Corcel PLC

("Corcel" or the "Company")

Final Audited Results

for the Year Ended 30 June 2024

16 December 2024

The Company's Annual Report and Financial Statements for 2024, extracts from which are set out below, will be published and sent out to the Company's shareholders shortly and will be available on the Company's website at www.corcelplc.com.

Chairman's Statement

Dear Shareholders,

I am pleased to present Corcel Plc's Annual Report and Accounts for the financial year ending 30 June 2024. Our activities this year have set the path for a true transformation of Corcel, characterised by strategic realignment, commercial and operational milestones, and a strengthened commitment to delivering significant sustainable value for our stakeholders.

Strategic and Operational Progress

In July 2023, with the acquisition of 90% of Atlas Petroleum Exploration Worldwide Ltd ("APEX"), we embarked on a strategic pivot, focusing our efforts on high-impact onshore oil and gas assets in Angola's Kwanza Basin, namely: operated Block KON-16 and non-operated blocks KON-11 and KON-12. The operator of KON-11, Angola's national oil company, Sonangol Pesquisa e Produção, S.A. ("Sonangol"), drilled two wells (TO-13 and TO-14) in the Tobias field during Q3 and Q4 of 2023. Both wells had oil shows, indicating the presence of hydrocarbons in the field. Detailed work is currently being undertaken to assess the results and address the mechanical and performance issues, faced during the testing of these two wells.

In our operated block KON-16, we initiated Geological and Geophysical "G&G" studies and conducted an Enhanced Full Tensor Gradiometry Survey ("eFTG"), which was successfully acquired post year-end reporting during Q3, 2024, with processing ongoing. The eFTG is expected to provide highly accurate geophysical representations of critical information for developing a detailed exploration programme, comprising of a 2D seismic acquisition programme and an exploration well to establish the shallow post-salt and deep pre-salt prospectivity of KON-16. 

In April 2024, to recalibrate the strategic direction, Mr. Scott Gilbert (a co-founder of APEX) was appointed as interim CEO, bringing to the Company extensive experience, operating in Brazil and in Angola, complementing the experience of Ms. Geraldine Geraldo, Executive Director (also a co-founder of APEX). In July 2024, post year end reporting, Scott was appointed as permanent CEO and an Executive Director to the Board. The newly formed management team delivered the following key milestones:  

o  Increased our equity in KON-16 from 31.5% to 49.5%, underscoring our confidence in what we believe to be one of the most exciting blocks in the onshore Kwanza Basin with not only a post-salt potential, but a significant pre-salt potential as well (September 2024);

o  Delivered critical G&G progress, including the completion of the eFTG survey for developing prospectivity in KON-16 (Q2-Q3 2024);

o  Signed a collaboration agreement with a Brazilian oil field services company, which has resulted in our entry into the country through the option agreement (with minimal dilution to shareholders) for the acquisition of gas production from the Irai field, onshore Brazil. Our collaboration has enhanced our operational capacity in Brazil, and we are presently reviewing several promising production acquisition opportunities in the region (July 2024); 

o  Strengthened the technical and operational team with the appointment of Chief Operating Officer, Richard Lane (November 2024);

o  Secured new strategic investors with extensive experience in oil and gas in both Angola and Brazil (September 2024);

o  Completed a full review and analysis of the mining portfolio, paving the way for operations to recommence in 2025 (Q3 2024).

Corcel is now firmly established as an energy company with three verticals, which intend to deliver a) significant upside through our Angola exploration assets, b) revenue from production through our entry into the Irai field and other potential acquisitions in Onshore Brazil, and c) continued exposure to rare earth and battery metals from our historical assets, which are very much at the forefront of energy transition and global electrification trends.

Financial Discipline and Fundraising

Financial resilience remains a cornerstone of our approach. In May 2024, we successfully raised £399,750 through equity issuances, reflecting continued investor confidence in our vision.  These funds have been deployed strategically to advance our work programs in Angola, evaluate opportunities in Brazil, and support ongoing operational needs.

Prior to year end reporting, in June 2024, we raised a further £500,000 from strategic investors, again, reflecting investor confidence in the Company and the management team. These modest raises were completed with the intention of minimising dilution to shareholders, yet enabled the Company to deliver on several of its newly set strategic objectives. 

In September 2024, the Company completed a fundraising of £1,220,000, which included the participation of several supportive long-term oil and gas investors.  

We report during the period that the Group incurred a loss of £3.03 million (2023: loss of 1.26 million), primarily due to increases in administrative expenses £2.57 million (2023: £1.44 million), related to the expansion of the business and asset portfolio, and the impairment of £0.22 million to the Company's Canegrass project in Australia (2023: £nil).  Project costs during the year held flat at £0.14 million (2023: £0.11 million) and finance costs fell to £0.13 million (2023: £0.45 million) reflecting the Company's transition to less expensive sources of capital.   

Governance and Leadership

This year, we undertook a governance refresh to better align with our evolving strategic priorities. I was honoured to assume the role of Non-Executive Chairman. The Company is supported by a talented Board and an excellent leadership team with deep expertise across oil and gas, finance and international markets. Together, we are committed to ensuring robust governance as a foundation for existing operations and our growth ambitions.

Outlook and Future Plans

The upcoming year is poised to be one of great importance for Corcel.

Our key priorities for 2024-2025 include:

o  Advancing the exploration program on KON-16;

o  Building on our first acquisition, expanding our footprint in Brazil through strategic acquisitions targeting near-term production;

o  Strengthening partnerships and working closely with the Operator in Angola to maximize the value of KON-11 and KON-12;

o  Maximising value potential from our Battery Metals and Rare Earth assets;

o  Upholding financial prudence and operational efficiency to sustain progress.

We remain steadfast in our commitment to building a balanced portfolio of energy assets, combining near-term production with long-term exploration upside, while delivering sustainable value for our shareholders.

On behalf of the Board, I extend my deepest gratitude to our shareholders for their unwavering support, to our employees for their dedication, and to our partners for their collaboration. Together, we are forging a resilient and dynamic Corcel, poised to thrive in an evolving energy landscape.

Yours sincerely,

Pradeep Kabra
Independent Non-Executive Chairman
Corcel Plc

CEO's Statement

Dear Shareholders,

I am delighted to provide the following statement, which underscores a year where we have laid the foundation for an ambitious transformation of our Company, emerging as a dynamic and resilient player in the energy sector. Our journey is characterised by a clear strategic vision, decisive actions, and an unwavering commitment to unlocking the immense potential of our asset portfolio across Angola, Brazil, and beyond, by investing and maturing our three verticals:

o  Exploration: high-impact oil and gas post-salt and pre-salt exploration from the onshore Kwanza Basin in Angola;

o  Production: low-risk production from oil and gas fields onshore Brazil for near-term revenue generation;

o  Energy Transition: through the development of our Battery Metals asset portfolio.

Operational Achievements and Strategic Momentum

2024 has been a pivotal year for Corcel. The acquisition of a 90% interest in APEX in June 2023 marked the beginning of a new chapter, enabling the business to pivot our focus toward high-impact, high-potential oil and gas assets in Angola's Kwanza Basin. In KON-16, our operated block, we made significant progress, including the completion of the Enhanced Full Tensor Gradiometry ("eFTG") survey-an instrumental step in refining our exploration plans.

Additionally, our increased equity in KON-16, as disclosed in the Chairman's Statement, underscores our confidence in this asset's transformative potential, particularly its pre-salt prospectivity. These advancements represent more than technical milestones; they signal Corcel's readiness to lead in unlocking the untapped value in Angola's onshore energy landscape.

Beyond Angola, we entered Brazil with a strategic collaboration, signing an option agreement to acquire gas production from the Irai field transaction (post year-end). This entry not only diversifies our portfolio but also establishes a beachhead for additional opportunities in a key market with significant near-term production potential.

Financial Resilience and Strategic Investment

The financial discipline, we have exercised, has been instrumental in achieving key operational objectives, while minimising shareholder dilution. With successful fundraisings, strategic partnerships, and a shift toward cost-effective capital, we have ensured Corcel's financial robustness even as we scale our ambitions.

The Company's loss during the period reflects necessary investments in our people, processes, and portfolio. These expenditures, while initiated under previous management, are not merely costs but strategic steps toward Corcel's future-a future rooted in operational excellence, technical innovation, and long-term value creation. Since taking over as CEO after the year-end, I have prioritised exercising tight cost control and adopting a more disciplined approach to ensure that every investment aligns with our strategic objectives and drives sustainable value. This marks a shift toward greater financial prudence and accountability under my leadership.

People and Partnerships: Driving Progress

At the core of our transformation is a talented team of experts, supported by strategic partnerships that amplify our operational capacity. The addition of a seasoned leadership team and our collaboration with partners in Angola and Brazil are critical enablers of our vision. We are building an organization that thrives on collective expertise, delivering impactful results with precision and accountability.

Looking Ahead: The Road to 2025

Corcel is entering an era of execution. Our focus for the year ahead includes advancing exploration on KON-16, expanding our footprint in Brazil, and maximising the value of KON-11 and KON-12 through close collaboration with Sonangol. Simultaneously, we will work to maximise value from our Battery Metals and Rare Earth assets to capture the opportunities, presented by the energy transition.

As we execute on these priorities, we will remain uncompromising in our commitment to financial prudence, operational excellence, and stakeholder value. Corcel is poised to deliver a balanced portfolio that marries the immediacy of production revenues with the upside potential of long-term exploration.

A Shared Vision for Success

I am deeply grateful to our shareholders, to our employees, and our partners. Together, we are not just building a Company-we are crafting a legacy of sustainable growth, innovation, and resilience in the energy sector.

Thank you for your support as we take bold steps toward realising the full potential of Corcel Plc.

Yours sincerely,

Scott Gilbert
Chief Executive Officer
Corcel Plc

Results and Dividends

The Group made a loss after taxation of £3.03million (2023: loss of £1.26 million) with the increase on the prior year, driven largely by the costs associated with operating an expanded Group, inclusive of operations in Angola, which had only been acquired at the end of the prior year. The Directors do not recommend the payment of a dividend (2023: nil).

For further information, please contact:

Scott Gilbert                                                                                         Corcel Plc CEO & Director

[email protected]                                                                           

James Joyce / James Bavister / Andrew de Andrade                            Zeus NOMAD & Broker

020 3829 5000                                                                                        

Jonathan Wright / Rupert Holdsworth Hunt                                          Auctus Advisors  Joint Broker

07711 627449

Patrick d'Ancona                                                                                  Vigo Communications IR

0207 3900 230  

The information, contained within this announcement, is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014, which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

About Corcel

Corcel has a notable oil and gas portfolio in onshore Angola that includes brownfield redevelopment opportunities and significant exploration upside. Corcel marked a new country entry into Brazil by acquiring rights to producing gas and exploration assets, further diversifying its portfolio and enhancing its growth potential.

Corcel's Angola portfolio consists of interests in three licences:

·      KON - 16 Operated - 55% working interest - 49.5% net to CRCL

·      KON - 11 Non-Operated - 20% working interest - 18% net to CRCL

·      KON - 12 Non-Operated - 25% working interest - 22.5% net to CRCL

 Corcel's Brazil portfolio consists of the option to acquire:

·      a 20% interest in the IRAI gas field

·      a right-of-first refusal ("ROFR") over the remaining 80% in the IRAI field, and

·      another ROFR for 100% of the adjacent TUC-T-172 exploration block, located in the state of Bahia, onshore Brazil.

Independent Auditor's Report to the Members of Corcel Plc

Opinion

We have audited the Financial Statements of Corcel Plc (the "Company") and its subsidiaries (the "Group") for the year ended 30 June 2024, which comprise the Consolidated and Company Statements of Financial Position, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statements of Cash Flows and notes to the Financial Statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the Company Financial Statements, as applied in accordance with the provisions of the Companies Act 2006.

In our opinion:

·      the Financial Statements give a true and fair view of the state of the Group's and of the Company's affairs as at 30 June 2024 and of the Group's loss for the year then ended;

·      the Group Financial Statements have been properly prepared in accordance with UK-adopted international accounting standards;

·      the Company Financial Statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and

·      the Financial Statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for Opinion

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

Material uncertainty related to going concern

We draw attention to Note 1.2 in the Financial Statements, which indicates that the Group and the Company are reliant on raising additional funding in order to meet commitments as they fall due, including working capital requirements and funding of agreed work programmes. As stated in Note 1.2, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Group's and the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the Financial Statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the Financial Statements is appropriate. Our evaluation of the Directors' assessment of the Group's and the Company's ability to continue to adopt the going concern basis of accounting included:

·    consideration of the objectives, policies and processes in managing its working capital;

·    reviewing the cash flow forecasts for the ensuing twelve months from the date of approval of these Financial Statements and critically analysing the key inputs and assumptions used;

·    reviewing the stress testing performed by management for reasonableness;

·    obtaining an understanding of committed spend versus spend that can be deferred if needed, and how management is able to cut back costs should it be needed to preserve cashflow in the short term;

·    reconciling the opening bank balance as per the cashflow forecast to the bank statements at the beginning of December 2024;

·    reviewing management's going concern memorandum and holding discussions with management regarding future plans and availability of funding;

·     reviewing the adequacy and completeness of disclosures in the Group and Company Financial Statements; and

·     reviewing post balance sheet events as they relate to the Group's and Company's ability to raise funds. 

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Our Application of Materiality

For the purposes of determining whether the Financial Statements are free from material misstatement, we define materiality as a magnitude of misstatement, including omission, that makes it probable that the economic decisions of a reasonably knowledgeable person, relying on the Financial Statements, would be changed or influenced. We have also considered those misstatements, including omissions that would be material by nature and would impact the economic decisions of a reasonably knowledgeable person based our understanding of the business, industry and complexity involved. 

We apply the concept of materiality both in planning and throughout the course of audit, and in evaluating the effect of misstatements. Materiality is used to determine the Financial Statements areas that are included within the scope of our audit and the extent of sample sizes during the audit.

We also determine a level of performance materiality, which we use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the Financial Statements as a whole. No significant changes have come to light during the course of the audit, which required a revision to our materiality for the Financial Statements as a whole.

In determining materiality and performance materiality, we considered the following factors:

·      our cumulative knowledge of the Group and its environment, including industry specific trends;

·      any change in the level of judgement required in respect of the key accounting estimates;

·      significant transactions during the year;

·      the stability in key management personnel; and

·      the level of misstatements identified in prior periods.

Materiality for the Group Financial Statements was set at £181,000 (2023: £172,400). This was calculated at 3% of net assets (2023: 3% of net assets). Using our professional judgement, we have determined this to be the principal benchmark within the Group Financial Statements as it is from these net assets that the Group seeks to deliver returns for shareholders, in particular the value of exploration and development projects the Group is interested in through its subsidiaries, mining tenements and joint venture.

Materiality for the significant components of the Group, ranged from £91,500 to £180,000 (2023: £87,600 to £171,000) calculated as a percentage of net assets.

Performance materiality for the Group Financial Statements was set at £126,700 (2023: £120,600), being 70% (2023: 70%) of materiality for the Group Financial Statements as a whole.

Materiality and performance materiality for the Company was set at £180,000 (2023: £171,000) and £126,000 (2023: £119,700) respectively.

The materiality and performance materiality for the significant components, including the Company, are calculated on the same factors as Group materiality and performance materiality.

We agreed to report to those charged with governance all corrected and uncorrected misstatements we identified through our audit with a value in excess of £9,050 (2023: £8,600) for the Group and for the Company a value in excess of £9,000 (2023: £8,500). We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

Our Approach to the Audit

Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, being areas subject to significant management judgement as well as areas of greatest complexity and size. The scope of our audit was based on the significance of components' operations and materiality. Each component was assessed as to whether they were significant to the Group based on financial significance or risk.

The Group includes the listed Company in United Kingdom and a number of subsidiaries based in different jurisdictions. The listed Company and one subsidiary were considered to be significant components due to identified risk and size.

In designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the Financial Statements. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the Financial Statements, considering the structure of the Group.

We considered areas deemed to involve significant judgement and estimation by the Directors, such as the key audit matters surrounding: the carrying value of investments in subsidiaries, assets held for sale, and receivables from other Group companies; and the carrying value of exploration and evaluation assets. Other judgemental areas relate to the valuation of share options and warrant instruments. We also addressed the risk of management override of controls, including consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

The Group's and the Company's centralised accounting function is based in United Kingdom and the audit work on all significant components was performed by our Group audit team in London.

Key Audit Matters

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

In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

We have determined the matters described below to be the key audit matters to be communicated in our report

Other Information

The other information comprises the information, included in the annual report, other than the Financial Statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the Group and the Company Financial Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on Other Matters Prescribed by the Companies Act 2006

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

·      the information given in the Strategic Report and the Directors' Report for the financial year for which the Financial Statements are prepared is consistent with the Financial Statements; and

·      the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on Which We are Required to Report by Exception

In the light of the knowledge and understanding of the Group and the Company and their environment, obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

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

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

·      the Company Financial Statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of Directors

As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the Group and Company Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error.

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

·      We obtained an understanding of the Group and the Company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the Financial Statements. We obtained our understanding in this regard through discussions with management. We also selected a specific audit team based on experience with auditing entities within this industry, facing similar audit and business risks.

·      We determined the principal laws and regulations relevant to the Group and the Company in this regard to be those arising from:

o  AIM Rules;

o  QCA Corporate Governance Code;

o  UK Companies Act 2006;

o  UK-adopted international accounting standards;

o  UK employment law;

o  UK tax legislation;

o  General Data Protection Regulations;

o  Anti-Bribery Act;

o  Anti-Money Laundering Regulations; and

o  Local environmental and exploration regulations.

·      We designed our audit procedures to ensure the audit team considered, whether there were any indications of non-compliance by the Group and the Company with those laws and regulations. These procedures included, but were not limited to:

o  Making enquiries of management;

o  A review of Board minutes;

o  A review of legal and professional ledger accounts; and

o  A review of Regulatory News Service Announcements

·      We also identified the risks of material misstatement of the Financial Statements due to fraud. Other than the non-rebuttable presumption of a risk of fraud, arising from management override of controls, we did not identify any significant fraud risks.

·      As in all of our audits, we addressed the risk of fraud, arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of bias (Refer to the Key Audit Matter section); and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

·      Our review of non-compliance with laws and regulations, incorporated all Group entities. The risk of actual or suspected non-compliance was not sufficiently significant to our audit to result in our response being identified as a key audit matter.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the Financial Statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the Financial Statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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

Use of Our Report

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

Imogen Massey (Senior Statutory Auditor)                                                                                                       15 Westferry Circus

For and on behalf of PKF Littlejohn LLP                                                                                                                       Canary Wharf

Statutory Auditor                                                                                                                                                          London E14 4HD

13 December 2024

Financial Statements

Consolidated Statement of Financial Position

as at 30 June 2024

The accompanying notes form an integral part of these Financial Statements.

These Financial Statements were approved by the Board of Directors and authorised for issue on 13 December 2024 and are signed on its behalf by:

Scott Gilbert
Executive Director 

Registration number: 05227458

Consolidated Income Statement

for the year ended 30 June 2024

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2024

The accompanying notes form an integral part of these Financial Statements.

Consolidated Statement of Changes in Equity

for the year ended 30 June 2024

The movements in equity during the year were as follows:

See Note 15 for a description of each reserve included above.

Consolidated Statement of Changes in Equity

See Note 15 for a description of each reserve included above.

Consolidated Statement of Cash Flows

for the year ended 30 June 2024

Major non-cash transactions are disclosed in Note 20.

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Company Statement of Financial Position

Corcel Plc (Registration Number: 05227458) as at 30 June 2024

Company Statement of Comprehensive Income

As permitted by Section 408 Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The Company's loss for the financial year was £3,127,247 (2023: loss of £1,494,325). The Company's total comprehensive loss for the financial year was £3,127,247 (2023: loss £1,419,325).

These Financial Statements were approved by the Board of Directors and authorised for issue on 13 December 2024 and are signed on its behalf by:

Scott Gilbert  

Executive Director

The accompanying notes form an integral part of these Financial Statements.

Company Statement of Changes in Equity

for the year ended 30 June 2024

The movements in reserves during the year were as follows:

Company Statement of Changes in Equity

See Note 15 for a description of each reserve included above.

Company Statement of Cash Flows

for the year ended 30 June 2024

Major non-cash transactions are disclosed in Note 20.

The accompanying notes and accounting policies form an integral part of these Financial Statements.

Notes to Financial Statements

1.   Principal Accounting Policies

1.1    Authorisation of Financial Statements and Statement of Compliance with IFRS

The Group Financial Statements of Corcel Plc (the "Company", "Corcel" or the "Parent Company"), for the year ended 30 June 2024, were authorised for issue by the Board on 13 December 2024 and signed on the Board's behalf by Scott Gilbert.  Corcel Plc is a public limited company, incorporated and domiciled in England and Wales. The Group's ordinary shares are traded on AIM.  The principal activity of the Group is the management of a portfolio of oil and gas projects in Africa and Brazil and battery metals exploration and development projects in Australia and PNG. The registered address of the Group is Salisbury House, Suite 425, London Wall, London EC2M 5PS.

1.2    Basis of Preparation

The Financial Statements have been prepared in accordance with UK adopted international accounting standards ("UK IAS") in conformity with the requirements of the Companies Act 2006. They are presented in thousand Pounds Sterling (£'000), unless stated otherwise.

The principal accounting policies adopted are set out below.

Going Concern

It is the prime responsibility and requirement of the Board to prepare the Group and the Company Financial Statements on a going concern basis, unless inappropriate to assume the Group will continue in business. At 30 June 2024, the Group had cash and cash equivalents of £0.3 million (2023: £0.3 million) and £1.3 million of borrowings (2023: £0.6).  The Group has nil revenues.    

The Directors note the necessity, given the limited cash resources currently held by the Group, that additional funding be raised in the near term to meet the ongoing spending projections and working capital requirements of the business.  This would most likely be through equity and/or debt issuances in Q1 2025 with, dependent on the quantum of near term funding raised, further resources required to be secured in the first quarter of 2025. Whilst the Directors remain confident that funding will be secured as and when required to continue to progress the Group's projects and meet its obligations, there can be no certainty that the Company will be able to secure the necessary funding when required. Consequently, there exists a material uncertainty over the application of the going concern principle.  See Note 1.2 to these Financial Statements for further details.    

Having considered the prepared cashflow forecasts and the Group budget, expected operational costs and the continued support of the Company's suppliers and shareholders, the Directors consider that they will have access to adequate resources in the 12 months from the date of the signing of these Financial Statements. As a result, they consider it appropriate to continue to adopt the going concern basis in the preparation of the Financial Statements.

Should the Group be unable to continue trading as a going concern, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities, which might arise, and to classify non-current assets as current. The Financial Statements have been prepared on the going concern basis and do not include the adjustments that would result if the Group was unable to continue as a going concern. Notwithstanding the confidence and historical track record of the Board and the Company in raising funding as and when required, there can be no certainty that the Company will be successful in raising the additional funding, necessary to continue to meet its obligations as and when they fall due.  Consequently, a material uncertainty exits, which may cast significant doubt on the Group and the Company's ability to act as a going concern.

New Standards, Amendments and Interpretations Not Yet Adopted

At the date of approval of these Financial Statements, the following standards and interpretations, which have not been applied in these Financial Statements were in issue but not yet effective:

·      Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (effective 1 January 2024);

·      Amendments to IAS 1: Classification of Liabilities as Current or Non-current - Deferral of Effective Date (effective 1 January 2024);

·      Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies (effective 1 January 2023);

·      Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates (effective 1 January 2023);

·      Amendments to IAS 12: Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective 1 January 2023);

·      Amendments to IAS 1 Presentation of Financial Statements: Non-current Liabilities with Covenants (effective 1 January 2024);

·      Amendments to IAS 12 International Tax Reform: Pillar Two Model Rules (effective 1 January 2023);

·      Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements (effective 1 January 2024);

·      Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rate: Lack of Exchangeability (effective 1 January 2025).

The effect of these new and amended Standards and Interpretations, which are in issue but not yet mandatorily effective, is not expected to be material.

Standards Adopted Early by the Group

The Group has not adopted any standards or interpretations early in either the current or the preceding financial year.

1.3  Basis of Consolidation

The consolidated Financial Statements of the Group incorporate the Financial Statements of the Company and entities controlled by the Company, its subsidiaries, made up to 30 June each year.

Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies so as to obtain economic benefits from their activities. Subsidiaries are consolidated from the date on which control is obtained, the acquisition date, until the date that control ceases. They are deconsolidated from the date on which control ceases.

The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred or assumed at the date of exchange. Costs, directly attributable to the acquisition, are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the acquisition date.

Provisional fair values are adjusted against goodwill if additional information is obtained within one year of the acquisition date about facts or circumstances, existing at the acquisition date. Other changes in provisional fair values are recognised through profit or loss.

Intra-group transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated on consolidation, except to the extent that intra-group losses indicate an impairment.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the Consolidated Statement of Comprehensive Income. Any impairment, recognised for goodwill, is not reversed.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it:

·      derecognises the assets (including goodwill) and liabilities of the subsidiary;

·      derecognises the carrying amount of any non-controlling interest;

·      derecognises the cumulative translation differences recorded in equity;

·      recognises the fair value of the consideration received;

·      recognises the fair value of any investment retained;

·      recognises any surplus or deficit in profit or loss; and

·      reclassifies the Parent's share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Non-Controlling Interests

Profit or loss and each component of other comprehensive income are allocated between the Parent and non-controlling interests, even if this results in the non-controlling interest having a deficit balance.

Transactions with non-controlling interests, that do not result in loss of control, are accounted for as equity transactions. Any differences, between the adjustment for the non-controlling interest and the fair value of consideration paid or received, are recognised in equity.

1.4    Summary of Significant Accounting Policies

1.4.1       Mineral Tenements and Exploration Property

Exploration licence and property acquisition costs are capitalised in intangible assets. Licence costs, paid in connection with a right to explore in an existing exploration area, are capitalised and held at cost. Licence and property acquisition costs are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable amount. If no future activity is planned or the licence has been relinquished or has expired, the carrying value of the licence and property acquisition costs are written off through the statement of profit or loss and other comprehensive income.

1.4.2       Investment in Associates

An associate is an entity over which the Company is in a position to exercise significant influence, but not control or joint control, through participation in the financial and operating policy decisions of the investee.

Investments in associates are recognised in the Consolidated Financial Statements, using the equity method of accounting. The Group's share of post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition movements in other comprehensive income are recognised directly in other comprehensive income. The carrying value of the investment, including goodwill, is tested for impairment when there is objective evidence of impairment. Losses in excess of the Group's interest in those associates are not recognised, unless the Group has incurred obligations or made payments on behalf of the associate.

Where a Group company transacts with an associate of the Group, unrealised gains are eliminated to the extent of the Group's interest in the relevant associate. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Where the Company's holding in an associate is diluted, the Company recognises a gain or loss on dilution in profit and loss. This is calculated as the difference between the Company's share of proceeds, received for the dilutive share issue and the value of the Company's effective disposal.

In the Company accounts, investments in associates are recognised and held at cost. The carrying value of the investment is tested for impairment, when there is objective evidence of impairment. Impairment charges are included in the Company Statement of Comprehensive Income.

1.4.3       Interests in Joint Ventures

A joint venture is a joint arrangement, whereby the partners, who have joint control of the arrangement, have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of the joint arrangement, which exists only when decisions on relevant activities require the unanimous consent of the parties sharing control. The Group recognises its interest in the entity's assets and liabilities, using the equity method of accounting. Under the equity method, the interest in the joint venture is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of its net assets, less distributions received and less any impairment in value of individual investments. The Group Income Statement reflects the share of the jointly controlled entity's results after tax. In the Company, only Financial Statements, the Company's interests in Joint Ventures is recognised at historic cost less any impairment charged to date.

Any goodwill, arising on the acquisition of a jointly controlled entity, is included in the carrying amount of the jointly controlled entity and is not amortised. To the extent that the net fair value of the entity's identifiable assets, liabilities and contingent liabilities is greater than the cost of the investment, a gain is recognised and added to the Group's share of the entity's profit or loss in the period in which the investment is acquired.

Financial Statements of the jointly controlled entity is prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies, used into line with those of the Group and to reflect impairment losses where appropriate. Adjustments are also made in the Group's Financial Statements to eliminate the Group's share of unrealised gains and losses on transactions between the Group and its jointly controlled entity. The Group ceases to use the equity method on the date from which it no longer has joint control over, or significant influence in, the joint venture.

1.4.4       Taxation

Corporation tax payable is provided on taxable profits at the prevailing tax rate. The tax expense represents the sum of the current tax expense and deferred tax expense.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is measured, using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition, other than in a business combination, of other assets and liabilities in a transaction, which affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is charged or credited in profit or loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity, or items charged or credited directly to other comprehensive income, in which case the deferred tax is also recognised in other comprehensive income.

Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax relates to income tax levied by the same tax authorities on either:

·      the same taxable entity; or

·      different taxable entities, which intend to settle current tax assets and liabilities on a net basis or to realise and settle them simultaneously in each future period, when the significant deferred tax assets and liabilities are expected to be realised or settled.

1.4.5       Property, Plant and Equipment

Property, plant and equipment, acquired and identified as having a useful life that exceeds one year, is capitalised at cost and is depreciated on a straight-line basis at annual rates that will reduce book values to estimated residual values over their anticipated useful lives as follows:

Office furniture, fixtures and fittings         -  33% per annum

Leasehold improvements                          -  5% per annum

1.4.6       Non-Current Assets and Liabilities Classified as Held for Sale and Discontinued Operations

A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale. A discontinued operation represents a separate major line of the business. Profit or loss from discontinued operations comprises the post-tax profit or loss of discontinued operations and the post-tax gain or loss, recognised on the measurement to fair value less costs to sell on the disposal group(s) constituting the discontinued operation.

Non-current assets, classified as held for sale, are presented separately and measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. Once classified as held for sale, the assets are not subject to depreciation or amortisation. See Note 22 for further details.

1.4.7       Foreign Currencies

Both the functional and presentational currency of Corcel Plc is Sterling ("£"). Each Group entity determines its own functional currency and items included in the Financial Statements of each entity are measured using that functional currency.

The functional currencies of the foreign subsidiaries and joint ventures are the Australian Dollar ("AUD"), the Papua New Guinea Kina ("PNG"), the Angolan Kwanza (''AOA'') and the US Dollar ("USD").  The Company's operations in Angola are primarily conducted in USD. 

Transactions in currencies, other than the functional currency of the relevant entity, are initially recorded at the exchange rate, prevailing on the dates of the transaction. At each reporting date, monetary assets and liabilities, that are denominated in foreign currencies, are retranslated at the exchange rate, prevailing at the reporting date. Non-monetary assets and liabilities, carried at fair value that are denominated in foreign currencies, are translated at the rates, prevailing at the date, when the fair value was determined. Gains and losses, arising on retranslation are included in profit or loss for the period, except for exchange differences on non-monetary assets and liabilities, which are recognised directly in other comprehensive income, when the changes in fair value are recognised directly in other comprehensive income.

On consolidation, the assets and liabilities of the Group's overseas operations are translated into the Group's presentational currency at exchange rates, prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates have fluctuated significantly during the year, in which case, the exchange rate at the date of the transaction is used. All exchange differences arising, if any, are recognised as other comprehensive income and are transferred to the Group's foreign currency translation reserve.

1.4.8       Exploration Assets and Mineral Tenements

Exploration assets comprise exploration and evaluation costs, incurred on prospects at an exploratory stage. These costs include the cost of acquisition, exploration, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads, directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments. Costs associated with an exploration activity will only be capitalised if, in management's opinion, the results from that activity led to a material increase in the market value of the exploration asset, which is determined by management to be following the economic feasibility stage.

The Group adopts the "area of interest" method of accounting whereby all exploration and development costs, relating to an area of interest, are capitalised and carried forward until either abandoned or an indicator of impairment is determined. In the event that an area of interest is abandoned, or if, following determination of an impairment indicator being present, the Directors consider the expenditure to be of no value, accumulated exploration costs are written off in the financial year in which the decision is made. All expenditure, incurred prior to approval of an application, is expensed, with the exception of refundable rent, which is raised as a receivable.

Upon disposal, the difference between the fair value of consideration receivable for exploration assets and the relevant cost within non-current assets is recognised in the Income Statement.

1.4.9       Impairment of Non-Financial Assets

The carrying values of assets, other than those to which IAS 36 "Impairment of Assets" does not apply, are reviewed at the end of each reporting period for impairment, when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.

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 profit or loss 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.

1.4.10    Share-Based Payments

Share Options

The Group operates equity-settled share-based payment arrangements, whereby the fair value of services provided is determined indirectly by reference to the fair value of the instrument granted.

The fair value of options and warrants, granted to Directors and other parties, in respect of services provided, is recognised as an expense in the Income Statement with a corresponding increase in equity reserves - the share-based payment reserve. On exercise or lapse of share options, the proportion of the share-based payment reserve, relevant to those options, is retained in the share-based payment reserve. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and charged over the vesting period, during which, the option becomes unconditional.

Where issued for services, fair value of services is used for determining the value of options and if not determinable, a valuation model such as the Black-Scholes model is used, taking into account the terms and conditions upon which the options were granted. The exercise price is fixed at the date of grant.

Non-market conditions are performance conditions that are not related to the market price of the entity's equity instruments. They are not considered, when estimating the fair value of a share-based payment. Where the vesting period is linked to a non-market performance condition, the Group recognises the goods and services it has acquired during the vesting period, based on the best available estimate of the number of equity instruments expected to vest. The estimate is reconsidered at each reporting date, based on factors such as a shortened vesting period, and the cumulative expense is "trued up" for both the change in the number, expected to vest, and any change in the expected vesting period.

Market conditions are performance conditions that relate to the market price of the entity's equity instruments. These conditions are included in the estimate of the fair value of a share-based payment. Where the vesting period is linked to a market performance condition, the Group estimates the expected vesting period. If the actual vesting period is shorter than estimated, the charge is be accelerated in the period that the entity delivers the cash or equity instruments to the counterparty. When the vesting period is longer, the expense is recognised over the originally estimated vesting period.

For other equity instruments, granted during the year (i.e. other than share options and warrants), fair value is measured on the basis of an observable market price.

Share Incentive Plan

Where the shares are granted to the employees under Share Incentive Plan, the fair value of services provided is determined indirectly by reference to the fair value of the free, partnership and matching shares, granted on the grant date. Fair value of shares is measured on the basis of an observable market price, i.e. share price as at grant date and is recognised as an expense in the Income Statement on the date of the grant. For the partnership shares, the charge is calculated as the excess of the mid-market price on the date of grant over the employee's contribution.

1.4.11        Pension

The Group operates a defined contribution pension plan, which requires contributions to be made to a separately administered fund. Contributions to the defined contribution scheme are charged to the profit and loss account as they become payable.

1.4.12    Finance Income/Expense

Finance income and expense is recognised as interest accrues, using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period, using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts/re-payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.

1.4.13    Financial Instruments

The Group classifies its financial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than financial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows:

Fair Value through Profit or Loss (FVTPL)

This category comprises in-the-money derivatives and out-of-money derivatives, where the time value offsets the negative intrinsic value. They are carried in the Statement of Financial Position at fair value with changes in fair value recognised in the Consolidated Statement of Comprehensive Income in the finance income or expense line. Other than derivative financial instruments, which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss.

Amortised Cost

These assets comprise the types of financial assets, where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost, using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receivables are recognised, based on the simplified approach within IFRS 9, using a provision matrix in the determination of the lifetime expected credit losses. During this process, the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss, arising from default to determine the lifetime expected credit loss for the trade receivables. For the receivables, which are reported net, such provisions are recorded in a separate provision account, with the loss being recognised in the Consolidated Statement of Comprehensive Income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions, for receivables from related parties and loans to related parties, are recognised based on a forward-looking expected credit loss model. The methodology, used to determine the amount of the provision, is based on whether there has been a significant increase in credit risk, since initial recognition of the financial asset. For those, where the credit risk has not increased significantly, since initial recognition of the financial asset, twelve month expected credit losses, along with gross interest income, are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses, along with interest income on a net basis, are recognised.

The Group's financial assets, measured at amortised cost, comprise trade and other receivables and cash and cash equivalents in the Consolidated Statement of Financial Position. Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and - for the purpose of the statement of cash flows - bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the Consolidated Statement of Financial Position.

Fair Value through Other Comprehensive Income (FVTOCI)

The Group held a number of strategic investments in listed and unlisted entities, which are not accounted for as subsidiaries, associates or jointly controlled entities. For those investments, the Group has made an irrevocable election to classify the investments at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value, recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.

Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investments carrying amount.

Purchases and sales of financial assets, measured at fair value through other comprehensive income, are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.

Financial Liabilities

The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired:

Other Financial Liabilities

Other financial liabilities include:

·      Borrowings, which are initially recognised at fair value net of any transaction costs, directly attributable to the issue of the instrument. Such interest-bearing liabilities are subsequently measured at amortised cost, using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the Consolidated Statement of Financial Position. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption as well as any interest or coupon payable, while the liability is outstanding.

·      Liability components of convertible loan notes are measured as described further below.

·      Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost, using the effective interest method.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: 

·      In the principal market for the asset or liability; or

·      In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured, using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and, for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

·      Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

·      Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and

·      Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Financial Statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

More information is disclosed in Note 19.

1.4.14     Investments in the Company Accounts

Investments in subsidiary companies are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairments.

For acquisitions of subsidiaries or associates, achieved in stages and qualifying as a business acquisition under IFRS 3, the Company re-measures its previously held equity interests in the acquiree at its acquisition-date fair value and recognises the resulting gain or loss, if any, in profit or loss. Any gains or losses, previously recognised in other comprehensive income, are transferred to profit and loss. Any acquisitions undertaken of interests, not qualifying as a business under IFRS 3, is treated as an asset acquisition and recognised at cost.

Investments in associates and joint ventures are classified as non-current assets and included in the Statement of Financial Position of the Company at cost at the date of acquisition less any identified impairment.

1.4.15    Share Capital

Financial instruments, issued by the Group, are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Group's ordinary shares are classified as equity instruments.

1.4.16     Convertible Debt

The proceeds, received on issue of the Group's convertible debt, are allocated into their liability and equity components. The amount, initially attributed to the debt component, equals the discounted cash flows, using a market rate of interest that would be payable on a similar debt instrument that does not include an option to convert. Subsequently, the debt component is accounted for as a financial liability, measured at amortised cost until extinguished on conversion or maturity of the bond. The remainder of the proceeds is allocated to the conversion option and is recognised in the "Convertible debt option reserve" within shareholders' equity, net of income tax effects.

1.4.17     Warrants and Share Options

Derivative contracts, that only result in the delivery of a fixed amount of cash or other financial assets for a fixed number of an entity's own equity instruments, are classified as equity instruments. Warrants, relating to equity finance and holders of debt liabilities and issued together with ordinary shares placement and share options issued to staff, are valued as outlined above and charged to profit and loss over the period in which they vest or, in the event of the instruments vesting on grant, in the period in which they arise. Warrants and options, classified as equity instruments, are not subsequently re-measured (i.e., subsequent changes in fair value are not recognised).  On expiry, exercise or lapse of such instruments, the fair value of the instruments in question is retained in the warrant reserve and is not transferred to retained earnings.

1.4.18     Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting, provided to the chief operating decision-maker as required by IFRS 8 "Operating Segments". The chief operating decision-maker, responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the Group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment non-current assets. For this purpose, all non-current assets are allocated to reportable segments.

1.4.19     Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability except for:

·      Leases of low value assets; and

·      Leases with a duration of 12 months or less.

On initial recognition, the carrying value of the lease liability also includes:

·      amounts expected to be payable under any residual value guarantee;

·      the exercise price of any purchase option, granted in favour of the Group, if it is reasonably certain to assess that option; and

·      any penalties payable for terminating the lease if the term of the lease has been estimated on the basis of termination option being exercised.

Lease liabilities are subsequently measured at the present value of the contractual payments due to the lessor over the lease term.

Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received and increased for:

·      lease payments made at or before commencement of the lease;

·      initial direct costs incurred; and

·      the amount of any provision recognised, where the Group is contractually required to dismantle, remove or restore the leased asset.

1.4.20     Asset Acquisitions

Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business, and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset.

The consideration for the asset is allocated to the assets based on their relative fair values at the date of acquisition.

Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated.

1.5    Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Group's Consolidated Financial Statements, requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Significant Judgements and Accounting Estimates

In the process of applying the Group's accounting policies, management has made the following judgements and estimates, which have the most significant effect on the amounts, recognised in the Consolidated Financial Statements.

Recognition of Non Controlling Interest in APEX

In June 2023, the Company acquired a 90% interest in the equity of APEX in Angola, which holds the KON-11, KON-12 and KON-16 oil and gas licences.  The commercial terms of at the acquisition are such that the remaining 10% shareholders of APEX are carried through all exploration, appraisal and development costs of the projects, essentially to the point of first oil.  As a consequence of this arrangement, Corcel is responsible for meeting 100% of the funding requirements of APEX over this period.

The commercial intentions, behind the above legal agreement, was to achieve an effective royalty arrangement, whereby the carried interest of the 10% partners is realised through production revenues or, in this case net revenues post production and corporate costs.  However, it was determined that this commercial end goal be achieved via a carried interest in equity rather than the granting of a royalty interest.

The Company therefore considers that, whilst the legal structure of the agreement is one of a 90/10 equity split, which primarily facie would give rise to the recognition of NCI on consolidation of APEX, the commercial substance of the arrangement more closely represents a profit royalty, arising out of net production revenues. Consequently, it has not proposed to recognise NCI on consolidation of the entity into the Group accounts with the amount being immaterial.

Recoverability of Carrying Value of Joint Ventures and Exploration and Evaluation Assets

The carrying amount of investments in joint ventures and mineral tenements is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable.

The Company has assessed the viability of the Mambare nickel project, given current and expected nickel prices and the anticipated cost of a DSO operation, and believes the project can be successfully taken into production in the mid-term with a mining lease application already at a very advanced stage with the PNG mining authorities. The Board further believes that the likelihood of recovery of the receivable has remained firm over the past 12-24 months following agreement during the year of terms for the disposal of the investment. See below under heading "Assets Held for Sale - Oro Nickel" for further details.

The Canegrass Lithium Project was purchased in April 2023 for £200,000 of new ordinary shares in Corcel.  The Company is currently conducting initial exploration activities on the license and is currently considering its options as relates to the project.  The Company, following discussions with the underlying tenement holders, Huntsman Exploration, have deemed it necessary to impair the Canegrass Project in full as Huntsman intends to drop the tenements and Corcel currently does not consider it possible to practically acquire them.  See Note 21 for further details.

The Group holds E&E assets of £7.7 million at 30 June 2024. Exploration assets comprise exploration and evaluation costs, incurred on prospects at an exploratory stage. These costs include the cost of acquisition of rights to explore, determination of recoverable reserves, economic feasibility studies and all technical and administrative overheads, directly associated with those projects. These costs are carried forward in the Statement of Financial Position as non-current intangible assets less provision for identified impairments. The most significant assumption for the Group is that exploration and evaluation work undertaken to develop its key projects will ultimately lead to successful recovery of these costs through production or sale. The Group believes these costs are fully recoverable, based on information available at this time.

The Company acquired the Mt. Weld Rare Earth Element project during the course of the second half of 2022, and immediately entered into a farm out agreement with Riversgold (ASX:RGL) ("RGL") for an immediate cash payment of AUD 30,000 and where RGL can earn a 50% interest through paying 100% of a work program with a required spend of AUD 500,000 over 12 months.  Subsequently, as announced on 5 May 2023 the Company sold a 20% interest in Mt. Weld to Extraction SRL for AUD 1,000,000, valuing the entirety at AUD 5 million and Corcel's 80% interest at AUD 4 million (£3.29 million). During the year RGL notified the Company of a rationalisation of its portfolio of projects, resulting in its decision to discontinue work on the Mt Weld project. The Company consequently retains its 80% interest in the project and is current assessing its options to take the project forward in 2025. 

Recoverability of Carrying Value of Investment In and Loan to Subsidiaries

The carrying amount of investments, in and loans made to subsidiaries, is tested for impairment annually and this process is considered to be key judgement along with determining whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. When assessing the recovery of these balances, the Directors consider the likelihood that the subsidiaries will be able to settle amounts owing, either out of future cashflows or though the recovery of balances receivable or divestment of assets.  Where recovery of these balances is driven by receivable balances within the subsidiary, assessment of the likelihood of recovery and present value of future cash inflows is undertaken to ensure the amounts support the subsidiary loan carrying values in full.

No impairment of inter-company loans were deemed necessary in the year.

Determination of Fair Value of Share-Based Payments

The Group measures the cost of equity-settled transactions with employees and the issuance of warrants to investors by reference to the fair value of the equity instruments at the date at which they are granted. The fair value of share options and warrants without market based vesting conditions is determined using the Black-Scholes model and the estimates used within this model are disclosed in Note 17.  Where market conditions exist for the vesting of any options or warrants granted, alternative approaches such as a probability weighted barrier model or Monte Carlo probability distribution model is used.

Consideration Receivable on Disposal of Niugini Nickel

During the prior year, the Group divested of its subsidiary Niugini Nickel Pty Ltd.  Consideration for the disposal is receivable in three tranches, see Note 22 for details.  In arriving at determination of the fair value of the consideration receivable, the Directors have had to make certain judgements as to the discount rate to use for the present valuing of future cashflows, arising from this consideration and the application of a risk, weighting to the determination of fair value for the tranche of consideration that remains conditional on the project, entering into production and generating a certain level of profits. Management have assessed the recoverability of the receivable and no risks have been identified.

Recoverability of Assets Held for Sale - Oro Nickel

During the prior year, the Group had entered into various discussions for the divestment of its interest in the Oro Nickel joint venture. On 16 October 2023, the Group announced the agreement of a deal to sell its share of the project to Integrated Battery Metals, the purchasers of the Niugini Nickel project during the course of the year. As the consideration proceeds agreed with the purchaser exceed the carrying value of the investment in the joint venture, which is held for sale, the Directors have determined that no impairment of this balance is necessary in these consolidated Financial Statements (with an impairment of £175,000 being recognised in the Company only Financial Statements as a result of the discounting of the present value of the consideration). On 23 October 2023, the initial consideration proceeds of USD 1.6 million, in the form of a loan for the divestment were received, following the execution of the transaction agreements. Management have assessed the recoverability of the receivable and no risks have been identified.

The Company is assessing various spurious claims made by its Joint Venture partner as regards to the project, including their purported rights to pre-empt the transaction under an earlier version of the sale of the project as originally announced on 14 April 2023 and terminated in October 2023. 

Currently, the Company is working with Australian legal counsel on determining the best manner in which to enforce its rights to complete this transaction as announced on 16 October 2023. The completion of the sale of this asset requires Joint Venture partner's administrative actions and processing in order to effect the transfer of shares in the holding company of the project.

Final determination of both the timing of any disposal and of the ultimate sale proceeds realised by the Company thus remain yet to be definitively determined. 

Refer to Note 24 for further information on how the criteria within IFRS 5 have been met to classify the investment as held for sale at the year end.

2.     Segmental Analysis

In 2023, the focus of the Group changed from the development of battery metals projects and flexible storage solutions to oil and gas exploration and production.  As a consequence, the nature of the operating segments for disclosure has changed in the current year to include oil and gas activities and exclude flexible grid solutions, to reflect this operational tilt toward the former and away from the latter.

As the Group's main focus of operations becomes production of oil and gas, the nature of management information, examined by the Board, will alter to reflect the need to monitor revenues, margins, overheads and trade balances as well as cash.

IFRS 8 requires the reporting of information about the revenues, derived from the various areas of activity and the countries in which revenue is earned, regardless of whether this information is used in by management in making operating decisions. Management determined that the most useful presentation of revenues and expenses came from an analysis by operational type as opposed to geographic representation due to the similar nature of the revenues and expenses when grouped in these categories.  

Information by Geographical Area

Presented below is certain information by the geographical area of the Group's activities. Investment sales revenue and exploration property sales revenue are allocated to the location of the asset sold.

3.     Loss on Ordinary Activities Before Taxation

4.   Administrative Expenses

5.   Finance Costs, Net

6.   Taxation