Results for the Year Ended 31 December 2019

RNS Number : 3651N

Curzon Energy PLC

19 May 2020

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

19 May 2020

Curzon Energy Plc
("Curzon" or the "Company")

Results for the Year Ended 31 December 2019

Curzon Energy plc (LON:CZN) the London Stock Exchange listed company, announces its full year audited results for the year ended 31 December 2019.

A copy of the Company's annual report and financial statements for the year ended 31 December 2019, extracts of which are set out below, will be made available on the Company's website www.curzonenergy.com shortly.

Curzon further announces that a Notice of Annual General Meeting ("AGM") will be posted to shareholders, along with the Annual Report and Financial Statements for the year ended 31 December 2019, on or before 22 May 2020.

The Company will be holding its AGM at the Company's business address, which is located at Curzon Energy Plc, (WeWork), 71-91 Aldwych House, London WC2B 4HN on Wednesday 24 June 2020 at 2:00 pm, the details of which are explained in the Notice of AGM, which will be also available on the Company's website www.curzonenergy.com by 22 May 2020.

Due to the ongoing impact of the COVID-19 pandemic and related public health guidance, we strongly encourage shareholders to submit their Forms of Proxy, to ensure they can vote and be represented at the AGM, without the need to attend in person.

Forms of proxy must be completed, signed and returned so as to be received by the Company's Registrars no later than 2:00 pm on 22 June 2020. 

Scott Kaintz, Chief Executive Officer comments:

"Following a challenging 2019, the subsequent global economic fallout from the COVID-19 pandemic and the collapse in oil and gas prices in Q1 2020 saw international markets largely shun the oil and gas sector.  However, after a change in strategy, Curzon now finds itself with an opportunity to potentially transition from oil and gas into the trading of the key metals likely to form the nucleus of a more sustainable future. 

The Board is enthusiastic about the opportunity to potentially acquire London Critical Metals Market and we are currently working to complete due diligence so as to facilitate a definitive agreement to acquire the business.  While it has been a difficult year for Curzon, the potential move out of the oil and gas sector into critical metals trading appears timely and offers the Company the best prospects for growth and development going forward.  We look forward to making additional announcements on progress in due course."

For further information please contact:
Curzon Energy Plc	[phone]
Scott Kaintz
www.curzonenergy.com
SP Angel Corporate Finance LLP	[phone]
Richard Hail
Optiva Securities Limited	[phone]

Chairman's Statement

I am pleased to present the annual report for the Company covering its results for the year to 31 December 2019.

During the course of 2018, the Company focused on extended testing of existing wells at Coos Bay, and, following several efforts to rework these wells, gas flow proved inconsistent and inconclusive.  Thereafter, the Company considered alternative options to advance the appraisal of the property, however, adequate funding was not available. 

In late 2018, the Company announced a memorandum of understanding with Pared Energy LLC to develop a conventional gas fairway in Texas.  The Company believed that the Texas Gas Project offered multi-TCF potential through the application of modern drilling and completion techniques applied to known hydrocarbon producing reservoirs. The Board further believed that the Texas Gas Project could provide a highly complementary addition to the Company's existing assets at Coos Bay, potentially creating a larger US focused natural gas offering for UK investors.

Considerable effort during 2019 was spent conducting due diligence on the Texas Gas Project, followed by a six month plus period of administrative and regulatory work required to complete a prospectus in order to raise funds to participate in and then invest in, this project.  Unfortunately, by the time these work streams were at an advanced stage, public equity markets were unpredictable due to Brexit and the US trade war uncertainties, and UK investor appetite for US oil investments was much depressed.

In addition, 2019 saw a marked reduction in the price of natural gas around the world and, by the end of 2019, it became apparent to the Board that the ongoing decline in the oil and gas markets would prove difficult if not impossible to overcome.  This meant that the Company's involvement in the Texas Gas Project and further attempts to restart activities and progress the Company's project at Coos Bay, at least in the near term, were unlikely.  Further, efforts towards year-end to reach agreement with a potential farm-in partner at Coos Bay became protracted due to the various factors mentioned previously and could not be consummated.

The Company then implemented a new strategy and began discussions with a number of groups presenting fresh opportunities both in and outside of the oil and gas sector and, on 18 March 2020, the Company announced that it had entered a period of exclusivity in order to conduct due diligence and to potentially acquire a 100% interest in London Critical Metals Market, the first unified global metals trading exchange for critical metals that have few or no direct investment or trading options elsewhere.

For the period ended 31 December 2019, the Group incurred a loss of US$3,580,750.  The majority of this loss comprised the impairment of the Company's coal bed methane assets at Coos Bay of US$2,559,000 that has been recognized in the accounts. 

At the time of writing, the United Kingdom and the World at large is in the process of dealing with the COVID-19 pandemic and its associated aftershocks.  While the disagreements between OPEC and Russia combined with the drop in demand for oil due to the COVID-19 fallout has been exceptionally destructive to the oil industry, we currently do not expect these developments to materially impact the potential transaction with London Critical Metals Market under consideration.  However, these same developments will likely impact our ability to further develop our asset at Coos Bay, and may make a disposal or farm-in more challenging.

Present turmoil aside, the Company continues to progress diligence activities in regards to London Critical Metals Market as announced in March this year, and the Board remains enthusiastic about the scale and quality of the opportunity this transaction represents for Curzon stakeholders.  The potential move from oil and gas into the trading of the metals the world requires to continue the transition to renewables and energy storage appears prescient, and the Company expects to make additional announcements on progress in the near term.

John McGoldrick

Non-Executive Chairman

18 May 20 20

Strategic Report

Financial Results

The Group loss for the year to 31 December 2019 was US$ 3,580,750 (2018: US$1,953,708). There were no revenues and the majority of this loss related to the impairment of the Company's coal bed methane interests at Coos Bay, Oregon. 

The loss per share was US$0.044 (2018: loss per share US$0.026).

Following mixed results from well testing operations at Coos Bay in 2018, the Directors put the project on care and maintenance in late 2018 and no significant development was undertaken during 2019.  Following the lack of progress on the project in 2019, and a general lack of interest in funding US oil projects observed in the UK equity market, an impairment loss on the project of US$ (2,559,000) has been recognized in the accounts. 

The Group currently has no source of revenue and is reliant on loans to continue to meet its overhead expenditure. The Group held cash balances of US$28,709 as at 31 December 2019 and has subsequently increased its borrowing capacity and current liquidity through the agreement with Seven Sun Stars Investment Group.

The Directors note that the Group will need additional funding to continue operations for the foreseeable future and this means there is a material uncertainty as to the Group's ability to continue as a going concern, however, the Directors are confident that the Group will be able to raise, as required, sufficient cash or reduce its commitments to enable it to continue its operations, and to continue to meet, as and when they fall due, its liabilities for at least the next twelve months from the date of approval of the Group financial statements.  The Group financial statements have, therefore, been prepared on the going concern basis.

The Group has 3 members of staff (including Directors).

Principal Activities

The Company was incorporated in England and Wales on 29 January 2016 as an investment company to acquire oil and gas assets. Its first acquisition was of Coos Bay.

The Group's business continues to be operated through the US Group, with a focus on oil and gas exploration, appraisal and development. 

The Company is a holding company with the following subsidiaries being part of the US Group:

Name	Country of Incorporation	Proportion of equity ownership	Principal activity
Coos Bay Energy LLC	Nevada, USA	100%	Gas Exploration & Development
Westport Energy Acquisition, Inc.	Delaware, USA	100%	Holding Company
Westport Energy, LLC	Delaware, USA	100%	Gas Exploration & Development
Curzon Energy, Inc.*	Delaware, USA	100%	Holding Company
Rigel Energy, LLC* *	Delaware, USA	100%	Holding Company

* Incorporated on 1 May 2019 and dissolved on 26 February 2020 as related transaction did not complete.

** Incorporated on 1 May 2019 and dissolved on 27 February 2020 as related transaction did not complete.

Coos Bay LLC, which employs the Group's employees and conducts operations in the Coos Bay basin area, is held directly by the Company. Its two indirectly owned subsidiaries are Westport Energy Acquisition Inc. and its wholly-owned subsidiary, Westport Energy LLC, which are held by Coos Bay Energy LLC. 

Review of the Business

2018 saw the Company conducting extensive well testing operations at Coos Bay in Oregon where the gas flow rates proved inconsistent and inconclusive. 

As such, the Company announced its intention to augment the Coos Bay project with a complementary project developed jointly with Pared Energy that offered significant multi-trillion cubic feet of upside in an established oil and gas region in Texas, USA.  The Company proceeded to sign a memorandum of understanding in November 2018 announcing its intention to pursue joint development of this project.  In February 2020, the Company announced that it had ended discussions with Pared Energy in Texas, as a transaction could not be completed. 

In March 2020, the Company announced that it had executed a letter of intent with Seven Sun Stars Investment Group ("SSSIG") to acquire a 100% interest in the London Critical Metals Market ("LCMM") the first unified global metals trading exchange for critical metals that have few or no direct investment or trading operations elsewhere in the world. 

Key performance indicators (KPIs)

As the Company is traditionally a pure exploration business with no production or proven reserves and which is currently exploring reverse takeover options that might materially change the business, the Directors take the view that KPIs would not provide materially useful information to investors at this time.  As the business develops further, the addition of KPIs will be considered and added as appropriate. 

Principal Risks and Risk Management

Exploration is an inherently high-risk business:

• Even the most promising prospects can have failures for many reasons, such as:

o  The gas assets may not be found in commercial quantities if there are errors in the underlying geological assumptions or analysis.

o  Hydrocarbons may have been present but escaped due to unexpected geological events.

o  The reservoir may not flow hydrocarbons at commercially viable rates of flow.

o  The drilling may encounter technical problems which make it impossible or too expensive to reach the target.

o  The ability of the Group to exploit and develop gas reserves depends on its current leases. There is no guarantee that existing leases will be continued beyond their primary term or additional leases acquired on attractive terms.

• The Company may take on commitments for which it then cannot find adequate funding. Although the Company can then potentially sell all or part of its assets:

o  There is no guarantee it could find a buyer.

o  Even if it does find a buyer, the transaction may take too long, and the Company's cash resources may become exhausted.

The Company's risk mitigation strategies include the following:

• Partnering with key experts that have demonstrated an ability to determine the presence or absence of hydrocarbons.

• Utilising the Directors' experience who have excellent technical, commercial or local knowledge as to where to locate assets.

• Securing the support of a number of key private shareholders, and actively pursuing other sources of funding.

• Utilising third parties to assist with the management of currency risk.

Corporate Responsibility

The Company takes its responsibilities as a corporate citizen seriously.  The Board's primary goal is to create shareholder value in a responsible way which serves all stakeholders.

Section 172 Statement

Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders in their decision making.  The Directors continue to have regard to the interests of the Company's employees and other stakeholders, including the impact of its activities on the community, the environment and the Company's reputation, when making decisions. Acting in good faith and fairly between members, the Directors consider what is most likely to promote the success of the Company for its members in the long term.

The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies Act 2006.  The Board regularly reviews our principal stakeholders and how we engage with them. The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management and also by direct engagement with stakeholders themselves.  The relevance of each stakeholder group may increase or decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group during its discussions and as part of its decision making.

The Board welcomes the opportunity to engage with our shareholders and with the capital markets more generally.  The Board achieves this through dialogue with shareholders, prospective shareholders and capital markets participants including corporate brokers.  Feedback from any such meetings or calls would be shared with all Board members. 

Investors, prospective investors and analysts can contact the Executive Director as well as access information on our corporate website.  The Board believes that appropriate steps have been taken during the year so that all members of the Board, and in particular the non-executive Directors, have an understanding of the views of major shareholders.

Governance

The Board considers sound governance as a critical component of the Company's success and the highest priority.  The Company has an effective and engaged Board, with a strong non-executive presence drawn from diverse backgrounds and with well-functioning governance committees. Through the Company's compensation policies and variable components of employee remuneration, the Remuneration Committee of the Board seeks to ensure that the Company's values are reinforced in employee behavior and that effective risk management is promoted.

Analysis by Gender

Category	Male	Female
Directors	3	0
Senior Managers	0	0
Other Employees	0	0

Employees and their development

The Company is dependent upon the qualities and skills of its employees and their commitment plays a major role in the Company's business success. Employees' performance is aligned to the Company's goals through an annual performance review process and via incentive programmes.  The Company provides employees with information about its activities through regular briefings and other media.  The Company operates a share option scheme operated at the discretion of the Remuneration Committee.

Diversity and inclusion

The Company does not discriminate on the grounds of age, gender, nationality, ethnic or racial origin, non-job-related-disability, sexual orientation or marital status.  The Company gives due consideration to all applications and provides training and the opportunity for career development wherever possible. The Board does not support discrimination of any form, positive or negative, and all appointments are based solely on merit.

Health and safety

The Company endeavors to ensure that the working environment is safe and healthy and conducive to the wellbeing of employees who are able to balance work and family commitments.  The Company has a Health and Safety at Work policy which is reviewed regularly by the Board and is committed to the health and safety of its employees and others who may be affected by the Company's activities.  The Company provides the information, instruction, training and supervision necessary to ensure that employees are able to discharge their duties effectively.  The Health and Safety procedures used by the Company ensure compliance with all applicable legal, environmental and regulatory requirements, as well as its own internal standards.

Outlook

The Company spent the majority of 2019 working with Pared Energy and the Company's advisors to both structure and fund an investment in Pared's Texas gas project in the United States.  This involved significant planning and administrative work as required by the Company's listing on the Standard List of the London Stock Exchange.  By the end of the year, it became apparent that a transaction in the oil and gas sector was not going to complete.  The Board then turned its attention to exploring new options for Curzon and implemented a new strategy.

In March 2020, the Company announced that it had executed a letter of intent with the Sun Seven Stars Investment Group ("SSSIG") to potentially acquire a 100% interest in London Critical Metals Market ("LCMM"), the first unified global metals trading exchange for critical metals that have few or no direct investment or trading options elsewhere in the World.

The Board is enthusiastic about the opportunity to potentially acquire LCMM and is currently working to complete its due diligence on the company, so as to facilitate the drafting and execution of a definitive agreement to acquire the business.  While it has been a difficult year for Curzon, the potential move out of the oil and gas sector into critical metals trading appears timely and offers the Company the best prospects for growth and development going forward. 

Signed by order of the Board. 

Scott Kaintz

Chief Executive Officer

18 May 2020

Independent auditor's report to the members of Curzon Energy Plc 

Opinion  

We have audited the consolidated financial statements of Curzon Energy Plc and its subsidiaries (the "Group") for the year ended 31 December 2019 which comprise the consolidated statement of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of cash flows, the consolidated and company statements of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion:

· the financial statements give a true and fair view of the state of the group's and company's affairs as at 31 December 2019 and of its loss for the year then ended;

· have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union;

· the company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union as applied in accordance with the provisions of the Companies Act 2006; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 2 to the financial statements, which details the factors the company has considered when assessing the going concern position. As detailed in note 2, the uncertainty surrounding the availability of funds to finance ongoing working capital requirements indicates the existence of a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter. 

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be £30,000, based on 5% of the adjusted results of the year.

We use a different level of materiality ('performance materiality') to determine the extent of our testing for the audit of the financial statements.  Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment. 

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors' remuneration.

We agreed with the Audit Committee to report to it all identified errors in excess of £1,500. Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

There are two components of the Group, Curzon Energy Plc as an entity and the US Group headed by Coos Bay Energy LLC. The audit of Curzon Energy Plc was conducted from the UK. The accounting records were provided to us by management.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Key audit matter

How the scope of our audit addressed the key audit matter

Valuation of Intangible assets The group's primary focus is on exploration activities in the Coos Bay Basin. The exploration assets at 31 December 2019 was $2.6m and an impairment of $2.6m was recognised in the year as it has not yielded meaningful gains in flow rates and well performance. The view has thus been taken that this work may not result in future recoverable economic value. Given the impairment recognised, we considered the risk that the residual intangible assets relating to the Coos Bay Basin was impaired.

In considering this assessment we carried out the following audit procedures: · Review the board minutes and announcements which indicated that well testing was not carried out during the year ended 31 December 2019. · Discussions with management regarding the plans and intentions in relation to the existing wells drilled in the Coos Bay Project. · It was confirmed by management that they were not expecting to carry out drilling operations for foreseeable future. · Assessment of the appropriateness of the accounting treatment of the exploration activities in accordance with IFRS 6. In addition, we considered the primary lease agreement which expires during 2020 and has not been renewed to date. Key observations We concur with management's decision to fully impair the cost of exploration activities capitalised to date.

Our audit procedures in relation to this matter were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on these matters individually and we express no such opinion.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion based on the work undertaken in the course of our audit

· the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

· the directors' report and strategic report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or

· the financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit

Responsibilities of the directors for the financial statements

As explained more fully in the directors' responsibilities statement set out on page 17, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Other matters which we are required to address

We were appointed by the Board on 15 April   2020 to audit the financial statements for the year ended 31 December 2019. Our total uninterrupted period of engagement is 4 years, covering the period ended 31 December 2016 to 31 December 2019.

The non-audit services prohibited by the FRC's Ethical Standard were not provided to the company and we remain independent of the group and the parent company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Matthew Stallabrass

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London

18 May 2020

Consolidated statement of comprehensive income

for the year ended 31 December 2019

	Note		2019	2018
			US$	US$
Administrative expenses	6		(913,572)	(1,363,949)
Loss from operations			(913,572)	(1,363,949)
Finance expense, net	7		(108,178)	(14,443)
Impairment of exploration and evaluation assets	10		(2,559,000)	(575,316)
Loss before taxation	4		(3,580,750)	(1,953,708)
Income tax expense	8		-	-
Loss for the year attributable to
equity holders of the parent company			(3,580,750)	(1,953,708)
Other comprehensive loss
(Loss) on translation of parent net assets and results from functional currency into presentation currency			(39,602)	(70,245)
Total comprehensive loss for the year			(3,620,352)	(2,023,953)
Loss per share - Basic and diluted, US$	9		(0.04)	(0.03)

Consolidated statements of financial position

as at 31 December 2019

	Note		2019	2018
			US$	US$
Assets
Non-current assets
Intangible assets	10		-	2,559,000
Property, plant and equipment			683	-
Restricted cash	12		125,000	125,000
Total non-current assets			125,683	2,684,000
Current assets
Prepayments and other receivables	13		31,203	36,157
Cash and cash equivalents	14		28,709	125,621
Total current assets			59,912	161,778
Total assets			185,595	2,845,778
Liabilities
Current liabilities
Trade and other payables	15		835,826	506,894
Borrowings	16		698,798	213,812
Total current liabilities			1,534,624	720,706
Total liabilities			1,534,624	720,706
Capital and reserves attributable to shareholders
Share capital	17		1,103,457	1,024,036
Share premium			3,586,947	3,563,122
Share-based payments reserve			474,792	454,026
Warrants reserve			213,250	191,011
Merger reserve			31,212,041	31,212,041
Foreign currency translation reserve			(103,376)	(63,774)
Accumulated losses			(37,836,140)	(34,255,390)
Total capital and reserves			(1,349,029)	2,125,072
Total equity and liabilities			185,595	2,845,778

The financial statements were approved and authorised for issue by the Board of Directors on 18 May 2020 and were signed on its behalf by:

John McGoldrick

Director

Consolidated statements of changes in equity

	Share capital	Share premium	Other reserves	Accumulated losses	Total
	US$	US$	US$	US$	US$
Equity at 1 January 2018	964,575	3,199,004	31,524,182	(32,301,682)	3,386,079
Loss for the year	-	-	-	(1,953,708)	(1,953,708)
Other comprehensive loss for the year	-	-	(70,245)	-	(70,245)
Total comprehensive loss for the year	-	-	(70,245)	(1,953,708)	(2,023,953)
Issue of shares	59,461	416,223	-	-	475,684
Share issue costs	-	(52,105)	-	-	(52,105)
Issue of share options	-	-	339,367	-	339,367
Total transactions with shareholders	59,461	364,118	339,367	-	762,946
Equity at 31 December 2018	1,024,036	3,563,122	31,793,304	(34,255,390)	2,125,072
Loss for the year	-	-	-	(3,580,750)	(3,580,750)
Other comprehensive loss for the year	-	-	(39,602)	-	(39,602)
Total comprehensive loss for the year	-	-	(39,602)	(3,580,750)	(3,620,352)
Issue of shares	79,421	46,064	-	-	125,485
Issue of warrants	-	(22,239)	22,239	-	-
Issue of share options	-	-	20,766	-	20,766
Total transactions with shareholders	79,421	23,825	43,005	-	146,251
Equity at 31 December 2019	1,103,457	3,586,947	31,796,707	(37,836,140)	(1,349,029)

Other Reserves

	Merger reserve	Share-based payments reserve	Warrants reserve	Foreign currency translation reserve	Total Other reserves
	US$	US$	US$	US$	US$
Other reserves as at 1 January 2018	31,212,041	114,659	191,011	6,471	31,524,182
Other comprehensive loss for the year	-	-	-	(70,245)	(70,245)
Total comprehensive loss for the year	-	-	-	(70,245)	(70,245)
Issue of share options	-	339,367	-	-	339,367
Other reserves at 31 December 2018	31,212,041	454,026	191,011	(63,774)	31,793,304
Other comprehensive loss for the year	-	-	-	(39,602)	(39,602)
Total comprehensive loss for the year	-	-	-	(39,602)	(39,602)
Issue of warrants	-	-	22,239	-	22,239
Issue of share options	-	20,766	-	-	20,766
Other reserves at 31 December 2019	31,212,041	474,792	213,250	(103,376)	31,796,707

Consolidated statement of cash flows

	Notes	2019	2018
		US$	US$
Cash flow from operating activities
Loss before taxation		(3,580,750)	(1,953,708)
Adjustments for:
Finance expenses	7	112,093	42,321
Share-based payments charge	18	20,766	339,367
Impairment of exploration assets		2,559,000	575,316
Unrealised foreign exchange movements		(3,915)	(27,878)
Operating cashflows before working capital changes		(892,806)	(1,024,582)
Changes in working capital:
Increase/(decrease) in payables		309,917	(22,541)
Decrease in receivables		27,084	112,461
Net cash used in operating activities		(555,805)	(934,662)
Investing activities
Capitalised exploration costs		-	(575,316)
Net cash outflow from investing activities		-	(575,316)
Financing activities
Issue of ordinary shares	17	104,021	-
Costs of share issue		-	(52,105)
Proceeds from new borrowings	16	362,320	100,000
Net cash flow from financing activities		466,341	47,895
Net (Decrease)/increase in cash and cash equivalents in the period		(89,464)	(1,462,083)
Cash and cash equivalents at the beginning of the period		125,621	1,595,035
Restricted cash held on deposits	12	125,000	125,440
Total cash and cash equivalents at the beginning of the period, including restricted cash		250,621	1,720,475
Effect of the translation of cash balances into presentation currency		(7,448)	(7,331)
(Charge) on restricted cash		-	(440)
Cash and cash equivalents at the end of the period		28,709	125,621
Restricted cash held on deposits	12	125,000	125,000
Total cash and cash equivalents at the end of the period, including restricted cash		153,709	250,621

 

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