Interim Results

RNS Number : 0325I

Technology Minerals PLC

12 April 2022

 

12 April 2022

Technology Minerals Plc

("Technology Minerals" or the "Company") 

Interim Results

Technology Minerals Plc (LSE: TM1), the first listed UK company focused on creating a sustainable circular economy for battery metals, is pleased to announce its results for the six months to 31 December 2021. 

Highlights

· Raised £1.5 million before expenses from admission to the London Stock Exchange in November 2021, which followed a pre-IPO fundraise that raised approximately £5 million

· Recyclus Group ("Recyclus"), a 49% Technology Minerals owned company, partnered with Slicker Recycling Limited ("Slicker Recycling"), whereby Slicker Recycling will collect battery waste from around the UK and transport it to the closest Recyclus plant

· Recyclus agreed an engineering development partnership (EngD) with WMG at the University of Warwick, a leading academic group providing research, education and knowledge transfer in engineering, management, manufacturing and technology

Post Period

· Recyclus opened first recycling site in Tipton in January 2022 - new facility will help provide national capability for lead-acid battery recycling and commissioning of the plant is going well.

· In January 2022, Recyclus opened first laboratory suite at its new battery processing facility in Wolverhampton, UK, to carry out in-house testing for both lead acid and lithium-ion ("Li-ion") battery recycling processes

· In February, received encouraging set of results from sampling survey at the Oacoma Project, which confirmed the presence of manganese and rare earth oxides ("REO")

· Received positive initial results from a due diligence sampling survey at the Asturmet Copper-Cobalt-Nickel ("Cu-Co-Ni") Project in Asturias, NW Spain

· In March, acquired Blackbird Creek Property (Idaho, USA), a project covering 1,285 hectares within the Idaho Cobalt Belt, with potential to host significant Cu-Co deposits

Alex Stanbury, Chief Executive Officer of Technology Minerals, said: "It has been a great six months for the development of Technology Minerals .  We successfully listed on the London Stock Exchange in November and raised capital to accelerate our development plans and pursue our growth strategy to create a circular economy for battery metals.

"Our aim is to build ten battery recycling plants within six years in the UK, with the first two coming online in the second half of this year.  Through our innovative technology, for the first time in the UK, there will be the capability to recycle Lithium-ion batteries on an industrial scale. Alongside the battery recycling business, our exploration assets are focused on the extraction of key battery metals with a strategy to bring early-stage projects up the value curve in a capital light manner and attract partners to fund their development. 

"Between battery recycling and the extraction of metals, we aim to cover the entire mineral life cycle from exploration and mining through to end-of-product recycling for cobalt, lithium, nickel, and manganese. Technology Minerals is in prime position to take advantage of the global swing to electrification as electric vehicles replace the internal combustion engine and the pressing necessity for battery metals heightens.  We are providing a solution to a critical need in the global transition to a more sustainable, green economy."

Enquiries

Technology Minerals Limited
Robin Brundle, Executive Chairman Alexander Stanbury, Chief Executive Officer	[phone] [e-mail]
Arden Partners Plc
Ruari McGirr, George Morgan	[phone]
Luther Pendragon
Harry Chathli, Alexis Gore, John Bick	[phone]

About Technology Minerals Plc

Technology Minerals is developing the UK's first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for Li-ion batteries, whilst solving the ecological issue of spent Li-ion batteries, by recycling them for re-use by battery manufacturers. With the increasing global demand for battery metals to supply electrification, the Group will explore, mine, and recycle metals from spent batteries. Further information on Technology Minerals is available at www.technologyminerals.co.uk  

 

INTERIM MANAGEMENT REPORT

Overview and Twin-track Strategy in Key Metals

Technology Minerals is developing the UK's first listed, sustainable circular economy for battery metals, using cutting-edge technology to recycle, recover, and re-use battery technologies for a renewable energy future. Technology Minerals is focused on extracting raw materials required for lithium-ion batteries, whilst solving the ecological issue of spent Li-ion batteries, by recycling the key metals they contain which can be re-introduced into the supply chain to battery manufacturers.

The Company's twin track strategy is well placed to benefit from the growing demand side for the key materials required to support the industrial pivot to electrification, in order to meet the Paris accord and COP26 targets, both of which the Company supports. As key industries rise to the challenge of electrification, there has been significant inflationary pressure on key metals such as lithium, nickel, cobalt, manganese and copper.

The adoption of battery technology is accelerating and as domestic UK production of batteries ramps-up that in turn will put huge pressure on the supply side of the key metals, no matter which chemistry the battery type. The creation of a circular economy for the UK is vital in terms of economics, in terms of security and cost of supply of materials and of sustainability.

Recyclus has been working for nearly three years developing its proprietary technology to recycle lithium-ion batteries and is now uniquely placed having created an industrial scale solution and being first to market for the UK. The Company has an early-to-market advantage in bringing a new capability to the UK's battery sector to service the growing requirements of the key industrial sectors from aerospace, transport and automotive to energy and hi-level motorsport.

Technology Minerals' mining strategy has been to identify assets across the key battery metals which can fit the Company's investment criteria, where the management team can develop the value of each asset, incrementally building value through prudent use of capital to the next development stage for the asset where we can introduce a larger funding and operational partner to take the asset through the capital heavy development stage through to eventual production.

Operating Review

In November 2021, Technology Minerals successfully completed an IPO on the London Stock Exchange, raising a total of £1.5 million. The listing followed on from a pre-IPO fundraise in which the Company raised approximately £5 million. The funds raised will support a planned roll out of the Company's growth strategy to create a sustainable circular economy for battery metals, through its twin track approach with the recycling of lead-acid and Li-ion batteries and the extraction of key battery minerals through its resource projects. During the period the Company extended its loan to Recyclus and associates to £3.3m.

Battery Recycling

During the period, Technology Minerals made excellent progress in the battery recycling business.  Recyclus is a battery-recycling business with innovative technology that can safely salvage key materials from End-of-Life ("EoL") batteries to produce black mass (consisting of cobalt, nickel, lithium, and manganese).

Recyclus is well placed to take advantage of the burgeoning demand for lithium-ion and lead-acid batteries ("LAB") through retrieval, recycling, and repurposing of used battery stock. Using proprietary technology that it has developed over the last three years it has successfully created an industrial scale solution to recycling Li-ion batteries.

The Recyclus process separates all of the plastics, the black mass which consists of the key cathode metals and the electrolyte, all of which can be recycled.  In due course we aim to get this back into new battery manufacturing in the UK thereby creating a true circular economy. The technology can process all of the current five main lithium-ion battery chemistries, in any combination and any state of charge. This is unique and Recyclus is first to market with this proprietary industrial solution designed to serve the key industrial markets in the UK from aerospace, automotive and other forms of transport, oil & gas, refining and energy storage.

It is also important to note that the solution first assesses the potential for repurposing batteries, and on passing key suitability, safety and performance tests, whether they can be re-certified for further operational use, typically for larger scale energy storage. As a result, the Recyclus solution can repurpose or recycle, thereby maximising the key materials back into the circular economy. This could significantly reduce the CO2 footprint for the industry when the key materials are sufficiently refined to re-enter the manufacture of new batteries in the UK and the repurposing can meaningfully lengthen the performance period. In addition, Recyclus can also test the safety of the batteries to determine whether they should be re-used or repurposed.

Agreement with Slicker Recycling

Recyclus signed a partnership with Slicker Recycling, one of the UK's leading hazardous waste management and service delivery providers to the automotive sector. Slicker Recycling, with its 13 depots nationwide and more than 25,000 collections per annum, will collect battery waste from around the UK and safely transport it to the closest Recyclus plant. Recyclus believes this partnership alone could deliver up to 40% of the lead-acid battery capacity, and up to 90% of its Li-ion capacity once the two plants are commissioned.

Partnership with WMG

Recyclus agreed an engineering development partnership with WMG at the University of Warwick, a leading academic group providing research, education and knowledge transfer in engineering, management, manufacturing and technology. Recyclus and WMG have been working together for over two years sharing expertise and developing the proprietary processes across the five battery chemistries. This partnership brings together WMG's world class research programmes and Recyclus' leading recycling technology. As part of the agreement a four-year engineering doctorate focused on battery recycling has been created to focus on addressing industrial and technical challenges across the battery recycling sector and support the development of new critical skill sets in this sector.

Two recycling plants to come online

Technology Minerals plans to build ten plants, five lead-acid battery and five Li-ion battery, in six years with the first two expected to be operational in the second half of the year. These plants will significantly increase the total annual input processing capacity.

Post period, in late January 2022, the Company announced it had opened its first lead-acid battery recycling site in Tipton, West Midlands.  The Tipton plant is designed to process up to 12 tonnes an hour of lead-acid batteries and is a fully automated system that is capable of recycling lead-acid batteries. The process breaks down the entire battery into separate constituent parts, to ensure it is fully recycled and recovers lead paste, acid, and plastic materials. These can be re-used to support a wide range of industries.

The plant is ready to go operational pending the final clearance from the Environmental Agency ("EA"). Technology Minerals continues to work as closely as possible with the EA in order to expedite the process, albeit the Company remains cognisant of the workload challenges which the EA has endured, in part due to the back-log created during the pandemic. That aside, the Company continues to build inventory and looks forward to commencing operations as soon as possible.

The Tipton plant will be closely followed by the opening of a new lithium-ion recycling facility in Wolverhampton. Equipment for the plant has been arriving and is being assembled. Once operational, the facility will be the first in the UK with the capacity to recycle lithium-ion batteries on an industrial scale. The aim is to increase the capacity of Recyclus' lithium-ion battery recycling volume from 8,300 tonnes in the first full year of production, to 41,500 tonnes by 2027.

Current sector forecasts by WMG predict that 22 per cent of key battery metals will be provided back into the UK's battery eco-system by 2030. Whilst that is certainly a major contributor both economically and from the standpoint of sustainability, it still means that circa 78% will need to come from mined sources for the foreseeable future.

Exploration Projects for battery metals

Technology Minerals has a portfolio of projects focused on key battery metals including cobalt, copper, nickel, manganese, and lithium to ensure a diversified portfolio. The Company's strategy is to take early-stage projects and bring then up the value curve through prudent deployment of capital to attract larger joint venture partners to fund the development of the projects and, if warranted, develop and mine the asset. Through this tested industry strategy and proven pathway strategy, significant value can potentially be added to the Company's portfolio without taking on the more substantial costs associated with developing exploration assets, whilst preserving the equity carry for the future benefit of shareholders.

The Company is very pleased with the current portfolio of assets, focused on the key metals and strategically important for the vital battery OEM markets which have come into sharp focus in terms of security of supply, supply squeeze and price inflation. 

The Company's exploration assets by location and resource:

Project	Location	Resource
Asturmet	Spain	Nickel, Copper, Cobalt
Blackbird Creek Property and Emperium	USA	Primary Cobalt
NW Leinster Lithium	Ireland	Lithium
Technology Minerals Cameroon	Cameroon	Nickel Laterite, Cobalt
Oacoma	USA	Manganese, Nickel, Cobalt, Rare Earth Oxides

Post period, Technology Minerals has made good progress in its exploration campaign to advance these projects. The Company acquired the Blackbird Creek Property which adds 158 contiguous lode claims covering an area of approximately 1,285 hectares (3,175 acres) to the Company's existing land position, located immediately southeast of Jervois Mining Ltd's Idaho Cobalt Operations ("ICO"). The ICO mine is expected to be operational this year and will be the United States first primary cobalt mine in decades.

The Company also received positive results from the Oacoma Project in South Dakota, USA. The Oacoma Project covers 13 state mineral leases covering a total of 3,083 acres in South Dakota, which the Company believes is prospective for stratabound manganese and rare earth oxides as well as nickel, cobalt, copper. A total of 27 rock samples were collected during October 2021 from across the site, which confirmed the presence of rare earth oxides and manganese.

Earlier this month, Technology Minerals announced initial results from a due diligence lithogeochemical characterisation sampling survey at its 100% owned Asturmet Cu-Co-Ni Project in Asturias, NW Spain. A total of 79 samples were collected during the campaign and initial results at the historic Aramo mine confirmed high grade Cu-Co-Ni mineralisation.

Risks

The Company was incorporated recently, in 2021 and lacks a significant operating history, and therefore, investors have little basis on which to evaluate the Company's ability to achieve its objective of identifying, acquiring and operating one or more companies, businesses, prospects or assets.

In addition to the general risks laid out in the prospectus, dated 11 November, the directors feel that the group has specific risks around the timing of the granting of the EA licenses for Recyclus's plants which could delay their commercial activity.

Technology Minerals Cameroon Limited, a wholly owned subsidiary of the Company applied for five exploration permits in Cameroon. As announced on 23 February 2022, the Company has received copies of all permits concerned and has instructed Cameroon legal counsel to verify the validity of the permits. The enquiries into the validity of the permits have not been concluded.

Outlook

Technology Minerals entered into the second half in a strong position having successfully listed on the London Stock Exchange and raised capital to accelerate its growth plans. In 2022, Technology Minerals will focus on increasing processing capacity for lead-acid and Li-ion batteries and has two new plants coming on stream that for the first time brings to the UK Li-ion battery recycling on an industrial scale. These will be the first two of a planned ten plants over the next six years.

Through Recyclus' innovative technology, for the first time in the UK, there will be the capability to recycle the key materials from end-of-life Lithium-ion batteries on an industrial scale. Alongside the battery recycling business, the Company's exploration assets are focused on the extraction of key battery metals with a strategy to bring early-stage projects up the value curve in a capital light manner and attract major partners to inject development capital into the projects.

This twin track approach of battery recycling and the extraction of metals covers the entire mineral life cycle from exploration and mining through to end-of-product recycling for cobalt, lithium, nickel, and manganese. Technology Minerals is in prime position to take advantage of the global swing to electrification as EVs replace the internal combustion engine and the pressing necessity for battery metals heightens.

Responsibility Statement

The Directors confirm that to the best of their knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

Mr Alexander Stanbury

Chief Executive Officer

11 April 2022
 

Condensed Consolidated Statement of Comprehensive Income

for the six-months ended 31 December 2021

	Notes	6 months to 31 December 2021 Unaudited	Period 9 June 2021 to 30 June 2021 Unaudited
Continuing operations		£000s	£000s
Administrative expenses		(757)	(387)
Operating loss		(757)	(387)
Fund raising fees		(314)	-
Loss before taxation		(1,071)	(387)
Income tax		-	-
Loss attributable to owners of the parent		(1,071)	(387)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Exchange gains arising on translation of foreign operations		(1)	-
Other comprehensive income for the period, net of tax		(1)	-
Total comprehensive income attributable to the owners of the parent		(1,072)	(387)
Earnings per share:
Basic and diluted earnings per share (pence)	7	(0.33)p	(0.77)p

Condensed Consolidated Statement of Financial Position

As at 31 December 2021

	Notes	31 December 2021 Unaudited	30 June 2021 Unaudited
		£000s	£000s
Non-current assets
Property, plant and equipment		5	-
Intangible assets	8	18,686	-
Financial assets		1,221	-
Loans to associates	11	3,294	-
Total non-current assets		23,206	-
Current assets
Trade and other receivables	12	295	59
Cash and cash equivalents		756	-
Current assets		1,051	59
Total assets		24,257	59
Current liabilities
Trade and other payables	13	(577)	(396)
Borrowings		(83)	-
Total current liabilities		(660)	(396)
Non-current liabilities
Deferred tax liability		(2,778)	-
Total non-current liabilities		(2,778)
Total liabilities		(3,438)	(396)
Net assets		20,819	(337)
Equity attributable to owners of the parent
Share Capital	14	1,213	50
Share Premium	14	19,409	-
Warrants reserve	15	1,656	-
Foreign exchange reserve		(1)	-
Accumulated deficit		(1,458)	(387)
Total equity		20,819	(337)

 

 

Condensed Consolidated Statement of Changes in Equity

for the six-month period ended 31 December 2021

	Share capital	Share Premium	Warrants  reserve	Foreign exchange  reserve	Retained Earnings	Total
Unaudited	£000s	£000s	£000s	£000s	£000s	£000s
At incorporation on 9 June 2021	50	-	-	-	-	50
Loss and total comprehensive income for the period	-	-	-	-	(387)	(387)
Total comprehensive income for the period	-	-	-	-	(387)	(387)
Balance at 30 June 2021	50	-	-	-	(387)	(337)

Loss for the period	-	-	-	-	(1,071)	(1,071)
Other comprehensive income:
Exchange losses on translation of foreign operations	-	-	-	(1)	-	(1)
Total comprehensive income for the period	-	-	-	(1)	(1,071)	(1,072)
Transactions with owners:
Issue of share capital	1,163	21,339	-	-	-	22,502
Share issue costs	-	(274)	-	-	-	(274)
Warrants issued	-	(1,656)	1,656	-	-	-
Balance at 31 December 2021	1,213	19,409	1,656	(1)	(1,458)	20,819

 

Condensed Consolidated Statement of Cash Flows

for the six-month period ended 31 December 2021

		6 months to 31 December 2021 Unaudited	Period 9 June 2021 to 30 June 2021 Unaudited
		£000's	£000's
Cash flows from operating activities
Loss before taxation		(1,071)	(387)
Net cashflow before changes in working capital		(1,071)	(387)
Increase in receivables		(235)	(9)
Increase in payables		181	396
Net cash (used in)/from operating activities		(1,125)	-
Cash flows from investing activities
Purchase of intangible assets		(217)	-
Purchase of property, plant and equipment		(5)	-
Loans to equity-accounted associates		(2,107)	-
Acquisitions net of cash		6	-
Net cash used in investing activities		(2,323)	-
Cash flows from financing activities
Issue of share capital		1,500	-
Cost of issue of shares		(190)	-
Proceeds of borrowing		2,894	-
Net cash generated from financing activities		4,204	-
Net increase in cash and cash equivalents during the period		756	-
Cash at the beginning of period		-	-
Effect of foreign exchange rate		-	-
Cash and cash equivalents at the end of the period		756	-

 

 

Notes to the condensed consolidated interim financial information

1.  GENERAL INFORMATION

The Company is incorporated and domiciled in England and the registered number of the Company is 13446965. The registered office is Finsgate 5-7 Cranwood Street, London, England, EC1V 9EE.

2.  BASIS OF PREPARATION

The accounting policies, methods of computation and presentation used in the preparation of the condensed consolidated interim financial information are shown below

There have been no changes to the reported figures as a result of any new reporting standards or interpretations.

Basis of preparation

The condensed interim financial statements have been prepared in accordance with the requirements of IAS 34 "Interim Financial Statements". The condensed interim financial statements should be read in conjunction with the financial statements for the period ended 30 June 2021, which have been prepared in accordance with International Financial Reporting Standards (IFRS) in conformity with the Companies Act 2006 and are contained in the Company's listing prospectus dated 11 November 2021.

The financial information set out in this interim report is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The auditor's report on the financial statements for the period ended 30 June 2021 was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Comparatives

As the Company was only incorporated on 9 June 2021 and the Group formed on 17 November 2021 the comparatives presented are for the statement of comprehensive income and statement of cashflow for the period 9 June 2021 to 30 June 2021 and statement of financial position and statement of changes in equity as at 30 June 2021.

Going Concern and COVID-19

The Company has raised £1.5m (before expenses) to finance the working capital requirements of the Group. Warrants have since been exercised raising a further £787,887 and additional plans are in place to raise further working capital. In the opinion of the Directors, based on the Group's financial projections, they have satisfied themselves that the business is a going concern. The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and therefore the accounts are prepared on a going concern basis.

The Board continues to monitor the impact of COVID-19 on the ability of the Group to pursue its strategy and will make appropriate changes should they be required.  There is not considered to be any material impacts on the financial position or results of the Group as a result of COVID-19 at this reporting date.

3.  SIGNIFICANT ACCOUNTING POLICIES

New standards, amendments and interpretations adopted by the Company

The following IFRS or IFRIC interpretations were effective for the first time for the financial year beginning 1 July 2021. Their adoption has not had any material impact on the disclosures or on the amounts reported in this financial information:

Standards/interpretations	Application
IAS 1 & IAS 8 amendments	Definition of Material
IFRS 3 amendments	Definition of business
IFRS 16 amendments	COVID-19 related rent concessions
N/A	N/A Amendments to References to the Conceptual Framework in IFRS Standards
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 amendments	Interest rate benchmark reform Effective 1 January 2021
IFRS 16 amendments	COVID-19 related rent concessions beyond 30 June 21 effective 1 January 2021
Issued but not yet effective
IAS 1 amendments	Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current and Classification of Liabilities as Current or Non-current - Deferral of Effective Date: Effective 1 January 2023
IFRS 3 amendments	Business Combinations - Reference to the Conceptual Framework: Effective 1 January 2022
IFRS 17	Insurance contracts effective 1 January 2023
IAS 8 amendments	Definition of accounting estimates Effective 1 January 2023
IAS 12 amendments	Deferred tax Effective 1 January 2023
IAS 16 amendments	Property, Plant and Equipment: Effective 1 January 2022
IAS 37 amendments	Provisions, Contingent Liabilities and Contingent Assets: effective 1 January 2022
N/A	Annual Improvements to IFRS Standards 2018-2020 cycle: effective 1 January 2022

Financial instruments

Financial assets

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value through profit or loss; and

• those to be measured at amortised cost.

The classification depends on the business model for managing the financial assets and the contracted terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:

• the asset is held within a business model whose objective is to collect contracted cash flows; and

• the contractual terms give rise to cash flows that are solely payments of principal and interest.

Financial assets, including trade and other receivables and cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in the consolidated income statement.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in the consolidated income statement.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions

Financial liabilities

Basic financial liabilities, being trade and other payables, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. The Company does not hold or issue derivative financial instruments.

Investment in subsidiaries

Investments in subsidiaries are initially measured as cost and reviewed for impairment at each reporting period. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control is obtained up to the date that control ceases.

Intra-group balances and any unrealised gains, losses, income or expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.

Investment in associates

Where the Group has the power to participate in (but not control) the financial and operating policy decisions of another entity, it is classified as an associate. Associates are initially recognised in the consolidated statement of financial position at cost. Subsequently associates are accounted for using the equity method, where the Group's share of post-acquisition profits and losses and other comprehensive income is recognised in the consolidated statement of profit and loss and other comprehensive income (except for losses in excess of the Group's investment in the associate unless there is an obligation to make good those losses).

Profits and losses arising on transactions between the Group and its associates are recognised only to the extent of unrelated investors' interests in the associate. The investor's share in the associate's profits and losses resulting from these transactions is eliminated against the carrying value of the associate.

Any premium paid for an associate above the fair value of the Group's share of the identifiable assets, liabilities and contingent liabilities acquired is capitalised and included in the carrying amount of the associate. Where there is objective evidence that the investment in an associate has been impaired the carrying amount of the investment is tested for impairment in the same way as other non-financial assets.

Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the date of the consolidated statement of financial position are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at foreign exchange rates ruling at the dates the fair value was determined.

Financial statements of operations

The assets and liabilities of operations, including goodwill and fair value adjustments arising on consolidation, are translated to Pound Sterling at exchange rates ruling at the date of the consolidated statement of financial position. The revenues and expenses of operations are translated to Pound Sterling at rates approximating to the exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income. They are reclassified to profit or loss upon disposal.

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are reclassified to the profit or loss as part of the profit or loss on disposal.

Current and deferred income tax

Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the country where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate119on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial information. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised

Loss per share

The Group presents basic and diluted loss per share ("LPS") data for its ordinary shares. Basic LPS is calculated by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted LPS is determined by adjusting the profit or loss attributable to shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares, which could comprise warrants, share options and the conversion of loan notes into shares.

Intangible assets

Deferred exploration and evaluation costs

These comprise costs directly incurred in exploration and evaluation as well as the cost of mineral licences. Costs which are capitalised include costs of licence acquisition, technical services and studies, exploration drilling and testing and appropriate technical and administrative expenses but do not include general administrative expenses or costs incurred prior to having obtained the legal rights to explore an area, which are expensed directly to the income statement account as they occur. They are capitalised as intangible assets pending the determination of the feasibility of the project. When the decision is taken to develop a mine the related intangible assets are transferred to property, plant and equipment and the exploration and evaluation costs are amortised over the estimated life of the project. Where a project is abandoned or is determined not economically viable, the related costs are written off.

The recoverability of deferred exploration and evaluation costs is dependent upon a number of factors common to the natural resource sector. These include the extent to which the Company can establish mineral reserves on its properties, the ability of the Company to obtain necessary financing to complete the development of such reserves and future profitable production or proceeds from the disposition thereof.

Option fees received in respect of Earn-in agreements are offset against the relevant exploration asset.  If the amount exceeds the value of the asset, the balance will be recognised via the income statement.

Goodwill

Goodwill represents the excess of the cost of a business combination over the Group's interest in the fair value of identifiable assets, liabilities and contingent liabilities acquired.

Cost comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree. Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a financial liability, remeasured subsequently through profit or loss.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

Impairment of non-financial assets

The carrying amounts of the Group's assets are reviewed at the date of each consolidated statement of financial position to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. Impairment is measured by comparing the carrying values of the asset with its recoverable amount. The recoverable amount of the asset is the higher of the assets' fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in the income statement immediately.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in the income statement immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Share capital and share premium

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction against share premium, net of tax, from the proceeds.

Warrants

The Company estimates the fair value of the future liability relating to issued warrants using the Black-Scholes pricing model considering the terms and conditions upon which the warrants were issued.

Warrants relating to equity finance are recorded as a reduction of capital stock based on the fair value of the warrants.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying amount of these assets approximates their fair value.

4.  FINANCIAL RISK

The following represent the key financial risks that the Company faces:

Financial risk factors

The Company's operations exposed it to a variety of financial risks that had included the effects of credit risk, liquidity risk and interest rate risk. The Company had in place a risk management programme that attempted to limit the adverse effects on the financial performance of the Company by monitoring levels of debt finance and the related finance costs. The Company did not use derivative financial instruments to manage interest rate costs and as such, no hedge accounting was applied.

Given the size of the Company, the directors did not delegate the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the board of directors were implemented by the Company's finance department

(a) Credit risk

The Company's credit risk was primarily attributable to its trade receivables balance. The amounts presented in the statement of financial position are net of allowances for impairment

(b) Liquidity risk

Liquidity risk was the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's financial liabilities included its trade and other payables shown in Note 13

(c) Interest rate cash flow risk

The Company had interest-bearing assets. Interest bearing assets comprised cash balances and unsecured loans, which earned interest at floating rates

Capital risk management

The Company monitors capital which comprises all components of equity (i.e., share capital, share premium and retained earnings/losses).

5.  CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

Information about such judgements and estimates are contained in the accounting policies and/or the notes to the consolidated financial statements. Areas of judgement that have the most significant effect on the amounts recognised in the consolidated financial statements are as follows:

Impairment of exploration and evaluation costs

Determination as to whether, and by how much, an asset or cash generating unit is impaired involves management estimates. Management uses the following triggers to assess whether impairment has occurred (the list is not exhaustive):

• the period for which the entity has the right to explore in the specific area has expired during the period or will expire in the near future and is not expected to be renewed.

• substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned.

• exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities in the specific area.

• sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full on successful development or by sale.

6.  BUSINESS AND GEOGRAPHICAL REPORTING

The Group's chief operating decision maker is considered to be the executive directors (the 'Executive Board').  The Executive Board evaluates the financial performance of the Group by reference to its mineral exploration and battery recycling activities - its reportable segments.

Below is a summary of the Group's results, assets and liabilities by reportable segment as presented to the Executive Board.

	Mineral exploration	Battery recycling	Other	Total
	£000's	£000's	£000s	£000's
9 June 2021 to 30 June 2021
Operating expenses	-	-	(387)	(387)
Total segment operating profit/(loss)	-	-	(387)	(387)
6 months to 31 December 2021
Operating expenses	(94)	-	(663)	(757)
Total segment operating profit/(loss)	(94)	-	(663)	(757)
Total segment assets
At 30 June 2021	-	-	59	59
At 31 December 2021	16,105	3,294	2,080	21,479
Total segment liabilities
At 30 June 2021	-	-	(396)	(396)
At 31 December 2021	(281)	-	(379)	(660)

7.  LOSS PER SHARE

Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

	6 months to 31 December 2021	Period 9 June 2021 to 30 June 2021
	£000's	£000's
Loss from continuing operations attributable to equity holders of the company	(1,071)	(387)
Weighted average number of ordinary shares in issue	327,989,689	50,000,000
Basic and fully diluted loss per share from continuing operations in pence	(0.33p)	(0.77p)

8.  INTANGIBLE ASSETS

 

Cost	Mineral exploration £000s	Goodwill £000s	Total £000s
As at incorporation 9 June 2021 and 30 June 2021	-	-	-
Acquired through business combinations	15,691	2,778	18,469
Exploration expenditure	217	-	217
At 31 December 2021	15,908	2,778	18,686
Accumulated amortisation
As at incorporation 9 June 2021 and 30 June 2021	-	-	-
Amortisation	-	-	-
At 31 December 2021	-	-	-
Net book value at 30 June 2021	-	-	-
Net book value at 31 December 2021	15,908	2,778	18,686

See note 9 for further details on the mineral resource exploration projects acquired through the acquisition of Emperium, LRH Group, TML and OEL Group.

9.  INVESTMENT IN SUBSIDIARIES

On 17 November 2021 the Company acquired 100% of the issued share capital of Emperium 1 Holdings Corporation (Emperium), LRH Resources Limited and its wholly owned subsidiary Asturmet Recursos S.L. (LRH Group), Techmin Limited (TML), Onshore Energy Limited (OEL) and its wholly owned subsidiary Technology Minerals Cameroon (TMC). The consideration to acquire each company except for TML was settled by the issuance of ordinary shares in the Company. See note 11 for further information.

Emperium is a company incorporated in the State of Nevada that owns mineral claims on approximately 13,900 acres in the United States in an area commonly known as the 'Idaho Cobalt Belt'.

LRH is a company incorporated in the Republic of Ireland and engages in mineral exploration, development and extraction and is primarily focused on Battery Metals. LRH owns a 100% interest in fifteen prospecting licences covering an area of approximately 477 sq. km in Ireland and a 100% interest in seven applications for exploration permits, one of which has been granted, in northern Spain.

OEL is a company incorporated in England that has applied for exploration permits covering an area of 2,456 square kilometres in Cameroon close to an area commonly known as the 'Nkamouna cobalt find'

TML is a company incorporated in the England that has entered into option agreements to acquire mining claim rights covering an area of 3,175 acres in Idaho and a working interest in a mining project in South Dakota, United States. The consideration paid and the fair value of the net assets acquired for each of the subsidiaries is as follows:

	Emperium £000s	LRH Group £000s	TML £000s	OEL £000s	TMC £000s	Total £000s
Consideration paid	8,400	605	20	6,720	-	15,745
Carrying amount of mineral resource projects acquired	(258)	(200)	792	(2,176)	(1)	(1,841)
Fair value of mineral resource projects acquired	8,142	405	812	4,543	(1)	13,902
Deferred tax on mineral resource projects acquired
Location	USA	Ireland	UK	UK	Cameroon
Tax rate	21%	12.5%	19%	19%	33%
Deferred tax liability	1,710	51	154	863	-	2,778
Mineral resources project transferred to intangible assets	9,852	456	966	5,406	(1)	16,680

The carrying amounts of the mineral resource projects acquired was considered to be equal to their fair values.

10.  INVESTMENT IN ASSOCIATES

In September 2021 the Company acquired 49% of a battery-recycling business, Recyclus Group Ltd ('Recyclus') for nil consideration.

Under the equity method the initial investment is recognised at cost being nil.

11.  LOANS TO ASSOCIATES

During the period the Company provided a loan to Recyclus as follows:

			£000s
At 30 June 2021			-
Loans acquired			1,187
Additions			2,107
At 31 December 2021			3,294

 

12.  TRADE AND OTHER RECEIVABLES

		31 December 2021 £000s	30 June 2021 £000s
Unpaid share capital		-	50
Other debtors		194	-
Loans to directors		11	-
VAT receivable		90	-
Prepayments		-	9
At 31 December 2021		295	59

13.  TRADE AND OTHER PAYABLES

		31 December 2021 £000s	30 June 2021 £000s
Trade and other payables		428	-
Taxation and social security		55	-
Accruals		94	396
At 31 December 2021		577	396

14.  SHARE CAPITAL AND SHARE PREMIUM

Group and Company	Number of ordinary shares of 1p	Share capital £000's	Share premium £000's
At incorporation 9 June 2021 and 30 June 2021	50,000,000	50	-
Share issue - placings	66,666,667	67	1,433
Share issue - deal consideration	786,239,131	786	14,939
Share issue - conversion of CLNs	306,229,366	306	4,887
Share issue - introduction fees	3,733,333	4	80
Share issue - costs	-	-	(274)
Fair value of share warrants issued	-	-	(1,656)
At 31 December 2021	1,212,868,497	1,213	19,409

The history of the Company's share capital is as follows:

On incorporation

50,000,000 Ordinary Shares of £0.001 each of which 49,999,999 Ordinary Shares were issued to Century Cobalt Corp. and 1 to Alexander Stanbury, who holds his share as nominee for Century Cobalt Corp.

 

Share placing - 17 November 2021

Placing of 66,666,667 Ordinary Shares of £0.001 at a price of £0.0225 (Placing Price) per Ordinary Share raising £1,500,000 before issue costs.

Deal consideration paid - 17 November 2021

420,000,000 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £8,400,000 to acquire 100% of Emperium.

336,000,000 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £6,720,000 to acquire 100% of OEL.

30,239,131 Ordinary Shares of £0.001 at a price of £0.02 per Ordinary Share were issued for a total consideration of £604,783 to acquire 100% of LRH.

Conversion of CLNs - 17 November 2021

Refer note 16

Introduction fees - 17 November 2021

£84,000 was paid by way of issuance of 3,733,333 Ordinary Shares of £0.001 at a price of £0.0225 per Ordinary Share to League of Angels for introduction fees.

15.  WARRANTS

CLN Warrants

Warrants were issued to the holders of the Convertible Loan Notes (CLN Warrants), that will give them the right to within 2 years from Admission to subscribe for one Ordinary Share in Technology Minerals for each Ordinary Share issued to the loan note holder on conversion of the loan note at Admission, at the Placing Price x 150%.

Placee Warrants

Each placee of the £1.5m share placing will have the right to subscribe for one Ordinary Share in Technology Minerals for each placing share issued to the placee at the Placing Price x 150% exercisable within 2 years from Admission.

Advisor Warrants

Warrants were issued to the Company's advisors that will give them the right to within 2 years from Admission to subscribe for Ordinary Shares in Technology Minerals at exercise prices of £0.03375 and £0.001

The fair value of the warrants issued during the period was calculated using the Black-Scholes mode using the following information:

	CLN Warrants	Placee and advisor Warrants	Advisor Warrants
Number of shares that could be acquired on the exercise of the warrant	306,229,366	72,955,554	7,333,334
Fair value of one CLN Warrant	£0.003937	£0.00401	£0.02151
Warrant Share exercise price	£0.03375	£0.03375	£0.001
Date of grant	29/07/2021	17/11/2021	17/11/2021
Time to maturity, years	2	2	2
Share price	£0.0225	£0.0225	£0.0225
Expected volatility*,%	55%	55%	55%
Expected dividend growth rate,%	0%	0%	0%
Risk-free interest rate (3 year bond),%	0.076%	0.56%	0.56%

*Calculation of volatility involves significant judgement by the Directors due to the absence of the historical trading data for the Company at the date of the grant.

The fair value of the warrants is £1,656,199 and has been charged to Share premium. See note 14

16.  CONVERTIBLE LOAN NOTES

On 29 July 2021 the Company issued convertible loan notes in 3 tranches: Series A, Series B and Series C. The Series A and Series B CLNs were originally issued by Techmin Limited and on 29 July 2021 the Company assumed all of Techmin Limited's obligations.

The Company raised a total of £5,192,800 before costs.

On 17 November the CLNs were converted into the Ordinary Shares of the Company as follows:

CLN Series	Amount borrowed £	Discount to Placing Price %	Issue price per Ordinary Share £	Number of Ordinary shares issued on conversion
Series A	1,762,800	30%	0.0158	111,923,810
Series A	292,500	35%	0.0146	20,000,000
Series B	2,137,500	20%	0.0180	118,750,000
Series C	1,000,000	20%	0.0180	55,555,556
Total	5,192,800			306,229,366

17.  RELATED PARTY TRANSACTIONS

Base salaries paid to the Executive Directors in the six-month period ended 31 December 2021 was £208,926

The amounts paid to the Non-Executive Directors for services in the six-month period ended 31 December 2021 was £10,800.

During the period an introductory fee of 5% was paid, in shares, to PAI.Capital Ltd. as a result of the convertible loan note issued to Kafina Investments, LLC in return for £1,000,000. Alexander Stanbury, Robin Brundle and Philip Beard were advisers to PAI.Capital Ltd at the time the note was issued but are longer advisors to PAI.Capital Ltd.

As at 31 December 2021 included in trade and other receivables is an amount of £11,010 owed by Alex Stanbury a director of the Company.  This was repaid in full 31 March 2022

During the period the Company provided a loan to Recyclus Group and associate of £3.3m.

Alex Stanbury is also a director of Recyclus Group Limited.

See note 11 for further information.

18.  EVENTS OCCURRING AFTER THE REPORTING DATE

On 14 February 2022, 23,147,274 and 6,666,667 warrants were exercised at a price of 3.375 pence and 0.1 pence per ordinary share respectively raising total proceeds of £787,887.

On 17 March 2022, 5,991,659 ordinary shares were issued in the Company as follows:

· 1,333,333 ordinary shares to United Capital Investments London Limited ("UCI") in settlement of a payment due to UCI for work carried out by UCI for the Company's wholly-owned subsidiary, Onshore Energy Limited;

· 2,222,222 ordinary shares to UCI in settlement of a payment due from the Company to PAI Capital Ltd; and

· 2,436,104 ordinary shares to Aurum Exploration Limited ("Aurum") in settlement of payment due to Aurum for work carried out by Aurum for the Company's wholly-owned subsidiary, LRH Limited.

· On 9 March 2022, the Group exercised its option to acquire Blackbird Creek property in Lemhi County, Idaho (USA) from DG Resource Management Ltd for a consideration of C$800,000 (approx.. £472,499) to be paid by issuing 21,013,440 ordinary shares in the Company.

 

END

 

 

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