Half-year Report
BERKELEY EMERGIA LIIMITED
Interim Financial Report for the Half Year Ended 31 December 2020
Informe financiero provisional correspondiente al semestre terminado el 31 de diciembre de 2020
abn 40 052 468 569
CORPORATE DIRECTORY | DIRECTORIO CORPORATIVO
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Directors
Mr Ian Middlemas Chairman
Company Secretary
Madrid Head Office Calle Capitán Haya 1 Planta 15. Edificio Eurocentro. 28020 Madrid, Spain
Project Office Berkeley Minera España, S.A. Carretera SA-322, Km 30 37495 Retortillo Salamanca Spain Telephone: +34 923 193 903
Registered Office
Telephone: +61 8 9322 6322
Website
Email
Auditor Spain Ernst & Young España
Australia Ernst and Young Australia - Perth |
Solicitors Spain Herbert Smith Freehills, S.L.P
United Kingdom Bryan Cave Leighton Paisner LLP
Australia Thomson Geer
Bankers Spain Santander Bank
Australia National Australia Bank Ltd Australia and New Zealand Banking Group Ltd
Spain Iberclear Plaza de la Lealtad, 1 28014 Madrid, Spain
United Kingdom Computershare Investor Services PLC The Pavilions, Bridgewater Road, Bristol BS99 6ZZ Telephone: +44 370 702 0000
Australia
Level 11, 172 St Georges Terrace
Perth WA 6000
Stock Exchange Listing
United Kingdom
Australia
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CONTENTS | CONTENIDO |
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Directors' Report |
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Directors' Declaration |
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Consolidated Statement of Profit or Loss and Other Comprehensive Income |
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Consolidated Statement of Financial Position |
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Consolidated Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Condensed Notes to the Financial Statements |
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To view the following sections as well as all illustrations and figures, please refer to the the full version of the Interim Financial Report on our website at www.berkeleyenergia.com : |
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Auditor's Independence Declaration |
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Auditor's Review Report |
DIRECTORS' REPORT
The Board of Directors of Berkeley Energia Limited present their report on the consolidated entity of Berkeley Energia Limited ("the Company" or "Berkeley") and the entities it controlled during the half year ended 31 December 2020 ("Consolidated Entity" or "Group").
DIRECTORS
The names of the Directors of Berkeley in office during the half year and until the date of this report are:
Mr Ian Middlemas Chairman
Mr Robert Behets Non-Executive Director (Acting Managing Director)
Mr Nigel Jones Non-Executive Director (resigned 25 November 2020)
Mr Adam Parker Non-Executive Director
Mr Deepankar Panigrahi Non-Executive Director
Unless otherwise disclosed, Directors were in office from the beginning of the half year until the date of this report.
OPERATING AND FINANCIAL REVIEW
Summary
Summary for and subsequent to the half year end include:
· Permitting Update:
Berkeley's focus continues to be on progressing the approvals required to commence construction of the Salamanca mine and bring it into production.
In August 2020, the Urbanism License ("UL") was granted by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León. The UL is a land use permit needed for construction works at the Salamanca mine. The grant of the UL was a significant permitting milestone for Berkeley and a positive step in the development of the project.
Following the grant of the UL, the Company received formal notification from the Ministry for Ecological Transition and the Demographic Challenge ("MITECO") that it had been granted the renewal of the Initial Authorisation for the uranium concentrate plant as a radioactive facility at the Salamanca project ("NSC I") until there is a resolution on the Authorisation for Construction for the uranium concentrate plant as a radioactive facility ("NSC II"). This renewal follows the Nuclear Safety Council ("NSC") issuing a favourable report for the extension of the validity of NSC I in July 2020.
NSC I was granted in September 2015 by the then Ministry of Industry, Energy and Tourism, with a 5-year validity period. The favourable report issued by the NSC in July 2020 considered that the circumstances and characteristics of the uranium concentrate plant are the same as those contained in the Initial Authorisation issued in 2015.
The Company formally submitted updated official documentation in relation to the NSC II in March 2020. The Company has subsequently held numerous meetings with the NSC technical team to discuss and clarify minor queries on the updated documentation. As requested, the Company submitted written responses to these queries, along with additional technical information, to the NSC in September 2020 and more recently in early March 2021. The next step in the process is for the NSC technical team to finalise their report and submit it to the NSC Board for ratification.
With more than 120 previous permits and favourable reports granted by the relevant authorities at the local, regional, federal and European Union levels, NSC II is the only pending approval required to commence full construction of the Salamanca mine.
The Company continues to engage with the relevant authorities to advance the approvals process for the Salamanca mine and maintain strong engagement with all key stakeholders in Spain.
· Outstanding Contribution to Sustainable Mining - Europe 2020 Award :
In December 2020, the Company was selected as the winner of the Outstanding Contribution to Sustainable Mining - Europe category in the 2020 Capital Finance International ("CFI.co") Sustainability Awards.
The CFI.co Sustainability Awards seek to recognise the best responses to sustainability issues by country or region, identifying companies that stand out as examples to others across the world.
Berkeley is extremely pleased to be recognised for its efforts in key area of Sustainable Mining. The Company's Salamanca mine is being developed to the highest international standards and the Company's commitment to health, safety and the environment is a priority. It holds certificates in Sustainable Mining (UNE 22470-80), Environmental Management (ISO 14001), and Health and Safety (ISO 45001) which were awarded by AENOR, an independent Spanish government agency.
· Uranium market:
The uranium spot price closed 2020 at US$30.00 per pound having drifted slightly lower after a period of strong growth in the first half of 2020.
The market has however, been buoyed towards the end of the half year due to recent events including:
· Utilities have increased their spot market purchases, especially in the US, subsequent to the finalisation of the amendment to the Russian Suspension Agreement in early October 2020;
· The US Congress tabled the artisan legislation aimed at supporting the US' nuclear infrastructure. The proposed "American Nuclear Infrastructure Act of 2020", provides that a national strategic uranium reserve be funded and a carbon emissions avoidance programme be established to support continued operation of reactors at risk of premature shutdown;
· The UK published an energy policy paper entitled "Ten Point Plan for a Green Industrial Revolution," which incorporated an Advanced Nuclear Fund. The goal of the fund is to provide financial support for small modular reactor development and advanced modular reactors; and
· The Biden Administration has proposed a sweeping clean energy plan including funding for advanced nuclear reactors and small modular reactors.
· Spanish Regulatory Regime :
During the half year, the Company noted that the Spanish Supreme Court had rejected an appeal filed by a group of opposition parties against NSC I.
In September 2019, the Spanish National Court fully dismissed a contentious-administrative appeal filed by the group of opposition parties against NSC I. Subsequent to the National Court ruling, the group of opposition parties appealed to the Supreme Court. The Supreme Court has confirmed all aspects of the ruling of the National Court and thus, has confirmed the legality of NSC I. As noted above, MITECO has granted renewal of NSC I through until there is a resolution on NSC II.
In October 2020, parliamentary groups of two political parties in the Spanish Government submitted a series of proposed amendments in October 2020 to a draft climate change and energy transition bill which was originally presented to the Spanish Parliament in May 2020.
Under one of the proposed amendments, investigation and exploitation of radioactive minerals (e.g. uranium) would be prohibited in the Spanish territory and any open proceedings related to the authorisation of radioactive facilities of the nuclear fuel cycle for the processing of such minerals would be closed.
Subsequent to the end of the half year end, the Company noted media reports following a meeting of the Ecological Transition 'Ponencia' ("Ponencia") held in February 2021 that discussed changes to the proposed amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals. Under the modified amendment proposed by the Ponencia:
· New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law.
· Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation.
Importantly under the modified amendment, existing rights for exploration, investigation and exploitation concessions would remain in force during their validity period. Existing proceedings underway would also continue under the legal framework set up by the current regulations.
The modified amendment proposed by the Ponencia must now be reviewed and approved or rejected by the Commission of Ecological Transition of the Parliament, and subsequently follow the same process in the Spanish Senate. Accordingly, the proposed modified amendment relating to the investigation and exploitation of radioactive minerals may or may not be included in the final draft of the climate change and energy transition bill.
Berkeley's position on any adverse changes that may be included in the final draft of the climate change and energy transition bill is clear: prohibition of economic activities in Spain with no justified reasons is contrary to the Spanish Constitution and to the legal rights recognised by other international instruments. In particular, it must be taken into account that the Company currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including a valid 30-year mining licence (renewable for two further periods of 30 years) for the Salamanca mine. The approval of any amendment which would imply a retroactive measure which expropriates the legal rights of Berkeley with no justification is not acceptable.
Operations
Permitting Update
During the half year, the Company received formal notification from the MITECO that it had been granted the renewal of the NSC I until there is a resolution on NSC II. This renewal follows the NSC issuing a favourable report for the extension of the validity of NSC I in July 2020.
NSC I was granted in September 2015 by the then Ministry of Industry, Energy and Tourism, with a 5-year validity period. The favourable report issued by the NSC in July considered that the circumstances and characteristics of the uranium concentrate plant are the same as those contained in the Initial Authorisation issued in 2015.
The Company formally submitted updated official documentation in relation to the NSC II in March 2020. The Company has subsequently held numerous meetings with the NSC technical team to discuss and clarify minor queries on the updated documentation. As requested, the Company submitted written responses to these queries, along with additional technical information, to the NSC in September 2020 and more recently in early March 2021. The next step in the process is for the NSC technical team to finalise their report and submit it to the NSC Board for ratification.
This was proceeded by the grant of the UL by the Municipality of Retortillo under the terms established in the Urbanism Law and Urban Planning Regulations of Castilla y León. The UL is a land use permit needed for construction works at the Salamanca mine. The grant of the UL was a significant permitting milestone for Berkeley and a positive step in the development of the project.
With more than 120 previous permits and favourable reports granted by the relevant authorities at the local, regional, federal and European Union levels, NSC II is the only pending approval required to commence full construction of the Salamanca mine.
The Company continues to engage with the relevant authorities and maintain strong engagement with all key stakeholders in Spain, as it progresses the approval process required to commence full construction of the Salamanca mine and bring it into production .
In December 2020, the Company was selected as the winner of the Outstanding Contribution to Sustainable Mining - Europe category in the 2020 CFI.co Sustainability Awards.
The CFI.co Sustainability Awards seek to recognise the best responses to sustainability issues by country or region, identifying companies that stand out as examples to others across the world.
The CFI.co award selection panel uses a wide range of criteria to help inform decisions regarding the awards, in order to identify top performing companies not based on the size of the nominated organisation but rather on its excellence in sustainability.
Berkeley is extremely pleased to be recognised for its efforts in key area of Sustainable Mining. The Company's Salamanca mine is being developed to the highest international standards and the Company's commitment to health, safety and the environment is a priority. It holds certificates in Sustainable Mining (UNE 22470-80), Environmental Management (ISO 14001), and Health and Safety (ISO 45001) which were awarded by AENOR, an independent Spanish government agency.
These management systems ensure that Company procedures are compliant with current regulations, ensure that the environment is protected, the project is sustainable, and that all activities are carried out with respect for and in collaboration with the local communities.
The Company also strives to uphold the United Nation's Sustainable Development Goals ("SDGs"). A recent detailed review of the Company's business strategy and activities in Spain has shown a close alignment with the SDGs (compliance with 14 out of the 17 SDGs) demonstrating a commitment to the sustainable development that will continue throughout the execution of the entire project.
The Company's sustainability strategy is driven by a Programme of Objectives defined in 2020, which strongly contributes to the achievement of the SDGs. The Company is working according to the following key focuses:
Ecodesign: The choice of transfer mining that minimises the footprint of the project, the closed circuit of industrial water and zero discharge, as well as heap leaching (that does not generate tailings in the form of sludge) are some examples of ecodesign.
Eco-Innovation: The re-use of waste-water and sludge from municipalities for industrial use will minimise the flow of water captured from streams and produce materials for the revegetation of the site.
Circular Economy: Concerned with the Life Cycle perspective, the objective is maximum efficiency of resources used. This strategy focuses on responsible consumption, minimising waste, optimising important resources such as water and energy, as well as reducing CO2 emissions. The objective is to minimise the environmental footprint of activities.
Eco-efficiency: Digitisation of the Company contributes to the optimisation of resources, which translates into minimising the environmental impact. Likewise, installing LED lighting and implementing Fleet Control for the optimisation of material movement will help protect the environment while improving economic performance.
Sustainable performance: Committed to creating employment in the province of Salamanca, the project will create 500 jobs during construction, and over 1000 direct and indirect jobs in the operational phase - compatible with existing activities (since 2012 the Company has allowed neighbours to make temporary use of its land for agricultural activity).
Environmental and sustainability training: Berkeley has set up a training centre for staff and local people to be trained in new skills. An interactive space will be created for environmental education and the dissemination of information regarding the importance of sustainability.
Spanish Regulatory Regime Update
During the half year, the Company noted that the Spanish Supreme Court had rejected an appeal filed by a group of opposition parties against NSC I.
In September 2019, the Spanish National Court fully dismissed a contentious-administrative appeal filed by the group of opposition parties against NSC I. Subsequent to the National Court ruling, the group of opposition parties appealed to the Supreme Court. The Supreme Court has now confirmed all aspects of the ruling of the National Court and thus, has confirmed the legality of NSC I. As noted above, MITECO has granted renewal of NSC I through until there is a resolution on NSC II.
In October 2020, Parliamentary groups of two political parties in the Spanish Government (Unidas Podemos and PSOE) submitted a series of proposed amendments to the draft climate change and energy transition bill which was originally presented to the Spanish Parliament in May 2020.
Under one of the proposed amendments, investigation and exploitation of radioactive minerals (e.g. uranium) would be prohibited in the Spanish territory and any open proceedings related to the authorisation of radioactive facilities of the nuclear fuel cycle for the processing of such minerals would be closed.
Subsequent to the end of the half year end, the Company noted media reports following a meeting of the Ponencia held in February 2021 that discussed changes to the proposed amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals. Under the modified amendment proposed by the Ponencia:
· New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law.
· Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation.
The modified text proposed by the Ponencia establishes that "As of the entry into force of this law, no new applications will be accepted for the granting of exploration permits, investigation permits or direct exploitation concessions, nor their extensions, regulated under Law 22/1973, of July 21, on mines of radioactive minerals, as defined in Law 25/1964, of April 29, on nuclear energy, when such resources are extracted for their radioactive, fissile or fertile properties. In addition, applications for the authorisation of new radioactive facilities of the nuclear fuel cycle for the processing of radioactive minerals, as defined in the Regulation on nuclear and radioactive facilities, will no longer be accepted." Importantly, existing rights for exploration, investigation and exploitation concessions would remain in force during their validity period. Existing proceedings underway would also continue under the legal framework set up by the current regulations.
It is important to note that this remains only a proposed amendment to the draft climate change and energy transition bill proposed by the Ponencia that must now be reviewed and approved or rejected by the Commission of Ecological Transition of the Parliament, and subsequently follow the same process in the Senate. The processes in both the Parliament and the Senate must be completed and consistent, and the proposed amendment supported by a majority of votes in both Commissions for it to be approved. Accordingly, the proposed modified amendment relating to the investigation and exploitation of radioactive minerals may or may not be included in the final draft of the climate change and energy transition bill.
Berkeley's position on the any adverse changes that may be included in the final draft of the climate change and energy transition bill is clear: prohibition of economic activities in Spain with no justified reasons is contrary to the Spanish Constitution and to the legal rights recognised by other international instruments. In particular, it must be taken into account that the Company currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including a valid 30-year mining licence (renewable for two further periods of 30 years) for the Salamanca mine. The approval of any amendment which would imply a retroactive measure which expropriates the legal rights of Berkeley with no justification is not acceptable.
Uranium market:
The uranium spot price closed 2020 at US$30.00 per pound having drifted lower, after a period of strong growth in the first half of 2020.
The market has however been buoyed towards the end of the half year due to recent events, including:
· Spot market purchases by utilities have increased, especially in the US, subsequent to the finalisation of the amendment to the Russian Suspension Agreement in early October 2020;
· The US Congress tabled the artisan legislation aimed at supporting the US' nuclear infrastructure. The proposed "American Nuclear Infrastructure Act of 2020", provides that a national strategic uranium reserve be funded and a carbon emissions avoidance programme be established to support continued operation of reactors at risk of premature shutdown;
· The UK published an energy policy paper entitled "Ten Point Plan for a Green Industrial Revolution," which incorporated an Advanced Nuclear Fund. The goal of the fund is to provide financial support for small modular reactor development and advanced modular reactors; and
· The Biden Administration has proposed a sweeping clean energy plan including funding for advanced nuclear reactors and small modular reactors.
The COVID-19 pandemic has disrupted global uranium production, adding to the supply curtailments that have occurred in the industry for many years, creating uncertainty in the nuclear fuel supply chain.
Analysts expect further tightening of market conditions as the current structural supply deficit in the global uranium market is exacerbated by these, and possible other, COVID-19 supply disruptions. The current market uncertainty is also expected to heighten concerns about the security of future supply.
IBEX Small Cap Index
During the half year, the Technical Advisory Committee of the IBEX INDICES included Berkeley in the IBEX SMALL CAP® index. The index adjustment took effect on the Spanish Stock Exchanges on 19 October 2020.
The IBEX indices measure the performance of securities listed on the Spanish Stock Market. The IBEX SMALL CAP® index is a market capitalisation weighted index adjusted by free float. It is Euro-denominated and calculated in real-time within the European time zone.
The IBEX SMALL CAP® index is composed of 30 securities listed on the Spanish Stock Exchanges that follow certain requirements in terms of stock market capitalisation, free floating capital, and annual rotation of the free float capitalisation.
The Technical Advisory Committee of the IBEX INDICES reviews and adjusts the composition of IBEX SMALL CAP® index on a biannual basis.
COVID-19:
Authorities in Spain, following a second surge in COVID-19 cases during the half year, tightened measures imposed to stem the spread of the disease with many Spanish regions being subject to entry and exit restrictions, including Madrid, the nearest large city to the Salamanca project.
Many regional authorities have also implemented tighter restrictions on gatherings and businesses, including the requirement to implement strict hygiene and social distancing measures.
The ongoing nationwide state of emergency will remain in effect until at least 9 May 2021, which empowers the government to limit certain rights, including freedom of movement. Accordingly, social gatherings are limited to six people nationwide and a 11pm to 6am curfew is in effect throughout Spain.
International travel to and from Spain is still possible, subject to travellers possessing a negative COVID-19 test which must be taken within 72 hours prior to arrival.
All of the Berkeley team based in Spain are safe and well. Consistent with current Government guidelines, the Company has continued its 'work from home' policy. Regular communication has however, been maintained with the relevant officials from the NSC and the federal, regional and local governments to ensure the permitting processes continued to advance.
Corporate:
On 25 November 2020, Mr Nigel Jones resigned as a Director of Berkeley following the completion of the Company's Annual General Meeting in November 2020. Mr Jones currently holds the position of Managing Director of the Simandou iron ore project and corporate governance policies at Rio Tinto did not allow Mr Jones to continue to sit on other publicly listed boards.
The net loss of the Consolidated Entity for the half year ended 31 December 2020 was $32,579,000 (31 December 2019: profit of $5,680,000 Significant items contributing to the current half year loss and the substantial differences from the previous half year include the following:
(i) Exploration and evaluation expenses of $2,555,000 (31 December 2019: $2,580,000), which is attributable to the Group's accounting policy of expensing exploration and evaluation expenditure incurred subsequent to the acquisition of the rights to explore and up to and until a decision to develop or mine is made;
(ii) Business development expenses of $43,000 (31 December 2019: $772,000), which includes the Group's investor relations activities including but not limited to public relations costs, marketing and digital marketing, broker fees, travel costs, conference fees, business development consultant fees and stock exchange admission fees;
(iii) Non-cash fair value movement loss of $21,989,000 (31 December 2019: $1,380,000) on the convertible note and unlisted options issued to the Oman Investment Authority ("OIA") (the "OIA Options"). These financial liabilities increase or decrease in size as the share price of the Company fluctuates. The Company has determined that the convertible note will convert at the floor price of £0.27. This has resulted in the large fair value loss for the six month period and contributed to the increase in the financial liability at 31 December 2020. As the convertible note and OIA Options convert into shares, the liabilities will be reclassified to equity and will require no cash settlement by the Company.
Commercially, the intentions of both OIA and the Company prior to completing the convertible note transaction was to enter into an equity type deal. The Company has however complied with the accounting standards and accounted for the convertible note as a financial liability.
Under the ASX Listing Rules, the convertible note and OIA options are defined as equity securities.
Due to the conversion terms of the convertible note leading to the issuance of a variable number of ordinary shares in the Company in return for conversion of the convertible note, the Company is required under the accounting standards to account for the convertible note as a current financial liability at fair value through profit and loss, despite the Company having no obligation to extinguish the convertible note using its cash resources;
(iv) Recognition of interest income of $8,000 (31 December 2019: $829,000). The decrease in interest is a direct result of significantly lower interest rates being offered by the banks on USD term deposits due to current global market conditions and the impact of Covid-19; and
(v) Foreign exchange loss of $7,401,000 (31 December 2019: $998,000) largely attributable on the US$53 million held in cash by the Group following the strengthening of the AUD against the USD by some 12% during the half year period.
Financial Position
At 31 December 2020, the Group is in an extremely strong financial position with cash reserves of $79,760,000 (30 June 2020: $91,767,000).
The Group had net assets of $3,361,000 at 31 December 2020 (30 June 2020: $36,211,000), a decrease of 90% compared with 30 June 2020. The decrease is consistent and largely attributable to the increase in non-cash financial liabilities (the convertible note and OIA Options).
Berkeley's strategic objective is to create long-term shareholder value with the Company's primary focus continuing to be on progressing the approvals required to commence construction of the Salamanca mine and bring it into production.
To achieve its strategic objective, the Company currently has the following business strategies and prospects:
· Continue to progress permitting and maintain the required licences to develop and operate at the Salamanca mine;
· Advance the Salamanca mine through the development phase into the main construction phase and then into production;
· Progress with seeking further offtake partners. The Company has maintained its preference to combine fixed and market related pricing across its contracts in order to secure positive margins in the early years of production whilst ensuring the Company remains exposed to potentially higher prices in the future; and
· Assess other mine development opportunities at the Salamanca mine.
As with any other mining projects, all of these activities are inherently risky and the Board is unable to provide certainty that any or all of these activities will be able to be achieved. The material business risks faced by the Company that are likely to have an effect on the Company's future prospects, and how the Company manages these risks, include but are not limited to the following:
· Mining licences and government approvals required - With the mining licence, environmental licence and the UL already obtained at the Salamanca mine, the only major approval to commence full construction at the Salamanca mine is NSC II.
However, various appeals have also been made against the permits and approvals discussed above, including the UL and NSC I, as allowed for under Spanish law. The Company expects that further appeals will be made against these and future authorisations and approvals in the ordinary course of events. Whilst none of these appeals have been finally determined, no precautionary or interim measures have been granted in relation to the appeals regarding the award of licences and authorisations at the Salamanca mine to date. However, the successful development of the Salamanca mine will be dependent on the granting of all permits and licences necessary for the construction and production phases, in particular the award NSC II which will allow for the construction of the plant as a radioactive facility.
The Company has to date received more than 120 favourable reports and permits for the development of the mine, however with any development project, there is no guarantee that the Company will be successful in applying for and maintaining all required permits and licences to complete construction and subsequently enter into production. If the required permits and licences are not obtained, then this could have a material adverse effect on the Group's financial performance, which may lead to a reduction in the carrying value of assets and may materially jeopardise the viability of the Salamanca mine and the price of its Ordinary Shares.
Further, the Company's exploration and any future mining activities are dependent upon the maintenance and renewal from time to time of the appropriate title interests, licences, concessions, leases, claims, permits, environmental decisions, planning consents and other regulatory consents which may be withdrawn or made subject to new limitations. The maintaining or obtaining of renewals or attainment and grant of title interests often depends on the Company being successful in obtaining and maintaining required statutory approvals for its proposed activities. The Company closely monitors the status of its mining permits and licences and works closely with the relevant Government departments in Spain to ensure the various licences are maintained and renewed when required. However, there is no assurance that such title interests, licenses, concessions, leases, claims, permits, decisions or consents will not be revoked, significantly altered or not renewed to the detriment of the Company or that the renewals and new applications will be successful;
· The Company's activities are subject to Government regulations and approvals - Any material adverse changes in government policies or legislation of Spain that affect uranium mining, processing, development and mineral exploration activities, income tax laws, royalty regulations, government subsidies and environmental issues may affect the viability and profitability of the Salamanca mine. No assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could adversely impact the Group's mineral properties. As discussed above, a series of proposed amendments to the draft climate change and energy transition bill in Spain has been proposed whereby a meeting of the Ponencia was held in February 2021 that discussed changes to this proposed draft climate change and energy transition bill. Under the modified amendment proposed by the Ponencia:
(i) New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law; and (ii) Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation. It is important to note that this remains only a proposed amendment to the draft climate change and energy transition bill proposed by the Ponencia that must now be reviewed and approved or rejected by the Commission of Ecological Transition of the Parliament, and subsequently follow the same process in the Senate. Berkeley's position on any adverse changes that may be included in the final draft of the climate change and energy transition bill the content of this proposed amendment is clear: prohibition of economic activities in Spain with no justified reasons is contrary to the Spanish Constitution and to the legal rights recognised by other international instruments. In particular, it must be taken into account that the Company currently holds legal, valid and consolidated rights for the investigation and exploitation of its mining projects, including a valid 30-year mining licence (renewable for two further periods of 30 years) for the Salamanca mine. The approval of any amendment which would imply a retroactive measure which expropriates the legal rights of Berkeley with no justification is not acceptable. However, if the draft climate change and energy transition bill is approved and passed, then this may adversely effective the viability of the Salamanca mine and the price of the Company's Ordinary Shares;
· Additional requirements for capital - The issue of the US$65 million Convertible Note and OIA Options to OIA has provided the Company the funds to complete the upfront capital items at the Salamanca mine, subject to the OIA Options being exercised early. Due to delays in the receipt of NSC II, the Company has been funding its ongoing working capital requirements which has reduced the amount available to fund full construction. This position will continue for so long as NSC II remains outstanding, unless the OIA Options are exercised early. As a result of the delay, the Company expects that following receipt of NSC II and in order to fully fund the full construction of the Salamanca mine into steady state production, it will be required to raise additional funding in order to meet the capital costs of the mine development and to fund working capital until positive cash flows are achieved;
· The Company may be adversely affected by fluctuations in commodity prices - The price of uranium has fluctuated widely since the Fukushima nuclear power plant disaster in March 2011 and is affected by further numerous factors beyond the control of the Company. Future production, if any, from the Salamanca mine will be dependent upon the price of uranium being adequate to make these properties economic. The Company currently does not engage in any hedging or derivative transactions to manage commodity price risk, but as the Company's Project advances, this policy will be reviewed periodically;
· The Group's projects are not yet in production - As a result of the substantial expenditures involved in mine development projects, mine developments are prone to material cost overruns versus budget. The capital expenditures and time required to develop new mines are considerable and changes in cost or construction schedules can significantly increase both the time and capital required to build the mine; and
· Global financial conditions may adversely affect the Company's growth and profitability - Many industries, including the mineral resource industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and energy markets, and a lack of market liquidity. A slowdown in the financial markets or other economic conditions may adversely affect the Company's growth and ability to finance its activities.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
(i) On 24 February 2021, the company announced that it had noted media reports following a meeting of the Ponencia that discussed changes to the proposed amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals. Under the modified amendment proposed by the Ponencia: (i) New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law; and (ii) Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation. It is important to note that this remains only a modified amendment to the draft climate change and energy transition bill proposed by the Ponencia that must now first be reviewed and approved or rejected under Spanish law.
Other than as disclosed above, there were no significant events occurring after balance date requiring disclosure.
ROUNDING
The amounts contained in the half year financial report have been rounded to the nearest $1,000 (where rounding is applicable) where noted ($000) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.
AUDITOR'S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 requires our auditors, Ernst & Young, to provide the Directors of Berkeley Energia Limited with an Independence Declaration in relation to the review of the half year financial report. This Independence Declaration is on page 24 and forms part of this Directors' Report.
Signed in accordance with a resolution of Directors.
Robert Behets
Acting Managing Director
9 March 2021
DIRECTORS' DECLARATION
In accordance with a resolution of the Directors of Berkeley Energia Limited, I state that:
In the opinion of the Directors:
(a) the financial statements and notes are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and
(ii) giving a true and fair view of the consolidated entity's financial position as at 31 December 2020 and of its performance for the half year ended on that date.
(b) The Directors Report, which includes the Operating and Financial Review, provides a fair review of:
(i) important events during the first six months of the current financial year and their impact on the half year financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and
(ii) related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Group during that period, and any changes in the related party transactions described in the last annual report that could have such a material effect; and
(c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
On behalf of the Board
Robert Behets
Acting Managing Director
9 March 2021
Forward Looking Statement
Statements regarding plans with respect to Berkeley's mineral properties are forward-looking statements. There can be no assurance that Berkeley's plans for development of its mineral properties will proceed as currently expected. There can also be no assurance that Berkeley will be able to confirm the presence of additional mineral deposits, that any mineralisation will prove to be economic or that a mine will successfully be developed on any of Berkeley's mineral properties.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE HALF YEAR ENDED 31 DECEMBER 2020
| Note | Half Year Ended | Half Year Ended |
|
|
|
|
Interest income |
| 8 | 829 |
Exploration and evaluation costs |
| (2,555) | (2,580) |
Corporate and administration costs |
| (466) | (779) |
Business development expenses |
| (43) | (772) |
Share based payments expense | 10(a) | (133) | - |
Fair value movements on financial liabilities | 5 | (21,989) | (1,380) |
Foreign exchange movements |
| (7,401) | (998) |
Loss before income tax |
| (32,579) | (5,680) |
Income tax expense |
| - | - |
Loss after income tax |
| (32,579) | (5,680) |
|
|
|
|
Other comprehensive income, net of income tax: |
|
|
|
Items that may be reclassified subsequently to profit or loss: |
|
|
|
Exchange differences arising on translation of foreign operations |
| (402) | (948) |
Other comprehensive loss, net of income tax |
| (402) | (948) |
Total comprehensive loss for the half year attributable to Members of Berkeley Energia Limited |
| (32,981) | (6,628) |
|
|
|
|
Basic and diluted loss per share (cents per share) |
| (7.31) | (1.28) |
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2020
| Note | 31 December 2020 | 30 June 2020 |
|
|
|
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
| 79,760 | 91,767 |
Other receivables |
| 1,411 | 1,436 |
Total Current Assets |
| 81,171 | 93,203 |
|
|
|
|
Non-current Assets |
|
|
|
Exploration expenditure | 6 | 8,221 | 8,293 |
Property, plant and equipment | 7 | 12,432 | 12,855 |
Other financial assets |
| 634 | 617 |
Total Non-Current Assets |
| 21,287 | 21,765 |
|
|
|
|
TOTAL ASSETS |
| 102,458 | 114,968 |
|
|
|
|
LIABILITIES |
|
|
|
Current Liabilities |
|
|
|
Trade and other payables |
| 971 | 1,158 |
Derivative financial liabilities | 8 | 97,381 | 76,747 |
Other financial liabilities |
| 745 | 852 |
Total Current Liabilities |
| 99,097 | 78,757 |
|
|
|
|
TOTAL LIABILITIES |
| 99,097 | 78,757 |
|
|
|
|
NET ASSETS |
| 3,361 | 36,211 |
|
|
|
|
EQUITY |
|
|
|
Issued capital | 9 | 169,827 | 169,829 |
Reserves | 10 | (1,385) | (1,116) |
Accumulated losses |
| (165,081) | (132,502) |
|
|
|
|
TOTAL EQUITY |
| 3,361 | 36,211 |
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 31 DECEMBER 2020
| Issued Capital | Share Based Payments Reserve | Foreign Currency Translation Reserve | Accumulated Losses | Total |
| $000 | $000 | $000 | $000 | $000 |
|
|
|
|
|
|
As at 1 July 2020 | 169,829 | 294 | (1,410) | (132,502) | 36,211 |
Total comprehensive income for the period: |
|
|
|
|
|
Net loss for the period | - | - | - | (32,579) | (32,579) |
Other comprehensive loss: |
|
|
|
|
|
Exchange differences arising on translation of foreign operations | - | - | (402) | - | (402) |
Total comprehensive loss | - | - | (402) | (32,579) | (32,981) |
Issue of ordinary shares | - | - | - | - | - |
Share issue costs | (2) | - | - | - | (2) |
Share-based payment expense | - | 133 | - | - | 133 |
As at 31 December 2020 | 169,827 | 427 | (1,812) | (165,081) | 3,361 |
|
|
|
|
|
|
As at 1 July 2019 | 169,736 | 341 | (872) | (89,557) | 79,648 |
Total comprehensive income for the period: |
|
|
|
|
|
Net loss for the period | - | - | - | (5,680) | (5,680) |
Other comprehensive loss: |
|
|
|
|
|
Exchange differences arising on translation of foreign operations | - | - | (948) | - | (948) |
Total comprehensive loss | - | - | (948) | (5,680) | (6,628) |
Issue of ordinary shares | 110 | - | - | - | 110 |
Share issue costs | (2) | - | - | - | (2) |
Lapse of performance rights | - | (109) | - | - | (109) |
As at 31 December 2019 | 169,844 | 232 | (1,820) | (95,237) | 73,019 |
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF YEAR ENDED 31 DECEMBER 2020
| Half Year Ended | Half Year Ended |
|
|
|
Cash flows from operating activities |
|
|
Payments to suppliers and employees | (3,226) | (5,251) |
Interest received | 8 | 752 |
Net cash outflow from operating activities | (3,218) | (4,499) |
|
|
|
Cash flows from investing activities |
|
|
Payments for property, plant and equipment | (27) | (159) |
Net cash outflow from investing activities | (27) | (159) |
|
|
|
Cash flows from financing activities |
|
|
Transaction costs from issue of securities | (2) | (2) |
Net cash outflow from financing activities | (2) | (2) |
|
|
|
Net decrease in cash and cash equivalents held | (3,247) | (4,660) |
Cash and cash equivalents at the beginning of the period | 91,767 | 96,587 |
Effects of exchange rate changes on cash and cash equivalents | (8,760) | 584 |
Cash and cash equivalents at the end of the period | 79,760 | 92,511 |
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
CONDENSED NOTES TO THE FINANCIAL STATEMENTS
FOR THE HALF YEAR ENDED 31 DECEMBER 2020
1. REPORTING ENTITY
Berkeley Energia Limited is a company domiciled in Australia. The interim financial report of the Company is as at and for the six months ended 31 December 2020.
The annual financial report of the Company as at and for the year ended 30 June 2020 is available upon request from the Company's registered office or is available to download from the Company's website at www.berkeleyenergia.com.
2. STATEMENT OF COMPLIANCE
The interim financial report is a general purpose condensed financial report which has been prepared in accordance with Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Act 2001.
This interim financial report does not include all the information of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report of Berkeley Energia Limited for the year ended 30 June 2020 and any public announcements made by Berkeley Energia Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
(a) Basis of Preparation of Half Year Financial Report
The amounts contained in the half year financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191.
(b) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified where applicable by the revaluation of certain financial assets and liabilities at fair value through profit or loss.
3. SIGNIFICANT ACCOUNTING POLICIES
Accounting policies applied by the Consolidated Entity in this consolidated interim condensed financial report are the same as those applied by the Consolidated Entity in its consolidated financial report for the year ended 30 June 2020.
In the current period, the Group has adopted all of the new and revised Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on or after 1 July 2020.
New and revised Standards and amendments thereof and Interpretations effective for the current half year that are relevant to the Group include:
· AASB 2018-6 Amendments to Australian Accounting Standards - Definition of a Business
· AASB 2018-7 Amendments to Australian Accounting Standards - Definition of Material
· 2019-1 Amendments to Australian Accounting Standards - References to the Conceptual Framework
· Conceptual Framework and Financial Reporting
The adoption of the aforementioned standards have resulted in no impact on interim financial statements of the Group as at 31 December 2020.
(a) Issued standards and interpretations not early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Group for the reporting period ended 31 December 2020. Those which may be relevant to the Group are set out in the table below, but these are not expected to have any significant impact on the Group's financial statements:
Standard/Interpretation | Application Date of Standard | Application Date for Company |
AASB 2020-2 Amendments to Australian Accounting Standards - Annual Improvements 2018-2020 and Other Amendments (AASB 1, 3, 9, 116, 137 & 141) | 1 January 2022 | 1 July 2022 |
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as Current or Non-Current | 1 January 2023 | 1 July 2023 |
4. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.
The Consolidated Entity operates in one operating segment, being exploration for mineral resources within Spain. This is the basis on which internal reports are provided to the Directors for assessing performance and determining the allocation of resources within the Consolidated Entity. All material non-current assets excluding financial instruments are located in Spain.
5. FAIR VALUE MOVEMENTS
| Consolidated | Consolidated |
|
|
|
Fair value loss on financial liabilities through profit and loss | (21,989) | (1,380) |
The fair value movements are a result of the fair value measurements of the convertible note and unlisted options issued to the OIA. These financial liabilities increase or decrease in size as the share price of the Company fluctuates. The Company has determined that the convertible note will convert at the floor price of £0.27. This has resulted in a fair value loss for the period. As the convertible note and OIA Options convert into shares, the liabilities will be reclassified to equity and will require no cash settlement by the Company. Please refer to note 8 for further disclosure.
6. NON-CURRENT ASSETS - EXPLORATION EXPENDITURE
| Consolidated | Consolidated |
The group has mineral exploration costs carried forward in respect of areas of interest1: |
|
|
Areas in exploration at cost: Salamanca mine |
|
|
Balance at the beginning of period | 8,293 | 8,274 |
Foreign exchange differences | (72) | 19 |
Balance at end of period1,2 | 8,221 | 8,293 |
1 The value of the exploration interests is dependent upon the discovery of commercially viable reserves and the successful development or alternatively sale of the respective tenements. An amount of €6m was capitalised for the fees paid to ENUSA under the Co-operation Agreement relating to the tenements within the State Reserves. The Company reached agreement with ENUSA in July 2012 in the form of an Addendum to the Consortium Agreement signed in January 2009. The Addendum includes the following terms:
· The Consortium consists of the Addendum Reserves (State Reserves Salamanca 28 and 29);
· Berkeley's stake in the Consortium increased to 100%;
· ENUSA will remain the owner of State Reserves 28 and 29, however, the exploitation rights have been assigned to Berkeley, together with authority to submit all applications for the permitting process;
· The Company is now the sole and exclusive operator in the Addendum Reserves, with the right to exploit the contained uranium resources and have full ownership of any uranium produced;
· ENUSA will receive a production fee equivalent to 2.5% of the net sale value (after marketing and transport costs) of any uranium produced within the Addendum Reserves;
· Berkeley has waived its rights to mining in State Reserves 2, 25, 30, 31, Hoja 528-1 and the Saelices El Chico Exploitation Concession, and has waived any rights to management of the Quercus plant; and
· The Co-operation Agreement with ENUSA, signed on 29 January 2009, has been terminated.
The Group's accounting policy is to account for contingent consideration on asset acquisitions as contingent liabilities.
2 In June 2016, the Company completed an upfront royalty sale to major shareholder Resource Capital Funds ("RCF"). The royalty financing comprised the sale of a 0.375% fully secured net smelter royalty over the project for US$5 million (A$6.7million)
7. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT
| Land and Buildings | Plant and | Right-of-use assets | Total |
| $000 | $000 | $000 | $000 |
|
|
|
|
|
Carrying amount at 1 July 2020 | 10,798 | 1,813 | 244 | 12,855 |
Additions | - | 27 | - | 27 |
Depreciation and amortisation | (17) | (64) | (48) | (129) |
Foreign exchange differences | (276) | (45) | - | (321) |
Carrying amount at 31 December 2020 | 10,505 | 1,731 | 196 | 12,432 |
- at cost | 10,779 | 3,409 | 407 | 14,595 |
- accumulated depreciation and amortisation | (274) | (1,678) | (211) | (2,163) |
8. FINANCIAL LIABILITIES
| Consolidated | Consolidated |
(a) Financial liabilities at fair value through profit and loss: |
|
|
|
|
|
Convertible note | 89,305 | 75,331 |
OIA Options | 8,076 | 1,416 |
| 97,381 | 76,747 |
On 30 November 2017, the Company issued an interest-free and unsecured US$65 million convertible note which can be converted into ordinary shares at £0.50 per share upon commissioning of the Salamanca mine, or by OIA at any time at their choosing. Should the Company raise further equity prior to conversion of the convertible note at a price below £0.50 then the conversion price of the convertible note will be reset to the issue price of the equity raising, subject to a floor price of £0.27 per share. If technical completion (mine commissioning) has not occurred by 30 November 2021, then the convertible note will automatically convert into shares at the floor price of £0.27 per share. The exchange rate fixed in the contract is US$1.00: £0.776. Given technical completion will not occur by 30 November 2021, the Company has formed a view that the convertible note will convert at the floor price of £0.27 on 30 November 2021.
Due to the conversion terms of the convertible note leading to the issuance of a variable number of ordinary shares in the Company in return for conversion of the convertible note, the Company is required under the accounting standards to account for the convertible note as a financial liability through profit and loss. The Company has no obligation to extinguish the convertible note using its cash reserves and it is only repayable in an event of breach of the terms of the investment agreement which includes a breach of a representation or warranty (at the date of signing the agreement), a breach of covenants, insolvency of the Company or the Company ceasing to conduct business or ceasing being listed on a recognised stock exchange.
As part of the convertible note transaction, the Company also issued OIA with 50,443,124 unlisted options which are exercisable at an average price of £0.85 per share contributing an additional US$55 million of funding if exercised in the future.
| Consolidated |
|
| Consolidated |
| Opening Balance | Fair Value Change | Foreign Exchange Loss/(Gain) | Total |
|
|
|
|
|
(b) Reconciliation: |
|
|
|
|
Convertible note | 75,331 | 15,179 | (1,205) | 89,305 |
OIA Options | 1,416 | 6,810 | (150) | 8,076 |
Total fair value | 76,747 | 21,989 | (1,355) | 97,381 |
(c) Fair Value Estimation
The fair value of the OIA Options was determined using a binomial option pricing model. The fair value of the convertible note has been calculated using a probability-weighted payout approach on the basis that the convertible note will convert at 30 November 2021 (when automatic conversion occurs) using the floor price of £0.27 as the conversion price. The fair value movement of both the OIA Options and the convertible note has been recognised in the Statement of Profit and Loss. Both fair value measurements are Level 2 valuation in the fair value hierarchy.
The reporting date fair values of the convertible note and OIA Options were estimated using the following assumptions:
Convertible note:
| 31 December 2020 |
Conversion price | £0.27 |
Number of shares ('000) | 186,815,000 |
Fair value ($) | $0.478 |
OIA Options:
31 December 2020 | Tranche 1 | Tranche 2 | Tranche 3 |
Exercise price | £0.600 | £0.750 | £1.000 |
Valuation date share price | £0.325 | £0.325 | £0.325 |
Dividend yield1 | - | - | - |
Volatility2 | 85% | 85% | 85% |
Risk-free interest rate | (0.14%) | (0.13%) | (0.12%) |
Number of OIA Options | 10,088,625 | 15,132,973 | 25,221,562 |
Issue date | 30 Nov 2017 | 30 Nov 2017 | 30 Nov 2017 |
Estimated Expiry date | 30 Nov 2022 | 31 May 2023 | 30 Nov 2023 |
Fair value (£) | £0.091 | £0.092 | £0.089 |
Fair value ($) | $0.161 | $0.164 | $0.158 |
1 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
2 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome
9. CONTRIBUTED EQUITY
(a) Issued and Paid Up Capital
| Consolidated | Consolidated |
258,605,000 (30 June 2020: 258,605,000) fully paid ordinary shares | 169,827 | 169,829 |
(b) Movements in Ordinary Share Capital during the Six Month Period ended 31 December 2020:
Date | Details | Number of Shares | $000 |
|
|
|
|
1 Jul 20 | Opening Balance | 258,605 | 169,829 |
Jul 20 to Dec 20 | Share issue costs | - | (2) |
31 Dec 20 | Closing Balance | 258,605 | 169,827 |
10. RESERVES
| Consolidated | Consolidated |
|
| |
Share based payments reserve (Note 10(a)) | 427 | 294 |
Foreign currency translation reserve | (1,812) | (1,410) |
| (1,385) | (1,116) |
(a) Movements in Options and Performance Rights during the Six Month Period ended 31 December 2020:
Date | Details | Number of Options | Number of Performance Rights | $000 |
|
|
|
|
|
1 Jul 20 | Opening Balance | 7,400 | 200 | 294 |
Jul 20 to Dec 20 | Share based payment expense | - | - | 133 |
31 Dec 20 | Closing Balance | 7,400 | 200 | 427 |
11. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
There was no material change in contingent liabilities or contingent assets from those previously disclosed at the last reporting period.
12. DIVIDENDS PAID OR PROVIDED FOR
No dividend has been paid or provided for during the half year (2019: nil).
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The majority of the Group's financial instruments consist of those which are measured at amortised cost including trade and other receivables, security bonds, trade and other payables and other financial liabilities. The carrying amount of these financial assets and liabilities approximate their fair value. Please refer to notes 5 and 8 for details on the fair value of non-cash settled financial liabilities classified as fair value through profit and loss.
14. RELATED PARTY DISCLOSURE
Balances and transactions between the Company and its subsidiaries, which are related parties to the Company, have been eliminated on consolidation. There have been no other transactions with related parties during the half-year ended 31 December 2020, other than remuneration with Key Management Personnel.
15. SUBSEQUENT EVENTS AFTER BALANCE DATE
(i) On 24 February 2021, the company announced that it had noted media reports following a meeting of the Ponencia that discussed changes to the proposed amendment to the draft climate change and energy transition bill relating to the investigation and exploitation of radioactive minerals. Under the modified amendment proposed by the Ponencia: (i) New applications for exploration, investigation or direct exploitation concessions for radioactive materials, nor their extensions, would not be accepted as of the entry into force of this law; and (ii) Existing concessions, and open proceedings and applications related to these, would continue as per normal based on the current legislation. It is important to note that this remains only a modified amendment to the draft climate change and energy transition bill proposed by the Ponencia that must now first be reviewed and approved or rejected under Spanish law.
Other than as disclosed above, there were no significant events occurring after balance date requiring disclosure.
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