Final Results

RNS Number : 6856T

Kodal Minerals PLC

22 July 2020

Certain information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Kodal Minerals Plc / Index: AIM / Epic: KOD / Sector: Mining

22 July 2020

Kodal Minerals plc ('Kodal' or the 'Company')

Final Results and Notice of AGM

Kodal Minerals plc, the mineral exploration and development company, is pleased to announce its audited final results for the year ended 31 March 2020.

To view the press release with illustrative maps, images and diagrams, please use the following link:

http://www.rns-pdf.londonstockexchange.com/rns/6856T_1-2020-7-21.pdf

CHAIRMAN'S STATEMENT

I am pleased to present the Annual Report of Kodal Minerals plc ('Kodal' or the 'Company' and together with its subsidiaries, the 'Group') for the year ended 31 March 2020.

This year has again marked major developments for Kodal and our focus on the flagship Bougouni Lithium project (the 'Project'). We have received an Environmental Permit following approval of our Environmental and Social Impact assessment ('ESIA') and have completed a Feasibility Study on the project. This study demonstrates a robust Open Pit mining and processing operation with an initial 8.5-year mine life, and a production profile of 220,000 tonnes of 6% spodumene concentrate per annum. The capital costs for the development are estimated to be US$117m (plus contingencies) with a payback period of 1.7 years. This positive Feasibility Study underpinned the Company's Mining Licence application lodged with the Mali Government in January 2020.

The outbreak of the Covid-19 pandemic at the beginning of 2020 caused significant disruption to global equity markets and impacted on our ability to readily raise funding for our ongoing development and exploration programmes at a crucial juncture. In April 2020 during these uncertain market conditions, the Company was able to secure funding through a Financing Facility, comprising a share subscription for £0.5 million and linked equity sharing agreement, such that the funding will be received over the next 12 months, but the net amount received will vary according to our share price performance. As a result, we have sought to minimise the Group's overheads and outgoings in order to preserve working capital, by reducing operational activity, agreeing salary and fee reductions for directors, management and staff, and reaching agreements with key suppliers on reduced charges and extending payment timings.

On 14 July 2020 the Company entered into a Convertible Loan Note Agreement for a total commitment of $1.5 million, with a first tranche of $750,000 advanced at closing and a second tranche at a date of mutual agreement, bearing interest at 9.85% per annum. These additional funds will enable us to finance our plans to further develop our Bougouni Lithium project , pay for the mining licence, fund additional exploration activity of our gold assets and explore new investment opportunities identified by the Company in the gold space.

The Company is maintaining close contact with the Mali Government with respect to its Mining Licence application, and while timing remains unclear, we understand it continues to progress well through the government agencies and is awaiting only final documentary sign off.

The year ahead promises to be a challenging and exciting one for Kodal as we expect to achieve full permitting of the Bougouni Lithium project and embark on the next stage of development, including final engineering design and financing negotiations for construction.

We thank all our shareholders for their continued support and hope that you keep safe and well.

Robert Wooldridge

Non-executive Chairman

21 July 2020

OPERATIONAL REVIEW

Summary

Kodal continued with the fast tracking of the flagship Bougouni Lithium project (the 'Project') during this reporting year. Following the approval of the Company's ESIA in November 2019 and receipt of an Environmental Permit for the Project, the Company completed a feasibility study and lodged a Mining Licence application in January 2020. Following receipt of approval of the Mining licence application the Company will have a fully permitted project ready to move to development.

The Feasibility Study for the Project proposes a contract mining operation and conventional "Milling and Flotation" processing facility, capable of treating 2 Mtpa of ore, complete with associated infrastructure, to mine and process approximately 16Mt of pegmatite ore over an initial 8.5 year Life of Mine ('LOM').

Kodal Minerals, and its Mali subsidiary Future Minerals SARL ('Future Minerals'), coordinated and managed the Study with various industry expert consulting firms engaged to contribute in the areas of geology, resources, geo-technical, mining, metallurgy, engineering, tailings, cost estimating, project implementation, operational readiness, risk identification, and health, safety, environmental and social aspects. The Project will consist of open-pit mines, a lithium concentrate processing plant, a tailings dam, waste rock dumps, a water storage dam, stores, a camp including administrative and living quarters and associated infrastructure.

In May 2020, Kodal received results of the processing of its bulk sample, with over 800 tons of pegmatite hosted lithium mineralisation collected from the Ngoualana prospect within the Bougouni Lithium project. The testwork has returned very encouraging results confirming a high-grade, low impurity spodumene concentrate from the mineralised sample. The results of the testwork demonstrate a metallurgical recovery of up to 83% for a 5.5 % to 6.0% Li2O spodumene product. This recovery is significantly higher than the 71% recovery used in the initial Feasibility Study and indicates upside on the Project's economics.

The Group carried out further exploratory work on its gold assets in Cote d'Ivoire during the year. It also maintained good title to its lithium and gold assets in Mali and Cote d'Ivoire.

Tenure Review

Lithium Projects

Kodal's Bougouni and Bougouni West lithium projects are located in southern Mali, with the rights and concessions held by subsidiary company Future Minerals, a Malian registered company owned 100% by the Group.

During the year, for the Bougouni Lithium project the Fariedele and Sogola-Nord concessions replaced the previous Madina concession that had reached its legal time limit. The new licences are held in the name of Kodal subsidiary companies Future Minerals (Fariedele) and International Goldfields Mali SARL ('IGS Mali') (Sogola-Nord) with Kodal holding a 90% economic interest in the concessions as per the Madina agreement. All concessions in the Project are now registered in the names of Kodal subsidiary companies with a granted area of 350km².

All licences remain valid and in good standing. All fees have been paid and reports lodged with the Directorate Nationale de la Géologie et des Mines ('DNGM', the Malian National Directorate of Geology and Mines).

The Diendio licences have passed their legal time limit; Kodal does not intend to renew them nor to undertake exploration on these areas in the future. Although they remain registered in the Company's name, they have been removed from the table of concessions below.

Table of Concessions - Mali Lithium projects

Tenements	Country	Kodal Economic Ownership	Project / Joint Venture	Validity
Dogobala	Mali	90% economic interest via direct ownership following completion of option payments	Bougouni	Licence valid and in good standing. Arrêté No. 2018-1115 granted on13 April 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each
Foulaboula	Mali	90% economic interest via direct ownership following completion of option payments	Bougouni	Licence valid and in good standing. Arrêté No. 2018-1116 granted on 13 April 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each
Sogola Nord	Mali	90% economic interest. (Concession replaces part of Madina concession, which had expired).	Bougouni	Licence valid and in good standing. Arrete number 2020-0072 granted 22 January 2020 for an initial 3 year period, with option for 2 extensions of 2 years validity each
Fariedele	Mali	90% economic interest. (Concession replaces part of Madina concession, which had expired)	Bougouni	Licence valid and in good standing. Arrete number 2020-0073 granted 22 January 2020 for an initial 3 year period, with option for 2 extensions of 2 years validity each
Mafele Ouest	Mali	Held through Option to Purchase giving right to acquire 80% economic interest	Bougouni West	Licence valid and in good standing. Arrêté No. 2018-4537 granted on 31 December 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each
NKemene Ouest	Mali	Held through Option to Purchase giving right to acquire 80% economic interest	Bougouni West	Licence valid and in good standing. Arrêté No. 2018-4486 granted on 28 December 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each

Figure 1: Location of Kodal Bougouni and Bougouni West Lithium projects and prospect, Mali - See PDF

Gold Projects

The Group's Gold Projects are located in Côte d'Ivoire and Mali and consist of licences either directly 100% owned by the Group, or held via option agreements granting the Group exclusive rights to explore minerals over the area and containing a right to purchase the licences. In Mali, the licences are held through subsidiary company IGS Mali, a Malian registered company, and in Côte d'Ivoire by subsidiary companies International Goldfields Côte d'Ivoire SARL ("IGS CIV") and Corvette SARL ("Corvette"), Côte d'Ivoire registered companies.

In Côte d'Ivoire, the Group is the 100% owner of the Korhogo and Dabakala licences; during the year confirmation was received that the exploration licences for these concessions were each renewed for a further three-year term, expiring in April 2023.The Group is also applying for the Boundiali licence. The Group continued its joint venture with Resolute Mining Limited ("Resolute") in Côte d'Ivoire, with Resolute responsible for the maintenance and good standing of the licences held in the name of Corevtte CIV SARL, namely the Nielle, Tiebissou and M'Bahaikro (application) concessions.

In Côte d'Ivoire, the Group continues to pursue the Boundiali and M'Bahaikro applications with the DGMG and is looking to advance the process this year and also to finalise the renewal of the Tiebissou concession.

In Mali, the Group has two projects, the Nangalasso Project (including the Nangalasso, Sotian and Tiedougoubougou licence areas) and the SLAM Project (the Djelibani Sud licence). No change to the Mali gold exploration concessions occurred during the year.

All licences remain valid and in good standing pending receipt of formal documents for renewals or arrêtés.

The gold exploration licences are tabled below:

Table of Licences - Gold Exploration projects

Tenements	Country	Kodal Economic Ownership	Project / Joint Venture	Validity
Boundiali	Côte d'Ivoire	100% direct ownership (under application)	N/A	Licence application submitted and in process.
Korhogo	Côte d'Ivoire	100% direct ownership	N/A	Licence valid and in good standing. Renewal granted on 31 March 2020 for a 3 year term
Dabakala	Côte d'Ivoire	100% direct ownership	N/A	Licence valid and in good standing. Renewal granted on 31 March 2020 for a 3 year term
Niéllé	Côte d'Ivoire	100% direct ownership, may be reduced to 25% under JV agreement	Resolute JV	Licence valid and in good standing. Renewal decree received on the 28 February 2018 for a 3 year period.
Tiebissou	Côte d'Ivoire	100% direct ownership, may be reduced to 25% under JV agreement	Resolute JV	Licence valid and in good standing. Initial term expired 30 September 2018; an application for renewal has been lodged.
M'Bahiakro	Côte d'Ivoire	100% direct ownership, may be reduced to 25% under JV agreement	Resolute JV	Licence application submitted and in process.
Djelibani Sud	Mali	100% direct ownership	SLAM Project	Convention d'Etablissement granted on 21 December 2018. Application for Arrêté made and all fees paid.
Nangalasso	Mali	100% direct ownership following completion of option payments	Nangalasso Project	First renewal of licence granted on 1 November 2017; valid for 2 years with a further 2 year renewal available. Renewal extension has been lodged.
Sotian	Mali	Held through Option Agreement giving right to acquire 100% ownership.	Nangalasso Project	Arrêté No. 2018-1925 granted on 12 June 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each.
Tiedougoubougou	Mali	Held through Option Agreement giving right to acquire 100% ownership.	Nangalasso Project	Arrêté No. 2018-3319 granted on 4 September 2018 for initial 3 year period, with option for 2 extensions of 2 years validity each

Figure 2: Location of Kodal Gold Exploration projects, West Africa - see pdf

Norway Projects

The Company has reviewed the Norway projects and has formed the view that the potential for future development is low and the Company does not intend to undertake any work on the projects in the near future. The Company has taken the decision to not renew the Norway licences and consequently they are removed from the Tenure review.

BOUGOUNI LITHIUM PROJECT REVIEW

Geology and Resources

The Bougouni pegmatites are hosted within an intercalated sequence of Palaeoproterozoic (Birimian-age) pelitic metasediments and amphibolites of the Leo-Man Shield, which are variably intruded by syn- and post-orogenic granitoids. Mineral Resources were modelled for three separate prospects, Ngoualana, Boumou and Sogola-Baoulé, on the basis of defining continuity of the pegmatite occurrence utilising a nominal 0.3% Li2O lower cut-off to define the boundary and continuity of the potential mineralised bodies. The mineral resource estimate ("MRE") has a cut-off date for data of 19 December 2018, with the MRE completed and announced on 28 February 2019.

The geological interpretation has demonstrated strong continuity of mineralisation in the major pegmatite veins as well as the smaller subsidiary veins that have been identified in each prospect.

The Mineral Resources have been classified as Indicated and Inferred based on the guidelines specified in the JORC Code. The classification applied is based upon an assessment of geological understanding of the deposit, geological and mineralisation continuity, drill hole spacing, quality control results, search and interpolation parameters and an analysis of available density information. Areas which were coherently considered to meet the requirements to be classified as Indicated or Inferred were then defined on a per-object basis, and long section strings were digitised to provide constraining boundaries which were then applied on the per-object basis.

The Mineral Resource estimate for the Sogola-Baoule, Ngoualana and Boumou prospects are tabulated below. These mineral resources are reported in accordance with the JORC Code.

Prospect	Indicated			Inferred			Total
Prospect	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)
Sogola Baoule	8.4	1.09	91.9	3.8	1.13	42.8	12.2	1.10	134.8
Ngoualana	3.1	1.25	39.2	2.0	1.12	22.1	5.1	1.20	61.3
Boumou				4.0	1.02	40.4	4.0	1.02	40.4
TOTAL	11.6	1.13	131.2	9.7	1.08	105.3	21.3	1.11	236.5

Notes: Mineral resources are reported using a 0.5%Li₂O cut-off applied to the block model for each prospect. The Block model for each prospect is based on the geological model of pegmatite bodies based on a 0.3%Li₂O cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.

Bougouni Lithium Project Feasibility Study and Mining Licence Application

Kodal completed a Feasibility Study for the Bougouni Lithium project in January 2020 and lodged a Mining Licence application for the future development of an open pit mining and spodumene concentration processing operation. The Feasibility Study is based on the Mineral Resource defined for the three prospects detailed above.

The highlights of the Feasibility Study are:

· It presents a very robust mining operation:

o Minimum 8.5-year mine life;

o Producing on average 220,000 tonnes of 6% spodumene concentrate per annum, at life of mine ('LOM') lithium average metallurgical recovery of 71%, based on laboratory metallurgical recoveries of 75%;

o Total LOM will produce 1.94Mt of concentrate; and

o LOM revenue exceeding US$1.4bn, with an initial concentrate sale price of US$680/t based on operations commencing H2 2021, thereafter, increasing 2% year-on-year.

· Proposed 2Mtpa processing plant utilising a conventional flotation circuit to maximise spodumene recovery:

o Estimated C1 cash costs ofUS$431 per tonne concentrate (US$466 including royalties and sustaining capital).

· Capital requirement for development estimated to be US$117M plus contingency:

o Forecast payback period of 1.7 years (pre tax);

o IRR of 58% (51% post tax).

· Pre-tax Project NPV_7% of approximately US$300M (NPV_7% US$200M post-tax).

· Opportunities to improve Project design through:

o Continued process plant reviews;

o Mine scheduling and infrastructure planning;

o Reducing initial capital expenditure.

· Opportunities for expansion of resource base through immediate extensions of defined mineralisation and continued exploration of key target areas.

A summary of the key findings of the Study including the financial parameters, capital and operating cost estimates, open-pit design and schedule, processing plant design, proposed operation and transport of product (note all costs referred to are in US dollars) are presented below:

Project Capital Costs and Operating Costs

The Study incorporated extensive review and communication with various West African and industry-wide operation and supply groups to determine expected capital and operating costs of the proposed operation. This Study has identified key operators who have been able to provide confidence in a low-cost, high quality contract mining operation and these costs have been used to inform the optimisation for the open-pit mining, planning and the expected Project development. The estimated operating costs for the operation are summarised below:

Cost Centre	Cost Basis	Comment
	US$ or %
Mining Costs	$2.63	Per tonne of material mined (ore + waste)
Processing Cost	$16.33	Per tonne of ore processed
General & Administration	$2.92	Per tonne of ore processed
Concentrate Freight Costs	$93.60	Per tonne of concentrate produced
Other Costs
Royalties	3.0%	Of receipts from product sales
Local Partner Royalties	0.5%	Of receipts from product sales
Land Tax	$149,333	Over life of mine
ISCP on Turnover	3.0%	Of Gross cash flow from operations
Corporate Tax	25%	Of earnings before tax

These costs, when utilised in the optimisation studies, highlight a C1 (Brook Hunt) operating cost of US$431 per tonne of concentrate produced and benchmarks the Project as a low-cost producer. A summary of the operating cash costs is tabled below:

Area	Base Case (Total $M)	Cash Costs ($/t of production)
Mining Costs Processing Costs General & Admin Costs Selling Costs	334 275 47 182	172 141 24 94
Sub Total (C1 Cash Cost)	838	431
Royalties (Government & NSR)	50	26
Sustaining Capital Costs	16	9
Net Cash Operating Costs	904	466

As outlined above, the proposed development of the Project is based on open-pit mining and processing through a 2Mtpa processing plant. The capital costs to develop this Project have been estimated utilising key consultants with relevant West African project experience, and represent all costs required to bring the Project into operation. A summary of the proposed capital costs is tabled below:

Main Area	US$M
Construction Indirect Costs	4.4
Treatment Plant Costs	52.4
Reagents and Plant Services	6.0
Infrastructure Mining *	17.7 2.2
Management Costs	11.8
Owners Project Costs	13.5
Owners Operation Costs (Working Capital)	3.4
Project Freight and Transport Logistics	5.5
Subtotal	116.9
Contingency (10%)	11.7
Fees, Taxes & Duties	Excl.
Escalation	Excl.
Grand Total	128.6
* Mining cost is for mining mobilisation and establishment only. Pre-construction capital is accounted for in the mining contractor operating cost estimate.

These operating and capital costs were then assembled into the proposed mining and processing operation based on Indicated and Inferred Resources to develop a financial model in order to evaluate the economics of the operation. The estimate for revenue is based on a year-on-year estimated sliding scale lithium selling price for a 6% concentrate, Free on Board at the Port of San Pedro in Côte d'Ivoire. Concentrate selling price is based on a start price of $680/t for the first year of production (second half of 2021), which is considered reasonable under current market conditions, then increasing 2% year-on-year for the LOM. Summaries of the cash flow model inputs and the resulting cash flow model are tabled below:

Model Inputs

Variable

Units

Base Case

Mine Life

Ore Tonnes

Lithium Grade

Lithium metallurgical recovery

6% Lithium Concentrate Produced

Average Annual Production

Years

kilo-tonnes

8.5

16.0

1.03

71.0

1,942

218

Cash flow model results - based on sliding scale lithium price

Base Case Sliding Scale lithium sale price commencing US$680 per tonne concentrate ($'000)

Pre-Tax Cash Flow

Pre-Tax NPV @ 7%

Pre-Tax IRR

Payback Period

Life of Mine Revenue

395,766

293,460

57.8%

1.7 yrs

1,432,907

Post-Tax Cash Flow

Post-Tax NPV @ 7%

Post-Tax IRR

Payback Period

Life of Mine Revenue

306,186

200,769

50.9%

1.8 yrs

1,432,907

Mining

Conventional open-pit mining is considered as the preferred mining method for the operation at Bougouni given:

· the ore presents at or near surface;

· there is space to construct waste dumps;

· it is expected, with a high chance of success, to generate the best value; and

· the operation is planned to be a mine contractor run operation.

Three mining areas including four individual ultimate pits will be developed. Vegetation will be cleared and grubbed prior to topsoil stripping and later used to cover the topsoil stockpiles. Topsoil will be stockpiled around the open pits.

It is proposed that mining activities will be undertaken by an experienced contractor. There are a number of mining contractors operating in the region. Engaging an experienced mining contractor will have benefits, including reduced capital costs, reduced operational risk and reduced recruitment burden for the Company.

Future Minerals will retain responsibility for technical services comprising of mine planning, production scheduling, grade control, surveying and supervision and management of contract mining operations.

Pit optimisations were carried out using industry standard methods and WHITTLE™ 4x Software. The results of the open-pit optimisations were put in context of sensitivities, risks, contained ounces, mine life and total project size.

A proposed project layout is provided below:

Figure 3: Metallurgy and Process Plant - see pdf

The processing facility has been designed in accordance with accepted industry practice and the flowsheet incorporates unit operations that are well proven in the industry and commensurate with the testwork conducted and results achieved to date.

The plant layout provides ease of access to all equipment for operating and maintenance requirements while maintaining a compact footprint to minimise construction costs. The key Project and ore specific design criteria for the processing facility design are as follows:

• 2,000,000 t/y of Run-of-Mine ("ROM") ore through the crushing plant operating at 65% utilisation (5,694 h/y).

• Surface plant utilisation of 85% (7,446 h/y) supported by crushed ore storage and standby equipment in critical areas.

• Sufficient automated plant control to minimise the need for continuous operator interface and allow manual override and control if and when required.

The testwork supports a flowsheet that utilises flotation to recover spodumene to a saleable concentrate. The laboratory flowsheet can recover 75% of Li2O to a concentrate grade of 6%. It is noted that the open-pit optimisations and mine scheduling were based on a more conservative recovery of 68%. Due to the timing of Study deliverables, this value had to be predicted in advance of finalising laboratory testwork. The laboratory scale recovery of 75% provided a more encouraging result but for the purposes of the financial modelling, a reduced metallurgical recovery of 71% was selected to reflect the likelihood of circuit losses when scaling up from the laboratory to a commercial production facility. This does therefore reflect a degree of conservatism in the Company's financial modelling.

As a result of the relatively conservative recovery value selected for the mine design process, the Project has an effective additional contingency margin within the pit inventories.

A flowsheet of the proposed processing plant and a 3-D representation are provided below:

Figure 4: 3D representation of the Project - See PDF

Project Implementation, Operations and Transport

It is proposed that an experienced Engineering firm (the "Engineer") will be engaged to provide Engineering, Procurement and Construction Management ("EPCM") services associated with the development of the process plant and associated infrastructure and services. Specialist consultants will be engaged to address specific elements of the Project not within the core competency of the Engineer.

Responsibility for the execution and delivery of the various Project scope elements will be divided between the Engineer and the Company. The implementation approach requires close integration with and collaboration between Company and Engineer to ensure all aspects of the Project development are executed efficiently.

Given the remote location of the Project in Mali, it will need to be self-sufficient in as many areas as possible. It is expected that the local Malian workforce will not have any previous mining and plant operation experience and that a core group of experienced Malian management and supervision, supplemented by expatriates, will be required for initial ramp-up, management and training of the operation.

As a result, an expatriate team has been included for start-up and establishment of procedures. It is anticipated that following two to three years of operation and training these expatriate roles will transfer to Malians.

The entire operations workforce will be under the control of a General Manager who will be supported by five main departments each with a manager heading the department; namely mining, exploration, processing, administration and health, safety, environment and community relations ("HSEC").

Transport and logistics are a significant component of the Project given the remote nature of the site. Internationally sourced goods, reagents and consumables will be containerised and transported by liner services to Abidjan or San Pedro ports in Côte d'Ivoire for forwarding on to the site. A freight forwarder will be engaged to clear port customs and organise transport to site. These services will be provided by a specialist West African transport and logistic firm with extensive experience in containerised and bulk commodity transport.

The Study determined costs for export of lithium concentrate product, which included consideration of ports in Côte d'Ivoire, Senegal and other regional facilities. Following consideration of transport routes, reliability and distance, it was concluded that the San Pedro Port provides the most cost-effective product export destination for the Project. A visit was conducted to the San Pedro Port Authority where Future Minerals was well received through a commitment to continue to work together in providing port access for product export.

Bulk Sample

In May 2020, Kodal received results for the testwork on the bulk sample that highlight opportunity for improvement of the feasibility study as the metallurgical recovery of up to 83% returned from the testwork is significantly higher than the 71% recovery used on the study. The test work was completed by Shandong Shengli Environment Protection Technology Co Ltd ('Shengli') a company associated with Shandong Ruifu Lithium Co Ltd ('Ruifu') at its Yishu plant in Shandong province, People's Republic of China. The Yishui processing plant is a 2 million tonne per annum (Mtpa) DMS (dense media separation) and flotation plant, purpose built for the concentration of spodumene mineralisation from pegmatite ore.

The bulk sample was assayed in the plant laboratory with lithium grades from 10 samples varying from 1.24% to 1.47% and is representative of the Ngoualana prospect. The bulk sample was processed via up-front crushing to reduce feed stock size to below 10mm for effective DMS extraction. The crushed ore is fed over a primary sizing screen whereby finer material reports to a flotation circuit, with the coarser material treated in the DMS circuit.

Figure 5: Primary sizing screen separating coarse DMS feed material from the finer Flotation feed material - see pdf

The dual processing streams achieved improved recovery over the standalone flotation circuit used for the feasibility study. As a result, the overall recovery achieved by Shengli in testing the bulk sample reached 83% compared with 71% for the flotation only test work that supports the feasibility study assumptions. The quality of saleable spodumene product produced retained a 5.5% to 6% Li₂O grade in both instances.

It is noted that DMS recoveries have always proven to be higher for the Ngoualana deposit compared with the recoveries from the Sogola Baoule and Boumou prospects in laboratory testing. It was the reduced DMS recoveries from these two deposits that substantiated the decision to revert to whole of ore processing via flotation only that was assessed in the recent optimisation and Feasibility Study.

With the marked improvement in recovery experienced at the Shengli processing facility, it is possible that improved project economics could be achieved by adopting a similar DMS-flotation plant for Bougouni. Furthermore, the testing confirms that the Shengli facility is suitable for processing Bougouni ores and further synergies may be able to be gained through the adoption of the same plant configuration.

Figure 6: Flotation product undergoing filtration for reduction of moisture content to <5%

In order to investigate these potential benefits, Kodal will undertake a study optimisation process using the Feasibility Study as a basis. The optimisations will need to consider the benefit of improved overall recovery, against any additional capital and operating costs of a combined DMS-flotation circuit. The optimisation studies will be completed internally and the results of this work are expected to be finalised by the end of 2020.

This bulk sample test work confirms that the spodumene concentrate from Bougouni is low in impurities and aligns with previous test work completed by Ruifu that has demonstrated the suitability of the Bougouni spodumene concentrate to achieve downstream processing of high quality, low impurity battery grade lithium carbonate.

Gold Projects - Exploration Review

Kodal has continued to hold gold exploration projects in Mali and Cote d'Ivoire. For the projects in Côte d'Ivoire, Kodal has maintained the concessions in good standing with exploration review and geochemical surveys continuing on the Korhogo and Dabakala projects. In addition, the Côte d'Ivoire Joint Venture with Resolute is continuing with a focus on the Nielle concession where a drilling programme is planned to commence following the cessation of the annual wet season.

In Cote d'Ivoire the geochemical sampling by Kodal consisted of conventional surface samples and termite mound sampling (where available) on a nominal 2km x 200m sample spacing at Dabakala (225 samples) infilling an area of previously defined gold anomalism, and a nominal 1km x 200m spacing at Korhogo (190 samples) targeting infill at several gold anomalous zones and structural targets within the project.

The Dabakala project is a single concession in central Cote d'Ivoire where previous work completed by the Company highlighted an extensive surface geochemical anomaly and field geological mapping indicated the association of sheared and altered geology associated with the anomaly. This is a large surface anomaly, extending for over 10km of strike and up to 800m in width and exploration is at an early stage. The follow-up work completed by the Company infilled the anomaly to a nominal 1km x 200m spacing over the key anomaly (and notes that still is very wide and reconnaissance level) and assay results received confirm the anomaly with results up to 97ppb returned and confirming the extent of the anomaly. Further work is required to define this prospect prior to initial drill testing.

The Korhogo project is a single concession in north central Cote d'Ivoire and several phases of geochemical sampling has defined surface geochemical anomalies. The recent sampling by the company has confirmed gold anomalous zones extending for over 2kms in strike and up to 600m in width. Further exploration is required to review these targets and prioritise further work.

The Company is continuing to review opportunities for the prospective suite of gold projects.

Future Strategy and Work programme for 2020/21

The next important milestone for Kodal will be the granting of a Mining licence for the Bougouni Lithium project. The licence application process is very well advanced with recent confirmation in May 2020 that the Feasibility Study has been accepted, that no further technical and financial meetings are required and that the Mining Licence area and new permit boundaries have been agreed. The Company maintains its expectation of the licence being granted as all due processes are now complete although the Covid-19 restrictions have impacted on the Mali Government's process and the timing of the issuance of the Mining Licence documents remains uncertain. Once the licence is issued, the Company will have achieved a fully permitted project for mining operations.

The Feasibility Study, and recent results for the bulk sample testing, have highlighted areas for further review and assessment that may have significant impact on the project. These include:

· Resource growth and increase of head grade from further exploration in the highly prospective areas contained within existing exploration licences;

· Reduction in capital cost through further optimisation of the flowsheet and consideration of packaged or modular plant supplies;

· Investigation of more favourable power supply solutions to reduce operating costs;

· Optimisation of mine scheduling and drill and blast strategy; and

· Cost savings relating to the construction of the tailings storage facility. Currently the design of Stage 1 is based on 24 months of capacity to combat potential for adverse climatic conditions. Potentially this could be reduced to about 18 months' capacity if the sequencing of construction is favourable with respect to maximising construction in the dry season

In addition to the focus on our flagship Bougouni Lithium project, the Company will continue to explore and improve its high priority gold projects in Mali and Côte d'Ivoire in this strong gold market. An exploration programme has been prepared for further work at the Nangalasso project in Mali and the Dabakala project in Côte d'Ivoire and we hope to commence work after the end of the rainy season in the last quarter of this year.

I look forward to being able to report back on our development strategy during the coming year.

Bernard Aylward

Chief Executive Officer

21 July 2020

Finance Review

Results of operations

For the year ended 31 March 2020, the Group reported a loss for the year of £630,000 before Other Comprehensive Income compared to a loss of £713,000 in the previous year. Operational activity has remained broadly in line with last year as the Group has completed the Feasibility Study work at Bougouni and has continued the running of offices in Mali and Côte d'Ivoire. Further information is provided in the Operational Review above.

During the year, the Group invested £1,602,000 (2019: £3,463,000) in exploration and evaluation expenditure on its various projects, the large majority of which related to its Bougouni Lithium project. As a result, the carrying value of the Group's capitalised exploration and evaluation expenditure increased from £6,951,000 to £8,643,000. At 31 March 2020, the carrying value of the gold projects in Mali and Cote d'Ivoire was £1,179,000 (2019: £1,070,000) and of the lithium projects in Mali was £7,464,000 (2019: £5,881,000).

Cash balances as at 31 March 2020 were £33,000, a decrease of £1,375,000 on the previous year's level of £1,408,000. Net assets of the Group at the year-end were £8,052,000 (2019: £7,803,000).

Financing

During the year, the Group has successfully completed a number of fundraisings.

In July 2019, the Company announced a fundraising of £575,000 before expenses through the issue of 718,750,000 ordinary shares including 250,000,000 shares for £200,000 placed with SVS Securities plc ("SVS"), a London based broking firm regulated by the Financial Conduct Authority ("FCA"). The shares were issued and admitted to trading on AIM on 2 August 2019 and the fundraising became unconditional at this time. On 5 August 2019, the FCA announced that SVS had entered special administration and subsequently SVS defaulted on its contractual commitment to pay for its shares. Under legal advice, the Company terminated the contract with SVS. 250,000,000 shares relating to SVS were not delivered to SVS and the shares remained under the control of the Company.

In October 2019, Kodal announced that it had completed a fundraising of £250,000 before expenses, for the purpose of further developing the Bougouni Lithium project, through the issue of 250,000,000 new ordinary shares as well as the placing out of the 250,000,000 ordinary shares allotted to SVS Securities plc in the fundraising announced in July 2019.

Subsequent to the year-end, in April 2020 the Company entered into a Financing Facility with Riverfort Global Opportunities PCC and YA II PN Ltd (the 'Investors'), who subscribed for 1,428,571,429 Ordinary Shares at a price of 0.035 pence per share, raising £0.5 million before expenses. These subscription proceeds were used immediately to satisfy the Company's obligation to pay £0.5 million to the Investors to enter into an Equity Sharing Agreement, under which the Investors will make monthly cash payments to the Company for a period of 12 months (which period can be shortened or extended up to 24 months at the Investors' discretion) based on the performance of Kodal's share price.

On 14 July 2020 the Company entered into a Convertible Loan Note Agreement with the Investors for a total commitment of $1.5 million before expenses with a first tranche of $750,000 advanced at closing, and a second tranche at a date of mutual agreement. Advances under the Loan Agreement have a 15-month term and carry interest at a rate of 9.85% per annum payable monthly . Investors have the option to convert outstanding principal and interest into new ordinary shares in the Company; conversion in shares is deferred for the first 90 days, and thereafter is at the lower of 130% of the share price at closing and 93% of the average of 3 daily VWAPs in the 10 days prior to conversion. The Company can repay the loan at any time in cash.

Impact of the Covid-19 pandemic

During the year to 31 March 2020, the Group's primary focus has been to complete the feasibility study and to submit its licence application for the Bougouni Lithium project to the Malian authorities, which it did in January 2020. Thereafter, in the first few months of 2020, there has been relatively limited activity on the ground in Mali and Cote d'Ivoire.

Accordingly, the lockdown and travel ban imposed in many countries, including in West Africa, has had limited impact on the Group's planned operations, but all field operations have ceased. Due to the disruption caused to normal working patterns, there is less clarity over the process for, and timing of, the decision on the granting of a mining licence by the Malian authorities.

The most significant impact on the Company has been the ability to raise funding at an important time in the Group's development caused by the substantial disruption to global equity markets a result of the economic impact of the pandemic. Responding to these events, the directors have sought to minimise the Group's overheads and outgoings in order to preserve working capital, by reducing operational activity, with commensurate salary reductions of local staff; fee and salary cuts for management and directors, with back pay taken in shares; and reaching agreements with key suppliers on reduced charges and extending payment timings. The Company was able to raise some funds at the height of the market uncertainty in early April 2020, and these will be received over a 12 month period. Although major markets have recovered somewhat, the environment for financing smaller resource companies remains challenging; however, the Company has recently been able to agree a $1.5 million loan note funding commitment, with $750,000 drawn down in July 2020.

The Convertible Loan Note Agreement entered into in July 2020 will now enable the Company to finance its plans to further develop the Bougouni Lithium project, pay for the mining licence, fund additional exploration activity and cover ongoing administrative overheads. These additional funds will enable us to finance our plans to further develop our Bougouni Lithium project , pay for the mining licence, fund additional exploration activity of our gold assets and explore new investment opportunities identified by the Company in the gold space.

Going concern and funding

The Group has not earned revenue during the year to 31 March 2020 as it is still in the exploration and development phases of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new shares and other equity linked facilities.

As at 31 March 2020, the Group held cash balances of £33,000 (2019: £ 1,408,000 ). As noted above, in April 2020 the Company entered into Financing Facility which will provide further funds on a monthly basis over approximately the next 12 months; however, the size of each month's receipts is dependent on the Company's share price during that month and hence the exact quantum of receipts cannot be known with any certainty. The Company also entered into a Convertible Loan Note Agreement for $1.5 million in July 2020, drawing down $750,000 on closing, with a second tranche of $750,000 to be drawn at a mutually agreed date. As a result, the Group's cash balances at 20 July 2020 were £598,433.

The Directors have prepared cash flow forecasts for the period ending 30 September 2021. The forecasts include payment for the mining licence, further development of the Feasibility Study, additional exploration activity for both gold and lithium as well as covering ongoing overheads ; the drawdown of the second tranche of $750,000 is also included based on the directors' reasonable expectation of receipt. Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further fund raising. Accordingly, the financial statements have been prepared on a going concern basis.

The financial statements are set out further below.

For further information, please visit www.kodalminerals.com or contact the following:

Kodal Minerals plc

Bernard Aylward, CEO

Tel: +61 418 943 345

Allenby Capital Limited, Nominated Adviser

Jeremy Porter/Nick Harriss

Tel: 020 3328 5656

SP Angel Corporate Finance LLP, Financial Adviser & Broker

John Mackay

Tel: 020 3470 0470

St Brides Partners Ltd, Financial PR

Susie Geliher/Cosima Akerman

Tel: 020 7236 1177

About Kodal Minerals

Kodal Minerals' primary focus is on the rapid advancement towards production of its flagship Bougouni Lithium project in Southern Mali. The JORC Resource Estimate places the Project in the top 15 hard rock lithium projects globally and was calculated using only three of the eight currently recognised prospects demonstrating the significant exploration upside potential remaining across the 450km² project area. The Mineral Resource estimate for the Ngoualana, Sogola-Baoule and Boumou prospects are tabulated below. These mineral resources are reported in accordance with the JORC Code:

Prospect	Indicated			Inferred			Total
Prospect	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)	Tonnes (Mt)	Li₂O% Grade	Contained Li₂O (kt)
Sogola_Baoule	8.4	1.09	91.9	3.8	1.13	42.8	12.2	1.10	134.8
Ngoualana	3.1	1.25	39.2	2.0	1.12	22.1	5.1	1.20	61.3
Boumou				4.0	1.02	40.4	4.0	1.02	40.4
TOTAL	11.6	1.13	131.2	9.7	1.08	105.3	21.3	1.11	236.5

Notes: Mineral resources are reported using a 0.5%Li₂O cut-off. Figures may not sum due to rounding. The contained metal is determined by the estimated tonnage and grade.

The Bougouni Lithium project and recently acquired 200km² Bougouni West project are located in an emerging lithium province that is already attracting the attention of investors and off-take partners interested in securing a long-term supply of lithium. With the support of its strategic investor and off-take partner Suay Chin International Pte, a Singapore-based lithium and chemical trader, Kodal Minerals is well positioned to continue its ambitious development programme at Bougouni.

Further to this, Kodal Minerals is the manager of additional lithium and gold projects that are undergoing low cost exploration programmes in addition to JV funded gold properties in Cote d'Ivoire that offer potentially significant long-term value.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2020

	Note	Year ended 31 March 2020	Year ended 31 March 2019
		£	£
Continuing operations
Revenue		-	-

Administrative expenses		(590,389)	(613,450)
Share based payments	5	(39,226)	(109,241)

OPERATING LOSS		(629,615)	(722,691)

Finance income		111	10,080

LOSS BEFORE TAX	2	(629,504)	(712,611)

Taxation	6	-	-

LOSS FOR THE YEAR FROM CONTINUING OPERATIONS		(629,504)	(712,611)

OTHER COMPREHENSIVE INCOME

Items that may be subsequently reclassified to profit or loss

Currency translation gain / (loss)		148,618	(113,844)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR		(480,886)	(826,455)

Loss per share
Basic and diluted - loss per share on total earnings (pence)	4	(0.0072)	(0.0096)

The loss for the current and prior years and the total comprehensive income for the current and the prior years are wholly attributable to owners of the parent company.

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF FINANCIAL POSITION

AS AT 31 MARCH 2020

		Group 31 March 2020	Group 31 March 2019	Company 31 March 2020	Company 31 March 2019
	Note	£	£	£	£
NON-CURRENT ASSETS
Intangible assets	7	8,642,568	6,951,209	-	-
Property, plant and equipment	8	14,549	19,901	-	-
Amounts due from subsidiary undertakings	9	-	-	7,104,085	6,511,913
Investments in subsidiary undertakings	9	-	-	512,373	512,373

		8,657,117	6,971,110	7,616,458	7,024,286
CURRENT ASSETS
Other receivables	10	19,978	21,011	19,978	21,011
Cash and cash equivalents		33,221	1,408,393	28,147	1,299,397

		53,199	1,429,404	48,125	1,320,408

TOTAL ASSETS		8,710,316	8,400,514	7,664,583	8,344,694

CURRENT LIABILITIES
Trade and other payables	11	(658,713)	(597,251)	(239,230)	(194,401)

TOTAL LIABILITIES		(658,713)	(597,251)	(239,230)	(194,401)

NET ASSETS		8,051,603	7,803,263	7,425,353	8,150,293

EQUITY
Attributable to owners of the parent:
Share capital	12	2,889,606	2,566,418	2,889,606	2,566,418
Share premium account	12	12,514,604	12,147,792	12,514,604	12,147,792
Share based payment reserve		729,823	690,597	729,823	690,597
Translation reserve		13,175	(135,443)	-	-
Retained deficit		(8,095,605)	(7,466,101)	(8,708,680)	(7,254,514)

TOTAL EQUITY		8,051,603	7,803,263	7,425,353	8,150,293

The Company's loss for the year ended 31 March 2020 was £1,454,166 (2019: £632,780).

The financial statements were approved and authorised for issue by the board of directors on 21 July 2020 and signed on its behalf by

Robert Wooldridge

Director

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2020

	Share capital	Share premium account	Share based payment reserve	Translation reserve	Retained deficit	Total equity
Group	£	£	£	£	£	£

At 31 March 2018	2,038,903	10,467,337	581,356	(21,599)	(6,753,490)	6,312,507

Comprehensive income
Loss for the year	-	-	-	-	(712,611)	(712,611)
Other comprehensive income
Currency translation (loss)	-	-	-	(113,844)	-	(113,844)
Total comprehensive income for the year	-	-	-	(113,844)	(712,611)	(826,455)

Transactions with owners
Share based payment	-	-	109,241	-	-	109,241
Proceeds from shares issued	527,515	1,680,455	-	-	-	2,207,970
At 31 March 2019	2,566,418	12,147,792	690,597	(135,443)	(7,466,101)	7,803,263

Comprehensive income
Loss for the year	-	-	-	-	(629,504)	(629,504)
Other comprehensive income
Currency translation gain	-	-	-	148,618	-	148,618
Total comprehensive income for the year	-	-	-	148,618	(629,504)	(480,886)

Transactions with owners
Share based payment	-	-	39,226	-	-	39,226
Proceeds from shares issued	323,188	366,812	-	-	-	690,000

At 31 March 2020	2,889,606	12,514,604	729,823	13,175	(8,095,605)	8,051,603

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2020

	Share capital	Share premium account	Share based payment reserve	Retained deficit	Total equity
Company	£	£	£	£	£

At 31 March 2018	2,038,903	10,467,337	581,356	(6,621,734)	6,465,862

Comprehensive income
Loss for the year	-	-	-	(632,780)	(632,780)

Total comprehensive income for the year	-	-	-	(632,780)	(632,780)

Transactions with owners
Share based payment	-	-	109,241	-	109,241
Proceeds from shares issued	527,515	1,680,455	-	-	2,207,970
At 31 March 2019	2,566,418	12,147,792	690,597	(7,254,514)	8,150,293

Comprehensive income
Loss for the year	-	-	-	(1,454,166)	(1,454,166)

Total comprehensive income for the year	-	-	-	(1,454,166)	(1,454,166)

Transactions with owners
Share based payment	-	-	39,226	-	39,226
Proceeds from shares issued	323,188	366,812	-	-	690,000
At 31 March 2020	2,889,606	12,514,604	729,823	(8,708,680)	7,425,353

CONSOLIDATED AND PARENT COMPANY STATEMENTS OF CASH FLOWS

FOR THE YEAR ENDED 31 MARCH 2020

		Group Year ended	Group Year ended	Company Year ended	Company Year ended
		31 March 2020	31 March 2019	31 March 2020	31 March 2019
	Note	£	£	£	£
Cash flows from operating activities
Loss before tax		(629,504)	(712,611)	(1,454,166)	(632,780)
Adjustments for non-cash items:
Share based payments		39,226	109,241	39,226	109,241
Operating cash flow before movements in working capital		(590,278)	(603,370)	(1,414,940)	(523,539)

Movement in working capital
Decrease / (increase) in receivables		1,033	(12,246)	1,033	(12,246)
Increase in payables		61,463	265,859	44,828	114,667
Net movements in working capital		62,496	253,613	45,861	102,421

Net cash outflow from operating activities		(527,782)	(349,757)	(1,369,079)	(421,118)

Cash flows from investing activities
Purchase of intangible assets	7	(1,554,353)	(3,371,781)	-	-
Purchase of property, plant and equipment	8	-	(20,014)	-	-
Loans to subsidiary undertakings		-	-	(592,171)	(3,561,780)
Net cash outflow from investing activities		(1,554,353)	(3,391,795)	(592,171)	(3,561,780)

Cash flow from financing activities
Net proceeds from share issues	12	690,000	2,207,970	690,000	2,207,970

Net cash inflow from financing activities		690,000	2,207,970	690,000	2,207,970

(Decrease) in cash and cash equivalents		(1,392,135)	(1,533,582)	(1,271,250)	(1,774,928)
Cash and cash equivalents at beginning of the year		1,408,393	3,123,549	1,299,397	3,074,325
Exchange gain / (loss) on cash		16,963	(181,574)	-	-

Cash and cash equivalents at end of the year		33,221	1,408,393	28,147	1,299,397

Cash and cash equivalents comprise cash on hand and bank balances.

PRINCIPAL ACCOUNTING POLICIES

FOR THE YEAR ENDED 31 MARCH 2020

Basis of preparation

The consolidated financial statements of Kodal Minerals Plc are prepared in accordance with the historical cost convention and in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by the European Union ("EU") and in accordance with the provisions of the Companies Act 2006. The Company's ordinary shares are quoted on AIM, a market operated by the London Stock Exchange.

The financial information set out in this preliminary announcement does not constitute the company's statutory financial statements for the years ended 31 March 2020 or 2019 but is derived from those financial statements. Statutory financial statements for 2019 have been delivered to the registrar of companies and those for 2020 will be delivered in due course. The auditors have reported on those financial statements; their reports were (i) unqualified (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.768125

Going concern

The Group has not earned revenue during the year to 31 March 2020 as it is still in the exploration and evaluation phase of its business. The operations of the Group are currently being financed from funds which the Company has raised from the issue of new shares and other equity linked facilities.

As at 31 March 2020, the Group held cash balances of £33,000 (2019: £1,408,000). The outbreak of the Covid-19 pandemic at the beginning of 2020 cause significant disruption to global equity markets and impacted on our ability to readily raise funding for our ongoing development and exploration programmes at a crucial juncture. As noted on page 19, in April 2020, during these uncertain market conditions, the Company entered into a Financing Facility which will provide further funds on a monthly basis over approximately the next 12 months; however, the size of each month's receipts is dependent on the Company's share price during that month and hence the exact quantum of receipts cannot be known with any certainty. The Company also entered into a Convertible Loan Note Agreement for $1.5 million in July 2020, drawing down $750,000 on closing, with a second tranche of $750,000 to be drawn at a mutually agreed date. As a result the Group's cash balances at 20 July 2020 were £598,433.

The Directors have prepared cash flow forecasts for the period ending 30 September 2021. The forecasts include payment for the mining licence, further development of the Feasibility Study, additional exploration activity for both gold and lithium as well as covering ongoing overheads; the drawdown of the second tranche of $750,000 is also included based on the directors' reasonable expectation of receipt. Further funding will be required in due course, but the forecasts show that the Group has sufficient cash resources available to allow it to continue as a going concern and meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements without the need for a further fund raising. Accordingly, the financial statements have been prepared on a going concern basis.

Critical accounting judgements and estimates

The preparation of these consolidated financial statements in accordance with International Financial Reporting Standards requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. IFRSs also require management to exercise its judgement in the process of applying the Group's accounting policies.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year are addressed below.

Exploration and evaluation expenditure

In accordance with the Group's accounting policy for exploration and evaluation expenditure, after obtaining licences giving legal rights to explore in the project area, all exploration and evaluation costs for each project are capitalised as exploration and evaluation assets.

The exploration and evaluation assets for each project are assessed for impairment when such facts and circumstances suggest that the carrying value of the assets may exceed the recoverable amount.

The directors have assessed the Group's Gold Projects in Mali and Côte d'Ivoire that are not part of the joint venture agreements and determined that they remain prospective. Accordingly, the directors have determined to continue to maintain these licences and explore ways for the Group to advance these prospective areas most effectively. Accordingly, no impairment review has been conducted on these assets.

The directors have assessed the Group's Bougouni Lithium project in Mali, taking into account the Preliminary Feasibility Study published during the year. This project continues to be evaluated and has not yet entered into development; there is no indication of impairment. Accordingly, no impairment review has been conducted on these assets.

The Group's exploration activities and future development opportunities are dependent upon maintaining the necessary licences and permits to operate, which typically require periodic renewal or extension. In Mali and Côte d'Ivoire, the process of renewal or extension of a licence can only be initiated on expiry of the previous term and takes time to be processed by the relevant government authority. Until formal notification is received there is a risk that renewal or extension will not be granted.

As detailed in the Operational Review, at the date of these financial statements, the Group's key exploration licences are current. As detailed in note 7, the total carrying value of the exploration and evaluation assets at 31 March 2020 was £8.6 million (2019: £7.0 million). The Group complies with the prevailing laws and regulations relating to these licences and ensures that the regulatory reporting and government compliance requirements for each licence are met.

Valuation of warrants and share options

In accordance with the Group's accounting policy for equity settled transactions, all equity settled share-based payments are measured at fair value at the date of issue. Fair value is determined by using the Black-Scholes option pricing model based on the terms of the options and warrants, the Company's share price at the time and assumptions for volatility and exercise date. The assumptions used to value the options and warrants are detailed in note 5.

For options awarded to the directors, the award has been considered to be in relation to their overall contribution to the Group and, accordingly, the charge has been included within operating costs in the Consolidated Statement of Comprehensive Income rather than treated as an exploration and evaluation cost and capitalised against specific projects. For the award of warrants associated with the raising of funds through the issue of new shares, the charge has been treated as a share issue expense and offset against the share premium account.

Recoverability of Intercompany Balances to Subsidiary Undertakings

The Company has outstanding intercompany balances from its directly held subsidiaries resulting from the primary method of financing the activity of those subsidiaries. The balances are shown in the Company balance sheet. However, there is a risk that the subsidiaries will not commence sufficient revenue generating activities and that the carrying amount of the intercompany balances will, therefore, exceed the recoverable amount. Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances , including entering production, project/asset sales, and insolvency . Given the current global financial disruption and expected future economic impact caused by the pandemic, management believes the risk of potential credit loss has increased and so has recognised a provision of £877,000 against those balances.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2020

1. SEGMENTAL REPORTING

The operations and assets of the Group in the year ended 31 March 2020 are focused in the United Kingdom and West Africa and comprise one class of business: the exploration and evaluation of mineral resources. Management have determined that the Group had three operating segments being the West African Gold Projects, the West African Lithium Projects and the UK administration operations. The Parent Company acts as a holding company. At 31 March 2020, the Group had not commenced commercial production from its exploration sites and therefore had no revenue for the year.

Year ended 31 March 2020	UK	West Africa	West Africa	Total
		Gold	Lithium
	£	£	£	£
Administrative expenses	(589,806)	(500)	(83)	(590,389)
Share based payments	(39,226)	-	-	(39,226)
Finance income	111	-	-	111
Loss for the year	(628,921)	(500)	(83)	(629,504)

At 31 March 2020
Other receivables	19,978	-	-	19,978
Cash and cash equivalents	29,516	3,536	169	33,221
Trade and other payables	(239,230)	(1,488)	(417,995)	(658,713)
Intangible assets - exploration and evaluation expenditure	-	1,178,567	7,464,001	8,642,568
Property, plant and equipment	-	-	14,549	14,549
Net (liabilities) / assets at 31 March 2020	(189,736)	1,180,615	7,060,724	8,051,603
Year ended 31 March 2019	UK	West Africa	West Africa	Total
		Gold	Lithium
	£	£	£	£
Administrative expenses	(574,431)	(478)	(38,541)	(613,450)
Share based payments	(109,241)	-	-	(109,241)
Finance income	10,080	-	-	10,080
Loss for the year	(673,592)	(478)	(38,541)	(712,611)

At 31 March 2019
Other receivables	21,011	-	-	21,011
Cash and cash equivalents	1,301,308	34,412	72,673	1,408,393
Trade and other payables	(194,401)	-	(402,850)	(597,251)
Intangible assets - exploration and evaluation expenditure	-	1,070,348	5,880,861	6,951,209
Property, plant and equipment	-	-	19,901	19,901
Net assets at 31 March 2019	1,127,918	1,104,760	5,570,585	7,803,263

The Group has ceased all activities in Norway and the Norwegian subsidiaries were liquidated during the year.

2. LOSS BEFORE TAX

The loss before tax from continuing activities is stated after charging:

	Group Year ended 31 March 2020	Group Year ended 31 March 2019
	£	£
Fees payable to the Company's auditor	30,000	30,500
Share based payments (note 5)	39,226	109,241
Directors' salaries and fees	164,939	136,061
Employer's National Insurance	1,956	3,645

Amounts payable to RSM UK Audit LLP and its associates in respect of both audit and non-audit services are as follows;

	Group Year ended 31 March 2020	Group Year ended 31 March 2019
	£	£
Audit services
- statutory audit of parent and consolidated accounts	30,000	30,500

3. EMPLOYEES' AND DIRECTORS' REMUNERATION

The average number of people employed in the Company and the Group is as follows:

Group

31 March 2020

Group

31 March 2019

Company

31 March 2020

Company

31 March 2019

Number

Average number of employees (including directors):

The remuneration expense for directors of the Company is as follows:

	Year ended 31 March 2020	Year ended 31 March 2019
	£	£
Directors' remuneration	164,939	136,061
Directors' social security costs	1,956	3,645
Total	166,895	139,706

In addition to the amounts included above, £67,300 (2019: £69,650) of the directors' remuneration cost has been treated as Exploration and Evaluation expenditure.

	Directors' salary and fees year ended 31 March 2020	Share based payments year ended 31 March 2020 (see note 5)	Total year ended 31 March 2020
	£	£	£
Bernard Aylward	111,763	1,776	113,539
Luke Bryan (a)	5,385	1,776	7,161
Charles Joseland (c)	33,430	9,564	42,994
Mark Pensabene	11,661	2,294	13,955
Robert Wooldridge	45,000	888	45,888
Qingtao Zeng (b)	25,000	1,321	26,321
	232,239	17,619	249,858

	Directors' salary and fees year ended 31 March 2019	Share based payments year ended 31 March 2019 (see note 5)	Total year ended 31 March 2019
	£	£	£
Luke Bryan (a)	20,000	20,615	40,615
Robert Wooldridge	45,000	10,308	55,308
Bernard Aylward	115,711	20,615	136,326
Qingtao Zeng (b)	25,000	4,701	29,701
	205,711	56,239	261,950

In addition to the amounts included above, Novoco Mine Engineering Limited, a company wholly owned by Luke Bryan, provided consultancy services to the Group during the year and received fees of £nil (2019: £12,075).

In addition to the amounts included above, Geosmart Consulting Pty Ltd, a company wholly owned by Qingtao Zeng, provided consultancy services to the Group during the year and received fees of £13,480 (2019: £44,660).

In addition to the amounts included above, Carolus Consulting Ltd, a company wholly owned by Charles Joseland, provided consultancy services to the Group during the year and received fees of £1,500 (2019: £5,000).

4. LOSS PER SHARE

Basic loss per share is calculated by dividing the loss for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

The following reflects the result and share data used in the computations:

	Loss	Weighted average number of shares	Basic loss per share (pence)
	£
Year ended 31 March 2020	(629,504)	8,786,936,058	0.0072
Year ended 31 March 2019	(712,611)	7,444,317,009	0.0096

Diluted loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Options in issue are not considered diluting to the loss per share as the Group is currently loss making. Diluted loss per share is therefore the same as the basic loss per share.

5. SHARE BASED PAYMENTS

The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

	Year ended 31 March 2020	Year ended 31 March 2019
Share options outstanding	Number	Number
Opening balance	195,000,000	195,000,000
Issued in the year	20,000,000	-
Lapsed in the year	(10,000,000)
Closing balance	205,000,000	195,000,000

	Year ended 31 March 2020	Year ended 31 March 2019
Warrants outstanding	Number	Number
Opening balance	205,000,000	25,000,000
Issued in the year	-	180,000,000
Closing balance	205,000,000	205,000,000

Options outstanding for each of the directors at the year-end are outlined below:

Exercisable between	Bernard Aylward	Robert Wooldridge	Qingtao Zeng	Charles Joseland

8 May 2017 - 8 May 2022	25,000,000	12,500,000	-	-
8 May 2018 - 8 May 2023	12,500,000	6,250,000	-	-
8 May 2019 - 8 May 2024	12,500,000	6,250,000	-	-
20 Nov 2017 - 20 Nov 2022	-	-	5,000,000	-
20 Nov 2018 - 20 Nov 2023	-	-	2,500,000	-
20 Nov 2019 - 20 Nov 2024	-	-	2,500,000	-
18 April 2019 - 18 April 2024	-	-	-	3,333,334
18 April 2020 - 18 April 2025	-	-	-	3,333,333
18 April 2021 - 18 April 2026	-	-	-	3,333,333


Closing balance	50,000,000	25,000,000	10,000,000	10,000,000

The total value of options and warrants granted in the year was £39,226 (2019: £109,241). Included within operating losses is a charge for issuing share options and making share-based payments of £39,226 (2019: £109,241).

Details of share options and warrants outstanding at 31 March 2020:

Date of grant Number of options Option price Exercisable between

20 December 2013 13,333,333 0.7 pence 30 Dec 2014 - 30 Dec 2024

20 December 2013 13,333,333 0.7 pence 30 Dec 2015 - 30 Dec 2025

20 December 2013 13,333,333 0.7 pence 30 Dec 2016 - 30 Dec 2026

8 May 2017 72,500,000 0.38 pence 8 May 2017 - 8 May 2022

8 May 2017 36,250,000 0.38 pence 8 May 2018 - 8 May 2023

8 May 2017 36,250,000 0.38 pence 8 May 2019 - 8 May 2024

22 May 2017 12,500,000 0.38 pence 22 May 2017 - 22 May 2022

22 May 2017 6,250,000 0.38 pence 22 May 2018 - 22 May 2023

22 May 2017 6,250,000 0.38 pence 22 May 2019 - 22 May 2024

20 November 2017 5,000,000 0.38 pence 20 Nov 2017 - 20 Nov 2022

20 November 2017 2,500,000 0.38 pence 20 Nov 2018 - 20 Nov 2023

20 November 2017 2,500,000 0.38 pence 20 Nov 2019 - 20 Nov 2024

23 November 2018 39,999,999 0.14-0.38 pence 1 March 2019 - 1 March 2024

23 November 2018 50,000,001 0.14-0.38 pence To be determined at a future date

23 November 2018 90,000,000 0.14-0.38 pence To be determined at a future date

18 April 2019 3,333,334 0.14-0.25 pence 18 April 2020 - 18 April 2025

18 April 2019 3,333,333 0.14-0.25 pence 18 April 2021 - 18 April 2026

18 April 2019 3,333,333 0.14-0.25 pence 18 April 2022 - 18 April 2027

8 May 2019 3,333,334 0.14-0.25 pence 8 May 2020 - 8 May 2025

8 May 2019 3,333,333 0.14-0.25 pence 8 May 2021 - 8 May 2026

8 May 2019 3,333,333 0.14-0.25 pence 8 May 2022 - 8 May 2027

Additional disclosure information:

Weighted average exercise price of share options and warrants:

· outstanding at the beginning of the period 0.44 pence

· granted during the period 0.20 pence

· outstanding at the end of the period 0.35 pence

· exercisable at the end of the period 0.41 pence

Weighted average remaining contractual life of

share options outstanding at the end of the period 4.8 years

Share options issued in the year to 31 March 2020

The Company entered into option agreements dated 18 April 2019 with Charles Joseland and dated 8 May 2019 with Mark Pensabene under which up to 10 million share options may be issued to each of Mr Joseland and Mr Pensabene in three tranches as follows:

Exercise price per share	Tranche 1	Tranche 2	Tranche 3	Total
0.14p	1,666,667	1,666,667	1,666,666	5,000,000
0.25p	1,666,667	1,666,666	1,666,667	5,000,000
Total	3,333,334	3,333,333	3,333,333	10,000,000

All the options have a life of 5 years from vesting. 34 per cent. of the options vest in one year, with a further 33 per cent. vesting in two years and the remaining 33 per cent. vesting in three years' time. The options issued to Mr Pensabene lapsed on 31 October 2019 when Mr Pensabene resigned before the options had vested.

The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:

	18 April 2019	8 May 2019

Strike price	0.14p - 0.25p	0.14p - 0.25p
Share price	0.08p - 0.11p	0.07p - 0.09p
Volatility	69%	69%
Expiry date	18 April 2020 - 18 April 2027	8 May 2020 - 8 May 2027
Risk free rate	0.11% - 0.19%	0.12% - 0.20%
Dividend yield	0.0%	0.0%

Warrants issued in the year to 31 March 2019

The Company entered into a warrant agreement dated 23 November 2018 with Zivvo Pty Ltd ("Zivvo"), a company controlled by a key member of personnel, under which up to 180 million warrants may be issued to Zivvo in three tranches as follows:

Exercise price per share	Tranche 1	Tranche 2	Tranche 3	Total
0.14p	13,333,333	16,666,667	30,000,000	60,000,000
0.25p	13,333,333	16,666,667	30,000,000	60,000,000
0.38p	13,333,333	16,666,667	30,000,000	60,000,000
Total	39,999,999	50,000,001	90,000,000	180,000,000

Tranche 1 vested and became exercisable from 1 March 2019, the date the services became provided on a full-time basis. Tranche 2 will vest and become exercisable from the date on which a mining licence for the project is awarded to the Company and Tranche 3 from the date on which commercial production commences. Each warrant is exercisable into one ordinary share of the Company and has a life of 5 five years from vesting.

The fair values of the options and warrants granted were calculated using the Black-Scholes valuation model. The inputs into the model were:

	23 November 2018

Strike price	0.14p - 0.38p
Share price	0.05p - 0.08p
Volatility	69%
Expiry date	23 November 2023 - 28 February 2026
Risk free rate	0.56% - 0.80%
Dividend yield	0.0%

6. TAXATION

	Group Year ended 31 March 2020	Group Year ended 31 March 2019
	£	£
Taxation charge for the year	-	-

Factors affecting the tax charge for the year
Loss from continuing operations before income tax	(629,504)	(712,611)

Tax at 19% (2019: 19%)	(119,606)	(135,396)

Expenses not deductible	606	1,204
Losses carried forward not deductible	111,547	113,436
Deferred tax differences	7,453	20,756
Income tax expense	-	-

The Group has tax losses and other potential deferred tax assets totalling £2,258,000 (2019: £1,837,000) which will be able to be offset against future income. No deferred tax asset has been recognised in respect of these losses as the timing of their utilisation is uncertain at this stage.

7. INTANGIBLE ASSETS

			Exploration and evaluation
GROUP			£
COST
At 1 April 2018			3,508,499
Additions in the year			3,462,593
Effects of foreign exchange			(19,883)
At 1 April 2019			6,951,209
Additions in the year			1,601,526
Effects of foreign exchange			89,833

At 31 March 2020			8,642,568

AMORTISATION
At 1 April 2018 and 1 April 2019 and 31 March 2020			-

NET BOOK VALUES
At 31 March 2020			8,642,568

At 31 March 2019			6,951,209

At 31 March 2018			3,508,499

The Company did note have any Intangible Assets as at 31 March 2018, 2019 and 2020.

8. PROPERTY, PLANT AND EQUIPMENT

		Plant and machinery
GROUP		£
COST
1 April 2018		3,702
Additions in the year		20,014
Effects of foreign exchange		2,731

At 1 April 2019		26,447
Additions in the year	-
Effects of foreign exchange	577

At 31 March 2020	27,024

DEPRECIATION
At 1 April 2018		617
Depreciation charge		5,929

At 1 April 2019		6,546
Depreciation charge		5,929

At 31 March 2020		12,475

NET BOOK VALUES
At 31 March 2020		14,549

At 31 March 2019		19,901

At 31 March 2018		3,085

For those tangible assets wholly associated with exploration and development projects, the amounts charged in respect of depreciation are capitalised as evaluation and exploration assets within intangible assets.

The Company did not have any Property, Plant and Equipment as at 31 March 2018, 2019 and 2020.

9. SUBSIDIARY UNDERTAKINGS

a. AMOUNTS DUE FROM SUBSIDIARY UNDERTAKINGS

	Company 31 March 2020	Company 31 March 2019
	£	£
Amounts due from subsidiary undertakings	7,104,085	6,511,913
	7,104,085	6,511,913

Under the requirements of IFRS 9 management has run various scenarios on the expected credit loss of the Company's intercompany balances. Given the current global financial disruption and expected future economic impact caused by the pandemic, management believes the risk of potential credit loss has increased and so has recognised a provision of £877,000 against those balances at 31 March 2020. The scenarios which have been used in the expected credit loss model are disclosed on the accounting policies on page 51.

b. INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

The consolidated financial statements include the following subsidiary companies:

Company	Subsidiary of	Country of incorporation	Registered office	Equity holding	Nature of business
Kodal Norway (UK) Ltd	Kodal Minerals Plc	United Kingdom	Prince Frederick House, 35-39 Maddox Street, London W1S 2PP	100%	Operating company
International Goldfields (Bermuda) Limited	Kodal Minerals Plc	Bermuda	MQ Services Ltd Victoria Place, 31 Victoria Street, Hamilton HM 10 Bermuda	100%	Holding company
International Goldfields Côte d'Ivoire SARL	International Goldfields (Bermuda) Limited	Côte d'Ivoire	Abidjan Cocody Les Deux Plateaux 7eme Tranche BP Abidjan Côte d'Ivoire	100%	Mining exploration
International Goldfields Mali SARL	International Goldfields (Bermuda) Limited	Mali	Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 Mali	100%	Mining exploration
Jigsaw Resources CIV Ltd	International Goldfields (Bermuda) Limited	Bermuda	MQ Services Ltd Victoria Place, 31 Victoria Street, Hamilton HM 10 Bermuda	100%	Mining exploration
Corvette CIV SARL	International Goldfields (Bermuda) Limited	Côte d'Ivoire	Abidjan Cocody Les Deux Plateaux 7eme Tranche BP Abidjan Côte d'Ivoire	100%	Mining exploration
Future Minerals SARL	International Goldfields (Bermuda) Limited	Mali	Bamako, Faladi, Mali Univers, Rue 886 B, Porte 487 Mali	100%	Mining exploration

On 18 September 2019, the Company received notification that Kodal Minerals AS and Kodal Phosphate AS had been liquidated.

Kodal Minerals plc has issued a guarantee under section 479C to its subsidiary, Kodal Norway (UK) Ltd ("Kodal Norway", company number 08491224) in respect of its activities for the year ended 31 March 2020 to allow Kodal Norway to take advantage of the exemption under s479A of the Companies Act 2006 from the requirements of the Act relating to audit of its individual accounts for the year ended 31 March 2020.

Carrying value of investment in subsidiaries	Year ended 31 March 2020	Year ended 31 March 2019
	£	£
Opening balance	512,373	512,373
Impairment in the year	-	-
Closing balance	512,373	512,373

10. OTHER RECEIVABLES

	Group 31 March 2020	Group 31 March 2019	Company 31 March 2020	Company 31 March 2019
	£	£	£	£
Other receivables	19,978	21,011	19,978	21,011
	19,978	21,011	19,978	21,011

All receivables at each reporting date are current. No receivables are past due. The Directors consider that the carrying amount of the other receivables approximates their fair value and there are no expected credit losses.

11. TRADE AND OTHER PAYABLES

	Group 31 March 2020	Group 31 March 2019	Company 31 March 2020	Company 31 March 2019
	£	£	£	£
Trade payables	456,847	192,940	147,438	118,101
Other payables	201,866	404,311	91,792	76,300
	658,713	597,251	239,230	194,401

All trade and other payables at each reporting date are current. The Directors consider that the carrying amount of the trade and other payables approximates their fair value.

12. SHARE CAPITAL

GROUP AND COMPANY

Allotted, issued and fully paid:

	Nominal Value		Number of Ordinary Shares	Share Capital £	Share Premium £

At 31 March 2018		6,524,482,828		2,038,903	10,467,337


June 2018	£0.0003125		230,769,226	72,112	212,857
June 2018	£0.0003125		923,076,923	288,462	911,538
February 2019	£0.0003125		34,210,526	10,691	54,309
March 2019	£0.0003125		500,000,000	156,250	501,750

At 31 March 2019			8,212,539,503	2,566,418	12,147,792


July 2019 (Note 1)	£0.0003125		718,750,000	224,609	228,516
July 2019 - Treasury shares held	£0.0003125		(250,000,000)	(78,125)	-
August 2019 (Note 2)	£0.0003125		65,451,616	20,454	44,546
October 2019 (Note 3)	£0.0003125		250,000,000	78,125	93,750
October 2019 - Treasury shares sold	£0.0003125		250,000,000	78,125	-

At 31 March 2020			9,246,741,119	2,889,606	12,514,604

Note 1 On 29 July 2019, a total of 718,750,000 shares were issued in a placing at an issue price of 0.08 pence per share. Of these placing shares, 250,000,000 shares were allotted to SVS Securities plc which entered administration on 5 August 2019 and did not complete its placing participation. These shares were held as treasury shares and were then placed on 28 October 2019.

Note 2 On 2 August 2019, a total of 65,451,616 shares were issued to Bambara Resources SARL at an issue price of 0.099 pence per share.

Note 3 On 28 October 2019, a total of 250,000,000 shares were issued in a placing and subscription at a price of 0.05 pence per share. In addition, the company placed the 250,000,000 shares allotted to SVS Securities plc in July 2019 at the same price.

13. RESERVES

Reserve	Description and purpose
Share premium	Amount subscribed for share capital in excess of nominal value.
Share based payment reserve	Cumulative fair value of options and share rights recognised as an expense. Upon exercise of options or share rights, any proceeds received are credited to share capital. The share-based payment reserve remains as a separate component of equity.
Translation reserve	Gains/losses arising on re-translating the net assets of overseas operations into sterling.
Retained earnings	Cumulative net gains and losses recognised in the consolidated statement of financial position.

14. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The Group's principal financial instruments comprise cash and cash equivalents, other receivables and trade and other payables.

The main purpose of cash and cash equivalents is to finance the Group's operations. The Group's other financial assets and liabilities such as other receivables and trade and other payables, arise directly from its operations.

It has been the Group's policy, throughout the periods presented in the consolidated financial statements, that no trading in financial instruments was to be undertaken, and no such instruments were entered in to.

The main risk arising from the Group's financial instruments is market risk. The Directors consider other risks to be more minor, and these are summarised below. The Board reviews and agrees policies for managing each of these risks.

Market risk

Market risk is the risk that changes in market prices, and market factors such as foreign exchange rates and interest rates will affect the Group's results or the value of its assets and liabilities.

The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

Interest rate risk

The Group does not have any borrowings and does not pay interest.

The Group's exposure to the risks of changes in market interest rates relates primarily to the Group's cash and cash equivalents with a floating interest rate. These financial assets with variable rates expose the Group to interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-interest bearing.

In regard to its interest rate risk, the Group periodically analyses its exposure. Within this analysis consideration is given to alternative investments and the mix of fixed and variable interest rates. The Group does not engage in any hedging or derivative transactions to manage interest rate risk.

The Group in the year to 31 March 2020 earned interest of £111 (2019: £10,080). Due to the Group's relatively low level of interest-bearing assets and the very low interest rates available in the market the Group is not exposed to any significant interest rate risk.

Credit risk

Credit risk refers to the risk that a counterparty could default on its contractual obligations resulting in financial loss to the Group. The Group's principal financial assets are cash balances and other receivables.

The Group has adopted a policy of only dealing with what it believes to be creditworthy counterparties and would consider obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group's exposure to and the credit ratings of its counterparties are continuously monitored. An allowance for impairment is made where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables concerned.

Other receivables consist primarily of prepayments and other sundry receivables and none of the amounts included therein are past due or impaired.

Financial instruments by category - Group

	Loans and receivables	Other financial liabilities at amortised cost	Total
31 March 2020
Assets
Other receivables	19,978	-	19,978
Cash and cash equivalents	33,221	-	33,221
Total	53,199	-	53,199

Liabilities
Trade and other payables	-	(658,713)	(658,713)
Total	-	(658,713)	(658,713)

31 March 2019	£	£	£
Assets
Other receivables	21,011	-	21,011
Cash and cash equivalents	1,408,393	-	1,408,393
Total	1,429,404	-	1,429,404

Liabilities
Trade and other payables	-	(597,251)	(597,251)
Total	-	(597,251)	(597,251)

Foreign exchange risk

Throughout the periods presented in the consolidated financial statements, the functional currency for the Group's West African subsidiaries has been the CFA Franc.

The Group incurs certain exploration costs in the CFA Franc, US Dollars and Australian Dollars and has exposure to foreign exchange rates prevailing at the dates when Sterling funds are translated into other currencies. The CFA Franc has a fixed exchange rate to the Euro and the Group therefore has exposure to movements in the Sterling : Euro exchange rate. The Group has not hedged against this foreign exchange risk as the Directors do not consider that the level of exposure poses a significant risk.

The Group continues to keep the matter under review as further exploration and evaluation work is performed in West Africa and other countries and will develop currency risk mitigation procedures if the significance of this risk materially increases.

The Group's consolidated financial statements have a low sensitivity to changes in exchange due to the low value of assets and liabilities (principally cash balances) maintained in foreign currencies. Once any project moves into the development phase a greater proportion of expenditure is expected to be denominated in foreign currencies which may increase the foreign exchange risk.

Financial instruments by currency - Group

	GBP	USD	NOK	AUD	XOF	Total
31 March 2020
Assets
Other receivables	19,978	-	-	-	-	19,978
Cash and cash equivalents	28,147	-	1,370	-	3,704	33,221

Total	48,125	-	1,370	-	3,704	53,199

Liabilities
Trade and other payables	(179,506)	(314,468)	-	(54,665)	(110,074)	(658,713)

	GBP	USD	NOK	AUD	XOF	Total
31 March 2019
Assets
Other receivables	21,011	-	-	-	-	21,011
Cash and cash equivalents	1,299,397	-	1,911	-	107,085	1,408,393

Total	1,320,408	-	1,911	-	107,085	1,429,404

Liabilities
Trade and other payables	(133,842)	(381,713)	-	(51,099)	(30,597)	(597,251)

Liquidity risk

Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due.

The objective of managing liquidity risk is to ensure, as far as possible, that the Group will always have sufficient liquidity to meet its liabilities when they fall due, under both normal and stressed conditions.

The Group has established policies and processes to manage liquidity risk. These include:

· Monitoring the maturity profiles of financial assets and liabilities in order to match inflows and outflows;

· Monitoring liquidity ratios (working capital); and

· Capital management procedures, as defined below.

Capital management

The Group's objective when managing capital is to ensure that adequate funding and resources are obtained to enable it to develop its projects through to profitable production, whilst in the meantime safeguarding the Group's ability to continue as a going concern. This is to enable the Group, once projects become commercially and technically viable, to provide appropriate returns for shareholders and benefits for other stakeholders.

The Group has historically relied on equity to finance its growth and exploration activity, raised through the issue of shares. In the future, the Board will utilise financing sources, be that debt or equity, that best suits the Group's working capital requirements and taking into account the prevailing market conditions.

Fair value

The fair value of the financial assets and financial liabilities of the Group, at each reporting date, approximates to their carrying amount as disclosed in the Statement of Financial Position and in the related notes.

The fair values of the financial assets and liabilities are included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The cash and cash equivalents, other receivables, trade payables and other current liabilities approximate their carrying value amounts largely due to the short-term maturities of these instruments.

Disclosure of financial instruments and financial risk management for the Company has not been performed as they are not significantly different from the Group's position described above.

15. RELATED PARTY TRANSACTIONS

The Directors represent the key management personnel of the Group and details of their remuneration are provided in note 3.

Robert Wooldridge, a Director, is a member of SP Angel Corporate Finance LLP ("SP Angel") which acts as financial adviser and broker to the Company. During the year ended 31 March 2020, the Company paid fees to SP Angel of £58,323 (2019: £82,550).

Matlock Geological Services Pty Ltd ("Matlock") a company wholly owned by Bernard Aylward, a Director, provided consultancy services to the Group during the year ended 31 March 2020 and received fees of £76,764 (2019 £80,711). These fees are included within the remuneration figure shown for Bernard Aylward in note 3.

Geosmart Consulting Pty Ltd ("Geosmart"), a company wholly owned by Qingtao Zeng, a Director, provided consultancy services to the Group during the year ended 31 March 2020 and received fees of £13,480 (2019: £44,660).

Carolus Consulting Ltd ("Carolus"), a company wholly owned by Charles Joseland, a Director, provided consultancy services to the Group during the year ended 31 March 2020 and received fees of £1,500 (2019: £5,000).

16. CONTROL

No one party is identified as controlling the Group.

17. CAPITAL COMMITMENTS

The Group had capital commitments to exploration and evaluation expenditure of £130,000 (2019: £nil), of which £65,000 is payable in cash and £65,000 in shares.

18. EVENTS AFTER THE REPORTING PERIOD

On 7 April 2020, the Company entered into Financing Facility with Riverfort Global Opportunities PCC and YA II PN Ltd (the 'Investors'), who subscribed for 1,428,571,429 ordinary shares at a price of 0.035 pence per share, raising £0.5 million before expenses. These subscription proceeds were used immediately to satisfy the Company's obligation to pay £0.5 million to the Investors to enter into an Equity Sharing Agreement, under which the Investors will make monthly cash payments to the Company for a period of 12 months (which period can be shortened or extended up to 24 months at the Investors' discretion), the value of such cash payments to vary in direct relation to the Company's share price from time to time.

On 7 April 2020 the Company announced the issue of a total of 378,323,379 shares to a number of Directors and senior management as payment for salaries or fees owed for the previous six months.

On 14 July 2020, the Company entered into a Convertible Loan Note Agreement with the Investors for a total commitment of $1.5 million before expenses with a first tranche of $750,000 advanced at closing, and a second tranche at a date of mutual agreement. Advances under the Loan Agreement have a 15-month term and carry interest at a rate of 9.85% per annum payable monthly. Investors have the option to convert outstanding principal and interest into new ordinary shares in the Company: conversion in shares is deferred for the first 90 days, and thereafter is at the lower of 130% of the share price at closing and 93% of the average of 3 daily VWAP in the 10 days prior to conversion. The Company can repay the loan at any time in cash.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

FR UASKRRWUBUAR

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Kodal Minerals (KOD)

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