Annual Results

RNS Number : 6740I

Helium One Global Ltd

06 December 2022

 

 

 

6 December 2022

Helium One Global Ltd

("Helium One", the "Company" or the "Group")

Annual Results

Helium One (AIM: HE1) ("Helium One" or "the Company"), the primary helium Company with exploration licences in Tanzania is pleased to announce the Company's audited results for the year ended 30 June 2022.

Within the period:

·     Completion of Maiden drilling programme, delivering a proof of concept and enabling the Company to de-risk the Rukwa Basin

·   Working helium system demonstrated at Tai-1/-1A with the presence of good quality reservoirs, thick sealing units and multiple helium shows

·   Commencement of Phase II exploration programme, providing the Company with the best information available to inform the planning and targeting for the Phase II drilling campaign

·     Significantly strengthened management team

·   Licence renewals and licence relinquishments concluded, enabling the Company to focus on more prospective remaining acreage, as well as saving capital

·     Signed Memorandum of Understanding with Exalo Drilling S.A. for the supply of a drilling rig

·     Letter of Intent with Baker Hughes for the supply of integrated wellsite services

·     Phase II drilling programme planned to commence Q1 2023

Ian Stalker, Chairman, commented:

"This was a significant year for the Company as we completed our first two exploration wells in Rukwa and significantly de-risked the Rukwa project by identifying a working helium system at our Tai prospect. As Phase II exploration moves towards drilling, with the potential to prove up what we believe to be a world class helium province, Helium One is able to leverage the knowledge and experience of the team of experts that have joined us over the period allowing us to move more confidently into the next phase of our development.

"I would like to thank all our staff, shareholders, local communities and the ministers and Government of Tanzania for their continued support as we enter what will undoubtedly be a very exciting period for the Company and deliver what we hope will be a commercial discovery at Rukwa."

 

David Minchin, CEO, commented: 

"The last year has been an incredibly busy period for the Company delivering our first drilling programme and building on the data gained from that with our Phase II exploration programme.  This has provided us with an exceptional dataset from which we have planned our Phase II drilling programme, targeted to commence in Q1 2023.

"As a team we are very excited about the year ahead, returning to Tai to target the intervals that we were unable to evaluate last year and with a view to confirm a discovery that we believe can unlock the value of an entire province.

"I would again like to thank all our stakeholders for their continued support and look forward to providing further updates in due course." 

A copy of the Annual Results is available on the Company's website, www.helium-one.com .

Contact

Helium One Global Ltd David Minchin, CEO	[phone]
Liberum Capital Limited (Nominated Adviser and Joint Broker) Scott Mathieson Ed Thomas Nikhil Varghese	[phone]
Peterhouse Capital Limited (Joint Broker) Lucy Williams	[phone]
Tavistock (Financial PR) Nick Elwes Tara Vivian - Neal	[phone]

Notes to Editors

Helium One Global, the AIM-listed Tanzanian explorer, holds prospecting licences totalling 2,966km² across three distinct project areas, with the potential to become a strategic player in resolving a supply-constrained helium market.

The Rukwa, Balangida, and Eyasi projects are located within rift basins on the margin of the Tanzanian Craton in the north and southwest of the country. The assets lie near surface seeps with helium concentrations ranging up to 10.6% He by volume. All Helium One's licences are held on a 100% equity basis and are in close proximity to the required infrastructure.

The Company's flagship Rukwa Project is located within the Rukwa Rift Basin covering 1,900km² in south-west Tanzania.  The project is considered to be an advanced exploration project with leads and prospects defined by a subsurface database including multispectral satellite spectroscopy, airborne gravity gradiometry, 2D seismic data, and QEMSCAN analysis. The Rukwa Project has been de-risked by the 2021 drilling campaign, which identified reservoir and seal with multiple prospective intervals from basin to near surface within a working helium system.

Helium One is listed on the AIM market of the London Stock Exchange with the ticker of HE1 and on the OTCQB in the United States with the ticker HLOGF.

Chairman's Statement

The period under review has been another busy period for the Company.  On the operational front, Helium One delivered its maiden exploration programme culminating in the milestone events of the Company's first two exploration wells being drilled on the Rukwa Project in Tanzania - the first drilling campaign in Africa to target primary helium. The work undertaken in 2021 provided a proof of concept and has enabled the Company to reduce exploration risk in finding helium in the Rukwa Basin. The drilling carried out on the Tai prospect demonstrated a working helium system: with good to excellent quality reservoirs, thick sealing units, and helium gas shows at multiple prospective intervals. 

Following this the Company then commenced Phase II of its exploration programme, building on information obtained from the 2021 campaign.  This included the successful completion of a 220-line kilometre 2D seismic campaign, targeting the northern extensions of known structural highs that are believed to act as charge focus areas for helium migration.  The Company also completed a multispectral satellite spectroscopy study over the entire licence area, which identified abundant near surface helium anomalies.  An Electrical Resistivity Tomography survey was also carried out across nine lines, totalling 56-line kilometres, over selected targets which will contribute significantly to our understanding of potential shallow helium plays within the top 200 metres of the Rukwa basin. 

All of the extensive work that the Company has completed to date ensures that the Company has the best information available to inform the planning and targeting for the Phase II drilling campaign.  The challenge of finding a suitable rig for Phase II drilling was compounded by increasing demand from the large and medium size oil and gas companies resulting in a scarcity of rigs and ancillary well evaluation equipment available for the East African market.  These challenges have been largely overcome and the Company has now signed a memorandum of understanding with Exalo Drilling S.A. ("Exalo") for the supply of a drilling rig ("the Rig") to be utilised in the Company's drilling operation on the Rukwa licence. 

In the period under review the Board continued to seek ways to improve its Environment, Social and Governance ("ESG") impact.  As part of our ESG strategy, we will continue our ongoing engagement with all stakeholders and governments to ensure that we operate our business in a way that is sustainable and benefits the local communities in which we have a presence.

During the year, the Company strengthened the team at Board level with the appointment of Nigel Friend as an Independent Non-Executive Director.  Nigel is highly regarded in the oil and gas sector having worked as CFO and CEO for a number of successful companies. Given his expertise, this is a major endorsement for the Company, its strategy and potential.  His deep industry experience and knowledge of commercialising significant gas discoveries will be invaluable as Helium One grows. 

I would like to take this opportunity to thank the Board and all our staff for all their efforts and continued dedication in what has been an incredibly busy period for the Company.  I would also like to thank the Government of Tanzania and the local communities in which we operate for their continued support which has enabled the Company to advance its operations at such a dramatic pace.  We look forward to continuing our work with them in the year ahead, and to delivering our Phase II programme.

Finally, I would like to thank all of our shareholders for their continued commitment and support. We believe that all the work completed to date in the field at Rukwa assists in de-risking our planned 2023 drilling effort. This combined information, along with the knowledge base of our expanded team of experienced gas professionals will allow us to run an efficient Phase II drilling programme with the maximum chance of success and proving up what we believe is a world class helium province.  The Company is able to leverage the vast knowledge and experience of the team of experts it has brought together under CEO David Minchin to grow the Company into a global explorer and producer .

Ian Stalker

Non-Executive Chairman

Chief Executive's Statement

I am pleased to be reporting on the Group's annual results for the 12 months to 30 June 2022.  The period under review has been another busy year of considerable progress for the Group leaving the Company poised to commence its Phase II drilling campaign.

The period to 30 June 2022 saw the Company conclude the Phase I exploration programme at our flagship Rukwa project whilst also commencing the Phase II programme with an infill 2D seismic campaign over the Rukwa licence area to identify the most suitable drill targets also completed.

Operational Review

On 11th August 2021, the Company announced the completion of drilling at its maiden Tai-1/-1A exploration well to a total depth (TD) of 1,121 metres. The well successfully identified helium shows within all three target formations, including five helium show intervals within the Karoo Group, as well as secondary targets in the Lake Bed Formation and Red Sandstone Group.

The uppermost Karoo encountered a thick (130 metres) claystone sequence, demonstrating seal presence which is supported by the interpretation of the 2D seismic data.  Wireline logging of the uppermost Karoo also indicated good reservoir potential with 15-20% porosity.

Unfortunately, due to poor downhole conditions, it was not possible to log the full Karoo sequence. Borehole washouts associated with interbedded sand-claystone sequences resulted in a series of ledges developing in the wellbore. The wireline tools subsequently became hung-up on these ledges and, after several attempts to clean the hole, the Company was unable to progress the tools beyond 880 metres.

Without wireline data it was not possible for the Company to assess the helium gas-bearing potential of the deeper, thicker, reservoir intervals which had demonstrated helium shows in the main Karoo Group.  As no free gas was identified, and due to safety concerns caused by the deteriorated hole conditions, no drill stem test was conducted, and no samples of brine or gas were recovered to surface. 

Whilst Helium One is disappointed not to have identified free gas within the Karoo Group of Tai-1/-1A, data acquired from this well significantly enhanced the Company's understanding of the helium system in the Rukwa Rift Basin.  By encountering helium shows in the Lake Bed Formation, Red Sandstone Group and Karoo Group, combined with QEMSCAN and petrophysical analysis confirming the presence of a seal and demonstrating good reservoir potential, the Board are encouraged that we have identified a working helium system in the Rukwa Rift Basin.

The Company subsequently spudded the Tai-2 exploration well on 17th August 2021. The well, despite not identifying helium gas, provided further valuable information on shallow trapping potential.  The aim of this well was to target the continuation of a 2.2% helium show identified in a sandstone interval at 70.5 metres in Tai-1. Wireline logging of Tai-2 demonstrated a continuous clay over this interval, suggesting that the sandstone unit identified in Tai-1 pinched out but provides evidence for vertical and lateral seal potential in any Lake Bed targets.

Operations at the Rukwa project continued with the announcement on 1st November 2021 of the commencement of the Company's Phase II 2D Seismic campaign.  The 200-line kilometre 2D seismic campaign targeted the northern extensions of known structural highs that act as a focus for helium charge.  Following encouraging early results, the Company decided to extend the survey with an additional 20-line kilometres of 2D Seismic to secure additional data over preliminary leads close to the Momba River.

Seismic acquisition parameters and line layout were based on the integration of data from the Phase I 2D seismic, the Company's Airborne Gravity Gradiometry dataset, remote sensing of surface helium anomalies utilising Sentinel-2 satellite data, and Helium One's technical understanding of charge and migration developed from Tai-1/-1A drilling results. 

Phase II 2D Seismic was positioned further northwards into the basin than the Phase I 2D Seismic, which was limited to areas of prospectivity close to the basin margin and to target depths of <2500 metres.  By advancing Phase II 2D Seismic investigation northward and targeting extensions of known structural highs and charge focus points, the Company's aim was to identify targets with a lower charge risk and target depths down to ~2500 metres for testing with a conventional drill rig.

In January this year, Company announced the results of a Multispectral Satellite Spectroscopy ("MSS") study providing a heat-map for helium at surface across the Company's entire licence area.  The study identified abundant helium anomalies indicating widespread helium charge and migration across the Rukwa, Eyasi and Balangida Rift Basins.  The Company's Phase II exploration programme continued in February with the Electrical Resistivity Tomography ("ERT") survey over priority areas identified from Phase I and Phase II 2D seismic, as well as investigating surface helium anomalies identified in the MSS study.  The ERT survey was designed to identify resistivity anomalies within the ultra-shallow zone (<200m), allowing a better understanding of near surface geology which is poorly resolved by seismic.

Also in February, the results of the Quantitative Evaluation of Minerals by Scanning Electron Microscopy ("QEMSCAN") study on drill cuttings collected from the Tai-1/-1A wells at its Rukwa (100%) project area were announced.  These results indicated good to excellent quality reservoir, demonstrating clean sands with very low clay content, whilst also confirming the presence of thick claystone units at the Top Karoo Group and Base Lake Bed Formation, as well as multiple intraformational claystone units.

Following the evaluation of all the data gained in the Phase I and Phase II exploration program, Helium One plans to commence Phase II exploration drilling operations at the Tai prospect which is the most advanced of all leads and prospects identified in the 1,898 km² Rukwa Basin.

The Subsurface team selected the Tai prospect as their primary Phase II exploration target given the new data from the Phase II 2D Seismic campaign. This interpretation has not only provided improved resolution over the Tai structural closure but has also identified a newly defined closure in the Lake Beds which was not previously targeted.

Drilling at Tai is supported by stratigraphic information from the 2021 drilling campaign. QEMSCAN analysis on cuttings has provided additional information on reservoir distribution, mineralogy, seal potential and grain size distribution of the entire sedimentary sequence at Tai-1/-1A, indicating good to excellent quality reservoir. This data also confirms the presence of a thick claystone unit at the top of the Karoo Group as well as the presence of intraformational claystone and calcrete interbeds within the Lake Bed Formation.

The Tai prospect is further understood by the identification of multiple helium shows (helium identified in drilling mud) across all formations but which the Company was unable to log or test with wireline equipment. With a robust structural closure, detailed information on reservoir and seal, and the identification of subsurface helium which proves a working helium system. Tai is the lowest risked prospect in Helium One's current AOI of the Rukwa Basin. Given this, Tai will be the focus of the Company's exploration expenditure with a primary objective of proving a discovery in the 2023 campaign.

The Company has now signed a memorandum of understanding ("MoU") with Exalo Drilling S.A.  (ORLEN Group) ("Exalo") for the supply of a drilling rig ("the Rig") to be utilised in the Company's drilling operation on the Rukwa licence, with a target spud date of Q1 2023 subject to the necessary funding for the drilling programme being in place.    

Exalo Drilling (ORLEN Group) is a one of Europe's leading onshore drilling contractors with a fleet of 35 drilling rigs allowing for well drilling up to 8000m of depth.  Exalo Drilling is a global brand with branches in Pakistan, Tanzania, Kazakhstan, Czech Republic, Chad, and a subsidiary in Ukraine. The company has over 70 years' experience operating in countries throughout Europe, Africa, and Asia and are known internationally for the delivery of high-quality drilling and oilfield services.

The Rig will be released from southern Africa on completion of current operations.  Thereafter, subject to final contract negotiations and dependent on local ground conditions, the Rig will mobilise directly to operations in Rukwa.  The Rig can be broken down into 28 tonne loads for ease of transportation, allowing for year-round transportation in a range of weather and road conditions.

The Rig was Helium One's first choice during research following the 2021 drill campaign but had already been contracted for operations elsewhere.  As the Rig is already engaged in drilling activities that exceed the total depth anticipated at Rukwa there is no requirement for an independent rig audit. 

The Baker Hughes integrated service package will be transported from the same location and at the same time as the Exalo 202 Rig, meaning that drilling operations will be able to begin as soon as the Rig is in place and accepted as ready to commence.

Drilling will target the Tai prospect where Phase II 2D Seismic provided improved resolution over a robust structural closure at Karoo level, and also identified a newly defined closure in the Lake Beds which was not previously tested. With 2021 drilling providing detailed information on reservoir and seal, and the identification of subsurface helium on multiple horizons which proves a working helium system, the Company is confident that Tai prospect gives the best opportunity to make an economic discovery that unlocks the potential of the Rukwa helium province.

Licence Area Evaluation

Helium One submitted licence renewal applications over 12 of its licences which were due for second renewal during September and October 2022. 

As part of the renewal process, Helium One conducted a review of all the Company's licences held with a view to fully or partially relinquish licences that were not considered to be prospective for helium. 

Prior to renewal, Helium One holds a prospecting licence footprint in the Rukwa Rift Basin totalling 3,448 km². Following review two PLs were fully relinquished (PL10728/2015 and PL10711/2015), and a further six were partially relinquished (PL10727/2015, PL10712/2015, PL10710/2015, PL10725/2015, PL10709/2015 and PL10686/2015). The others remained unchanged. This combined relinquished area totals 1,549.27 km² saving approximately $309,000 per year in licence fees.

The Helium One technical team selected the chosen areas for relinquishment based on the following criteria:

·   inaccessible offshore areas with no, or poorly, defined exploration leads;

·   onshore areas with no, or poorly, defined exploration leads; and

·     onshore areas on outcropping basement i.e. no sediment fill therefore deemed to be non-prospective

Retained areas were selected based on the following criteria:

·     existing prospective areas with 2D seismic data coverage;

·   offshore areas with well-defined leads, i.e. defined by multiple seismic interpreters, and supported by gravity - magnetic data; and

·   onshore areas with well-defined leads and prospects in areas with known surface helium seeps

By relinquishing portions of our licenced acreage, Helium One can eliminate those areas deemed to be non-prospective and ensure future work programmes are focussed more effectively on the remaining, higher ranked acreage that is leased.

Historically, expenditure on the licence areas has been capitalized on the Company's balance sheet as an intangible asset.  The Board undertakes an annual review of the carrying value of the Group's intangible assets and as a result of the relinquishment, the value of the intangible assets has been impaired by the total of the expenditure on the relinquished areas.  The total impairment charge for the year is $8,520,929.

Financial results for the year ended 30 June 2022

For the year to 30 June 2022 the Group recorded a total comprehensive loss attributable to shareholders of the Company of $13,356,151 an increase compared with $5,155,028 for the year to 30 June 2021. The largest contributor to the total comprehensive loss was the impairment loss of $8,520,929 on the relinquishment of licences as detailed in note 12 to the financial statements.

The Group's net assets as at 30 June 2022 were $18,033,568 in comparison with $28,536,258 at 30 June 2021. The decrease is due to the impairment of the exploration assets as a result of the relinquishment of licence areas. At 30 June 2022, the Group cash position was $4,906,153.

Outlook

Helium remains an irreplaceable technology commodity in supply crisis: the Board believes that Helium One may have a significant asset which can help resolve this crisis. The year ahead promises to be another busy and very significant period for the Company as we deliver our Phase II drilling programme as we look to deliver a commercial discovery at our Rukwa Project. We have a strong and highly experienced management team clearly focussed on delivering a discovery at Rukwa.

I would like to take this opportunity to thank all our staff who have again worked so hard this year as well as the local communities and the Government ministries that have continued to work with us and support us enabling us to continue to drive our programme forward.  Lastly, I would also like to thank all of our shareholders for their continued support and look forward to providing further updates as we progress our Phase II exploration programme.

David Minchin
Chief Executive Officer

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 30 June 2022

	Note	Year ended 30 June 2022 $	Year ended 30 June 2021 $
Continuing Operations
Revenue		-	-
Administrative expenses	6	(4,664,694)	(2,888,177)
Impairments	5	(8,701,875)	(2,277,196)
Other income		10,418	21,314
Other gains and losses		-	12,865
Operating loss		(13,356,151)	(5,131,194)
Finance costs	8	-	(23,834)
Loss for the year before taxation		(13,356,151)	(5,155,028)
Taxation	9	-	-
Loss for the year from continuing operations (attributable to the equity holders of the parent)		(13,356,151)	(5,155,028)
Items that may be reclassified subsequently to profit and loss:
Exchange difference on translation of foreign operations		(875,055)	138,745
Total comprehensive loss for the year (attributable to the equity holders of the parent)		(14,231,206)	(5,016,283)
Earnings per share:
Basic and diluted earnings per share (cents)	10	(2.17)c	(1.33)c

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2022

	Note	30 June 2022 $	30 June 2021 $
ASSETS Non-current assets
Intangible assets	12	11,758,362	13,061,285
Property, Plant & Equipment	13	7,760	5,252
Other receivables	15	1,210,352	584,702
Total non-current assets		12,976,474	13,651,239
Current assets
Inventory	14	117,878	224,879
Trade and other receivables	15	644,336	64,282
Cash and cash equivalents	16	4,906,153	15,802,111
Total current assets		5,668,367	16,091,272
Total assets		18,644,841	29,742,511
LIABILITIES Current liabilities
Trade and other payables	17	(611,273)	(1,206,253)
Total liabilities		(611,273)	(1,206,253)
Net assets		18,033,568	28,536,258
EQUITY
Share premium	18	43,061,318	42,660,713
Other reserves	20	2,587,348	601,884
Retained earnings		(27,615,098)	(14,726,339)
Total equity		18,033,568	28,536,258

The financial statements were approved and authorised for issue by the Board of Directors on 5 December 2022 and were signed on its behalf by:

David Minchin

Director and Chief Executive Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2022

	Share premium	Other reserves	Retained earnings	Total
Note	$	$	$	$
Balance as at 1 July 2020	17,879,884	(524,737)	(9,571,311)	7,783,836
Comprehensive income
Loss for the year	-	-	(5,155,028)	(5,155,028)
Currency translation differences		138,745	-	138,745
Total comprehensive loss for the year	-	138,745	(5,155,028)	(5,016,283)
Transactions with owners recognised directly in equity
Issue of ordinary shares                         18	21,700,000	-	-	21,700,000
Issue of ordinary shares - for CLNs…18	823,836			823,836
Issue of ordinary shares related to asset acquisition	2,299,416	-	-	2,299,416
Issue of ordinary shares - for fees/services	570,758	-	-	570,758
Cost of share issue	(1,458,273)			(1,458,273)
Share based payments	-	987,876	-	987,876
Warrants and options exercised during the year	845,092	-	-	845 , 092
Total transactions with owners	24,780,829	987,876	-	25,768,705
Balance as at 30 June 2021	42,660,713	601,884	(14,726,339)	28,536,258

Balance as at 1 July 2021		42,660,713		601,884	(14,726,339)	28,536,258
Comprehensive income
Loss for the year		-		-	(13,356,151)	(13,356,151)
Currency translation differences		-		(875,055)	-	(875,055)
Total comprehensive loss for the year		-		(875,055)	(13,356,151)	(14,231,206)
Transactions with owners recognised directly in equity
Issue of ordinary shares - for fees/services	18	260,965		-	-	260,965
Share based payments		-		3,327,911	-	3,327,911
Warrants and options expired during the year		-		(18,980)	18,980	-
Warrants and options exercised during the year		139,640		(448,412)	448,412	139,640
Total transactions with owners		400,605		2,860,519	467,392	3,728,516
Balance as at 30 June 2022		43,061,318		2,587,348	(27,615,098)	18,033,568

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 June 2022

	Note	30 June 2022 $	30 June 2021 $
Cash flows from operating activities
Loss before taxation		(13,356,151)	(5,155,028)
Adjustments for:
Depreciation and amortisation	13	4,896	701
Share-based payments		3,327,911	526,081
Shares issued for services		260,965	570,758
Net finance costs	8	-	23,863
Impairment on acquisition Impairment of intangibles	11 12	- 8,520,929	2,277,196 -
Increase in trade and other receivables		(1,205,704)	(33,041)
(Decrease)/increase in trade and other payables		(594,980)	153,840
Decrease in inventories	14	107,001	(224,879)
Foreign exchange		(560,434)	(96,792)
Net cash outflows from operating activities		(3,495,567)	(1,957,328)
Investing activities
Cash from acquisitions	11	-	246,509
Purchase of property, plant, and equipment	13	(7,404)	(5,953)
Exploration and evaluation activities	12	(7,218,006)	(5,096,098)
Net cash used in investing activities		(7,225,410)	(4,855,542)
Financing activities
Proceeds from issue of share capital	18	-	21,700,000
Proceeds from exercise of warrant options	18	139,640	845,092
Proceeds from borrowings	17	-	750,000
Cost of share issue		-	(881,271)
Net cash generated from financing activities		139,640	22,413,821
Net increase in cash and cash equivalents		(10,581,337)	15,600,951
Cash and cash equivalents at beginning of year Exchange movement on cash		15,802,111 (314,621)	212,132 (10,972)
Cash and cash equivalents at end of year	16, 27	4,906,153	15,802,111

Major non-cash transactions:

On 4 December 2020 the Company acquired all the assets and liabilities of the Attis Group for a total consideration of $2,299,416 via the issue of 62,281,048 ordinary shares in the Company (see note 11). Other significant non-cash transactions are as detailed in the Intangible note 12, Share premium note 18 and Share-based payments in note 19.

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2022

 

1.         General Information

 

The principal activity of Helium One Global Limited (the 'Company') (formerly Helium One Limited) and its subsidiaries (together the 'Group') is the exploration and development of helium gas resources. The Company is incorporated and domiciled in the British Virgin Islands. The address of its registered office is P.O Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. The Company is exemptfrompreparingseparateparentcompanyfinancialstatementsforthe year ended 30 June 2022 inline withBVI Business Companies Act 2004.

Following amalgamation with Attis Oil and Gas ("Attis") as approved at the Extraordinary General Meeting held on the 25th of November 2020, the Company's ordinary shares were admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange under the ticker 'HE1'.  The Company is also listed on the OTCQB market with the ticker HLOGF and is quoted on Böurse Frankfurt with symbol 9K3.

2.         Functional and presentational currency

 

The determination of an entity's functional currency is assessed on an entity-by-entity basis. A company's functional currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Parent Company is the US Dollar, because it operates in the BVI, where the majority of its transactions are in US dollars. The functional currencies of its subsidiaries are the US dollar, because the majority of their transactions by value are in US dollars.

The presentational currency of the Group for year ended 30 June 2022 is US dollars. The presentational currency is an accounting policy choice.

 

3.         Summary of Significant Accounting policies

 

The principal accounting policies that have been used in the preparation of these consolidated financial statements   are set out below.  These policies have been consistently applied unless otherwise stated.

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union applicable to companies under IFRS and in accordance with AIM Rules. The financial statements are prepared on the historical cost basis or the fair value basis where the fair valuing of relevant assets or liabilities has been applied.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised.

New and amended standards 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 30 June 2022.

New Accounting Standards issued but not yet effective

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 17	Insurance Contracts	1 January 2023
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
Amendments to IAS 1	Disclosure of accounting policies	1 January 2023
Amendments to IAS 8	Definition of accounting estimates	1 January 2023
Amendments to IAS 12	Deferred tax related to 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 on the Group's results or shareholders' funds.

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and could affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

The investments in subsidiaries held by the Company are valued at cost less any provision for impairment that is considered to have occurred, the resultant loss being recognised in the income statement.

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries up to 30 June 2022.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are recognised in profit or loss and presented on the statement of comprehensive income.

However, foreign currency differences arising from the translation of the following items are recognised in OCI:

-        An investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognised in OCI are reclassified to profit or loss).

-        A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective.

Foreign operations

The assets and liabilities of foreign operations and fair value adjustment arising on acquisition, are translated into United States Dollars at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to OCI. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to OCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

Going concer n                                                              

The consolidated financial statements have been prepared on a going concern basis. The Group incurred a net loss of $13,356,151 and incurred an operating cash outflows of $3,495,567 and is not expected to generate any revenue or positive cash flows from operations in the next 12 months from the date at which these consolidated financial statements were approved.  In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Group, including current level of resources and the required level of spending on exploration and evaluation activities. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments.

The Group meets its working capital requirements from its cash and cash equivalents. The Group is pre-revenue and to date the Group has raised finance for its activities through the issue of equity. The Group has $4,906,153 of cash and cash equivalents at 30 June 2022. The Group's ability to meet operational objectives and general overheads is reliant on raising further capital in the near future.

The Directors are confident that further funds can be raised and it is appropriate to prepare the consolidated financial statements on a going concern basis, however there can be no certainty that any fundraise will complete or be sufficient to meet the Group's future obligations . These conditions indicate existence of a material uncertainty related to events or conditions that may cast significant doubt about the Group's ability to continue as a going concern, and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. There consolidated financial statements do not include the adjustments that would be required if the Group could not continue as a going concern. 

Cash and cash equivalents

Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short-term investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

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 - 2 years

There was no depreciation charge for the field equipment in the year as this was fully depreciated in the financial year ended 30 June 2019.

Expenses incurred in respect of the maintenance and repair of property, plant and equipment are charged against income when incurred. Refurbishments and improvements expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.

An item of property, plant and equipment ceases to be recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on cessation of recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset ceases to be recognised.

Intangible assets - Exploration and Evaluation assets

The Group applies the full cost method of accounting for Exploration & Evaluation ('E&E') costs, having regard to the requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources. Under the full cost method of accounting, costs of exploring for and evaluating mineral resources are accumulated by reference to appropriate cost centres being the appropriate licence area and /or licence areas held under licence agreements. A licence agreement grants the right to explore and evaluate mineral resources, and to acquire the licences later at the discretion of the licence holder. Exploration and evaluation assets are tested for impairment as described further below. Where appropriate, licences may be grouped into a cost pool.

All costs associated with E&E are initially capitalised as E&E assets, including payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling, and testing.

Exploration and evaluation costs include directly attributable overheads together with the cost of materials consumed during the exploration and evaluation phases. Costs incurred prior to having obtained the legal right to explore an area are expensed directly to profit and loss as they are incurred.

E&E Costs are not amortised prior to the conclusion of appraisal activities.

E&E costs assets related to each exploration licence or pool of licences are carried forward until the existence (or otherwise) of commercial reserves has been determined. Once the technical feasibility and commercial viability of extracting a mineral resource is demonstrable, the related E&E assets are assessed for impairment on an individual licence or cost pool basis, as appropriate, as set out below and any impairment loss is recognised in profit and loss. The carrying value, after, any impairment loss, of the relevant E&E assets is then reclassified as Property, Plant and Equipment.

E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral resources and include the point at which a determination is made as to whether commercial reserves exist.

The aggregate carrying value is compared against the expected recoverable amount, by reference to the present value of future cash flows expected to be derived from production of commercial reserves.

When a licence or pool of licences is abandoned or there is no planned future work, the costs associated with the respective licences are written off in full.

Any impairment loss is recognised in profit and loss and separately disclosed.

The Group considers each licence, or where appropriate pool of licences, separately for purposes of determining whether impairment of E&E assets has occurred.

Impairment

All capitalised exploration and evaluation assets and property, plant and equipment are monitored for indications of impairment. Where a potential impairment is indicated, assessment is made for the group of assets representing a cash generating unit.

In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired, whether:

-       the period for which the Group has the right to explore in a specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

-       unexpected geological occurrences render the resource uneconomic;

-       a significant fall in realised prices or oil and gas price benchmarks render the project uneconomic; or

-       an increase in operating costs occurs.

If any such facts or circumstances are noted, the Group perform an impairment test in accordance with the provisions of IAS 36.

The aggregate carrying value is compared against the expected recoverable amount of the cash generating unit. The recoverable amount is the higher of value in use and the fair value less costs to sell. An impairment loss is reversed if the assets or cash-generating unit's recoverable amount exceeds its carrying amount. A reversal of impairment loss is recognised in the profit or loss immediately.

Provisions

A provision is recognised in the Statement of Financial Position when the Group or Company has a present legal or constructive obligation because of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Taxation

There is no current tax payable in view of the losses incurred to date.

Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity, in which case the related current or deferred tax is also charged or credited directly to equity.

Inventory

Inventory is valued at the lower of cost and net realisable value. The cost of inventories is based on the cost of the consumable and cost of transport to the site where stored. Net realisable value is estimated selling price in the ordinary course of business, less costs related to selling the inventory.

For other inventories, cost is determined on a weighted average basis (for fuel and chemicals) or a specific identification basis (for spares and supplies), including the cost of direct material and (where applicable) direct labour and a proportion of overhead expenses.  Items are classified as spares and supplies inventory where they are either standard parts, easily resalable or available for use on non-specific campaigns, and as intangible exploration and evaluation assets where they are specific parts intended for specific projects.  Net realisable value is determined by an estimate of the price that could be realised through resale or scrappage based on its condition at the balance sheet date.

Equity

Equity comprises the following:

1.   "Share premium" represents the total value of equity shares issued (there is no par value) net of expenses of the share issues.

2.   "Other reserves" includes the following:

a.     the "Merger reserve" arose on the acquisition of CJT Ventures Limited.  There have been no movements in the reserve since acquisition.

b.     the "Share option reserve" represent the fair values of share options and warrants issued and

c.       the "Foreign exchange reserve" represents the cumulative translation difference on the net assets of the subsidiaries

3.   "Retained reserves" include all current and prior year results, including fair value adjustments on financial assets, as disclosed in the consolidated statement of comprehensive income.

Share Issue Costs

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

Share-based payments

The Company awards share options to certain Directors and employees to acquire shares of the Company. Additionally, the Company has issued warrants to providers of equity finance. 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.

All goods and services received in exchange for the grant of any share-based payment is measured at their fair values in accordance with IFRS 2. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.

The fair value is appraised at the grant date and excludes the impact of non-market vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.  All equity-settled share-based payments are recognised as an expense in the income statement with a corresponding credit to "other reserves."

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior years if share options exercised are different to that estimated on vesting. Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share premium.

A gain or loss is recognised in profit or loss when a financial liability is settled through the issuance of the Company's own equity instruments. The amount of the gain or loss is calculated as the difference between the carrying value of the financial liability extinguished and the fair value of the equity instrument issued. A gain or loss is recognised in profit or loss on the expiry of a financial liability. The amount of the gain or loss is calculated as the difference between the carrying value of the expired financial liability and the fair value of the equity instrument issued.

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.

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 IFRS 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;

·       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; and

·       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.

4.     Critical accounting judgments, estimates and assumptions

The preparation of the financial statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the year.  Actual results may vary from the estimates used to produce these financial statements. 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 

Significant items subject to such estimates and assumptions include:

Valuation of exploration and evaluation expenditure (see Note 12)

Exploration and evaluation assets include mineral rights and exploration and evaluation costs, including payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling, and testing. Exploration and evaluation costs are capitalised if management concludes that future economic benefits are likely to be realisable and determines that economically viable extraction operation can be established as a result of exploration activities and internal assessment of mineral resources. According to 'IFRS 6 Exploration for and evaluation of mineral resources', the potential indicators of impairment include: management's plans to discontinue the exploration activities, lack of further substantial exploration expenditure planned, expiry of exploration licences in the period or in the nearest future, or existence of other data indicating the expenditure capitalised is not recoverable. At the end of each reporting period, management assesses whether such indicators exist for the exploration and evaluation assets capitalised, which requires significant judgement. This review takes into consideration long term commodity prices, anticipated resource volumes and supply and demand outlook.  As of 30 June 2022, total exploration and evaluation costs capitalised amounted to $11,758,362 after taking into account an impairment of $8,520,929 for licences which have been surrendered. (2020: $13,061,285).

Tax receivable (see Note 15)

At 30 June 2022, the Group recognised an amount of $1,210,352 (2021 $584,702) within other receivables which relate to VAT receivable.  The amount is subject to being recoverable once a subsidiary of the Group becomes revenue generating.  The Directors believe that the amount will be recovered in full and therefore have not recognised any impairment to the carrying value of this amount.

Share based payment ( see Note 19 )

The Group issues share options and warrants to its employees, directors, investors and suppliers.  These are valued in accordance with IFRS 2 "Share-based payments".  In calculating the related charge on issuing either share options or warrants the Group will use a variety of estimates and judgements in respect of inputs used including share price volatility, risk free rate, and expected life.  Changes to these inputs may impact the related charge.

Accounting for acquisitions and fair value ( see Note 11 )

Acquisitions are accounted for at fair value. The assessment of fair value is subjective and depends on a number of assumptions. These assumptions include assessment of discount rates, and the amount and timing of expected future cash flows from assets and liabilities. In addition, the selection of specific valuation methods for individual assets and liabilities requires judgment. The specific valuation methods applied will be driven by the nature of the asset or liability being assessed. The consideration given to a seller for the purchase of a business or a company is accounted for at its fair value. When the consideration given includes elements that are not cash, such as shares or options to acquire shares, the fair value of the consideration given is calculated by reference to the specific nature of the consideration given to the seller .

5.     Segment information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in two key geographical segments, being the British Virgin Islands and Tanzania. Activities in British Virgin Islands is limited to corporate management as well as desktop exploration costs whilst activities in Tanzania relates to operations and exploration.

 

2022                                                           Note	Tanzania $	BVI $	Total $
Other Income	-	10,418	10,418
Administrative expenses	(333,475)	(1,563,742)	(1,897,217)
Total impairments	(6,996,726)	(1,705,149)	(8,701,875)
Impairment of loans	(47,537)	(26,139)	(73,676)
Impairment of inventory                            14 Impairment of intangibles                         12	(107,270) (6,841,919)	- (1,679,010)	(107,270) (8,520,929)
Share based payments	-	(3,327,911)	(3,327,911)
Foreign exchange	65,753	494,681	560,434
Loss from operations per reportable segment	(7,264,448)	(6,091,703)	(13,356,151)
Additions to non-current assets	(1,098,418)	423,653	(674,765)
Intangible assets	8,232,922	3,525,440	11,758,362
Inventory	117,878	-	117,878
Reportable segment assets	8,483,451	10,161,390	18,644,841
Reportable segment liabilities	(325,126)	(286,147)	(611,273)

 

2021	Tanzania	BVI	Total
	$	$	$
Other Income	-	21,314	21,314
Administrative expenses	(293,135)	(2,054,583)	(2,347,718)
Impairment on acquisition		(2,277,196)	(2,277,196)
Impairment of inventory	(111,169)		(111,169)
Finance Charges		(23,834)	(23,834)
Share based payments		(526,081)	(526,081)
Other gains/(losses)	23,485	(10,620)	12,865
Foreign exchange	218,928	(122,136)	96,792
Loss from operations per reportable segment	(161,891)	(4,993,137)	(5,155,028)
Additions to non-current assets	4,239,124	1,171,743	5,410,867
Intangible assets	9,930,809	3,130,476	13,061,285
Inventory	224,879	-	224,879
Reportable segment assets	14,970,601	14,771,910	29,742,511
Reportable segment liabilities	(873,953)	(332,300)	(1,206,253)

Segment assets and liabilities are allocated based on geographical location.

6.     Expenses by nature breakdown

 

	30 June 2022 $	30 June 2021 $
Depreciation	4,896	701
Wages and salaries (including Directors' fees)	3,251,224	754,806
Professional & Consulting fees	950,852	776,886
Foreign Exchange Movements	(560,434)	(96,792)
Insurance	66,518	103,539
Office expenses	30,572	9,539
Travel and subsistence expenses	79,876	15,291
Listing costs	-	942,895
Other expenses	841,190	381,312
	4,664,694	2,888,177

During the year the Group obtained the following services from their auditors:

	30 June 2022 $	30 June 2021 $
Fees payable to the Group's auditors for the audit of the Company	56,848	55,250
Fees payable to the Subsidiaries auditors for the audit of the Subsidiaries	21,633	21,806
Fees payable in respect of audit overruns	46,168	-
	124,649	77,056

7.     Directors and Employees

	30 June 2022 $	30 June  2021 $
Wages and salaries	336,831	39,600
Social security costs	91,085	12,573
Pension costs	7,067	855
Share based payments	2,746,664	453,786
Directors' remuneration (note 7.1)	595,928	462,149
	3,777,575	968,963
Less capitalised amounts	(526,351)	(214,157)
	3,251,224	754,806

Wages and salaries include amounts that are recharged between subsidiaries. Some of these costs are then capitalised as exploration and evaluation assets and others are administration expenses.

The share-based payments comprised the fair value of warrants and options granted to directors and employees in respect of services provided.

Apart from the directors, the Group only had an average number of five employees during the year (2021: One).

	30 June 2022 $	30 June  2021 $
Amounts attributable to the highest paid director:
Director's remuneration	227,308	163,639
	227,308	163,639

David Minchin is a full time CEO from 1 December 2020 and Russel Swarts has been employed on a full-time basis since 1 June 2021. The other directors provided professional services as required on a part-time basis. Details of Directors' remuneration are disclosed below.

7.1    Directors' remuneration

	Salaries and Fees	Bonuses	Fees paid in shares	Total 30 June 2022
	$	$		$
Ian Stalker	80,296	-	-	80,296
Robin Birchall	34,047	-	-	34,047
Russel Swarts	130,699	-	-	130,699
James Smith	48,521	-	-	48,521
Sarah Cope	66,443	-	-	66,443
David Minchin	187,108	40,200	-	227,308
Nigel Friend 1	8,615	-	-	8,615
	555,728	40,200	-	595,928

	Salaries and Fees	Bonuses	Fees paid in shares	Total 30 June 2021
	$	$	$	$
Joshua Bluett 2		-	20,000	20,000
Jonathan Taylor 5	336	-		336
Chukwuemeka Obiora Okwuosa 3	2,000	-	1,000	3,000
Ian Stalker	74,282	-		74,282
Thomas Reynolds 4	-	-	1,000	1,000
Robin Birchall	57,833	-		57,833
Russel Swarts	42,190			42,190
James Smith	28,791	25,868		54,659
Sarah Cope	19,342	25,868		45,210
David Minchin	134,850	28,789		163,639
	359,624	80,525	22,000	462,149

¹ Nigel Friend was appointed on 17 March 2022

² Joshua Bluett resigned on 2 November 2020

³ Chukwuemeka Obiora Okwuosa resigned on 2 November 2020

⁴ Thomas Reynolds resigned on 2 November 2020

⁵ Jonathan Taylor resigned on 30 June 2020

The Directors of the Group are considered to be Key Management Personnel. No director was paid pension benefits  in either year and there are no post-employment benefits, other long-term benefits or termination benefits outstanding.

8.     Finance Costs

	30 June 2022 $	30 June  2021 $
Finance costs	-	23,834
	-	23,834

In the prior year, finance charges arose on the redemption of Convertible loan notes  which carried a 10% interest rate per annum.

9.     Taxation

	30 June 2022 $	30 June 2021 $
Taxation expense
Current tax	-	-
Deferred tax	-	-
Loss before tax	(13,356,151	(5,155,028)
Tax at the applicable rate of 21% (2021: 7.80%)	(2,804,792)	(402,092)
Effects of: Expenditure not deductible for tax	138	837
Losses carried forward not recognised as a deferred tax asset	2,804,654	401,675
Tax charge	-	-

No tax charge or credit arises from the loss for the year.

The tax rate used is a weighted average of the standard rate of corporation tax in the UK being 19% and Tanzania being 30%. No deferred tax asset has been recognised in view of the uncertainty over the timing of future taxable profits against which the losses may be offset.

The Company has unused tax losses of approximately $5,122,914 (2021: $ 2,318,260) to carry forward and set against future profits. The related deferred tax asset has not been recognised in respect of these losses as there is no certainty regarding the level and timing of future profits.

10.   Loss per share

The calculation for earnings per share (basic and diluted) is based on the consolidated loss attributable to the equity shareholders of the Company is as follows:

	30 June 2022 $	30 June  2021 $
Loss attributable to equity shareholders	13,356,151	5,155,028
Weighted average number of Ordinary Shares	616,086,860	387,130,595
Loss per Ordinary Share ($/cents)	(2.17)c	(1.33)c

Basic and diluted loss per share have been calculated by dividing the loss attributable to equity holders of the Company after taxation by the weighted average number of shares in issue during the year. Diluted loss per share has not been calculated as the options, warrants and loan notes have no dilutive effect given the loss arising in the year.

11.   Asset Acquisition

On 5 November 2020, the Company, and Attis entered into the "Amalgamation Agreement" whereby a wholly owned subsidiary of the Company, Helium One Treasury Limited agreed to acquire all of the assets and liabilities of Attis.  This was completed on 4 December 2020, when the Company acquired 100% of the share capital of Attis for the total consideration of $2,299,416.  This was satisfied by the issue of 62,281,048 new Ordinary Shares to the Attis sellers at a price of $0.0369 per Ordinary Share. The fair value of the ordinary shares issued as part of the consideration was based on the IPO share price on "Amalgamation".

Attis' primary activities at the date of acquisition was the investment and development in oil and gas exploration and production. The Amalgamation was undertaken for several reasons. The association with Attis has provided invaluable introductions to investors for Convertible Loan Notes and the Amalgamation. It also provided the Company with access to and the benefit of Attis' shareholders, many of whom have been supportive and have participated in the Amalgamation. The Attis shareholders may also contribute towards additional liquidity in the trading of the Company's shares in the future. Helium One also received the benefit of Attis' cash balances which were used to pay some of the costs associated with Admission, leaving the majority of new money raised at Admission to be used for the Company's work programme. 

The following table summarises the fair value of assets acquired and liabilities assumed as the acquisition date:

	Book Value	Fair Value Adjustment	Fair Value
	$	$	$
Cash and cash equivalents	246,509	-	246,509
Trade and other payables	(224,289)	-	(224,289)
Net assets acquired	22,220	-	22,220

Fair Value of Consideration Paid
	$
Shares issued	2,299,416

Analysis of cash flows on acquisition
	$
Payment on acquisition	-
Net cash acquired on acquisition	246,509
Net cash inflow on acquisition	246,509

Under IFR3, a business must have 3 elements: inputs, processes, and outputs. Following the disposal of the Austin Field assets in August 2020, Attis became an AIM Rule 15 cash shell. Attis did not have title to licences or intangible or tangible assets and held only cash balances and payables. These could not be considered inputs given that Attis was a cash shell. Attis had no processes to produce outputs and had no infrastructure or assets that could produce outputs. Therefore, the Directors' conclusion was that the transaction was an asset acquisition and not a business combination. There was no fair value adjustment required as Attis had no intangible or tangible assets to uplift.

Therefore, the Group is required to recognise an impairment for the difference between the fair value of consideration paid and the fair value of the net assets acquired. This amounts to an impairment of $2,277,196 to the cost of the investment which has been recognised in the Statement of Comprehensive Income in the current year.

The total amount of the amalgamation related costs expensed by the group was $942,185 ($346,821 of this was settled in shares). These costs have been recognised in administrative expenses within the Statement of Comprehensive Income. The cost includes external legal, consulting and accounting cost incurred compiling the documentation required by the Registrar and other bodies and the performance of due diligence activities and have been taken to expense in the year under review.

12.   Intangible Assets

Intangible assets comprise exploration and evaluation costs capitalised as at 30 June 2022 and 2021, less impairment.

	Note	30 June 2022 $	30 June 2021 $
Exploration & Evaluation Assets - Cost and Net Fair Value
Opening balance		13,061,285	7,942,967
Additions to exploration assets		6,269,562	4,653,495
Capitalised directors' fees and employee wages	7	526,351	214,157
Capitalised other expenses Equity Settled		274,276 260,965	191,786 72,482
Foreign exchange rate movements on intangible assets		(113,147)	(13,602)
Total additions		7,218,006	5,118,318
Impairment of intangibles		(8,520,929)	-
Closing balance		11,758,362	13,061,285

Exploration projects in Tanzania are at an early stage of development and no resource estimates are available to enable value in use calculations to be prepared. 

In accordance with IFRS 6, the Directors undertook an assessment of the following areas and circumstances that could indicate the existence of impairment which included the following:

-      The Group's right to explore in an area has expired or will expire soon 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; and

-     Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

With a number of Prospecting Licences approaching their second renewal period in August/September 2022, the Helium One technical team made a recommendation as to which areas are likely to be less prospective for helium and therefore could be fully or partially relinquished. This is commonplace in any exploration strategy as by relinquishing some of the licenced acreage those areas deemed to be less prospective are eliminated and assists in ensuring that a work programme can be more effective on the remaining, higher ranked acreage.

The Helium One technical team derived  the areas for relinquishment based on the following criteria:

-     inaccessible offshore areas with no or poorly defined exploration leads;

-     onshore areas with no or poorly defined exploration leads; and

-     onshore areas on outcropping basement i.e., no sediment fill therefore deemed to be non-prospective.

The retained areas were selected based on the following criteria:

-     existing prospective areas with 2D seismic data coverage;

-     marginal offshore areas with well-defined leads i.e., defined by multiple seismic interpreters, and supported by gravity - magnetic data; and

-     onshore areas with well-defined leads and prospects in areas with known surface helium seeps.

Following their assessment and as a result of various licences being relinquished, the Directors concluded that an impairment charge of $8,520,929 was necessary for the year ended 30 June 2022 (2021: $Nil).

13.   Property, Plant and Equipment

 

		Field Equipment	Office equipment	Total
		$	$	$
Cost				-
As at 1 July 2020		71,087	17,009	88,096
Additions		-	5,953	5,953
Foreign exchange movements		(460)	-	(460)
As at 30 June 2021		70,627	22,962	93,589
Additions		-	7,404	7,404
As at 30 June 2022		70,627	30,366	100,993
Accumulated depreciation				-
As at 1 July 2020		(70,627)	(17,009)	(87,636)
Charge for the year		-	(701)	(701)
As at 30 June 2021		(70,627)	(17,710)	(88,337)
Charge for the year		-	(4,896)	(4,896)
As at 30 June 2022		(70,627)	(22,606)	(93,233)
Carrying Amount
At 30 June 2021		-	5,252	5,252
At 30 June 2022		-	7,760	7,760

The Group's property, plant and equipment are free from any mortgage or charge.

14.   Inventory

		30 June 2022	30 June 2021
		$	$
Inventory at cost		224,879	336,048
Less impairment		(107,270)	(111,169)
Exchange Gain		269	-
Net realisable value		117,878	224,879

Inventory comprises drill rods and drilling chemicals used in the previous drilling campaign.

15.   Trade and other receivables

Non-current other receivables are as follows:

		30 June 2022	30 June 2021
		$	$
VAT receivable		1,210,352	584,702

In 2020, VAT receivable was reclassified as a non-current asset as the amounts will only become receivable upon the Group being revenue generating. This is not estimated to occur in the next 12-month period. Non-current receivables were not discounted as the balance, as well as any impact of discounting, is considered to be immaterial to the financial statements.

Other receivables are as follows:

		30 June 2022	30 June 2021
Prepayments		$ 481,236	$ 39,657
Other receivables		163,100	24,625
		644,336	64,282

Prepayments include an amount of $371,381 for drill casings (2021: $Nil)  and  $65,080 for drilling equipment (2021: $Nil)  to be used in the upcoming drilling campaign. Other receivables comprise VAT refunds to be submitted. .

16.   Cash and cash equivalents

		30 June 2022	30 June 2021
		$	$
Cash and cash equivalents		4,906,153	15,802,111

The Group's cash at bank is held with two listed international banking institutions.

17.   Trade and other payables

	30 June 2022	30 June 2021
	$	$
Trade payables	219,624	940,134
Accruals	331,703	241,048
Other creditors	59,946	25,071
	611,273	1,206,253

Trade payables have shown a significant reduction in the current year. In the prior year the Group was in the middle of a drilling campaign, resulting in higher expenditure and payables at year end. 

18.   Share premium

	Number of shares	Ordinary shares $	Total  $
Issued and fully paid as at 30 June 2020	176,818,166	17,879,887	17,879,884
Issue of new shares - 9 September 2020 (1)	985,712	34,500	34,500
Issue of new shares - 9 September 2020 (2)	18,000	1,800	1,800
Issue of new shares - 9 September 2020 (3)	4,000,000	100,000	100,000
Issue of new shares - 2 December 2020 (4)	12,514,319	462,030	462,030
Issue of new shares - 2 December 2020 (5)	29,008,239	823,836	823,836
Issue of new shares - 2 December 2020 (6)	211,267,627	7,800,000	7,800,000
Issue of new shares - 2 December 2020 (7)	62,281,048	2,299,416	2,299,416
Issue of new shares - 20 January 2021 (8)	2,868,954	-	-
Issue of new shares - 16 April 2021 (9)	100,000,000	13,800,000	13,800,000
Issue of new shares - 27 April 2021 (10)	1,560,230	61,597	61,597
Issue of new shares - 4 May 2021 (11)	4,730,452	186,369	186,369
Issue of new shares - 10 May 2021 (12)	3,891,115	434,672	434,672
Issue of new shares - 21 May 2021 (13)	2,482,394	99,404	99,404
Issue of new shares - 27 May 2021 (14)	372,669	72,428	72,428
Issue of new shares - 27 May 2021 (15)	1,000,000	-	-
Issue of new shares - 7 June 2021 (16)	300,000	12,013	12,013
Issue of new shares - 16 June 2021 (17)	400,000	16,037	16,037
Issue of new shares - 28 June 2021 (18)	1,000,000	35,000	35,000
Movement for 2021	438,680,759	26,239,102	26,239,102
Share issue costs	-	(1,458,273)	(1,458,273)
As at 30 June 2021	615,498,925	42,660,713	42,660,713
Issue of new shares - 18 January 2022 (19)	100,000	3,857	3,857
Issue of new shares - 21 January 2022 (20)	211,864	10,191	10,191
Issue of new shares - 1 March 2022 (21)	182,394	6,953	6,953
Issue of new shares -27 May 2022 (22)	1,560,229	55,946	55,946
Issue of new shares - 30 May 2022 (23)	1,990,000	250,000	250,000
Issue of new shares - 30 May 2022 (24)	87,284	10,965	10,965
Issue of new shares - 10 June 2022 (25)	1,760,563	62,693	62,693
Movement for 2022	5,892,334	400,605	400,605
As at 30 June 2022	621,391,259	43,061,318	43,061,318

All shares issued are issued at no par value. All new shares issued will rank pari passu with the existing ordinary shares in issue.

(1)   On 9 September 2020, the Company issued 985,712 new ordinary shares at a price $0.035 per share in lieu of directors fees for a total value of $34,500.

(2)   On 9 September 2020, the Company issued 18,000 new ordinary shares at a price of $0.10 per share for a total value of $1,800.

(3)   On 9 September 2020, the Company issued 4,000,000 new ordinary shares at $0.025 per share for a total value of $100,000 to raise funds for the Company.

(4)   On 2 December 2020, the Company issued 12,514,349 new ordinary shares to consultants and advisors in lieu of cash settlement for part of the services provided to the Company in relation to the "Amalgamation" with a total value of $462,030.

(5)   On 2 December 2020, the Company issued 29,008,239 new ordinary shares at 2.84p (rather than at a 30% discount to 2.84p see issue 16 below for share correction) per share for the Conversion of Loan Notes for a value of $823,836.

(6)   On 2 December 2020, the Company raised gross proceeds of £6,000,000 ($7,800,000) through the placing of 211,267,597 new ordinary shares at 2.84p per share as part of the "Placing Agreement".

(7)   On 2 December 2020, the Company issued 62,281,048 new ordinary shares as Consideration Shares to existing Attis shareholders pursuant to the terms of the Amalgamation for a value of $2,299,416.

(8)   On 20 January 2021, the Company issued 2,868,954 new ordinary shares to correct an error in calculation of shares to be allotted on the conversion of the Convertible Loan Notes at Admission as issued on 2 December 2020.  These additional shares were issued at a Nil value. 

(9)   On 16 April 2021, the Company raised gross proceeds of £10,000,000 ($13,800,000) through a fundraising placing of 100,000,000 new ordinary shares at 10p per share.

(10) On 27 April 2021, the Company issued 1,560,230 new ordinary shares in the Company for warrants exercised at a price of 2.84p to a service provider for a value of (£44,311) $61,597.

(11) On 4 May 2021, the Company issued 4,730,452 new ordinary shares in the Company for warrants exercised at a price of 2.84p to three service providers for a value of (£134,981) $186,369.

(12) On 10 May 2021, the Company issued 3,891,115 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£308,278) $434,672.

(13) On 21 May 2021, the Company issued 2,482,394, new ordinary shares in the Company for warrants exercised at a price of 2.84p for value of (£70,500) $99,404.

(14) On 27 May 2021, the Company issued 372,669 new ordinary shares in the Company at a price of 13.99p to a service provider for a value of (£52,136) $72,428.

(15) On 27 May 2021, the Company issued 1,000,000 new ordinary shares in the Company for nil cost options.

(16) On 7 June 2021, the Company issued 300,000 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£8,520) $12,013.

(17) On 16 June 2021, the Company issued 400,000 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£11,360) $16,037.

(18) On 23 June 2021, the Company issued 1,000,000 new ordinary shares in the Company for warrants exercised at a price of 2.84p for value of (£28,400) $35,000.

(19) On 18 January 2022, the Company issued 100,000 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£2,840) $3,857.

(20) On 21 January 2022, the Company issued 211,864 new ordinary shares in the Company for warrants exercised at a price of 3.554p for a value of (£7,521) $10,191.

(21) On 1 March 2022, the Company issued 182,394 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£5,180) $6,953.

(22) On 27 May 2022, the Company issued 1,560,229 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£44,310) $55,946.

(23) On 30 May 2022, the Company issued 1,999,000 new ordinary shares in the Company to a service provider at a price of 10.00p for a value of (£199,000) $250,000.

(24) On 30 May 2022, the Company issued 87,284, new ordinary shares in the Company to a service provider at a price of 10.00p (£8,728) $10,965.

(25) On 10 June 2022, the Company issued 1,760,563 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£50,000) $62,693.

19.   Share-based payments

Under IFRS 2, an expense is recognised in the statement of comprehensive income for equity settled share-based payments, at the fair value at the date of grant.  If this payment relates directly to the cost of raising funds through the issue of shares, then it is debited against the share premium reserve.  The share-based payments were all valued using the Black-Scholes Pricing Model.

The Group has a share option scheme that entitles key management personnel to purchase shares at the market price of the shares at grant date. Currently, these schemes are limited to key management personnel and certain key contractors.  The vesting conditions are as set out in the Report of the Directors.  The share-based payments debited to the Share Premium account all related to share options issued to Directors and key management personnel.

No warrants were granted during the year that were determined as equity instruments under IAS 32.

The application of IFRS 2 gave rise to the following share-base payments:

	2022	2021
	$	$
Share-based payments	3,327,911	987,876
Amounts debited to Share Premium	-	(461,795)
Warrants exercised	(448,412)	-
Options expired	(18,980)	-
	2,860,519	526,081

The following table sets out the movements of warrants and options during the year:

	2022	2022	2021	2021
	Warrants and Options	Weighted average exercise price ($)	Warrants and Options	Weighted average exercise price ($)
Outstanding at the beginning of the year	70,154,090	0.24	10,902,860	0.32
Granted during the year	6,000,000	0.18	77,615,421	0.22
Exercised during the year	(3,815,050)	0.04	(15,364,191)	0.06
Expired during the year	(1,156,902)	0.305
Cancelled during the year	(3,300,000)	0.18	(3,000,000)	0.13
Outstanding at the end of the year	67,882,138	0.13	70,154,090	0.24

The warrants and options outstanding at 30 June 2022 had an exercise price in the range of $0.04 to $0.305 (2021: range of $0.04 to $0.32) and a weighted-average contractual life of 5.81 years (2021: 4.5 years).   The warrants exercised during the year were at an exercise price of $0.04 (2.84 pence) - see note 18 for further breakdown.

The cancelled warrants in the year were not replaced, whilst in the prior year all cancelled warrants were replaced with new warrants under the same terms but issued through the EMI share option scheme and no movement in reserves was recognised for this replacement.

The share price at the time of exercise of the warrants and options was an average of $0.25 (£0.196) (2021: $0.06), ranging from $0.091-$0.279 (£0.07-£0.215).

Measurement of fair values on Equity-settled share-based payment arrangements

The fair value of the employee share options has been calculated using the Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not considered in measuring fair value.

The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments were as

follows:

	Award 09 09 2020	Award 29 09 2020	Award 04 12 2020 (1)	Award 04 12 2020 (2)	Award 04 12 2020 (3)	Award 04 12 2020 (4)
Fair value at grant date	0.025	0.028	0.013	0.03	0.025	0.024
Share price at grant date	0.038	0.038	0.037 -0.038	0.038	0.038	0.038
Exercise price	0.035	0.035	0.045-0.3	0.038	0.04,0.05	0.04 & 0.11
Expected volatility	76%	76%	76%	76%	76%	76%
Expected life years	3	4	4	5	1.5	1
Expected dividend yield	-	-	-	-	-	-
Risk-free interest rate	0.32%	0.32%	0.32%	0.32%	0.32%	0.32%
		Award 08 12 2020	Award 15 04 2021	Award 21 06 2021	Award 24 01 2020	Award 16 02 2022
Fair value at grant date		0.03	0.245	0.253	0	0.56
Share price at grant date		0.038	0.161	0.257	0	0.1085
Exercise price		0.11 & 0.038	0.188 & 0.112	0.296 & 0.134	0.038	0.1747
Expected volatility		76%	76%	76%	87.70%	55%
Expected life years		5	2	10	3	9
Expected dividend yield		-	-	-	-	-
Risk-free interest rate		0.32%	0.32%	0.32%	0.32%	1.53%

The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.  Expected volatility was determined by reviewing benchmark value from comparator companies.

The Company has issued the following warrants and options, which are still in force at the balance sheet date:

Grant date	Number of warrants and options	Expiry date	Exercise price $ per share
21 September 2016*	5,686,550	20 April 2023	0.285
18 October 2016*	474,185	20 April 2023	0.285
22 October 2016*	2,426,625	20 April 2023	0.40
14 November 2016*	263,000	20 April 2023	0.285
3 March 2017*	52,500	20 April 2023	0.285
22 June 2017*	1,000,000	20 April 2023	0.40
9 September 2020	1,000,000	9 September 2023	0.035
29 September 2020	9,000,000	30 September 2024	0.035
4 December 2020	21,166,668	3 December 2025	0.0382
4 December 2020	3,120,465	15 September 2023 to 20 October 2024	0.0477-0.112
15 April 2021	2,492,145	15 April 2023	0.1881
21 June 2021	3,000,000	20 June 2031	0.1344
21 June 2021	15,200,000	20 June 2031	0.2956
16 February 2022	3,000,000	15 February 2032	0.1747
	67,882,138

* During the prior year the Board granted an extension of expiry for warrants issued 21 September 2016, 22 October 2016, 14 November 2016 and 3 March 2017, the expiration date was extended to 20 April 2023.

There are 67,882,138 (2021: 70,154,090) options/warrants exercisable at year end.

20.   Other reserves

 

Merger reserve	30 June 2022	30 June 2021
	$	$
Opening and closing balance	(349,710)	(349,710)

 

The merger reserve arose on the acquisition of CJT Ventures Limited. There have been no movements in the reserve since acquisition.

Foreign currency reserve	30 June  2022 $	30 June 2021 $
Opening balance	(36,282)	(175,027)
Movement	(875,055)	138,745
As at 30 June	(911,337)	(36,282)

Share option reserve	2022 $	2021 $
Opening balance	987,876	-
Share based payments	3,327,911	987,876
Warrants exercised/expired	(467,392)	-
As at 30 June	3,848,395	987,876
Total Other Reserves	2,587,348	601,884

21.   Financial Instruments

Capital risk management

The Group's objective when managing capital is to safeguard the entity's ability to continue as a going concern and develop its mineral exploration and development and other activities to provide returns for shareholders and benefits for other stakeholders.

The Group's capital structure comprises all the components of equity (all share capital, share premium, retained earnings when earned and other reserves). When considering the future capital requirements of the Group and the potential to fund specific project development via debt, the Directors consider the risk characteristics of the underlying assets in assessing the optimal capital structure.

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and price risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Fair value of financial instruments

The fair values of the Company's financial instruments on 30 June 2022 and 30 June 2021 did not differ materially from their carrying values.

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

-     Level 1 fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

-     Level 2 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

-     Level 3 assets are assets whose fair value cannot be determined by using observable inputs or measures, such as market prices or models. Level 3 assets are typically very illiquid, and fair values can only be calculated using estimates or risk-adjusted value ranges.

Market Risk

Market risk arises from the Group's use of interest bearing and foreign currency financial instruments. It is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), and foreign exchange rates (currency risk). No such instruments are held by the Group and therefore no risk has been identified.

Price Risk

Price risk arises from the exposure to equity securities arising from investments held by the Group.  No such investments are held by the Group and therefore no risk has been identified.

Foreign Exchange Risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Pound sterling, US Dollar and Tanzanian Shilling. Foreign exchange risk arises from recognised monetary assets and liabilities, where they may be denominated in a currency that is not the Group's functional currency. While the Tanzanian Shilling has not depreciated since 31 March 2019 the Tanzanian Shilling risk is mitigated by the fact that Helium One would only have one month's cash requirement on hand at any one time. Another significant risk in Tanzania is a US Dollar risk as the loans to Tanzanian subsidiaries are denominated in US Dollars. The Directors consider that, for the time being, no hedging or other arrangements are necessary to mitigate this risk.

On the assumption that all other variables were held constant, and in respect of the Group and the Company's expenses the potential impact of a 20% increase/decrease in the USD: Tanzanian Shilling foreign exchange rate on the Group's loss for the year and on equity is as follows:

	30 June 2022	30 June 2021
Increase/(decrease) in USD/ TzSh
20%	87,085	107,480
-20%	(87,085)	(107,480)

Credit Risk

Credit risk is the risk that the Group will suffer a financial loss as a result of another party failing to discharge an obligation and arises from cash and other liquid investments deposited with banks and financial institutions. The Group considers the credit ratings of banks in which it holds funds to reduce exposure to credit risk. The Group will only keep its holdings of cash and cash equivalents with institutions which have a minimum credit rating of 'BBB'.

Whilst the cash holdings are deposited with institutions in terms of the policy, the Group considers that it is not exposed to any significant increases in credit risk and no Expected Credit Loss has been recognised.

The Group considers that it is not exposed to major concentrations of credit risk.

The Group holds cash as a liquid resource to fund its obligations. The Group's cash balances are held primarily in US Dollars. The Group's strategy for managing cash is to assess opportunity for interest income whilst ensuring cash is available to match the profile of the Group's expenditure. This is achieved by regular monitoring of interest rates and monthly review of expenditure forecasts. Short term interest rates on deposits have for the fiscal year been very unattractive.

The Group has a policy of not hedging and therefore takes market rates in respect of foreign exchange risk; however, it does review its currency exposures on an ad hoc basis. Currency exposures relating to monetary assets held by foreign operations are included within the foreign exchange reserve in the Group Balance Sheet.

The currency profile of the Group's cash and cash equivalent is as follows:

	30 June 2022	30 June 2021
Cash and cash equivalents	$	$
US Dollar	3,709,922	12,078,057
GBP	1,184,601	3,724,054
Tanzanian Shillings	11,630	-

On the assumption that all other variables were held constant, and in respect of the Group's cash position, the potential impact of a 20% increase in the GBP: USD foreign exchange rate would not have a material impact on the Group's cash position and as such is not disclosed.

Liquidity Risk

Liquidity risk arises from the possibility that the Group and its subsidiaries might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. In addition to equity funding, additional borrowings have been secured in the past to finance operations. The Company manages this risk by monitoring its financial resources and carefully plans its expenditure programmes. Financial liabilities of the Group comprise trade payables which mature in less than six months.

Interest rate risk

The Group has no material exposure to interest rate risk.

22.       Categories of financial instruments

In terms of financial instruments, these solely comprise of those measured at amortised costs and are as follows:

	30 June 2022 $	30 June 2021 $
Liabilities at amortised cost	611,273	1,206,253
Cash and cash equivalents at amortised cost	4,906,153	15,802,111
Financial assets at amortised cost	1,373,452	609,327
	6,279,605	16,411,438

23.       List of Subsidiaries

      At 30 June 2022, the Group consists of the following subsidiaries:

Name of subsidiary	Country of incorporation	Principal place of business	Share capital held by Ultimate Parent	Share capital held by Group	Principal activities
Black Swan Resources Ltd	BVI	BVI	100%	100%	Holding
Helium One (Stahamili) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One (Njozi) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One (Gogota) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One Holdings Ltd	Mauritius	Mauritius	100%	100%	Holding
CJT Ventures Ltd	BVI	BVI	100%	100%	Holding
Helium One Treasury Ltd*	BVI	BVI	100%	100%	Holding
Helium One (UK) Limited*	UK	UK	Nil	100%	Administration Services
Northcote Energy Ltd*	Cayman	Cayman	Nil	100%	Holding
Northcote Energy USA Inc*	USA	USA	Nil	100%	Dormant
Attis Oil and Gas Management LLC*	USA	USA	Nil	100%	Dormant

Black Swan Resources Limited holds 99% of Helium One (Stahamili) Ltd, Helium One (Gogota) Ltd and Helium One (Njozi) Ltd. The remaining 1% is held on trust for the Company. This is due to Tanzanian law stating that a company must have a minimum of two shareholders.

* These companies were acquired on 4 December 2020

Helium One Holdings was incorporated in Mauritius on 23 May 2022 and has acquired 100% of the shares in Black Swan Resources Limited.

Ngurumo (Tz) Ltd and Sharifu (Tz) Ltd have been wound up and were issued with Strike Off Notices on 8 June 2022.

24.       Commitments

The Group currently has an interest in 16 licences in Tanzania after relinquishment of two licences.  These are initially granted for a period of four years with the option to extend on first renewal for further three years and second renewal of a further two years.  Licence areas PL10711/2015 and PL10728/2015 measuring 585 square kilometres were fully relinquished during the year. There were 6 other licences areas which were partially relinquished and measuring 964 square kilometres.

These licence's include commitments to pay licence fees and minimum spending requirements. As at 30 June 2022

1 these are as follows:

	30 June 2022	30 June 2022	30 June 2022
	Licence fees $	Minimum spend $	Total $
Not later than one year	866,947	451,123	1,318,070
Later than one year but less than 5 years	804,490	402,245	1,206,735
More than 5 years	-	-	-
Total	1,671,437	853,368	2,524,805
	30 June 2021	30 June 2021	30 June 2021
	Licence fees $	Minimum spend $	Total $
Not later than one year	676,684	451,123	1,127,807
Later than one year but less than 5 years	1,963,531	1,008,272	2,971,803
More than 5 years	-	-	-
	2,640,215	1,459,395	4,099,610

25.       Operating leases

The Group had no operating leases in either year.

26.       Related parties

 

A.   Parent and ultimate controlling party

There is no ultimate controlling party.

B.    Transactions with key management personnel and transactions

Key management personnel compensation and transactions are disclosed in note 7.

C.    Other related party transactions

Other related party transactions were in respect of transactions with other group companies and have been eliminated on consolidation.

Other transactions

Promaco Limited, a limited company of which Ian Stalker is a director, was paid a fee of $80,296 (2021: $74,282) for director services to the Company. The balance outstanding at year end was Nil (2021: $Nil).

All related party transactions took place at arm's length.

27.       Reconciliation of movement in Debt position

			Non cash changes
	At 30 June 2021	Cash flows	Foreign exchange movements	Interest charged	Bonds converted to equity	At 30 June 2022
	$	$	$	$	$	$
Cash and Cash equivalents
Cash	15,802,111	(10,581,374)	(314,584)	-	-	4,906,153
TOTAL	15,802,111	(10,581,374)	(314,584)	-	-	4,906,153

			Non cash changes
	At 30 June 2020	Cash flows	Foreign exchange movements	Interest charged	Bonds converted to equity	At 30 June 2021
	$	$	$	$	$	$
Cash and Cash equivalents
Cash	212,132	15,600,951	(10,972)	-	-	15,802,111
Borrowings
Debt due within one year	(50,000)	(750,000)	-	(23,826)	823,826	-
TOTAL	152,132	14,850,951		(23,826)	823,826	15,802,111

28.       Post Balance Sheet Events

As announced on 24 October 2022, the company received notice to exercise warrants over 880,282 Ordinary Shares at a price of $0,032c per share.

As announced on 22 November, the Company entered into a memorandum of understanding ("MoU") with Exalo Drilling S.A.  (ORLEN Group) for the supply of a drilling rig to be utilised in the Company's drilling operation on the Rukwa licence.  

As announced on 25 November 2002, the Company received notice to exercise warrants over 84,745 Ordinary Shares at a price of £0.0355 per share.

 

END

 

 

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