
- (895,438)
(895,438)
Transactions with owners
recognised directly in equity
Issue of shares 373,113 4,526,887 - (100,000) - 4,800,000
Cost of shares issued - (314,550) 29,530 - - (285,020)
Share-
b
ased payments - - 69,387 - - 69,387
Total transactions with owners
recognised directly in equity 373,113 4,212,337 98,917
(100,000)
-
4,584,367
Balance as at 31 December
2021
612,113
5,840,002
98,917
-
(1,541,260)
5,009,772
Comprehensive income
Loss for the yea
r
- - - - (4,177,016) (4,177,016)
Total comprehensive income for
the year - - - - (4,177,016) (4,177,016)
Transactions with owners
recognised directly in equity
Share-
b
ased payments - - 137,274 - - 137,274
Cancelled warrants - - (167,485) - 167,485 -
Total transactions with owners
recognised directly in equity - - (30,211) - 167,485 137,274
Balance as at 31 December
2022 612,113 5,840,002 68,706 - (5,550,791) 970,030
CAERUS MINERAL RESOURCES PLC
42
Consolidated Statement of Cash Flows
Year ended
31 December
2022
Year ended
31 December
2021
Notes £ £
Cash flow from operating activities
Loss for the period before taxation (5,526,529 ) (987,970 )
Adjustments for:
Interest paid 380 35
Foreign exchange movements 18,003 46,198
Share-
b
ased payments 137,274 69,387
Impairment of intangible assets 11 3,067,298 118,690
Bad debt written off 302,886 -
Liability in subsidiary 25 1,126,589 -
Depreciation 12 45,592 5,147
Operating cash flows before movements in working
capital
(828,507 )
(748,513 )
Increase in trade and other receivables
(31,948 )
(187,039 )
Decrease in trade and other payables (28,659 ) (2,647 )
Net cash used in operating activities (889,114 ) (938,199 )
Cash flow from investing activities
Payment for acquisition of subsidiary 13 - (284,230 )
Proceeds from sale of subsidiary 13 100,000 300,000
Deposit on potential acquisition (500,000 ) -
Expenditure on fixed assets (37,032 ) (25,947 )
Expenditure on intangible assets 11 (1,003,612 ) (444,625 )
Net cash used in investing activities (1,440,644 ) (454,802 )
Cash flow from financing activities
Proceeds from the issue of shares - 4,050,000
Cost of share issue - (285,020 )
Finance lease payments (31,420 ) -
Interest paid (380 ) (35 )
Net cash (outflow)/inflow from financing activities (31,800 ) 3,764,945
Net (decrease)/increase in cash and cash equivalents (2,361,558 ) 2,371,944
Cash and cash equivalent at beginning of period 2,508,108 137,906
Foreign exchange effect of cash movements (4,532 ) (1,742 )
Cash and cash equivalent at end of period 142,018 2,508,108
Significant non-cash transactions
The significant non-cash transactions were the shares received back by the Company as detailed in note
20 and the cancelled warrants as detailed in note 23.
The accounting policies and notes on pages 44 to 68 form part of these financial statements.
CAERUS MINERAL RESOURCES PLC
43
Parent Company Statement of Cash Flows
Year ended
31 December
2022
Year ended
31 December
2021
Notes £ £
Cash flow from operating activities
Loss for the period before taxation (4,177,016) (895,438)
Adjustments for:
Finance and service income (115,726) (107,251)
Interest paid 380 35
Depreciation 12 32,586 -
Loss on sale of subsidiary - 350,000
Bad debt written off 302,886 -
Share-
b
ased payments 137,274 69,387
Foreign exchange movemen
t
(95,081) 33,305
Write off of investment in subsidiaries 3,243,312 -
Operating cash flows before movements in working
capital
(671,385)
(549,962)
Increase in trade and other receivables (51,466) (44,165)
(Decrease)/increase in trade and other payables (28,947) 6,559
Net cash used in operating activities (751,798) (587,568)
Cash flow from investing activities
Investment in subsidiaries through cash advances (1,127,076) (903,658)
Payment for acquisition of subsidiary 13 - (262,734)
Deposit on potential acquisition (500,000) -
Proceeds from sale of subsidiary 13 100,000 300,000
Net cash used in investing activities (1,527,076) (866,392)
Cash flow from financing activities
Proceeds from the issue of shares - 4,050,000
Finance lease payments (31,420) -
Interest paid (380) (35)
Share issue costs - (285,020)
Net cash (outflow)/ inflow from financing activities (31,800) 3,764,945
Net (decrease)/ increase in cash and cash
equivalents
(2,310,674)
2,310,985
Cash and cash equivalent at beginning of period 2,426,498 115,513
Cash and cash equivalent at end of period 115,824 2,426,498
Significant non-cash transactions
The significant non-cash transactions were the shares received back by the Company as detailed in note
20 and the cancelled warrants as detailed in note 23.
The accounting policies and notes on pages 44 to 68 form part of these financial statements.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
44
Notes to the Consolidated Financial Statements
1. GENERAL INFORMATION
with Registered Number 11043077 under the Companies Act 2006. The Company was incorporated on
1 November 2017 under the name Leopard Mineral Investments Limited as a private limited company
and subsequently re-registered as a public limited company on 9 January 2018; and changed its name
to Caerus Mineral Resources plc on 18 September 2018.
The principal activity of the Group is the exploration for, and development of mineral resources, including
in Cyprus, and the identification of future acquisition targets in the same industry.
The Company’s
registered office is at Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF.
In the prior year, the Company acquired the entire share capital of PR Ploutonic Resources Ltd (“PRL”)
on 11 June 2021 and transferred its three licences into New Cyprus Copper P.A Ltd (“NCC”). Licences,
which were not considered to be in line with the Group’s future strategy were then moved from another
subsidiary company into PRL, and then PRL was sold, on 5 November 2021. On 10 August 2021, the
Company acquired the entire share capital of Cyprus Gold Mines Ltd (”CGML”). Both of these
acquisitions were treated as asset acquisitions.
On 26 January 2023, the Company announced it had signed a Share Purchase Agreement (the “SPA”)
with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-European Mining PR Ltd (“Indo”) for the sale of
the Company’s Cyprus subsidiaries. This was in line with the Heads of agreement that was announced
on 7 December 2022. The carrying value of these investments have been revalued, in line with IFRS
5, at the fair value less costs to sell, at £424,328, resulting in an impairment of investments of
£1,034,595 at the year end. The fair value less costs to sell is based on the agreed consideration for the
Cypriot asses as per the SPA with the vendor. This is a Level 3 on the fair value hierarchy.
The Directors are required to and have prepared Group financial statements which include the results
of the acquired subsidiaries from the date that the acquisitions took place. As the acquisitions were not
considered to meet the definition of a business combination under IFRS 3, the Group financial
statements are prepared as though the Company has acquired assets.
On 19
March 2021, the Company announced its admission to the Main Market of the London Stock
Exchange under the Standard Segment of the Official List under the ticker “LSE:CMRS”.
2. ADOPTION OF NEW AND REVISED STANDARDS
(a) New standards, amendments and interpretations adopted by the Group.
There were no new or amended accounting standards that required the Group to change its accounting
policies for the year ended 31 December 2022 and no new standards, amendments or interpretations
were adopted by the Group
(b) New standards, amendments and interpretations not yet adopted by the Group.
The standards and interpretations that are relevant to the Group, issued, but not yet effective, up to the
date of the Financial Statements are listed below. The Group intends to adopt these standards, if
applicable, when they become effective.
| Standard | Impact on initial application | Effective date |
| IFRS 10 and IAS 28 | ||
| (Amendments) | ||
| Long term interests in associates and joint | ||
| ventures | ||
| Unknown | ||
| Amendments to IAS 1 | Classification of Liabilities as current or non- | |
| current | ||
| 1 January 2023 |
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
45
| Standard | Impact on initial application | Effective date |
| Amendments to IAS 1 | Disclosure of material rather than significant | |
| accounting policies. | ||
| I January 2023 | ||
| Amendments to IAS 8 | Clarification on how companies should | |
| distinguish between changed in accounting | ||
| policies and accounting estimates | ||
| 1 January 2023 | ||
| Amendments to IFRS 12 | Deferred Tax assets and Liabilities arising from | |
| a single transaction | ||
| 1 January 2023 |
The Directors have evaluated the impact of transition to the above standards and do not consider that
there will be a material impact of transition on the financial statements.
3. SIGNIFICANT ACCOUNTING POLICIES
Summary of significant accounting policies
The principal accounting policies applied in the preparation of the consolidated financial statements are
set out below. These polices have been consistently applied to all the periods presented, unless otherwise
stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted international
accounting standards and requirements of the Companies Act 2006. The Financial Statements have also
been prepared under the historical cost convention, as modified by the revaluation of financial assets at
fair value through profit or loss.
The functional currency for each entity in the Group is determined as the currency of the primary
economic environment in which it operates. The functional currency of the parent company Caerus is
Pounds Sterling (£) as this is the currency that finance is raised in. The functional currency of NCC,
TDL and CGML is the Euro as this is the currency that mainly influences labour, material and other
costs of providing services. The Group has chosen to present its consolidated financial statements in
Pounds Sterling (£), as the Directors believe it is a more convenient presentational currency for users
of the consolidated financial statements. Foreign operations are included in accordance with the
policies set out below.
The preparation of financial statements in accordance with UK-adopted International accounting
standards requires the use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial information are disclosed in Note 4.
Going concern
The financial statements have been prepared under the going concern assumption. Under the going concern
assumption, an entity is ordinarily viewed as continuing in business for at least the 12 month period from
the date of Board approval of the financial statements, with neither the intention nor the necessity of
liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations. The Group
is not currently generating revenues and therefore an operating loss has been reported and is expected in the
12 months subsequent to the date of these financial statements.
On 10 May 2023, the Company received the return of a £500,000 deposit relating to the decision not to
pursue a potential acquisition. The Company is in addition expecting a receipt of £312,300 in relation to
commission payments received from EV Metals Group for the placing of their shares as part of the settlement
terms agreed with a former director.
The Company has the ability to place the approximately 10.7 million Ordinary shares held by itself to raise
additional finance without dilution to the current shareholders.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
46
The Company has performed a review of its financial resources taking into account, the cash currently
available to the Company which includes the following sources of funding, which though not available at
the date of the signing of these consolidated financial statements are expected to be available in the
immediate future.
• The Company announced the sale of the Cyprus Assets and is expecting to receive a further
$428,001 in final payment by 30 September 2023.
• The Company has agreed to acquire 80% of a Moroccan company ‘Atlantic Research Minerals’ and
will be seeking to raise finance in the short term to fund the building of its exploration portfolio.
The Company has included these funds in its cash flow projections for the twelve month period from the
date of this report, and based on this review, and after considering reasonably possible operational downside
sensitivities and uncertainties, the Board, whilst acknowledging this material uncertainty, remains confident
of raising finance and therefore have concluded that there is a reasonable expectation that the Company has
access to adequate resources to continue in operational existence for the foreseeable future. In the event of
lack of funds, the Directors would implement temporary reductions in salaries. For this reason, the Directors
have adopted the going concern basis in preparing the financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries) made up to 31 December each year. Per IFRS 10,
control is achieved when the Company:
• has the power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affects its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above. When the Company has
less than a majority of the voting rights of an investee, it considers that it has power over the investee
when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the
investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether
or not the Company’s voting rights in an investee are sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of
holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have,
the current ability to direct the relevant activities at the time that decisions need to be made,
including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or
disposed of during the year are included in profit or loss from the date the Company gains control until
the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring the accounting policies used into line with the
Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between the members of the Group are eliminated on consolidation.
The Group recognises any non-controlling interest in the acquired entity at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets. Subsequent to acquisition, the
carrying amount of non-controlling interests is the amount of those interests at initial recognition plus
the non-controlling interests’ share of subsequent changes in equity.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
47
Profit or loss and each component of other comprehensive income are attributed to the owners of the
Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Foreign currencies
In preparing the financial statements of the Group entities, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on
the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated
in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at
fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost
in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise except for:
• exchange differences on foreign currency borrowings relating to assets under construction for future
productive use, which are included in the cost of those assets when they are regarded as an
adjustment to interest costs on those foreign currency borrowings;
• exchange differences on transactions entered into to hedge certain foreign currency risks (see below
under financial instruments/hedge accounting); and
• exchange differences on monetary items receivable from or payable to a foreign operation for which
settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of
the net investment in the foreign operation), which are recognised initially in other comprehensive
income and reclassified from equity to profit or loss on disposal or partial disposal of the net
investment.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s
foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuate
significantly during that period, in which case the exchange rates at the date of transactions are used.
Exchange differences arising, if any, are recognised in other comprehensive income and accumulated
in a foreign exchange translation reserve (attributed to non-controlling interests as appropriate).
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets
and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are
recognised in other comprehensive income.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
decision-maker. The chief decision-maker has been identified as the Executive Board, at which level
strategic decisions are made.
An operating segment is a component of the Group:
• That engages in business activities from which it may earn revenues and earn expenses,
• Whose operating results are regularly reviewed by the entity’s chief operating decision-maker
to make decisions about resources to be allocated to the segment and assess its performance, and
• For which discrete financial information is available.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
48
Intangible assets – exploration and evaluation expenditure
Mineral exploration and evaluation expenditure relates to costs incurred in the exploration and
evaluation of potential mineral resources and includes exploration and mineral licences, researching
and analysing historical exploration data, exploratory drilling, trenching, sampling and the costs of pre-
feasibility studies.
Exploration and evaluation expenditure for each area of interest, other than that acquired from another
entity, is charged to the consolidated statement of income as incurred except when the expenditure is
expected to be recouped from future exploitation or sale of the area of interest and it is planned to
continue with active and significant operations in relation to the area, or at the reporting period end, the
activity has not reached a stage which permits a reasonable assessment of the existence of commercially
recoverable reserves, in which case the expenditure is capitalised. Purchased exploration and evaluation
assets are recognised at their fair value at acquisition. As the capitalised exploration and evaluation
expenditure asset is not available for use, it is not depreciated.
Exploration and evaluation assets have an indefinite useful life and are assessed for impairment annually
or when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable
amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating
units, which are based on specific projects or geographical areas. IFRS 6 permits impairments of
exploration and evaluation expenditure to be reversed should the conditions which led to the impairment
improve. The Group continually monitors the position of the projects capitalised and impaired.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead
to the discovery of commercially viable quantities of mineral resources and the Group has decided to
discontinue such activities of that unit, the associated expenditures are written off to the Income
Statement. Following the agreement to sell the Cypriot assets, the Company valued these assets in
accordance with IFRS 5 at their fair value less costs to sell. The difference has been recorded as an
impairment in the Group accounts.
Tangible fixed assets – Property, plant and equipment
Property, plant, and equipment are stated at cost, less accumulated depreciation, and any provision for
impairment losses.
Depreciation is charged on each part of an item of property, plant, and equipment to write off the cost
of assets less the residual value over their estimated useful lives, using the straight–line method.
Depreciation is charged to the income statement. The estimated useful lives are as follows:
Office equipment - 5 years
Office lease – 1 year
Vehicles – 5 years
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of the following lease payments:
- Fixed payments less any lease incentive receivable.
- Variable lease payment that are based on an index or rate, initially measured using the index or
rate as at the commencement date, and
- Amounts expected to be payable by the group under residual value guarantees.
Lease payments to be made under reasonably certain extension options are also included in the
measurement of the liability.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit
or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
49
Right-of -use assets are measured at cost comprising the following:
- The amounts of the initial measurement of lease liability;
- Any lease payments made at or before the commence date less any lease incentives received, and
- And initial direct costs.
Depreciation is charged over the shorter of the lease term and the related leased asset as per the Group’s
tangible fixed asset policy.
Financial Instruments
Financial assets
Classification
The Group’s financial assets consist of financial assets held at amortised cost. The classification
depends on the purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
Financial assets held at amortised cost
Assets that are held for collection of contractual cash flows, where those cash flows represent solely
payments of principal and interest, are measured at amortised cost. Any gain or loss arising on
derecognition is recognised directly in the profit or loss and presented in other gain/ (losses) together
with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the
statement of profit or loss.
They are included in current assets, except for maturities greater than 12 months after the reporting date,
which are classified as non-current assets. The Group’s financial assets at amortised cost comprise
trade and other current assets and cash and cash equivalents at the year end.
Recognition and measurement
Regular purchases and sales of financial assets are recognised on the trade date – the date on which the
Group commits to purchasing or selling the asset. Financial assets are initially measured at fair value
plus transaction costs. Financial assets are de-recognised when the rights to receive cash flows from
the assets have expired or have been transferred, and the Group has transferred substantially all of the
risks and rewards of ownership.
Financial assets are subsequently carried at amortised cost using the effective interest method.
Other receivables are recognised initially at the amount of consideration that is unconditional, unless
they contain significant financing components when they are recognised at fair value. The other
receivables in the accounts do not contain significant financing components.
Impairment of financial assets
The Group assesses, on a forward-looking basis, the expected credit losses associated with its financial
assets carried at amortised cost. For trade and other receivable due within 12 months the Group applies
the simplified approach permitted by IFS 9. Therefore, the Group does not track changes in credit risk,
but rather recognises a loss allowance based on the financial asset’s lifetime expected credit losses at
each reporting date.
A financial asset is impaired if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the
estimated future cash flows of that asset that can be estimated reliably. The Group assesses at the end
of each reporting period whether there is objective evidence that a financial asset, or a group of financial
assets, is impaired.
The criteria that the Group uses to determine that there is objective evidence of an impairment loss
include:
• Significant financial difficulty of the issuer or obligor;
• A breach of contract, such as a default or delinquency in interest or principal repayments;
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
50
• The Group, for economic or legal reasons relating the borrower’s financial difficulty, granting
the borrower a concession that the lender would not otherwise consider;
• It becomes probable that the borrower will enter bankruptcy or other financial reorganisation.
The Group first assesses whether objective evidence of impairment exists.
The amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flow (excluding future credit losses that have not been incurred),
discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced
and the loss is recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectively to an event occurring after the impairment was recognised (such as an improvement in the
debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit
or loss.
Financial liabilities at amortised cost
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if payment is
due within one year or less. If not, they are presented as non-currently liabilities.
Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using
the effective interest method.
Other financial liabilities are initially measured at fair value. They are subsequently measured at
amortised cost using the effective interest method.
Financial liabilities are de-recognised when the Group’s contractual obligations expire or are discharged
or cancelled.
Cash and cash equivalents
The Group considers any cash on short-term deposits and other short term investments to be cash
equivalents.
Investment and loans in subsidiaries
Subsidiary fixed asset investments are valued at cost less provision for impairment. The Group applies
the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all investment and loans in subsidiaries.
Non-current assets (or disposal groups) held for sale and discontinued operations
Non- current assets (or disposal groups) are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their carrying amount and fair value less
costs to sell.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal
group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value
less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss
previously recognised. A gain or loss not previously recognised by the date of the sale of the non-
current asset (or disposal group) is recognised at the date of recognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
51
Non-current assets classified as held for sale and the assets of a disposal group classified as held for
sale are presented separately from other liabilities in the notes to the balance sheet.
A discontinued operation is a component of the entity that has been disposed of or is classified as held
for sale and that represents a separate major line of business or geographical area of operations, is part
of a single coordinated plan to dispose of such a line of business or area of operations. The results of
discontinued operations are presented separately in the statements of profit or loss and the prior year is
restated to the enable prior year comparatives.
Equity Instruments
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 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 share-based payments reserve represents equity-settled shared-based employee remuneration for
the fair value of the warrants issued. It also includes the warrants issued for services rendered accounted
for in accordance with IFRS 2.
Retained earnings include all current and prior period results as disclosed in the Statement of
Comprehensive Income, less dividends paid to the owners of the Company.
Treasury Shares
Treasury shares are presented within other equity at the consideration paid for them. No gain or loss
on the purchase, sale, issue or cancellation is recognised. Where such ordinary shares are subsequently
reissued, any consideration received, net of any directly attributable incremental transaction costs and
the related income tax effects, is included in equity attributable to the owners of the Company.
Share-based compensation (Employee based benefits)
The Group operates an equity-settled share-based compensation plan, in that it issues share options and
warrants to its employees in recognition of their services. The fair value of these is recognised as an
employee expense with a corresponding charge to the share-based payment reserve. The total amount
to be expensed is determined by reference to the fair value of the options or warrants granted:
- Including any market performance condition (such as the entity’s share price).
- Excluding the impact of any service and non-market performance vesting conditions.
- Including the impact of any non-vesting conditions (such as the requirement to hold shares for
a specific time).
The fair value of these share options and warrants is determined using an adjusted form of the Black-
Scholes option pricing model which includes a Monte Carlo simulation model. The assumptions are
included in note 23 to the financial statements.
Share-based payments
The Group has two types of share-based payments other than employee compensation.
Warrants issued for services rendered which are accounted for in accordance with IFRS 2 recognising
either the costs of the service if it can be reliably measured or the fair value of the warrant (using Black-
Scholes option pricing models – see note 23).
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
52
Warrants issued as part of share issues have been determined as equity instruments under IAS 32. Since
the fair value of the shares issued at the same time is equal to the price paid, these warrants, by
deduction, are considered to have been issued at nil value.
Current and deferred income tax
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in profit
or loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss
for the year, using tax rates enacted or substantively enacted at the consolidated statement of financial
position date, and any adjustment to tax in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the 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.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the company intends to settle its current tax assets and liabilities on a net basis.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In applying the Group’s accounting policies, which are described in note 3, the Directors are required
to make judgements (other than those involving estimations) that have a significant impact on the
amounts recognised and to make 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 ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
(a) Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are presented
separately below), that the Directors have made in the process of applying the Group’s accounting
policies and that have the most significant effect on the amounts recognised in these financial
statements.
Recoverability of exploration and evaluation assets (see Note 11)
As of 31 December 2022 the value of these assets have been written down to the fair value less cost to
sale. The Directors have assessed the recoverability of these assets and have judged them as recoverable
up to the fair value amount. The Company has also written down its investment in its subsidiaries to
the same fair value and all intragroup loans have been written down to nil and expensed in the current
year Company only profit and loss account. The fair value is equivalent to the Purchase Price as set out
in the Share Purchase Agreement (the “SPA”) with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-
European Mining PR Ltd (“Indo”) for the sale of the Company’s Cyprus subsidiaries, including NCC,
as signed on 26 January 2023.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
53
(b) Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the
reporting period that may have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are discussed below.
Share-based payments (see Note 23)
The Group has issued share options to its directors to provide long-term incentives to deliver long-term
shareholder returns. Participants are granted options which only vest if certain performance standards
are met. The amounts of options that will vest depends on the Company’s share price growth. Once
vested the options remain exercisable for a period of five years. These are valued in accordance with
IFRS 2 “Share-based payments”. In calculating the related charge on the options granted in 2022, the
Company will use a variety of estimates and judgements in respect of inputs used including share price
volatility, risk free rate, and expected life. These are set out in note 23 to the accounts. Changes to
these inputs may impact the related charge.
Fair Value of assets held for sale less cost to sell (see Note 21)
On 26 January 2023, the Company announced it had signed a Share and Purchase Agreement (the
“SPA”) with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-European Mining PR Ltd (“Indo”) for
the sale of the Company’s Cyprus subsidiaries. This was in line with the Heads of Agreement that was
announced on 7 December 2022. These subsidiaries were consolidated at year end, as the Company
still exerted control over its subsidiaries at year end. However, in line with IFRS 5, the Company was
required to value the disposal group at its fair value (as per the SPA) less costs to sell as this is lower
than its carrying value. In calculating this amount the Directors included the Purchase Price and made
the judgement that none of the contingent consideration value, as included in the SPA, should be
recognised. This is because the future amount includes various unknown factors such as the prevailing
copper price and unknown geological results. Should the full amount of contingent consideration have
been recognised the fair value would have increased by a further £357,000.
5. SEGMENTAL REPORTING
For the purpose of IFRS 8, the Chief Operating Decision Maker “CODM” takes the form of the board
of directors. The Directors are of the opinion that the business of the Group focused on two reportable
segments as follows:
• Head office, corporate and administrative, including parent company activities of raising finance
and seeking new investment opportunities, all based in the UK and
• Mineral exploration, all based in Cyprus (all discontinued operations and disclosed in this note as
the CODM have continued to review the results of this segment for the year).
The geographical information is the same as the operational segmental information shown below – the
segments have not been combined as only the Corporate and Administrative relates to continuing
operations.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
54
| Year ending 31 December | ||
| 2022 | ||
| (Continuing operations) | ||
| Corporate and | ||
| Administrative (UK) | ||
| £ | ||
| (Discontinued operations) | ||
| Mineral exploration | ||
| (CYPRUS) | ||
| £ | ||
| Operating loss from total | ||
| operations before and after | ||
| taxation | (1,168,414) | |
| (4,358,115) | ||
| Segment total assets – (net of | ||
| investments in subsidiaries) | ||
| 726,963 | ||
| 515,796 | ||
| Segment liabilities | (181,261) | (1,218,058) |
| Year ending 31 December | ||
| 2021 | ||
| Corporate and | ||
| Administrative (UK) | ||
| £ | ||
| Mineral exploration | ||
| (CYPRUS) | ||
| £ | ||
| Operating loss from total | ||
| operations before and after | ||
| taxation | (590,341) | |
| (397,629) | ||
| Segment total assets – (net of | ||
| investments in subsidiaries) | ||
| 2,805,154 | ||
| 2,734,522 | ||
| Segment liabilities | (312,053) | (276,306) |
6. EXPENSES BY NATURE
(Continuing operations)
| Year ended 31 | ||
| December 2022 | ||
| £ | ||
| Year ended 31 | ||
| December 2021* | ||
| £ | ||
| Wages and salaries (see note 8) | 314,011 | 89,067 |
| Share-based payment | ||
| 137,274 | 69,388 | |
| Legal and professional fees | 217,239 | 151,507 |
| IPO costs | - | 132,182 |
| Travel | 42,791 | 24,612 |
| Office and sundry expenditure | 40,557 | 67,282 |
| Insurance | 34,413 | 22,874 |
| Regulatory fees | 46,277 | 83,515 |
| Bad debts | 302,886 | - |
| Depreciation | 32,586 | - |
| 1,168,034 | 640,427 |
*restated to show only continuing operations
The intangible assets held by the Group were written down to their recoverable amount of £428,328
which was determined by reference to the fair value less cost to sell as set out in the Sale and Purchase
Agreement. This total impairment charge of £2,918,303 has been separately disclosed in the statement
of profit and loss due to the materiality of this impairment.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
55
During the year the Group obtained the following services from their auditors and its associates:
| Year ended 31 | ||
| December 2022 | ||
| £ | ||
| Year ended 31 | ||
| December 2021 | ||
| £ | ||
| Fees payable to the Company’s auditor and its | ||
| associates in relation to the audit of the parent | ||
| company and consolidated financial statements | ||
| 48,000 | ||
| 35,000 | ||
| Fees payable to the Company’s auditor and its | ||
| associates in relation to the audit of the | ||
| Company’s subsidiaries | ||
| 9,500 | ||
| 7,897 | ||
| Fees payable to the Company’s auditor for other | ||
| services: | ||
| - Reporting Accountant services in respect to IPO | - | 30,000 |
| 57,500 | 72,897 |
7. FINANCE COSTS
| Year ended 31 | ||
| December 2022 | ||
| £ | ||
| Year ended 31 | ||
| December 2021 | ||
| £ | ||
| Interest payable | 380 | 35 |
| Unwinding of Financial Liability (see note 15) | - | 12,228 |
| 380 | 12,263 |
8. DIRECTORS AND EMPLOYEES
The monthly average number of people employed by the Group, including Executive Directors, was:
| 2022 | 2021 | |
| Operations | ||
| 2 | 2 | |
| Corporate and administration | ||
| 3 | 1 | |
| 5 | 3 |
The Directors were the key management personnel. Remuneration in respect of these Directors and
Employees was:
| Year ended 31 | ||
| December 2022 | ||
| £ | ||
| Year ended 31 | ||
| December 2021* | ||
| £ | ||
| Wages and salaries | ||
| 276,498 | 62,001 | |
| Social security costs | ||
| 34,640 | 8,145 | |
| Pension costs | ||
| 2,873 | 921 | |
| Share-based payments | ||
| 137,274 | 51,158 | |
| 451,285 | 122,225 |
*restated to show only continuing operations
9. INCOME TAX
No charge to taxation arises due to the losses incurred.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
56
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the
weighted average tax rate applicable to the losses of the consolidated entities as follows:
| GROUP | Year ended | |
| 31 December | ||
| 2022 | ||
| Year ended | ||
| 31 December | ||
| 2021 | ||
| £ | £ | |
| Loss before tax | (5,526,529) | (987,970) |
| Tax at the applicable rate of 17.2% (2021:17.3%) | (949,458) | (170,919) |
| Disallowed expenses (including impairment) at 19% | 555,825 | 169,149 |
| Losses for which no deferred tax is recognised | (393,633) | (1,770) |
| Total tax charge | - | - |
The weighted average applicable tax rate of 17.2% (2021: 17.3%) used is a combination of the 19%
standard rate of corporation tax in the UK and 12.5% Cypriot corporation tax.
The Group has total tax losses of £4,038,559 to carry forward against future profits (2021: £1,437,424
losses carried forward). No deferred tax asset on losses carried forward has been recognised on the
grounds of uncertainty as to when profits will be generated against which to relieve said amount.
10. EARNINGS PER SHARE
The calculation for earnings per Ordinary Share (basic and diluted) is based on the consolidated loss
attributable to the equity shareholders of the Company is as follows:
Continuing operations:
| Year ended | ||
| 31 December 2022 | ||
| Year ended | ||
| 31 December 2021* | ||
| Total loss for the year (£) | (1,168,414) | (652,690) |
| Weighted average number of Ordinary shares** | 60,178,208 | 48,366,261 |
| Total Loss per Ordinary share (£) | (0.019) | (0.013) |
| Continuing and discontinued operations: | ||
| Total loss for the year (£) | (5,526,529) | (987,970) |
| Weighted average number of Ordinary shares | 60,178,208 | 48,366,261 |
| Total Loss per Ordinary share (£) | (0.092) | (0.020) |
*Restated to show discontinued operations as comparative
Earnings and diluted earnings per Ordinary share are calculated using the weighted average number of
Ordinary shares in issue during the period. There were no dilutive potential Ordinary shares outstanding
during the period.
**Shares held by the Company at year end of 10,685,313 have been excluded from the weighted
average number of Ordinary shares calculation from the date of gift.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
57
11. INTANGIBLE ASSETS
| Group | Exploration and |
| Evaluation assets | |
| Cost and Carrying Value | £ |
| At 1 January 2021 | 1,690,536 |
| Exploration and evaluation assets acquired at fair value (note 13): | |
| Licences acquired via acquisition of PRL | 754,292 |
| Licences acquired via acquisition of CGML | 335,062 |
| Additions | 444,625 |
| Disposals of assets | (517,966) |
| Impairment on licence disposal | (118,690) |
| Foreign exchange movements | (9,330) |
| At 31 December 2021 | 2,578,529 |
| Additions | 1,003,612 |
| Foreign exchange movements | (104,132) |
| Impairment in subsidiaries | (148,995) |
| Group impairment charge on discontinued operations | (2,918,303) |
| Assets classified as held for sale and other disposal | (410,711) |
| At 31 December 2022 | - |
In accordance with IFRS 6, the Directors undertook an assessment of the following areas and
circumstances which could indicate the existence of impairment:
• The Group’s right to explore in an area has expired, or will expire in the near future without renewal.
• No further exploration or evaluation is planned or budgeted for.
• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to
the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the book value may not be fully recovered from future
development and production.
An impairment charge was made in regard to the intangible assets as the Board has taken a decision to
discontinue the operations in Cyprus and therefore an impairment charge of £2,918,303 has been
included in the accounts to write down the value of the intangible assets to their Fair value less cost to
sell. This fair value has been calculated from the Sales and Purchase Agreement, recognising only the
Purchase Price of US$528,001.
A 10% movement either way in the US/GBP exchange rate would change the fair value by £73,500.
12. TANGIBLE FIXED ASSETS
| Group | Office leases | ||
| & Equipment | |||
| £ | |||
| Vehicles | |||
| £ | |||
| Total | |||
| Assets | |||
| £ | |||
| Cost | |||
| At 1 January 2022 | 9,087 | 16,860 | 25,947 |
| Additions | 106,601 | 46,921 | 153,522 |
| At 31 December 2022 | 115,688 | 63,781 | 179,469 |
Accumulated depreciation
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
58
| At 1 January 2022 | (1,802) | (3,345) | (5,147) |
| Depreciation charge for the year | (36,223) | (9,369) | (45,592) |
| At 31 December 2022 | (38,025) | (12,714) | (50,739) |
| Net book value | |||
| Assets classified as held for resale | (29,303) | (15,525) | (44,828) |
| At 31 December 2021 | 7,285 | 13,515 | 20,800 |
| At 31 December 2022 | 48,360 | 35,542 | 83,902 |
| Company | Office leases | ||
£ | |||
| Vehicles | |||
£ | |||
| Total Assets | |||
£ | |||
| Cost | |||
| At 1 January 2022 | |||
| - | - | - | |
| Additions | |||
| 76,570 | 39,918 | 116,488 | |
| At 31 December 2022 | |||
| 76,570 | 39,918 | 116,488 | |
| Accumulated depreciation | |||
| At 1 January 2022 | |||
| - | - | - | |
| Depreciation charge for the year | |||
| (28,210) | (4,376) | (32,586) | |
| At 31 December 2022 | |||
| (28,210) | (4,376) | (32,586) | |
| Net book value | |||
| At 31 December 2021 | |||
| - | - | - | |
| At 31 December 2022 | |||
| 48,360 | 35,542 | 83,902 |
Right-of-use assets: The Company only assets relate to an office lease and a vehicle which have both
been accounted for as finance leases under IFRS 16. Additions to the right-of use assets during 2022
financial year were £116,488 (2021: Nil) and the depreciation charge was £32,586 (2021: Nil).
Lease liabilities
Current £61,718 (2021: £nil)
Non-current £23,717 (2021: £nil)
The office lease was renewed on 7 November 2022 and its term ends on 5 December 2022. The liability
related to this is all included in the current lease liabilities.
13. INVESTMENTS IN SUBSIDIARIES/ASSETS HELD FOR SALE
| Company | £ |
| Cost and net book amount | |
| At 1 January 2021 | 1,174,693 |
| Additions | 1,034,230 |
| Disposals | (750,000) |
| At 31 December 2021 | 1,458,923 |
| Write down of investments | (1,034,595) |
| At 31 December 2022 | 424,328 |
On 26 January 2023, the Company announced it had signed a Share Purchase Agreement (the “SPA”)
with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-European Mining PR Ltd (“Indo”) for the sale of
the Company’s Cyprus subsidiaries. This was in line with the Heads of Agreement that was announced
on 7 December 2022. The carrying value of these investments have been revalued, in line with IFRS
5, at the fair value less costs to sell, at £424,328, resulting in an impairment of investments of
£1,034,595 at the year end. The fair value less costs to sell is based on the agreed consideration for the
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
59
Cypriot asses as per the SPA with the vendor. This is Level 3 on the fair value hierarchy.
This valuation does not include the “Revised Valuation Amount” of $432,000 which becomes payable,
by the acquirer, if a new JORC or NI 43-101 compliant Troulli mineral resource estimate of 7.75 million
tonnes or more at a 0.5% Copper equivalent or higher is reported. The Board, will disclose this as a
Contingent Asset after the completion of the sale of the Cypriot assets.
Information about the composition of the Group at the end of the reporting period is as follows:
| Name | Principal activity | Place of | |
| incorporation | |||
| and operation | |||
| % owned | |||
| subsidiary | |||
| New Cyprus Copper P.A. Ltd | |||
| (“NCC”) | Mineral exploration | Cyprus | 100% |
| Treasure Development Limited | |||
| (“TDL”) | Mineral exploration | Cyprus | 90% |
| GC Gold Mines (Cyprus) Ltd | |||
| (“CGML”)* | Mineral exploration | Cyprus | 100% |
On 11 May 2022 NCC increased its shareholding in TDL to 90% based on meeting the agreed
expenditure commitments of the original SPA with BMG Resources Limited. No consideration was
paid for this increase in shareholding. NCC has not recognised the ownership of the final 10% of TDL
as this additional shareholding is in dispute (see note 25) and no share ownership documents have been
signed as at the date of these accounts.
On 9 August 2021, the Company acquired 100% of the issued share capital of CGML for a total cash
consideration of £284,230. The investment provides Caerus with the opportunity to expand its mineral
exploration programme.
On 5 November 2021, the Company sold its subsidiary PR Ploutonic Resources Ltd for a consideration
of £400,000. The final amount of £100,000 was received for this disposal in 2022.
*Changed its name from P. Von-De-Tsianos Gold Mines Ltd (Cyprus) Ltd to GC Gold Mines (Cyprus)
Ltd on 4 July 2021.
The registered office of NCC, TDL and CGML is 10 Tyrnavou Street, Quality Tower C, 3
rd
Floor,
Office C32, 6037 Larnaca, Cyprus.
14. RECEIVABLES
| Group | Company | |||
| 2022 | 2021 | 2022 | 2021 | |
| Current: | £ | £ | £ | £ |
| Other receivables | 527,237 | 432,239 | 527,237 | 378,656 |
| Total current receivables | 527,237 | 432,239 | 527,237 | 378,656 |
| Non current: | ||||
| Loans to subsidiary companies | - | - | - | 1,057,750 |
| Total non-current receivables | - | - | - | 1,057,750 |
Loans to subsidiary companies have been fully written down at year end due to the sale of the
subsidiaries as these amounts will not be repaid.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60
Other receivables includes a sum of £500,000 which was paid on the 13 December 2022 to EV Metals
Group Plc, as a fully refundable deposit, in return for an extendable three month due diligence period
to enter into an exclusive option agreement to acquire 90% of RIWAQ Al Mawarid for Mining. This
deposit was returned on 10 May – see note 28.
15. FINANCIAL LIABILITY – CONTINGENT CONSIDERATION
| 2022 | 2021 | |
| £ | £ | |
| Contingent liability brought forward | 186,916 | 174,688 |
| Provision unwound | (186,916) | 12,228 |
| - | 186,916 |
The Group recorded a contingent consideration liability relating to the acquisition of the NCC group in
2020 which was payable upon publication of a JORC compliant resource on the licences related to this
acquisition. This liability has now been unwound as the assets that it relates to are being held as assets
for sale and no JORC compliant resource had been published at the balance sheet date.
16. TRADE CREDITORS AND OTHER PAYABLES
| Group | Company | |||
| 2022 | 2021 | 2022 | 2021 | |
| £ | £ | £ | £ | |
| Trade payables | 21,311 | 84,245 | 21,311 | 67,609 |
| Accruals | 60,800 | 57,324 | 60,800 | 45,000 |
| Taxes and social security | 13,715 | 12,530 | 13,715 | 12,530 |
| Trade and other payables | 95,826 | 154,099 | 95,826 | 125,139 |
The carrying value of these liabilities is deemed to equate to their fair value, due to their short-term
nature.
17. NON-CURRENT LIABILITIES
| Group | Company | |||
| 2022 | 2021 | 2022 | 2021 | |
| £ | £ | £ | £ | |
| Lease liabilities | 23,717 | - | 23,717 | - |
| Long term loans | - | 504 | - | - |
| 23,717 | 504 | 23,717 | - |
During the year, the Company leased a vehicle in the year for a fixed period of 4 years.
18. DEFERRED TAX
The movement in the deferred tax liabilities account is as follows:
| Group | ||
| 2022 | 2021 | |
| £ | £ | |
| Deferred tax liability brought forward | 246,840 | 125,801 |
| (Impairment)/acquisition of subsidiaries | (201,205) | 121,039 |
| 45,635 | 246,840 | |
| Less liabilities held for resale | (45,635) | - |
| Deferred tax liability carried forward | - | 246,840 |
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
61
The deferred tax liability has arisen following the acquisitions in the prior year which have been
accounted for as asset acquisitions. Therefore a deferred tax liability has been recognised on the Fair
Value uplift of the assets acquired, which has been calculated at a rate of 12.5% of the uplift of asset
value being the applicable Cypriot tax rate. This has been reduced and reclassified into current liabilities
in the current year to reflect the impairment of these assets which are held for sale and the associated
reduced value in deferred tax.
19. SHARE CAPITAL AND SHARE PREMIUM
| Number of | ||||
| Ordinary | ||||
| shares | ||||
| Share | ||||
| capital | ||||
| £ | ||||
| Share | ||||
| premium | ||||
| £ | ||||
| Total | ||||
| £ | ||||
| As at 31 December 2020 | 23,900,000 | 239,000 | 1,627,665 | 1,866,665 |
| Issued 19 March 2021 | 26,500,000 | 265,000 | 2,385,000 | 2,650,000 |
| Issued 11 June 2021 | 3,311,258 | 33,113 | 716,887 | 750,000 |
| Issued 5 October 2021 | 7,500,000 | 75,000 | 1,425,000 | 1,500,000 |
| 61,211,258 | 612,113 | 6,154,552 | 6,766,665 | |
| Less share issue costs | - | - | (314,550) | (314,550) |
| As at 31 December 2021 | 61,211,258 | 612,113 | 5,840,002 | 6,452,115 |
| As at 31 December 2022 | 61,211,258 | 612,113 | 5,840,002 | 6,452,115 |
On 19 March 2021, the Company completed a placing of 21,000,000 new Ordinary shares of £0.01
each at a price of £0.10 per share, a Subscription Agreement for an aggregate 1,500,000 new Ordinary
Shares at a price of £0.10 and issued a further 4,000,000 shares to EV Metals Limited in return for a
further £400,000 investment in the Company. (£100,000 of the cash received for the issue of shares was
received in the prior year and was recorded in the Company balance sheet under ‘Shares paid not
issued’). In total this raised a cumulative £2.25 million (gross proceeds).
On 11 June 2021, the Company issued 3,311,258 new Ordinary shares of £0.01 each at a deemed price
of £0.23 per share to the owners of PRL as part of the consideration for the acquisition of said company.
On 5 October 2021, the Company completed a placing of 7,500,000 new Ordinary shares of £0.01 each
at a price of £0.20 per share to raise £1.5m (gross proceeds).
20. OTHER EQUITY
Other equity consists of “Treasury Shares” in Caerus Mineral Resources Plc that are held by the
Company. These were gifted back to the Company for nil consideration and are therefore recognised
in other equity at nil value. These have accounted for as Treasury shares, though they are not legally
considered to be Treasury Shares as they were not “purchased” by the Company.
The number of shares gifted back to the Company amounts to 10,685,313 Ordinary shares and if
recognised at fair value, at the listed price on day of transfer, would be stated at a fair value of £620,745.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62
21. DISCONTINUED OPERATIONS AND DISPOSAL GROUP HELD FOR SALE
The following information relates to Cypriot assets which are being held for sale and the investments
held by the parent Company – see note 13 for further details:
| 2022 | |
| £ | |
| Operating losses | 1,439,812 |
| Impairment loss | 2,918,303 |
| Employment relating to discontinued operations | 75,834 |
| Cash outflows from discontinued operations | |
| Cash outflow from operating activities | (96,824) |
| Cash outflow from investing activities | (1,040,644) |
| Cash outflow from financing activities | - |
| Net cash outflow for the year | (1,137,468) |
| Assets and liabilities of disposal group held for sale | |
| Intangible assets | 410,711 |
| Property, plant and equipment | 44,828 |
| Trade and other receivables | 34,063 |
| Cash and cash equivalents | 26,194 |
| Assets held for sale | 515,796 |
| Trade and other payables | (45,834) |
| Deferred tax liabilities | (45,635) |
| (91,469) | |
| Liability in subsidiary | (1,126,589) |
| Liabilities directly associated with the assets held for sale | (1,218,058) |
| Fair value of assets held for resale | 424,328 |
The Group is required to recognise a liability of £1,126,589 in its loss from discontinued activities in
relation to the Amendment dated 20 May 2021 to the SPA dated 14 April 2016 between NCC and
BMG. This liability has been recorded at its full value based on an undiscounted translation of an A$2
million possible payment that could arise for NCC from this disputed contract. The Group has
disclaimed the liability and will defend any action taken against it in this matter.
The Board of NCC maintains that the intention behind the Amendment dated 20 May 2021 was for
NCC to retain its ability to elect to pay the balance payment via a smelter royalty, as had been the case
under the SPA. The fair value of assets held for resale do not include this liability– see note 25 for
further details.
22. FOREIGN EXCHANGE TRANSLATION RESERVE
| £ | |
| As at 31 December 2020 | (14,165) |
| Exchange differences on translating the net assets of foreign operations | (14,264) |
| Exchange movements associated with the NCI | 8,830 |
| As at 31 December 2021 | (19,599) |
| Exchange differences on translating the net assets of foreign operations | 232,772 |
| Exchange movements associated with the NCI | (850) |
| As at 31 December 2022 | 212,323 |
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
63
23. WARRANTS AND SHARE-BASED PAYMENTS
The following table sets out the movement of warrants during the year, no warrants were exercised
during either year:
| Number of warrants | Exercise price (pence) | |
| As at 31 December 2020 | 5,400,000 | 5.0p |
| Issued in the year | 11,983,174 | 12.5p to 30.0p |
| As at 31 December 2021 | 17,383,174 | 5.0p to 30.0p |
| Issued in the year | 1,000,000 | 5.0p |
| Cancelled in the year | (10,100,000) | 5.0p to 25.0p |
| As at 31 December 2022 | 8,283,174 | 5.0p to 30.0p |
The weighted average exercise price of the warrants at the year end is £0.21 (2021: £0.16). The
weighted average life of the warrants at the year end is 0.58 years (2021: 1.49 years).
Cancelled warrants
The cancelled warrants were part of the settlement agreement with the former directors. The Company
has transferred the amount of £167,485, which was initially recognised in the share-based payment
reserve in relation to these cancelled warrants into retained earnings.
On 7 January 2022, 1,000,000 Bonus (2025) warrants were issued to Professor Michael Johnson at a
price of 7.5p per share with an expiry date of 7 January 2025. These were issued in lieu of salary. The
exercise price was subsequently reduced on 28 April 2022 to 5p per share. The warrants were valued,
after repricing, at £47,942. These warrants were subsequently cancelled on 16 November 2022.
On 10 January 2022, the exercise price of the 2,000,000 Performance warrants, issued to Martyn
Churchouse in 2021, was reduced to 12.5p and the expiry date was extended to 10 January 2025. On 3
May 2022, the exercise price of the 2,000,000 Bonus (2023) warrants, previously issued to Professor
Michael Johnson was reduced to 5p. The original fair value of these warrants as recognised in prior
year was £51,158. The value of this change £68,385, was debited to the profit and loss account in the
current year. These warrants were subsequently cancelled on 16 November 2022.
1,800,000 Founder warrants, 2,300,000 Seed warrants and 1,000,000 Investor warrants were also
cancelled on 16 November 2022, however as they have been determined as equity instruments under
IAS 32 their cancellation had nil effect on the profit and loss reserve.
Current warrants
The Group has issued the following warrants, which are still in force at the balance sheet date.
| Date of | ||||
| Issue | ||||
| Reason for issue | No. of | |||
| warrants | ||||
| Exercise price | ||||
| pence per share | ||||
| Life in | ||||
| years | ||||
| 25/01/2018 | Founder warrants – dated from Admission | 300,000 | 5.0p | 1.2 |
| 19/03/2021 | Broker warrants A– Share Issue | 3,360,000 | 12.5p | 0.2 |
| 16/06/2021 | Introduction warrants – Cost of Services | 441,174 | 17.0p | 0.5 |
| 05/10/2021 | Placing warrants – Share Issue | 3,750,000 | 30.0p | 1.8 |
| 05/10/2021 | Broker warrants B – Cost of Services | 432,000 | 20.0p | 1.8 |
| 8,283,174 |
The Founder and Placing warrants have been determined as equity instruments under IAS 32 and as
such have been issued at nil cost.
In the prior year the Broker warrants, A and B, have been fair valued at £29,530 in accordance with
IFRS 2 and are measured at the fair value of the services received. This amount is attributable to the
cost of shares issued and therefore has been accounted for in the Share Premium reserve.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64
The remaining warrants are valued in accordance with IFRS 2, as equity settled share-based payment
transactions. £18,230 was recognised as the fair value of Broker Introduction services received during
the prior year. The fair value was calculated using the Black Scholes model with inputs as detailed
below:
| Bonus (2025) | Bonus (2023) | Performance | ||||
| Broker (A) | ||||||
| warrants | ||||||
| Introduction | ||||||
| warrants | ||||||
| Broker (B) | ||||||
| warrants | ||||||
| Share price | 14.3p | 10p | 24p | 10p | 24p | 19.3p |
| Share price | ||||||
| (repriced) | ||||||
| 12.5p | ||||||
| 12.8p | ||||||
| 14.3p | ||||||
| - | ||||||
| - | ||||||
| - | ||||||
| Exercise price | 7.5p | 12.5p | 25p | 12.5p | 17p | 20p |
| Exercise price | ||||||
| (repriced) | ||||||
| 5p | ||||||
| 5p | ||||||
| 12.5p | ||||||
| - | ||||||
| - | ||||||
| - | ||||||
| Expected life | 3 years | 1.5 years | 1.5 years | 1.5 years | 1.5 years | 2.5 years |
| Volatilit | ||||||
y | ||||||
| 40% | 38% | 38% | 38% | 38% | 48% | |
| Volatility | ||||||
| (repriced) | ||||||
| 40% | ||||||
| 48% | ||||||
| 48% | ||||||
| - | ||||||
| - | ||||||
| - | ||||||
| Risk-Free Interest | ||||||
| rate | 0.13% | 0.13% | 0.13% | 0.13% | 0.13% | 0.13% |
| Expected dividends | - | - | - | - | - | - |
| Fair Values | - | £10,593 | £40,565 | £17,797 | £18,229 | £11,733 |
| Fair Values | ||||||
| (repriced) | ||||||
| £47,942 | ||||||
| £68,071 | ||||||
| £314 | ||||||
| - | ||||||
| - | ||||||
| - |
Expected volatility has been based on an evaluation of the historical volatility of similar Company’s
share prices in the same industry and listed on the same Exchange. The fair value has been discounted
by 50% to account for the early stage development of the Company and limited liquidity due to its small
cap nature.
SHARE OPTIONS
On 25 November 2022, the Company granted options over a total of 4,400,000 Ordinary shares of 1
pence each in the capital of the Company with an exercise price of 7.5 pence per Ordinary share.
The Options will vest in three instalments and will have an exercise period of five years. The first
tranche will vest when the closing mid-market share price reaches 7.5 pence or above for three
consecutive trading days. The second tranche will vest when the share price reaches 12.5 pence. The
third tranche will vest when the share price reaches 17.5 pence.
The Board approved the issuance of these share option grants to incentivise and retain the Directors,
who are considered key to enhancing the future market value of the Company and notes the premium
of the exercise price relative to the current share price.
These options are valued in accordance with IFRS2, as equity settled share-based payment transactions.
£104,734 has been recognised as the fair value of employee compensation and this will be charged over
a period of 5 years in the profit and loss account (£20,947 per annum). The fair value was calculated
using the Black Scholes model for inputs and a Monte Carlo simulation; this application simulates the
stock’s share price for a specified number of days. The inputs are shown in the table below.
| Share Options | |
| Share price | |
| 5.5p | |
| Exercise price | |
| 7.5p | |
| Expected life | |
| 5 years | |
| Volatility | |
| 83% | |
| Risk-Free Interest rate | |
| 3.04 % | |
| Expected dividends | |
| - | |
| Fair Values | £104,734 |
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
65
24. RELATED PARTY TRANSACTIONS
Balances and transactions between the Company and its subsidiaries, which are related parties, have
been eliminated on consolidation.
Amounts owed to the parent company by subsidiaries are as follows:
New Cyprus Copper P.A. Ltd £nil (2021: £1,015,270)
Treasure Development Limited £nil (2021: £28,085)
Cyprus Gold Mine Ltd £nil (2021: £14,395)
Funding provided directly to the subsidiaries by the parent company during the year are as follows:
New Cyprus Copper P.A. Ltd £988,871 (2021: £849,445)
In prior year, CMR acquired PRL, one of the owners of this company is the Director Andrew Daniels
who was issued 1,931,457 shares, fair valued at £437,475 for his 58.33% ownership in this company.
The valuation of this company was carried out independently of said director and is viewed by the Board
as an arms length transaction.
In prior year, PM Ploutonic Metals Ltd (“Ploutonic”), a company owned wholly by the Director,
Andrew Daniels, was paid £79,245 in cash for his share in the subsidiary NCC.
During year, £1,052 (2021: £4,969) was paid to Ploutonic for the hire of a field vehicle. Also during
the year £75,834 (2021: £52,240) was paid to T.Bear Contracting Limited (a company owned wholly
by the Director Andrew Daniels) for Consultancy and office expenses.
Transactions with Directors:
Remuneration paid and share options granted to the Directors is disclosed in the Remuneration Report
on pages 24 to 28.
Transactions with Other Related Parties:
On 26 January 2023, the Company signed the share purchase agreement (the "SPA") with PM Ploutonic
Metals Ltd ("Ploutonic") and Indo-European Mining PR Ltd ("Indo") for the sale of the Company's
Cyprus subsidiaries. Ploutonic and Indo are shareholders of the Company, holding as at the date of this
announcement 1.3 and 8.39 per cent. respectively of the voting rights of the Company. The beneficial
owner of Ploutonic is Andrew Daniels, a previous Non-Executive Director of the Company, and the
beneficial owner of Indo is Pierre Richard. The independent directors of the Company have determined
that the terms of the proposed transaction are fair and reasonable and in the best interest of its
shareholders.
On 13 December 2022, the Company announced it had entered into an exclusive option agreement
(including a deposit of £500,000) with EV Metals Group Plc ("EVM") to acquire 90% of RIWAQ Al
Mawarid for Mining ("RIWAQ"). EVM is a significant shareholder of the Company holding as at the
date of this announcement approximately 16.34 per cent. of the voting rights of the Company.
Mr Russell Thomson is a statutory director of EVM and Mr Dominic Traynor is corporate secretary to
EVM. Mr Thomson and Mr Traynor did not form part of the quorum and did not vote on the proposal
to approve the terms of the MOU. The independent directors of the Company have determined that the
terms of the MOU are fair and reasonable and in the best interest of its shareholders other than EVM.
Mr Dominic Traynor is a Partner at Druces LLP who have provided the Company with legal services
during the year costing £16,884 (2021: £125,192) and the balance due to Druces LLP at year end was
£6,323 (2021: £nil). Since being appointed as a Director of the Company Dominic has not been part of
the legal team providing services to the Company.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66
25. COMMITMENTS, PROVISIONS, CONTINGENT LIABILITIES AND ASSETS
On 12 July 2022, the Company announced that BMG Resources Limited (“BMG”) (a minority
shareholder in TDL), had notified NCC that it had defaulted on a A$2m payment based upon BMG’s
interpretation of an amendment to the original share and purchase agreement between BMG, NCC and
TDL dated 14 April 2016 (the “Original SPA”), inter alia, granting a put-option to BMG in respect of
the acquisition of the balance 10% shares of TDL (the “Amendment”). BMG expressed its interest in
exercising the put-option and NCC confirmed it elected to revert to payment through a net smelter
royalty on 4 July 2022. The Board of NCC maintains that the intention behind the Amendment dated
20 May 2021 was for NCC to retain its ability to elect to pay the balance payment via a smelter
royalty. BMG has invoked the dispute resolution process with NCC under the Original SPA.
The Group has disclaimed the liability and will defend any action taken against it in this
matter. However, the Group is required to recognise this potential liability in full and therefore has
included an undiscounted liability of £1,126,589 in their accounts under ‘loss from discontinued
activities’ in the consolidated profit and loss account and within ‘liabilities directly associated with
assets classified as held for sale’ in the consolidated statement of financial position. This recognition of
a liability should not be taken as an acknowledgement of the merits of the claim being asserted by BMG
in this matter.
On 26 January 2023, the Company announced it had signed a Share Purchase Agreement (the “SPA”)
with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-European Mining PR Ltd (“Indo”) for the sale of
the Company’s Cyprus subsidiaries, including NCC. The carrying value of these investments have been
valued at £424,328. This valuation does not include the “Revised Valuation Amount” of £360,000
($432,000) which becomes payable if a new JORC or NI43-101 compliant Troulli mineral resource
estimate of 7.75 million tonnes or more at a 0.5% Copper equivalent or higher is reported. As this is a
known potential asset but the Board are not certain that this gain will materialise it has been determined
as a contingent asset in line with the guidance in IAS 37.
Except for the RIWAQ option agreement referred to in note 24, the Group had not entered into any
material capital commitments as at 31 December 2022 (2021: £nil).
In the current year the Group held obligations with the Mines Department in Cyprus for a minimum
annual spend of (£140,000) (2021: £655,000) on its respective permits and licences.
26. FINANCIAL INSTRUMENTS – RISK MANAGEMENT
Capital risk management
The Directors’ objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for Shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. At the date of these financial
statements, the Group had been financed from equity and borrowings.
The Group is exposed through its operations to a number of risks, the most significant of which are
credit risk, liquidity risk and foreign exchange risks. In common with all other businesses, the Group is
exposed to risks that arise from its use of financial instruments. This note describes the Group’s
objectives, policies and processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial
statements.
Financial instruments
Categories of financial assets and liabilities
The carrying amounts presented in the Consolidated and Company Statement of financial position relate
to the following categories of assets and liabilities:
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
67
| Group | Company | |||
| As at | ||||
| 31 December | ||||
| 2022 | ||||
| £ | ||||
| As at | ||||
| 31 December | ||||
| 2021 | ||||
| £ | ||||
| As at | ||||
| 31 December | ||||
| 2022 | ||||
| £ | ||||
| As at | ||||
| 31 December | ||||
| 2021 | ||||
| £ | ||||
| Financial assets measured at | ||||
| amortised cost: | ||||
| Trade and other receivables | 561,302 | 379,720 | 527,237 | 1,436,406 |
| Cash and cash equivalents | 142,017 | 2,508,108 | 115,824 | 2,426,498 |
| 703,319 | 2,887,828 | 643,061 | 3,826,904 | |
| Financial liabilities | ||||
| measured at amortised cost: | ||||
| Trade and other payables | 83,861 | 96,775 | 120,461 | 80,139 |
| Liability in subsidiary | 1,126,589 | - | - | - |
| 1,210,450 | 96,775 | 120,461 | 80,139 |
Financial risk management
The risk associated with the cash and cash equivalents is that the Group’s banks will enter financial
distress and be unable to repay the Group its cash on deposit. To mitigate this risk, cash and cash
equivalents are only lodged with independent financial institutions designated with minimum rating
“A” in the UK and only required working capital for a 2 month period is retained at the Bank of Cyprus
with a rating “B”.
The risk associated with the other payables is that the Group will not have sufficient funds to settle the
liability when it falls due.
General objectives, policies and processes
The Directors have overall responsibility for the determination of the Group’s risk management
objectives and policies. Further details regarding these policies are set out below:
Credit risk
The Group’s credit risk arises from cash and cash equivalents with banks and financial institutions. For
banks and financial institutions, only independently rated parties with minimum rating “A” are accepted
in the UK. The Group banks with Coutts & Co, part of the NatWest group, who have a Fitch Credit
rating of A and therefore the credit risk is not considered material.
Liquidity risk
Liquidity risk arises from the Directors’ management of working capital. It is the risk that the Group
will encounter difficulty in meeting its financial obligations as they fall due.
The Group is disposing of its assets in Cyprus and the ongoing working capital requirements in relation
to these assets. The Group also has a CLN with EVM which is still unused at the date of these accounts.
Therefore this is not considered a material risk and no further sensitive analyses were considered
necessary by the Group.
CAERUS MINERAL RESOURCES PLC
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68
Maturities of financial liabilities
The table below analyse the Group’s financial liabilities in relation to continuing operations based on
their undiscounted contractual maturities (cashflow):
| Within 12 months | Between 1 and 2 years | Between 2 and 5 years | |
| Lease liabilities | £ | £ | £ |
| Vehicles | 10,503 | 10,503 | 45,519 |
| Office lease | 48,660 | - | - |
| 59,163 | 10,503 | 45,519 |
Currency risk
Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Group reports in Pounds Sterling, but the
functional currency of its subsidiaries is the Euro. The Group does not currently hedge its exposure to
other currencies. The Group’s cash and cash equivalents are held in Pounds Sterling and Euros. At 31
December 2022, only 19% (2021: 3%) of the Group’s cash and cash equivalent were held in Euros. A
10% increase in the strength of Sterling against the Euro would cause an estimated increase of £2,698
(2021: £8,161) on the loss after tax of the Group for the year ended 31 December 2022, with a 10%
weakening causing an equal and opposite decrease.
27. ULTIMATE CONTROLLING PARTY
The Directors consider that there is no ultimate controlling party.
28. EVENTS AFTER THE REPORTING DATE
After the year end the Company made the decision that it would no longer be pursuing the RIWAQ
acquisition and on 10 May 2023, the £500,000 deposit was returned.
On 26 January 2023, the Company announced it had signed a Share Purchase Agreement (the “SPA”)
with PM Ploutonic Metals ltd (“Ploutonic”) and Indo-European Mining PR Ltd (“Indo”) for the sale of
the Company’s Cyprus subsidiaries. This was in line with the Heads of agreement that was announced
on 7 December 2022 and is set out in further detail in note 11.
On 24 June 2023, the Company entered into a binding MOU for the acquisition of 80% of Atlantic
Research Minerals SARL.
