Audited Results for Year Ended 30 June 2023

Mineral & Financial Invest. Limited

20 December 2023

 

Mineral and Financial Investments Limited

Audited Full Year Financial Results and NAV for Period ended 30 June 2023

HIGHLIGHTS

·     Fiscal Year-end Net Asset Value £ 9.4M (FYE: 30/6/23) up 26.5%, from £7.5M (FYE: 30/6/22)

·     Net Asset Value Per Share ("NAVPS") fully diluted 24.27p, up 21.1%, from 20.04p (FYE: 30/6/22)

·     Net Asset Value has increased at Compound Annual Growth Rate of 29.1% since 30 June 2018

·     Investment Portfolio now totals £9.1m, up 18.7%, Year/Year from £7.7M (FY: 30/6/22).

·     NAVPS growth has exceeded that of the FTSE 350 Mining index and of the S&P GSCI since 2017

Camana Bay, Cayman Island - 20 December 2023 - Mineral & Financial Investments (LSE-AIM: MAFL) ("M&F" or the "Company")) is very pleased to announce its audited Net Asset value and  fiscal year results on its activities for the 12 months ended 30 June 2023.

CHAIRMAN'S COMMENTS

During the 12-month fiscal period ending 30 June 2023 your company generated Gross Income of £2.394 million which translated into an Operating Profit of £1.806 million. Net Profit for the full year was £1.550 million or 4.35p per share basic or 4.03p per share on a Fully Diluted ("FD") basis for the period. At the year-end of 30 June 2023, our Net Asset Value (NAV) was £9.423M an increase of 26.4% from the 30 June 2022 NAV of £7.454M.  The NAV per share - fully diluted (NAVPS-FD) as of 30 June 2023 was 24.27p, up 21.1% from the 30 June 2022 was 20.04p. Since 30 June 2018, our NAV FD has appreciated on average by 26.5% annually. We continue to be effectively debt free, with working capital of £9.542M.

Summary of Financial Performance (Fig. 1)

	30 June 2018	30 June 2019	30 June 2020	June 30 2021	June 30 2022	June 30 2023	CAGR (%)
Net Asset Value ('000)	£2,623	£5,114	£5,474	£6,438	£7,454	£9,423	29.1%
Fully diluted NAV per share	7.49p	14.50p	15.50p	18.22p	20.04p	24.27p	26.5%

In a series of challenging years for the metals and mining sector, we believe 2023 has been the most challenging year since 2013. The industry has experienced slowing total World output (Fig. 3) from a COVID recovery high of 6% in 2021 to an estimated 3% in 2023. In 2022 total World Consumer Prices (Fig. 3) peaked at an 8.7% increase for the full year 2022. We believe cost inflation coupled with rising interest rates, mediocre metal price performance and "peak apathy" for the sector by investment markets has created a brutal environment for the sector and general investment performance. The FTSE 350 Mining Index was up 5.2% Yr/Yr. for the period ending 30 June 2023 (Fig.6). As we write this statement the month over month performance has been down for the major equity markets indices we follow, but the FTSE 350 Mining Index was up 3.9% in October 2023 over September 2023. We consider this might be a turning point. The Directors noted that US 10-year Treasuries rose 27.2% during the Company's fiscal year, ending 30 June 2023 to 3.84%, and today stand at 4.86%. US treasuries, which we believe is the reference point for most interest rate markets, have guided global rates upwards. We also have observed the Western Central Banks, to mitigate inflationary pressures, have increased their rates up along with the US Federal Reserve. We believe a secondary objective, of the central banks is a return to more historically consistent levels of treasury yields ending the prolonged period of depressed interest rates. The Directors note that according to Yale University's Professor Schiller, long term Interest Rates, although volatile over time, have averaged 4.49%.

The regular readers of our Annual Report to shareholders will note that we regularly refer to the International Monetary Fund ("IMF") bi-annual economic forecasts as a yardstick for global economic performance. Additionally, we include the IMF's economic forecast which we believe provide a sense of what the best-informed consensus estimates are for near term economic performance. The IMF is forecasting slowing economic performance from the so-called "Advanced Economies" while forecasting that "Emerging and Developing" economies should continue to generate constant growth through 2024.

IMF - WORLD ECONOMIC OUTLOOK[1] (Fig. 2)

October 2023	2018	2019	2020	2021	2022	2023(e)	2024(f)
World Output	3.6%	2.8%	-3.1%	6.0%	3.5%	3.0%	2.9%
World Output - Advanced Economies	2.3%	1.7%	-4.5%	5.2%	2.6%	1.5%	1.4%
Emerging Markets and Developing Economies	4.5%	3.7%	-2.1%	6.6%	4.1%	4.0%	4.0%
World Consumer Prices	3.6%	3.5%	3.2%	4.7%	8.7%	6.9%	5.8%
Consumer Prices - Advanced Economies	2.0%	1.4%	0.7%	3.1%	7.3%	4.6%	3.0%
Emerging Markets and Developing Economies	4.9%	5.1%	5.1%	5.9%	9.8%	8.5%	7.8%

The US dollar, as measured by the DXY Index, which is a trade weighted index of the US dollar (composed of USD vs six foreign currencies), was up 6.0% during our fiscal year, appreciating currencies in that index. This rise exceeds the DXY's compounded growth rate of 3.2% (fig. 5) since 2018 -we believe that a mean reversion will occur at some point should aid the US dollar pricing commodities.

The US Equity market valuation, as measured by the S&P 500 P/E Index, peaked this cycle at 4,766 in December 2022. Our June 30 fiscal period saw the S&P 500 open at 3785, peak at 4,766, but end on 30 June 2023 at 4,450, resulting in a 17.6% yr./yr. gain. The composite measure for the European big cap stocks, the Euro Stoxx 50, appreciated by 27.3% in the period ending 30 June 2023. The Shanghai and Hong Kong equity market indices were down 14.3% and 13.5%, respectively. The Hang Seng (Hong Kong) index today is at 17,101, down 24.6% from its 27 January 2023 peak of 22,701 - Technically it is now in a "bear" market, while the Shanghai exchange is down 16.3% from its January 2023, approaching bear market territory.

Global Stock Index performance (Fig.3)

	30/6/2023	30/06/2022	% Ch.
Shanghai Shenzhen CSI 300	3842	4485	-14.3%
Standard & Poor 500	4450	3785	17.6%
Euro Stoxx 50	4399	3455	27.3%
Hang Seng	18916	21870	-13.5%
FTSE 100	7532	7169	5.1%
Nikkei 225	33189	26393	25.7%

                           Source:  Bloomberg LLP

M&FI continues to seek suitable strategic investment opportunities that we believe will generate above average returns while adhering to our standards of prudence while seeking above average investment returns. We thank you for your support and we will continue to work diligently and thoroughly to advance your company's assets and market position.

CHIEF EXECUTIVE'S OFFICER'S REPORT

The Company generated gross income of £2.394M during the year, an 84.5% improvement from the previous year's gross profit of £1.297M. The operating profit for the full year, ending 30 June 2023, improved by 135.7% to £1.806M versus last year's operating profit of £766,000.

The rise in profits is mainly due to the improved valuation of Redcorp. Previously we used historical cost accounting to value the investment, but since the publication of the feasibility study in July 2023 it was resolved that the value of the investment should be based on the estimated discounted cash flows from the Feasibility Study of the project, applying an annual discount rate of 20%. This has resulted in a £624,000 uplift in its carried value. The improvement in M&F's profits is principally linked to our investment portfolio performance and administrative costs that rose by 10.6%, less than the rise in M&F's investment performance.  Per share earnings were 4.35p (basic) or 4.03p (FD), up 71% from 2.55p (basic) and 2.35p (FD) for the 2022 fiscal year. Foreign exchange rates negatively impacted our pre-tax income by £230,000. as the British Pound rose by about 5% versus the US dollar. The after-tax Net Income for the 2023 fiscal year was £1.550,000 vs. £899,000 achieved during the 2022 fiscal year. M&FI's NAVPS (FD) increased 21.1% year over year to 24.27p. The overall cash and investment portfolios increased to £9.720M or by 26.8% on a year over year basis from £7.665M.

Summary of Financial Performance (Fig.4)

Net Asset Value Performance	30 June 2018	30 June 2019	30 June 2020	June 30 2021	June 30 2022	June 30 2023	CAGR (%)
Net Asset Value ('000)	£2,623	£5,114	£5,474	£6,438	£7,454	£9,423	29.2%
Fully diluted NAV per share	7.49p	14.50p	15.50p	18.22p	20.04p	24.27p	26.5%

The Directors believe the key to creating shareholder value for Mineral & Financial Investments is attempting to achieve positive risk adjusted investment returns while keeping operating costs low. More specifically, operating costs which grow at a slower rate than the accretion in the Net Asset Value. Our full year administrative costs totalled £588,000, an increase of 10.6% versus the previous year's costs of £531,000. General & Administrative ("G&A") costs were up nominally but declined as a percentage of year/year total assets (6.2% vs. 7.1%). The increase in yr./yr. costs were principally associated with increased share-based payments and higher operating costs for our Swiss subsidiary M&F AG.

Price Performance of Various Commodities & Indices (Fig.5)

Commodity	2019 (June 30)	2020 (June 30)	2021 (June 30)	2022 (June 30)	2023 (June 30)	% Ch. 2023 vs. 2022	CAGR 2018 - 2023
Gold (US$/oz)	1,389	1,784	1,784	1,809	1,920	5.7%	8.4%
Silver (US$/oz)	15.30	18.30	26.15	19.80	22.76	11.3%	10.4%
Platinum (US$/oz)	837	828	1083	881	903	0.6%	1.9%
Copper (US$/t)	5,969	6,120	9,279	7,901	8,257	(1.1%)	8.5%
Nickel (US$/t)	12,670	13,240	18,172	23,229	19,869	(16.4%)	11.9%
Aluminium (US$/t)	1,779	1,598	2,514	2,659	2,104	(20.3%)	4.3%
Zinc (US$/t)	2,575	2,043	2,899	3,147	2,369	(27.5%)	(2.1%)
Lead (US$/t)	1,913	1,770	2,301	1,899	2,126	10.6%	2.7%
Uranium (US$/t)	54,454	71,871	70,768	108,027	124,561	15.3%	23.0%
WTI (US$/Bbl.)	60.06	40.39	75.25	107.86	70.64	6.1%	4.1%
Trade Weighted US$ (DXY)	96.56	96.68	92.66	105.09	102.91	6.0%	3.2%
FTSE 350 Mining Index	20,080	17,714	22,585	9,810	10,161	5.2%	(15.7%)
Global Food Price Index[2]	100.272	97.636	129.448	144.224	136.674	(5.2%)	8.1%

 Source: Bloomberg LLP

During our fiscal year global commodity price performances were mixed. Precious metals were up modestly, base metals were down with zinc being down 27.5%, which led to reduced mine production from several mines. We also believe that temporary mine closures are critical, and often needed, market reactions to return markets to more favourable supply demand balances. Lead, the standout exception amongst base metals, was up 10.6%. Oil (WTI) prices was up 6.1%, above its 5-year growth trend. Uranium surprised with the creation of several physical U₃O₈ investment funds, and or ETF's and the growth in energy insecurity caused by the energy shortfalls caused by the Russian/Ukrainian conflict. We admit to not having missed the boom in the Lithium market and chose not to chase the sector.  Lithium, carbonate prices peaked late in 2022 at US$82.00/kg and are now US$23.00/kg. It is our considered belief that Lithium will be an important part of energy storage as we transition away from hydrocarbon usage. However, we believed that the market was "over exuberant" for Lithium which is the 25^th most abundant mineral on the planet. The US Geological Survey estimated in 2021 that there was 88M/t of Lithium, and total global Lithium consumption in 2023 was 134,000 tonnes (i.e. 0.15% of currently estimated reserves). It should be noted that current estimates are that 80% to 90% of Lithium in EV's will be recycled. The Directors understand that a little-publicized clause in the U.S. Inflation Reduction Act ("IRA") has had US companies scrambling to recycle electric vehicle batteries in North America, which they also believe will put the region at the forefront of a global race to undermine China's dominance of the field. The Directors also understand that IRA includes a clause that automatically qualifies EV battery materials recycled in the U.S. as American-made for subsidies, regardless of their origin. The Directors consider that, if this is correct, it is important because it could potentially qualify automakers using U.S.-recycled battery materials for EV production incentives, although there is no guarantee that this will be the case. In summary, we take the view that it is unlikely that we will experience a shortage of Lithium, however, much like oil, we consider we may run out of very cheap Lithium sometime in the future.

We have been overweight in precious metals, notably gold and to a lesser extent silver as well as platinum group metals ("PGM"). We remain confident that the decision was correct, and the relative performance of precious metals to date supports this. Gold is up 5.7% yr/yr, while silver has appreciated 11.3% for the period ended June 30, 2023. However, the share performance of the underlying mining companies has been below our expectations due to cost inflation exceeding metal price appreciation. We believe that this will reverse itself and the underlying companies will outperform metal prices. It is also our considered view that when a sector has been out of favour, but its fundamentals are improving - the larger cap companies will receive the first wave of investments attention, followed by mid-caps and the small caps are last to benefit from the markets' attention.  We continue to look for that change in trend across our portfolios.

Precious metals represent 39.2% of our asset allocation, down from 44.9% of our assets in 2022, however, the overall value of the investment in the sector is up 10.9% yr/yr. Base metals now represent 39.5% of our asset allocation and, as of our YE were up 35.8% to £3.844M. Food, Energy and Technology increased as a percentage of our total investable assets to 12.5% , but also on an absolute dollar amount (+12.1%),  due to increased investment into food and fertilizer stocks, a graphite producer as well as a small new Strategic investment in the Environmental, Social and Governance ("ESG") auditing as well as digitizing global project data. 

Commodity Class Investment Allocation

2023-Q4 vs. 2022-Q4 (Fig. 6)

INVESTMENT COMMODITY CLASSES	Q4-2023 (£)	Q4-2023 (%)	Q4-2022 (£)	Q4-2022 (%)	FYE 2023/ 2022 % Ch
Cash	£795,560	8.2%	£481,401	6.3%	65.3%
Precious Metal	£3,814,916	39.2%	£3,441,285	44.9%	10.9%
Base Metals	£3,843,664	39.5%	£2,743,970	35.8%	40.1%
Food, Energy, Tech & Misc.	£1,212,451	12.5%	£926,120	12.1%	30.9%
Diamonds	£53,775	0.6%	£72,163	0.9%	-25.5%
Total investments	£9,720,366	100.0%	£7,664,939	100.0%	26.8%

For the past year we have seen and experienced mining indices underperforming commodity indices. Equity markets have been afflicted with a disconnect between metal prices and the performance of the shares of the companies that explore and produce these metals. For the first time in many years, we are seeing the FTSE 350 mining index outperform average commodity prices.  The market is anxious about the mediocre metal price performances and the increases in production costs, led upwards by energy costs and soon to be followed by labour costs. We also believe that inflation above Central banks' inflation targets will be a fact of life for a few more years. The US dollar's out-performance is, we believe, unlikely to continue as it did in 2023. Lastly, we continue to maintain the view that commodity prices will have to rise, or capacity will have to close, which will lead to metal price rises. Although not the most robust setting for mining companies, there is, we believe, good cause for bullishness that more broadly based metal price rises will define 2024 and that the inflationary pressures of 2022 will moderate, but nevertheless remain stubbornly higher than desirable.

INVESTMENT PORTFOLIOS

We have high expectations and rarely exceed those expectations. However, FYE 2023 has been challenging for the whole of the metals and mining sector. Our performance in 2023 was relatively strong, but below our expectations for the year. Our NAV rose 26.5% year over year while NAVPS rose by 21.2%. The variance was mostly due to the issuance of 1.44 million shares via a small capital raise at 21.0p (see announcement dated 24/5/2023). These results exceed the performance yardsticks by which we measure our performance as can be seen in Fig. 1.

The broader equity markets rose during our fiscal year: The Euro Stoxx 50 was up strongly by 27.3%; The S&P 500 was up 17.6%, the CSI 300 (Shanghai) was down 14.3%, while the FTSE 100 did manage a gain of 5.1%. The more specific comparable measures, such as - the S&P/TSX Global Mining Index was down 11.5% during our fiscal period, while FTSE 350 Mining Index, was down 55.2% - although it must be noted that we believe the FTSE 350 Mining Index was dragged down by the Ukrainian conflict and the sanctions imposed on Russian companies, which are part of the Index.

CASH                                                                                                                      As a percentage of Total Investments: 8.2%

Our cash as of 30 June 2023, was £796,000 a rise of 65.3% from the £481,000 as at the end of fiscal 2022.  We view Cash as an investment. In FY 2023 we received the final US$2.5M payment from Ascendant as part of their earn-in on the Lagoa Salgada project. The intention is to keep the cash somewhere between 5% and 20% of our NAV so that we may take advantage of investment opportunities quickly when they present themselves. Since 2017 our average cash holding has been around 10%. Moreover, as a rule of thumb we like to have a combined value of our cash and the Tactical portfolio to range between 25 and 60 percent depending on our market perspective.  For the past 3 years we have been at 35% as of the end of 2021 and ended 2022 at 35% of NAV and as at FYE 2023 we were at 31%. At the current time we believe that our greatest performance risk is under investment to the mining sector. As the mining cycle evolves, we would like to gradually evolve to a higher cash & tactical holding as we monetise our strategic investments and marshal our cash holdings to protect our overall performance record.

M&F Portfolio Performance 2017 - 2023 (Fig.7)

(£,000)	2018	2019	2020	2021	2022	2023	2023 vs. 2022	CAGR '18 to 2023
Strategic	£766.9	£3,655.3	£3,909.7	£4,110.3	£4,946.5	£6,721.3	35.9%	54.4%
Tactical	£1,319.2	£226.3	£430.4	£1,711.9	£2,237.0	£2,203.5	-1.5%	10.8%
Cash	£422.3	£224.4	£274.6	£854.7	£481.4	£795.6	65.3%	13.5%
Total	£2,508.3	£4,106.0	£4,614.8	£6,677.0	£7,664.9	£9,720.4	26.8%	31.1%

TACTICAL HOLDINGS                                                                                          As a percentage of Total Investments: 22.7%

The Tactical portfolios declined by 1.5% to end the year at £2.203M. We have seen a compression of public company valuations which we believe is due to higher interest rates, increased inflation, and commodity price movements largely below the rate of inflation. As we advance through the mining cycle, we believe the tactical portfolio should grow more quickly than the strategic portfolio, as we monetise some of our strategic investments and convert them into either cash or tactical investments. The tactical portfolio now comprises 22 distinct investments of our total portfolio of 29 investments.

STRATEGIC PORTFOLIO                                                                                       As a percentage of Total Investments: 69.1%

Our Strategic Portfolio are longer term holdings, that we strongly believe will outperform given sufficient time and capital. We believe we made these "Strategic" investments at the bottom of the cycle. These investments were in out-of-favour assets that we considered had high potential but were, we acknowledge, higher risk and less liquid. We believe our competitive advantage was that we were capable and willing to invest when others would, or could, not invest in what we believe are good geologic assets.  We believe that the best return to risk ratio is to invest in good assets when these are out of favour. Our Strategic Portfolio now totals £6.097M and represents 67% of our Net Investable funds. The Strategic Portfolio was up 23.3% yr./yr. in FY 2023 and has grown by 41.9% compounded annually since 2017. The next phase of our strategy is to gradually "harvest" these investments when and where it makes sense and redeploy these funds into more liquid investments that are out of favour but have strong long term investment merits. The following are some of the most noteworthy holdings in our Strategic Portfolio. All values are as of June 30, 2023

Redcorp Empreedimentos Mineiros Lda.:                                                     As a percentage of Total Investments: 24.4%

Redcorp is a Portuguese company whose main asset is 85% ownership of the Lagoa Salgada project. Our investment in Redcorp, held through our subsidiary, represents 19.2% of our investment portfolios. In 2018 our subsidiary entered into a sale and earn-in option agreement with a Canadian listed company, Ascendant Resources ("Ascendant"). Ascendant has met all its financial and operational obligations to date. The Board consider that they have been good partners, running the exploration program for which, we are appreciative. On 25 May 2022, Ascendant increased its ownership of Redcorp to 50% by completing US$9,000,000 of exploration work on the project and making a US$1.0M payment to M&FI's subsidiary (in accordance with the terms of the agreement between the parties). Ascendant has now earned 80% of the overall project by making a final US$2.5M payment to M&FI in June 2023 and completing a Definitive Feasibility Study post year end in July 2023.

The project has advanced from an initial resource of approximately 4.4Mt with Zinc Equivalent grade of 6.0% in 2015  to a resource totalling 27.5Mt with a ≧7.5% Zinc Equivalent grade today. On November 8, 2021 Redcorp and Ascendant announced that they have secured a mine development licence from the Portuguese government. As announced on 26 July 2023 Redcorp and Ascendant completed a Feasibility Study after our year end indicating that the Lagoa Salgada Project has, based on 100% ownership, a pre-tax NPV^@8% of US$188.8.M resulting in a pre-tax IRR of 47% with a 2-year pre-tax payback based on its planned 14-year life of mine. After tax NPV^@8% is US$147.1M with a 39% IRR and should generate a Life of Mine Cash Flow of US$261M.

In November 2022 Ascendant entered into a streaming agreement to fund the completion of the feasibility study for Redcorp's Lagoa Salgada project and for general corporate and working capital purposes. In connection with this agreement M&FI and Ascendant amended the terms of their shareholders agreement in respect of Redcorp on November 28, 2022.  It was agreed that M&FI should have the right and option, but not the obligation, to exercise an option within 6 months (plus 10 business days) of the Stage Two Option Exercise Date (being the date when Ascendant has earned 80% of Redcorp and being no later than 22 June 2023) to require Ascendant to purchase all, but not less than all, of the shares in Redcorp at a defined price. The price would be an amount in US dollars, payable in cash, equal to 5% of the post-tax net present value of the Project provided in the feasibility study completed prior to the date of exercise using a 10.5% discount rate (the "Put Option").  On 23 June 2023 M&FI and Ascendant announced that they had agreed to an extension to the final delivery date of the feasibility study, pursuant to the Earn-in Option Agreement for the Lagoa Salgada project. As a result of the extension, the final delivery date of the feasibility study would be on or before 3 August 2023. In consideration for the extension, Ascendant agreed to grant M&FI 500,000 common share purchase warrants. Each Warrant is exercisable into one common share in Ascendant at any time for a period of 30 months at a price of $0.20 per share. On 26 July 2023 (after the M&FI's year end) Ascendant announced the results of the feasibility study and with its completion Ascendant completed the option earn-in requirements to move its ownership of Redcorp to 80%.

FINANCIAL STATEMENTS

Consolidated Income Statement

			Year ended 30 June 2023	Year ended 30 June 2022
		Notes	£'000	£'000
	Investment income		119	128
	Fee revenue		-	-
	Net gains on disposal of investments		2,108	861
	Net change in fair value of investments		167	308
			2,394	1,297
	Operating expenses	3	(452)	(439)
	Share based payment expense		(136)	(92)
	Other gains and losses	5	(230)	133
	Profit before taxation		1,576	899
	Taxation expense	6	(26)	-
	Profit for the year from continuing operations and total comprehensive income, attributable to owners of the Company		1,550	899
	Profit per share attributable to owners of the Company during the year from continuing and total operations:	7	Pence	Pence
	Basic (pence per share)		4.4	2.5
	Fully diluted (pence per share)		4.0	2.5

Consolidated Statement of Financial Position

		2023	2022
	Notes	£'000	£'000
CURRENT ASSETS
Financial assets held at fair value through profit or loss	8	8,925	7,183
Trade and other receivables	10	25	18
Cash and cash equivalents		796	481
		9,746	7,682
CURRENT LIABILITIES
Trade and other payables	11	194	125
Convertible unsecured loan notes	12	10	10
		204	135
NET CURRENT ASSETS		9,542	7,547
NON-CURRENT LIABILITIES
Deferred tax provision	13	(119)	(93)
NET ASSETS		9,423	7,454
EQUITY
Share capital	15	3,114	3,099
Share premium	15	6,182	5,914
Loan note equity reserve	16	6	6
Reserve for employee share schemes	17	228	92
Capital reserve		15,736	15,736
Retained earnings		(15,843)	(17,393)
Equity attributable to owners of the Company and total equity		9,423	7,454

Consolidated Statement of Changes in Equity

	Share capital	Share premium	Reserve for employee share schemes	Loan note reserve	Capital  reserve	Accumulated losses	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 July 2021	3,096	5,892	23	6	15,736	(18,315)	6,438
Total comprehensive income for the year	-	-	-	-	-	899	899
Share based payment expense	-	-	92	-	-	-	92
Exercise of options	3	22	(23)	-	-	23	25
At 30 June 2022	3,099	5,914	92	6	15,736	(17, 393)	7,454
Total comprehensive income for the year	-	-	-	-	-	1,550	1,550
Share based payment expense	-	-	136	-	-	-	136
Issues of equity	15	268	-	-	-	-	283
At 30 June 2023	3,114	6,182	228	6	15,736	(15,843)	9,423

Consolidated Statement of Cash Flows

		Year ended 30 June 2023	Year ended 30 June 2022
	Notes	£'000	£'000
OPERATING ACTIVITIES
Profit before taxation		1,576	899
Adjustments for:
Profit on disposal of trading investments		(2,108)	(861)
Fair value loss/(gain) on trading investments		(167)	(308)
Investment income		(119)	(128)
Share based payment expense		136	92
Operating cash flow before working capital changes		(682)	(306)
(Increase)/decrease in trade and other receivables		(7)	9
Increase/(decrease) in trade and other payables		69	(52)
Net cash outflow from operating activities		(620)	(348)
INVESTING ACTIVITIES
Purchase of financial assets		(3,783)	(2,177)
Disposal of financial assets		4,396	2,098
Investment income		39	29
Net cash (outflow)/inflow from investing activities		652	(50)
FINANCING ACTIVITIES
Proceeds of share issues		282	25
Net cash inflow from financing activities		282	25
Net (decrease)/increase in cash and cash equivalents		315	(374)
Cash and cash equivalents as at 1 July		481	855
Cash and cash equivalents as at 30 June		796	481

Notes to the Financial Statements

1.    Operating Profit

	2023	2022
	£'000	£'000
Profit from operations is arrived at after charging:
Directors fees	105	105
Other salary costs	23	20
Share based payment expense	136	92
Registrars fees	36	31
Corporate adviser and broking fees	37	39
Other professional fees	197	180
Foreign exchange differences	230	(133)
Other administrative expenses	34	44
Fees payable to the Group's auditor:
For the audit of the Group's consolidated financial statements	20	20
	818	398

2.    Other Gains and Losses

	2023 £'000	2022 £'000
Foreign currency exchange differences	(230)	133
	(230)	133

3.    Income Tax Expenses

	2023	2022
	£'000	£'000
Deferred tax charge relating to unrealised gains on investments	26	-
Other tax payable	-	-
	26	-
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to the results of the Consolidated entities as follows:
	2023	2022
	£'000	£'000
Profit before tax from continuing operations	1,576	899
Profit before tax multiplied by rate of federal and cantonal tax in Switzerland of 14.6% (2021: 14.6%)	230	131
Less abatement in respect of long term investment holdings	(207)	(118)
Unrelieved tax losses	-	-
Overprovided in previous period	3	(13)
Total tax	26	-

4.    Earnings Per Share

The basic and diluted earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year.
		2023	2022
		£'000	£'000
Profit attributable to owners of the Company
- Continuing and total operations		1,550	899
		2023	2022
Weighted average number of shares for calculating basic earnings per share		35,611,416	35,271,011
Weighted average number of shares for calculating fully diluted earnings per share		38,511,416	35,271,011
Earnings per share from continuing and total operations
- Basic (pence per share)		4.4	2.5
- Fully diluted (pence per share)		4.0	2.5

5.    Investments Held at Fair Value Through Profit or Loss

	2023			2022
	£'000			£'000
1 July - Investments at fair value	7,183			5,822
Cost of investment purchases	3,783			2,177
Proceeds of investment disposals	(4,396)			(2,098)
Profit on disposal of investments	2,108			861
Fair value adjustment	167			308
Accrued interest on loan notes	80			113
30 June - Investments at fair value	8,925			7,183
Categorised as:
Level 1 - Quoted investments	3,835			2,237
Level 3 - Unquoted investments	5,090			4,946
	8,925			7,183
The Group has adopted fair value measurements using the IFRS 7 fair value hierarchy Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows: Level 1 - valued using quoted prices in active markets for identical assets Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1. Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market criteria.
LEVEL 3 investments Reconciliation of Level 3 fair value measurement of investments
		2023	2022
		£'000	£'000
Brought forward		4,946	4,110
Purchases		307	152
Proceeds of investment disposals		(238)	-
Profit on disposal of investments		90	-
Fair value adjustment		(639)	684
Carried forward		4,466	4,946

Level 3, unquoted investments are valued on the basis of the last fund raise, except for Redcorp where the value has been based on the net present value of the cash flows from the project. The Group's largest Level 3 investment is Redcorp Empreendimentos Mineiros LDA ("Redcorp"). REDCORP EMPREENDIMENTOS MINEIROS LDA Redcorp is a Portuguese exploration development and mining company whose main asset is the Polymetallic) Lagoa Salgada Volcanogenic Massive Sulphide (VMS) Project, which has resources of zinc, lead, copper, gold, silver, tin and indium. In June 2018, TH Crestgate entered into an agreement with Ascendant Resources Inc ("Ascendant") under which Ascendant initially acquired 25% of the equity in Redcorp for a consideration of US$2.45 million, composed of US$1.65 million in Ascendant shares and US$800,000 in cash. The second part of the Agreement was an Earn-in Option under which Ascendant had the right to earn a further effective 25% interest via staged payments amounting to US$3.5 million. In addition Ascendant was required to spend a minimum of US$9.0 million directly on the Lagoa Salgada Project within 48 months of the closing date, to fund exploration drilling, metallurgical test work, economic studies and other customary activities for exploration and development. Under the last part of the agreement Ascendant was able to acquire an additional 30% taking its total interest to 80% by the payment of US$2,500,000 on or before 22 Dec 2022 This date was amended so that the cash payment had to be received on/or before 22 June 2023. In addition a feasibility study was to be delivered by 22 August 2023.

To date the payments due from Ascendant under the agreement have all been fulfilled. The Group's investment in Redcorp has been valued on a discounted cash flow basis using a 20% discount rate from the from the Feasibility Study completed in July 2023. As at 30 June 2023, Mineral and Financial Investments AG owned 50% of Redcorp (2022: 50%). Redcorp currently owns 85% of the Lagoa Salgada project.  M&F agreed in June 2017 with Empresa Desenvolvimento Mineiro SA (EDM), a Portuguese State-owned company, to re-acquire EDM's 15% rights on the project resulting in Redcorp holding a 100% ownership of the project. The 2017 agreement was subject to the Portuguese Secretary of State's approval which was not received. Redcorp and M&F continue to explore ways and means to complete the purchase. EDM's right is an option, if exercised, to receive a 15% working interest ("WI") in the Lagoa Salgada Project ("LSP"). This 15% WI is subject to a Right of First Refusal ("ROFR") if EDM exercises the Option and choses to sell its interest. The WI is subject to standard dilution features if financial obligations are unsatisfied. This option expires 120 days after the delivery of a Feasibility Study. M&F has granted Ascendant conditional options that would, if exercised, result in Ascendant owning (net) 80% interest in the Project if M&F is unsuccessful in re-acquiring EDM's rights/interest. Within 6 months & 10 days after the delivery of the Feasibility Study. If EDM opt to not exercise its Option, M&F would retain its 20% Carried Interest and the adjusting call options held by Ascendant would be nullified. If EDM exercises its option to the 15% WI then M&F would retain a (net) 5% CI. M&F has the right to sell its (net) 5% CI to Ascendant at a price representing M&F's 5% share of the NPV of the LSP as estimated in the Feasibility Study (using a 10.5% Discount Rate). We currently estimate that this value would be significantly higher than the year end value.

6.    Subsidiary companies

The Group's subsidiary companies are as follows:
Name	Principal activity	Country of incorporation  and principal place of business	Proportion of ownership  interest and voting rights held by the Group
Mineral & Financial Investments AG	Investment  company	Steinengraben 18 4051 Basel, Switzerland	100%
M&FI Services Ltd	Service company	5 Bath Road, London, United Kingdom, W4 1LL	100%

All intergroup transactions and balances are eliminated on consolidation.

7.    Trade and other receivables

	2023	2022
	£'000	£'000
Other receivables	10	12
Prepayments	15	6
Total	25	18
The fair value of trade and other receivables is considered by the Directors not to be materially different to the carrying amounts. At the balance sheet date in 2023 and 2022 there were no trade and other receivables past due

1

8.    Trade and other payables

	2023	2022
	£'000	£'000
Trade payables	12	50
Other payables	114	21
Accrued charges	68	54
Total	194	125
The fair value of trade and other payables is considered by the Directors not to be materially different to carrying amounts.

9.    Convertible unsecured loan notes

The outstanding convertible loan notes are zero coupon, unsecured and unless previously purchased or converted they are redeemable at their principal amount at any time on or after 31 December 2014. The net proceeds from the issue of the loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company as follows:
	2023	2022
	£'000	£'000
Liability component at beginning and end of period	10	10
The Directors estimate the fair value of the liability component of the loan notes at 30 June 2023 to be approximately £10,000 (2022: £10,000)

10.  Deferred taxation provision

	2023	2022
	£'000	£'000
As at 1 July	93	93
Provision relating to unrealised gains on investments	26	-
As at 30 June	119	93

11.  Employee share schemes

SHARE OPTIONS On 10 June 2022 the Company granted 2,350,000 options to directors, advisers and consultants, exercisable at 13.5p per share, representing a 15% premium to the closing mid-market price on 9 June 2022.  The options vest in three tranches, one third on the date of grant, one third on the anniversary of the date of grant, and one third on the second anniversary of the date of grant.  The options can be exercised at any time from the date of vesting for a period of 5 years whilst the recipient is employed or engaged by the Company. The fair value of the options granted during the year was determined using the Black-Scholes pricing model.  The significant inputs to the model in respect of the options were as follows:
Date of grant	10 June 2022
Share price at date of grant	11.75p
Exercise price per share	13.50p
No. of options	2,350,000
Risk free rate	1.0%
Expected volatility	50%
Life of option	5 years
Calculated fair value per share	4.6797p
The share-based payment charge for the year was £52,000 (2022: £41,000).
The share options movements and their weighted average exercise price are as follows:
	2023		2022
		Weighted average exercise price		Weighted average exercise price
	Number	(pence)	Number	(pence)
Outstanding at 1 July	2,350,000	13.50	330,000	7.50
Granted	-	-	2,350,000	13.50
Exercised	-	-	(330,000)	7.50
Lapsed	-	-	-	-
Outstanding at 30 June	2,350,000	13.50	2,350,000	13.50

RESTRICTED SHARE UNITS ("RSUs") On 10 June 2022 the Company granted 1,150,000 RSUs to directors.  The RSUs vest in three tranches, one third on the date of grant, one third on the anniversary of the date of grant, and one third on the second anniversary of the date of grant.  They can be exercised at any time from the date of vesting for a period of 5 years whilst the recipient is employed or engaged by the Company, with a reference price of 11.75p being the closing mid-market price on 9 June 2022. The fair value of the RSUs granted during the year was determined to be the reference price of 11.75p per share, and the share-based payment charge for the year in respect of the RSUs was £84,000 (2022: £51,000).
The RSU movements and their weighted average reference price are as follows:
	2023		2022
		Weighted average Reference price		Weighted average Reference price
	Number	(pence)	Number	(pence)
Outstanding at 1 July	1,150,000	11.75	-	-
Granted	-	-	1,150,000	11.75
Exercised	-	-	-	-
Lapsed	-	-	-	-
Outstanding at 30 June	1,150,000	11.75	1,150,000	11.75

12.          Share capital

	Number of  shares	Nominal Value	Share  premium
		£'000	£'000
AUTHORISED
At 30 June 2022 and 30 June 2023
Ordinary shares of 1p each	160,000,000	1,600
Deferred shares of 24p each	35,000,000	8,400
		10,000
ISSUED AND FULLY PAID
At 30 June 2022
Ordinary shares of 1p each	35,465,395	354
Deferred shares of 24p each	11,435,062	2,745
		3,099	5,914
Ordinary shares issued in year to 30 June 2023	1,440,476	15	268
At 30 June 2023
Ordinary shares of 1p each	36,905,871	369
Deferred shares of 24p each	11,435,062	2,745
		3,114	6,182
The ordinary shares carry no rights to fixed income but entitle the holders to participate in dividends and vote at Annual and General meetings of the Company. The restricted rights of the deferred shares are such that they have no economic value.

13.  Loan note equity reserve

	2023	2022
	£'000	£'000
Equity component of convertible loan notes at 1 July	6	6
Equity component of convertible loan notes at 30 June	6	6

14.  Reserve for employee share schemes

	2023	2022
	£'000	£'000
Brought forward at 1 July	92	23
Transfer to retained earnings on exercise of options	-	(23)
Share based payment charge	136	92
Carried forward at 30 June	228	92

15.   Risk management objectives and policies

The Company is exposed to a variety of financial risks which result from both its operating and investing activities.  The Company's risk management is coordinated by the board of directors and focuses on actively securing the Company's short to medium term cash flows by minimising the exposure to financial markets.
MARKET PRICE RISK The Company's exposure to market price risk mainly arises from potential movements in the fair value of its investments.  The Company manages this price risk within its long-term investment strategy to manage a diversified exposure to the market.  If each of the Company's equity investments were to experience a rise or fall of 10% in their fair value, this would result in the Company's net asset value and statement of comprehensive income increasing or decreasing by £893,000 (2022:  £718,000).
FOREIGN CURRENCY RISK The Group holds investments and cash balances denominated in foreign currencies and investments quoted on overseas exchanges; consequently, exposures to exchange rate fluctuations arise.  The Group does not hedge its foreign currency exposure and its liabilities in foreign currencies are limited to the trade payables of Mineral & Financial Investments AG which are not material. The carrying amounts of the Group's foreign currency denominated monetary assets at the reporting date are as follows:
		2023 £'000	2022 £'000
US Dollar		5,740	5,913
Canadian Dollar		3,142	1,402
Swiss franc		201	28
Euro		115	-
Australian Dollar		-	208
FOREIGN CURRENCY SENSITIVITY ANALYSIS The Group is mainly exposed to the US Dollar and the Canadian Dollar in respect of investments which are either denominated in or valued in terms of those currencies. The following table details the Group's sensitivity to a 5 per cent increase and decrease in pounds sterling against the US Dollar, Canadian Dollar and Swiss franc. The Group's exposure to the Australian Dollar and the Euro are not considered material.
		2023 £'000	2022 £'000
US Dollar	5% increase in exchange rate against GBP 5% decrease in exchange rate against GBP	287 (287)	296 (296)
Canadian Dollar	5% increase in exchange rate against GBP 5% decrease in exchange rate against GBP	157 (157)	70 (70)
Swiss franc	5% increase in exchange rate against GBP 5% decrease in exchange rate against GBP	10 (10)	1 (1)
Euro	5% increase in exchange rate against GBP 5% decrease in exchange rate against GBP	6 (6)	- -
Australian Dollar	5% increase in exchange rate against GBP 5% decrease in exchange rate against GBP	- -	10 (10)
CREDIT RISK The Company's financial instruments, which are exposed to credit risk, are considered to be mainly cash and cash equivalents and the Company's receivables are not material.  The credit risk for cash and cash equivalents is not considered material since the counterparties are reputable banks. The Company's exposure to credit risk is limited to the carrying amount of the financial assets recognised at the balance sheet date, as summarised below:

15.   Risk management and objectives

	2023 £'000	2022 £'000
Cash and cash equivalents	796	481
Other receivables	10	12
	806	493
No impairment provision was required against other receivables which are not past due. LIQUIDITY RISK Liquidity risk is managed by means of ensuring sufficient cash and cash equivalents are held to meet the Company's payment obligations arising from administrative expenses.
CAPITAL RISK MANAGEMENT The Company's objectives when managing capital are: ·    to safeguard the Company's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders; ·    to support the Company's growth; and ·    to provide capital for the purpose of strengthening the Company's risk management capability. The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities.  Management regards total equity as capital and reserves, for capital management purposes.

16.  Financial instruments

FINANCIAL ASSETS BY CATEGORY The IFRS 9 categories of financial assets included in the balance sheet and the headings in which they are included are as follows:
		2023	2022
		£'000	£'000
Financial assets:
Cash and cash equivalents		796	481
Loans and receivables		10	12
Investments held at fair value through profit and loss		8,925	7,183
		9,731	7,675
FINANCIAL LIABILITIES BY CATEGORY The IFRS 9 categories of financial liability included in the balance sheet and the headings in which they are included are as follows:
		2023	2022
		£'000	£'000
Financial liabilities at amortised cost:
Convertible unsecured loan notes		10	10
Trade and other payables		126	71
		136	81

17.  Contingent liabilities and capital commitments

There were no contingent liabilities or capital commitments at 30 June 2023 or 30 June 2022.

18.  Post year end events

On 26 July 2023 the Company announced that Ascendant had completed the feasibility study for the Lagoa Salgada project and thus had completed its earn in to 80% of Redcorp.

19.  Related party transactions

Key management personnel, as defined by IAS 24 'Related Party Disclosures' have been identified as the Board of Directors, as the controls operated by the Group ensure that all key decisions are reserved for the Board of Directors.  Details of the directors' remuneration and the options and RSUs granted to directors are disclosed in the remuneration report.

20.  Ultimate controlling party

The Directors do not consider there to be a single ultimate controlling party.

FOR MORE INFORMATION:

Jacques Vaillancourt, Mineral & Financial Investments Ltd.                        [phone]

Katy Mitchell and Sarah Mather​, WH Ireland Limited                         [phone]

Jon Belliss, Novum Securities Limited                                          [phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 (MAR) as in force in the United Kingdom pursuant to the European Union (Withdrawal) Act 2018. Upon the publication of this announcement via Regulatory Information Service (RIS), this inside information is now considered to be in the public domain.

---

[1] International Monetary Fund, "World Economic Outlook: Recovery - Navigating Global Divergences" - October, 2023

[2] International Monetary Fund / Monthly / 2016 = 100 / Not seasonally adjusted

 

END