Final Results

1.      reporting entity

The consolidated financial statements for the year ended 31 December 2023 (the "financial statements") comprise GoldStone Resources Limited (the "Company") and its subsidiaries, set out in note 23, (together referred to as the "Group").

The Company is quoted on the AIM market of the London Stock Exchange and is incorporated and domiciled in Jersey, Channel Islands.  The address of its registered office is 2^nd Floor, International House, 41 The Parade, St. Helier, Jersey, JE2 3QQ.  The Company's principal activity is that of a holding company. The Group's principal activity is exploration and mining of gold and associated elements.

2.         basis of preparation

(a)       statement of compliance and basis of preparation

The Group's annual report is for the year ended 31 December 2023 and includes the consolidated financial statements of the Group prepared in accordance with UK-adopted International Accounting Standards.

The consolidated financial statements have been prepared using accounting policies set out in note 3 which are consistent with all applicable UK-adopted International Accounting Standards.

The consolidated financial statements have been prepared under the historical cost convention except for the treatment of share-based payments and derivatives.  The consolidated financial statements are presented in United States Dollars ("$").

The preparation of consolidated financial statements in conformity with UK-adopted International Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts in the consolidated financial statements.  The areas involving a higher degree of judgement or complexity, or areas where assumptions or estimates are significant to the consolidated financial statements, are disclosed in note 2(d).

(b)       going concern

The financial statements have been prepared assuming the Group and Company will continue as a going concern for at least twelve months from the date of approval of these financial statements.  In assessing whether the going concern assumption is appropriate, the directors have taken into account all available information for the foreseeable future; in particular for the 12 months from the date of approval of these financial statements.  This assessment included consideration of future revenues as the Group has recommenced gold production, and is building production up with existing cash resources and available facilities.

The Group had available cash of US$121k as at 31 December 2023 (2022: US$113k).

AIMSL, who hold the secured Gold Loan of US$3.0 million, supported the Group by agreeing to a number of deferments of interest payments throughout 2021 and 2022, continues to support the Company. Post period end, the company has entered into a standstill agreement, the conditions of which included a plan to repay the loan from July 2024 and a change in Chairman and the operational team at the Homase mine.  A further agreement then extended the standstill period to 31 December 2025. AIMSL have also agreed to convert and settle the interest accrued to 31 December 2023 by the issue of new Ordinary Shares.

The Company continues to actively pursue funding proposals and/or similar potential solutions to enable the Company to seek to extend, renegotiate or refinance the outstanding secured Gold Loan and the provision of additional working capital, but there can be no guarantee that such an agreement can be reached or additional working capital provided. The Board is taking appropriate professional advice, but in the event that a solution cannot be achieved and the outstanding principal amount of the Gold Loan and accrued interest thereon (which as of 31 December 2023 amounted to, in aggregate, 2,449 ounces of gold) as of 10 April 2024, the Company extended the Standstill Agreement, to 31 December 2025, and agreed to convert and settle the interest accrued to 31 December 2023 by the issue of ordinary Shares.  If the Gold Loan cannot be repaid or rescheduled prior to 31 December 2025, security over the Company's primary assets could potentially be enforced. 

The Group commenced commercial production in January 2022. This was later than previously anticipated due to permitting issues and then with the operational setbacks, production has not been delivering the expected revenues.  With the CLN investment in January 2023, this enabled the Company to invest in new plant and equipment to help improve and increase the production and staking onto the Heap Leach. Mining and Staking recommenced in June 2023 and the cashflow projections are based upon increasing the production and staking, which has improved in 2024, which in turn will improve revenues. 2023 gold produced and sold amounted to approximately 1,250 ounces of gold bullion.

The financial models and projections prepared by the Board, in order to monitor cash flow, demonstrate that the Group, in common with many businesses engaged in the early stages of development will require additional funds and/or funding facilities in order to fully develop its business, which is a follow on from the delays and problems encountered with production and permitting, and for the exploration to expand the resource. With continued support from the Group and Companies shareholders, the directors are confident that the Group and Company are able to meet their liabilities as they fall due.

At the date of this report the Board is, therefore, confident of the ability of the Group and Company to continue mining and make the on-going operational improvements, as announced in January 2023. The Board is confident that with the continued support of the shareholders, the Group and Company can meet all its contractual obligations as they fall due for the foreseeable future and therefore, the Board believes it is appropriate to continue to adopt the going concern basis.

Although the Board is confident that it will be able to raise further funding if and when required, there is always a risk that this may not be possible.  In April 2024 the Company announced a conditional Subscription of 83,400,000 new ordinary shares at the closing offer price of 1 penny per ordinary share. The Subscription Shares shall have one warrant attached with an exercise price of 2 pence for a period of 24 months from the date of admission. In addition, the Company has agreed an extension of the standstill agreement until 31 December 2025, as announced on 10 April 2024 and for the conversion of the accrued interest to 31 December 2023 to be converted in addition to the conditional Subscription

(c)          functional and presentational currency

Items included in the financial statements of each of the Group's subsidiaries are measured using the currency of the primary economic environment in which the entity operates (its functional currency).  These consolidated financial statements are presented in United States Dollars, which is the functional and presentational currency of the Group.

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.  At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet date. 

Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items are included in the statement of comprehensive income for the period.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are expressed in United States Dollars using exchange rates prevailing at the balance sheet date.  Income and expense items are translated at the average exchange rates for the period.  Exchange differences arising if any, are classified as other comprehensive income and are transferred to the Group's translation reserve.

When the settlement of monetary items receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in foreign operations and are recognised in other comprehensive income, and presented in the exchange reserve in equity.

(d)          use of estimates and judgements

In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources.  The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant.  Actual results may differ from these estimates.  The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimates are revised if the revision affects only that period, or in a period of the revision and future periods if the revision affects both current and future periods.

The following are the key estimates and judgements that have a significant risk of resulting in a material adjustment within the next year:

(i)            impairment of property, plant and equipment

The assessment of property, plant and equipment for any internal and external indications of impairment involves judgement.  Each reporting period, the Group assesses whether there are any indicators of impairment, if indicated then a formal estimate of the recoverable amount is performed and an impairment loss recognised to the extent that the carrying amount exceeds recoverable amount.  Recoverable amount is determined as the value in use.  Determining whether the projects are impaired requires an estimation of the recoverable value of the individual areas to which value has been ascribed.  The value in use calculation requires the entity to estimate the future cash flows expected to arise from the projects in order to calculate present value. 

(ii)           production start date

The Group assesses the stage of the mine under construction to determine when the mine moves into production stage.  The criteria used to assess the start date are determined based on the complexities and operational status of the mine.  The Group considers various criteria to assess when the mine is commercially operational and should be reclassified from Assets under construction to 'Producing Mines' or 'Property plant and equipment.' Some of the criteria will include, but not limited to the following:

·    completion of a reasonable period of testing the mine plant and equipment;

·    completion of the commissioning period;

·    ability to produce metal in a saleable form;

·    ability to sustain ongoing production of metal; and

·    ability to be able to export product for commercial sale.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs cease and costs are either regarded as inventory or expenses except for costs that qualify for capitalisation relating to mining assets.  This is also the point at which the depreciation/amortisation recognition criteria commences.  The Group considers that the above criteria was met in the year and the asset was transferred from Assets under construction to a Producing Mine.

(iii)          inventory

Net realisable tests are performed at least annually and represent the future sale price of the product based on prevailing spot metal prices at the reporting date, less estimated costs to complete production and bring the product to sale.

Stockpiles are measure by estimating the number of tonnes added and removed from the stockpile, the number of contained gold ounces based on assay data and estimated recovery percentage based on expected processing method. 

(iv)         ore reserves and resources

Ore reserves are estimates of the amount of ore that can economically and legally be extracted from the mine.  The Group estimates its ore reserves and mineral resources, based on information compiled by appropriately qualified person relating to the geological data on the size, depth and share of the ore body and requires complex geological judgments to interpret the data.  The estimation of recoverable reserves is based upon factors such as estimates of foreign exchanges rates, commodity prices, future capital requirements and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body.  Changes in the reserve or resource estimates may impact upon the carrying value of exploration and evaluation asses, mine properties, property plant and equipment provision for rehabilitation and depreciation/amortisation charges.

(v)          mine rehabilitation provision

The Group assesses its mine rehabilitation provision annually.  Significant estimates and assumptions are made in determining the provision for the mine rehabilitation as there are numerous factors that will affect the ultimate liability payable.  These factors include estimates of the extent and cost of rehabilitation activities, technological changes, regulatory changes, and changes in discount rates.  Those uncertainties may result in future actual expenditure differing from the amounts currently provided.  The provision at the reporting date represents managements best estimate of the present value of the rehabilitation provision.  

(vi)         valuation of share warrants

The fair value of warrants and the employee share option scheme is calculated at the grant date using the intrinsic value as the share price never exceeded the warrant exercise price.  The directors have reviewed the underlying inputs and are happy that these appear reasonable.

(vii)        gold bullion loan

A loan repayable in gold bullion is recorded as a revenue transaction as the extracted gold used in settlement would otherwise generate income. A currency value is placed on repayments based on pre agreed US$ value per ounce.

3.      significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

(a)       basis of consolidation

The consolidated financial statements comprise the financial statements of the Group as at 31 December 2023. Control is achieved when the Group 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. Specifically, the Group controls an investee if, and only if, the Group has:

·    power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); 

·    exposure, or rights, to variable returns from its involvement with the investee; and 

·    the ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

·    the contractual arrangement with the other vote holders of the investee;

·    rights arising from other contractual arrangements; and

·    the Group's voting rights and potential voting rights.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

All intra-group transactions, balances, income and expenses are eliminated on consolidation. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

(b)       financial instruments

(i) non-derivative financial assets

The Group recognises loans and receivables at fair value on the date that they are originated.  All other financial assets are recognised initially on the trade date, which is the date that the Group becomes party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.  Any interest in such transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.  The Group classifies non-derivative financial assets into the following categories: loans and receivables and cash and cash equivalents.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise trade and other receivables.

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

(ii) non-derivative financial liabilities

The Group recognises financial liabilities initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.  The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire.

The Group classifies non-derivative financial liabilities into trade and other payables.

(iii) gold loan

The gold loan is initially valued at cost on day one and then revalued at spot rate at each financial year end.  This gives rise to an embedded swap which is recorded separately in the financial statements as a financial derivative but is part of the overall gold loan. The loan is repayable in ounces of gold at a pre-determined rate, with interest accruing in ounces. Gold prices at the year end are used to convert these amounts into a US dollar value. Ounces of mined gold used as repayment are recorded and recognised as revenue in the financial statements.

(iv) share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of the ordinary shares are recognised as a deduction from equity, net of any tax effects.

(v) deferred shares

Deferred shares are classified as equity and held in the capital contribution reserve.

(c)       share based payments

The Group has applied the requirements of IFRS 2 - 'Share based payment.' IFRS 2 has been applied to all grants of equity instruments.  The fair value of warrants and the employee share option scheme is calculated at the grant date using the intrinsic value as the share price never exceeded the warrant exercise price.  The resulting cost is charged to the statement of comprehensive income over the vesting period or in line with the services provided in consideration for the issue.  Fair value at the date of issue is recognised in the share option reserve and then transferred to the profit and loss reserve once warrants have been exercised.

(d)       property, plant and equipment

Upon completion of mine construction, the assets initially charged to 'Assets under construction' are transferred to 'Plant and equipment and motor vehicles' or 'Producing mines.'  Items of 'Plant and equipment and motor vehicles' and 'Producing Mines' are stated at cost, less accumulated depreciation and accumulated impairment losses.

During the construction period expenditure directly attributable to the construction of each individual asset is capitalised as 'Assets under construction' up to the period when the asset is ready to be put into operation.  When an asset is put into operation it is transferred to 'Plant and equipment and motor vehicles' or 'Producing mines.' Additional capital cost incurred subsequent to the date of commencement of operation of the asset are charged directly to 'Plant and equipment motor vehicles' or 'Producing mines', i.e. where the asset itself was transferred.

The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of the rehabilitation obligation and, for qualifying assets, borrowing costs.  The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.

When a mine construction project moves into production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs which qualify for capitalisation relating to mining asset additions or improvements, underground mine development or mineable reserve development.  Accumulated mine development costs within producing mines are depreciated on a units-of-production basis over the economically viable reserves of the mine. 

Property, plant and equipment is stated at cost less accumulated depreciation and any recognised impairment loss.  Depreciation is charged so as to write off the cost or valuation of assets over their estimated lives, using the straight-line method, on the following bases:

Gold samples                                     no depreciation charged

Computer equipment                    over three years

Office equipment                            over four years

Field/geological equipment         over four years

Motor vehicles                                  over four years

The carrying value of property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.  The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset is recognised in statement of comprehensive income.

(e)       intangible assets - exploration and evaluation

The costs of exploration properties and leases, which include the cost of acquiring prospective properties and exploration rights and costs incurred in exploration and evaluation activities, are capitalised as intangible assets as part of exploration and evaluation assets.

Exploration and evaluation assets are carried forward during the exploration and evaluation stage and are assessed for impairment in accordance with indicators of impairment set out in IFRS 6 - 'Exploration for and Evaluation of Mineral Resources.'

In circumstances where a property is abandoned, the cumulative capitalised costs relating to the property are written off in the period.  No amortisation is charged prior to commencement of production.

Once commercially viable reserves are established and development is sanctioned, exploration and evaluation assets are transferred to assets under construction.

When commercial production commences, exploration, evaluation and development costs previously capitalised are transferred to property, plant and equipment and depreciated. 

Exploration and evaluation costs incurred after commercial production start date in relation to evaluation of potential mineral reserves and resources that are expected to result in increase of reserves are capitalised as evaluation and exploration assets within intangible assets.  Once there is evidence that reserves are increased, such costs are tested for impairment and transferred to producing mines.

(f)        impairment of financial assets

A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably.

The Group considers evidence of impairment for financial assets measured at amortised cost at both a specific asset and collective level based on useful economic life.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognised in the statement of comprehensive income.

For trade receivables and other receivables due in less than 12 months, the Group applies the simplified approach in calculating ECL's, as permitted by IFRS 9.  Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on the financial asset's lifetime ECL at each reporting date.  

(g)          provisions

(i)            general

Provisions are recognised when (a) the Group has a present obligation (legal or constructive) as a result of a past event and (b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.  If the effect of the time value of money is material, provisions are discounted using a risk free rate that reflects, where appropriate, the risks specific to the liability.  When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(ii)           rehabilitation provision

The Group records the present value of estimated costs of legal and constructive obligations required to restore the operating locations in the period in which the obligation is incurred.  The nature of these restoration activities include dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas.

The obligation generally arises when the asset is installed or environment is disturbed at the production location.  When the liability is initially recognised, the present value of the estimated cost is capitalised by increasing the carrying amount of the related mining asset to the extent that it was incurred prior to the production of related ore.  Over time, the discounted liability is increased for the change in present value based on the discount rates that reflect current market assessments and the risks specific to the liability. 

The periodic unwinding of the discount is recognised in the Group statement of comprehensive income as a finance cost.  Additional disturbances or changes in rehabilitation costs will be recognised as additions or charges to the corresponding assets and rehabilitation liability when they occur.  Any reduction in the rehabilitation liability and therefore any deduction from the rehabilitation asset may not exceed the carrying amount of that asset.  If it does, any excess over the carrying value is taken immediately to the Group statement of comprehensive income.

If the change in estimate results in an increase in the rehabilitation liability and therefore an addition to the carrying value of the asset, the Group is required to consider whether this is an indication of impairment of the asset as whole and test for impairment in accordance with IAS 36.

(h)          related parties

For the purposes of the consolidated financial statements, the following parties are considered to be related:

·    Where one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions;

·    Entities under common control; and

·    Key management personnel.

In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form.

Related parties may enter into transactions which unrelated parties might not and transactions between related parties may not be effected on the same terms, condition and amounts as transaction between unrelated parties.  It is the nature of transactions with related parties that they cannot be presumed to be carried out on an arm's length basis.

(i)            taxation

Current and deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the related tax is also dealt with in equity. Current tax is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the Company and its subsidiaries operate.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised, except for differences arising on investments in subsidiaries where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.

Recognition of the deferred tax assets is restricted to those instances where it is probable that a taxable profit will be available against which the difference can be utilised.

Deferred tax is calculated based on rates enacted or substantively enacted at the reporting date and expected to apply when the related deferred tax asset is realised or liability settled.

(j)        inventories

Metal in circuit consists of in-circuit material at properties with milling or processing operations and ore awaiting refinement, all valued at the lower of average cost and net realisable value.  In-process inventory costs consist of direct production costs (including mining, crushing, and processing and site administration costs) and allocated indirect costs (including depreciation, depletion and amortisation of producing mines and mining interests).

Ore stockpiles consist of stockpiled ore, ore on surface and crushed ore, all valued at the lower of average cost and net realisable value.  Ore stockpile costs consist of direct production costs (including mining, crushing and processing and site administration costs) and allocated indirect costs (including depreciation, depletion and amortisation of producing mines and mining interests).

Finished goods consist of doré bars that have been refined and assayed and are in the form that allows them to be sold.  Finished goods valued at the lower of average cost and net realisable value.  Finished goods cost consist of direct production costs (including mining, crushing and processing and site administration costs) and allocated indirect costs (including depreciation, depletion and amortisation of producing mines and mining interests).

(k)       finance cost

Borrowing costs directly relating to the acquisition, construction or production of a qualifying capital project under construction are capitalised and added to the project cost during construction until such time the asset are considered substantially ready for intended use i.e. commercial production.  When funds are borrowed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred.

Any general borrowing costs are recognised in the statement of comprehensive income of the period in which they are incurred.

(l)        revenue

The Group is principally engaged in the business of producing gold and silver bullion concentrate.  Revenue from contracts with customers is recognised when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods.

4.         adoption of new and revised standards

(a)       new and amended standards

The following standards and amendments were applicable for annual financial statements beginning on or after 1 January 2023:

·    Amendments to IFRS 17, IAS 8, IAS 1 and IAS 12.

The above amendments had no impact on the consolidated financial statements of the Group.

(b)       new standards in issue but not yet effective

The new and amended standards and interpretations that are issued, but not yet effective up to the date of issuance of the Group's consolidated financial statements are disclosed below. 

The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective;

·    Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between and investor and its associate or joint venture;

·    Amendments to IFRS 16: Lease liability in a sale and leaseback;

·    Amendments to IAS 1: Non-current liabilities with covenants;

Where relevant, the Group evaluates the effect of new Standards, amendments to published Standards and Interpretations issued but not effective, on the presentation of the financial statements.  The directors have assessed there to be no material impact on the financial statements.

5.         revenue

The Group's revenue consists of sales of gold and silver bullion to a third-party refiner.

Sales of gold and silver bullion were made to one main customer, Metalor Technologies SA, the Group's gold and silver refiners, who are based in Switzerland. The gold bullion concentrate figure includes US$10,529 (2022: US$1,191,427) used to repay the Gold Loan Facility, set out in the Consolidated Statement of Cash Flows and in note 18.

6.         operating segments

The Group has two reportable segments, exploration and corporate, which are the Group's strategic divisions. For each of the strategic divisions, the Group's CEO, deemed to be the Chief Operating Decision Maker ("CODM"), reviews internal management reports on at least a monthly basis.  The results are then subsequently shared with the Board.  The Group's reportable segments are:

Exploration, Evaluation and production: the exploration operating segment is presented as an aggregation of the Homase and Akrokeri licences (Ghana).  Expenditure on exploration activities for each licence is used to measure agreed upon expenditure targets for each licence to ensure the licence clauses are met.

Corporate: the corporate segment includes the holding company costs in respect of managing the Group. There are varying levels of integration between the corporate segment and the combined exploration activities, which include resources spent and accounted for as corporate expenses that relate to furthering the exploration activities of individual licences.

information about reportable segments for the year ended 31 December 2023

information about reportable segments for the year ended 31 December 2022

7.         expenses by nature

The operating loss is stated after charging:

8.            finance costs

9.         property, plant and equipment

reconciliation of property, plant and equipment - 31 December 2023

reconciliation of property, plant and equipment -31 December 2022

*  Includes a provision for rehabilitation costs of $821,622 (2022: $821,622). The opening balance includes transfer from intangible assets of $15,086,412 (refer to note 10).

Exchange losses on opening assets of $1,432,908 (2022: $2,634,053) were recognised in the financial statements.

10.       taxation

             current and deferred tax

The Company is subject to Jersey income tax at the rate of 0%. The subsidiary is registered for income tax purposes with the Ghana Revenue Service.  Due to the loss-making position of the Group in all jurisdictions there is no tax charge and no deferred tax asset has been recognised in the current or prior periods due to the uncertainty and timing of future profits. As a result, no reconciliation has been prepared. The Company should be registered for UK Corporation Tax and management are currently in the process of registering it for such.

11.       trade and other receivables

12.       inventory

At the Homase Mine Heap Leach Operation, from the process recovery sheet, it has been calculated that there is 25.3 kilos of gold, 813.29 ounces, that is still within the heap leach process circuit, this is classed as "Gold in Process" ("GIP"). This GIP is currently locked within the heap leach circuit and classed within the stockpile.  The gold price as at 31 December 2023 was USD2063.45.

The GIP calculated for 2022 was calculated as 66.3 kilos which was valued as zero due to operational issues, including inefficient screening, agglomeration and stacking methods, as such, there will be limited recovery from this GIP gold until a new process method is introduced. Therefore the 2022 GIP was incorporated into the current JORC Resource, at 602,000 ounces.

13.          cash and cash equivalents

The cash and cash equivalents balance at the year-end consists of balances in the following currencies:

14.       provision for rehabilitation

The Group has a liability for restoration, rehabilitation and environmental costs arising from its mining operations. Estimates of the cost of this work including reclamation costs, close down and pollution control are made on an ongoing basis, based on the estimated life of the mine. The provision represents the net present value of the best estimate of the expenditure required to settle the obligation to rehabilitate any environmental disturbances caused by mining operations.

15.     capital and reserves

(a)       share capital

During the year the Company issued the following 1 penny fully paid shares:

(b)          ordinary shares

Each holder of ordinary shares is entitled to receive dividends as declared from time to time and is entitled to one vote per share at meetings of the Company.

(c)         deferred shares

Each holder of deferred shares shall not be entitled to receive notice of, attend or vote at any meeting of the Company (other than a meeting of the holder of the deferred shares), shall not be entitled to any dividends or other distributions (whether on a winding up of the Company or otherwise).  On a winding up of the Company, each deferred share shall confer upon its holder the right to receive an amount equal to the nominal amount paid up on such deferred share.  

The Company has not concluded any share repurchases since its incorporation.

(d)       dividends

No dividends were proposed or declared during the period under review (2022: Nil).

(e)       description and purpose of reserves

(i) share capital

Share capital consists of amounts subscribed for share capital at nominal value.

(ii) share premium

Share premium consists of amounts subscribed for share capital in excess of nominal value.

(iii) foreign exchange reserve

Cumulative gains and losses on translating the net assets of overseas operations to the presentation currency.

(iv) capital contribution reserve

Capital contribution reserve consists of deferred shares classified as equity.

(v) share options reserve

Share options and warrants reserve consists of the fair value of options and warrants outstanding at the year end.  As there are no share options and warrants outstanding as at year end, the whole balance has been transferred to accumulated deficit.

(vi) accumulated deficit

Accumulated deficit reserve represents the cumulative net gains and losses recognised in the consolidated statement of comprehensive income.

16.          earnings per share

The calculation of basic and diluted earnings per share at 31 December 2023 was based on the losses attributable to ordinary shareholders of US$2,687,330 (2022: US$674,413), and an average number of ordinary shares in issue of 498,513,333 (2022: 474,744,043).

17.          share based payment arrangements

At 31 December 2023, the Group has the following share-based payment arrangements:

(a)       share option programmes (equity-settled)

The Group has adopted an Option Scheme in order to incentivise key management and staff. Pursuant to the option scheme, a duly authorised committee of the Board of the Company may, at its discretion, grant options to eligible employees, including directors, of the Company or any of its subsidiaries, to subscribe for shares in the Company at a price not less than the higher of (i) the closing price of the shares of the Company on the Stock Exchange on the date of grant of the particular option or (ii) the nominal value of the shares.

There were no market conditions within the terms of the grant of the options therefore the main vesting condition for all the options awarded was that the director or employee remained contracted to the Group at the date of exercise.

The conditions relating to the grants of the share option programmes are as follows:

The terms relating to the grants of the share option programmes are that on exercise date, the receiver of the options must still be employed by the Company, or in the case of the receiver being retrenched or retired, before three months thereafter, or in the case of the death of the receiver, before six months thereafter.

There were no such options granted during the years ended 31 December 2023 or 31 December 2022.

(b)       reconciliation of outstanding share options

There are no options outstanding at 31 December 2023 or 31 December 2022.

(c)           warrants

All Ordinary Shares issued (excluding deferred shares) pursuant to the exercise of warrants rank pari passu in all respects with the ordinary shares.

There were 60,000,000 warrants granted 27 January 2023 for a two-year period following the grant date. The value of the warrants issued was valued at $nil. As the share price was never above the exercise price of the warrant in the financial year ended 31 December 2023, this the intrinsic value was a negative amount, coupled with the fact that the company was suspended for 6 months of the financial year.

reconciliation of outstanding warrants

the number and weighted average exercise prices

The warrants outstanding as at 31 December 2023 have a weighted exercise price of 4.0p and weighted average life was 1 year.

(e)       expense recognised in statement of comprehensive income

The fair value of the warrants issued on 27 December 2018 has been reflected within trade and other receivables and is being released and initially capitalised as part of the exploration asset, over the period of the loan facility; see note 18 for further details.  The amount capitalised during the year was US$nil (2022: US$nil).

The fair value of the warrants issued on 19 March 2020 has been reflected within trade and other receivables and is being released and initially capitalised as part of the exploration asset over the period of the bond facility, see note 18 for further details.  The amount capitalised during the year was US$nil (2022: US$nil).

The fair value of the warrants issued on 22 June 2020 has been reflected within trade and other receivables and is being released and initially capitalised as part of the exploration asset over the period of the gold loan facility, see note 18 for further details.  The amount capitalised during the year was US$nil (2022: US$nil).

18.       borrowings

Loan notes

On 27 January 2023 the parent Company, Goldstone Resources Limited ("GRL"), issued convertible loan notes to Blue Gold International Limited, ("BGL") in the nominal amount of £2,400,000 (the "Loan Notes") which are due for redemption on 30 November 2024. 

As with all equity and debt raised by GRL, all monies are intended for Goldstone Akrokeri Limited ("GAK") only as this is the sole subsidiary trading company.  As such every time monies are raised there is a subsequent intercompany loan taken out between the two companies.

At the election of BGL, the Loan Notes (together with accrued interest to date) may be converted (in whole or in part) at any time prior to redemption into new ordinary shares of 1 penny each in the capital of the Company ("Ordinary Shares") at a conversion price of £0.0325 per share.  BGL also received warrants to subscribe for up to 60,000,000 Ordinary Shares at a price of £0.04 per share exercisable at any time until 26 January 2025 (the "Warrants").

Summary terms of the Loan Notes

·    Issue of £2,400,000 unsecured convertible loan notes due for redemption on 30 November 2024;

·    The Loan Notes are denominated in units of £10,000, are unsecured and will attract interest at a rate of 8 per cent per annum, compounded daily until redemption or conversion;

·    The Loan Notes, including accrued interest, are convertible at any time prior to cash redemption, at the holder's election, into new Ordinary Shares at a price of £0.0325 per Ordinary Share (the "Conversion Shares");

·    BGL shall also receive Warrants to subscribe for up to 60,000,000 new Ordinary Shares at a price of 4 pence per Ordinary Share at any time during the 2-year period following the grant date; and

Loan Notes (continued)

·    Pursuant to the Loan Note agreement, BGL has the right to appoint a non-executive director to the Board, subject, inter alia, to the consent of the Company's Nominated Adviser with respect to suitability.

Gold Loan

The Company entered into a loan agreement with Asian Investment Management Services Limited ("AIMSL") in June 2020, for a gold loan of up to 2,000 troy ounces of gold at a price of US$1,500 per troy ounce, equating to a value of US$3.0 million before expenses.  AIMSL and the Company agreed during 2021 to a further extension to the timing of payment of the principal and interest on the Gold Loan, to 19 September 2021 (being the maturity date of the Gold Loan) (the ''Extension''), although at the default interest rate of 17%.  Interest therefore accrued at the default rate of 17%.

In January 2022, a payment of 19kg of gold was made in order to repay the interest due for October, November, and December 2021.  The payment was against the principal and accrued interest, with the interest paid in full and reducing the principal from 2,000 oz to 1,924.61 oz.

It was further agreed with AIMSL that in order to enable the Company to efficiently manage shipments, it would not be deemed an event of default if the monthly payments set out in the Company's announcement on 20 September 2021 were not made at the end of each month.

On 29 September 2022, it was agreed with AIMSL to vary the terms of the Agreement as follows:

·    the date for repayment of the Gold Loan shall be extended to 30 September 2023 (the ''Revised Term'') and the Maturity Date stated in Schedule 1 of the Agreement shall be amended accordingly; and

·    interest shall continue to accrue on the Gold Loan at the non-default rate of 14% per annum until the date of repayment.

On 3 January 2024, the Company announced a Standstill Agreement with AIMSL which provided the Company with the potential to defer repayment of the gold loan until 29 June 2024, this has subsequently been extended to 31 December 2025. 

The outstanding principal of the Gold Loan stands at 1,871.31oz, with accrued interest to date of 578.43oz, as at 30 December 2023.  A total of 675 oz (21 kilos) of gold has been paid to AIMSL in respect of the Gold Loan, to the date of signing this report.

As part of the fundraise, on 23 May 2024, AIMSL agreed to convert and settle the interest accrued to 31 December 2023 by the issue of ordinary Shares of £0.01 each in the capital of the Company (the "Conversion Shares"), 52,800,000 Conversion Shares were allotted, representing approximately 300 oz of the 578.4 oz of gold interest accrued on the Gold Loan to 31 December 2023.  This is in order to ensure AIMSL's interest in the Company remains below 30% of the Company's issued share capital on Admission. The balance of the Conversion Shares will be issued to AIMSL in due course on the same terms at such time as this can be achieved without increasing AIMSL's interest in the Company's Ordinary Shares above 30%.  The resulting share issue to AIMSL is 194,800,000 ordinary shares representing 29.68%.

19.       trade and other payables

20.      contingent liabilities

Goldstone Akrokeri Limited has a contingent liability for 2,913,448 Ghanian Cedi equivalent to US$ 191,007 to cover the litigation cases for alleged land and crop compensation disputes.

21.      financial instruments

(a)       financial risk management

financial instruments comprise of cash, receivables and payables including the various loans and bonds.  Financial risk management of the Group is governed by policies and guidelines described in the Group's Financial Reporting Memorandum approved by the Board.  Group policies and guidelines cover interest rate risk, foreign currency risk, credit risk and liquidity risk.  The objective of financial risk management is to contain, where appropriate, exposures in these financial risks to limit any negative impact on the Group's financial performance and financial position.

(b)       credit risk

Credit risk is the risk of financial loss to the Group if its main customer fails to meet its contractual obligations.  The maximum credit risk exposure relating to financial assets is represented by their carrying value as at the consolidated statement of financial position date. The Group's exposure to significant concentration on credit risk on trade and other receivables is considered low as the main customer is reputable and the company has a strong relationship in place.

(c)       liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset when they fall due.  Ultimate responsibility for liquidity risk management rests with the Board, which has established an appropriate liquidity risk management framework for the management of the Group's liquidity management requirements.  The Group manages liquidity risk by continuously monitoring forecast and actual cash flows, and by preserving cash resources through minimising the cash burn out rate achieved through cost reduction.  The financial liabilities of the Group are mainly creditors which are payable on demand, hence it is the opinion of the Board that an analysis of liabilities by maturity dates is not appropriate.

(d)          market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Group's income or the value of its holding in financial instruments.  The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

(i) foreign currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.  The Group has cash assets denominated in Sterling, United States Dollars and Ghanaian Cedis and incurs liabilities for its working capital expenditure in one of these denominations.  Payments are made in Sterling (GBP), United States Dollars (US$) and Ghanaian Cedis (GHS), or Euro at the pre-agreed price and converted (if necessary) as soon as payment needs to occur.  Currency conversions and provisions for expenditure are only made as soon as debts are due and payable.  The Group is therefore exposed to currency risk in so far as its liabilities are incurred in Ghanaian Cedi and fluctuations occur due to changes in the GHS/US$ exchange rates. The Group's policy is not to enter into any currency hedging transactions.

The directors consider currency risk to be manifested in the expenditure made on a day-to-day basis in Sterling, Ghanaian Cedi and US Dollars.  The directors have undertaken a policy of holding cash raised in Sterling and US Dollars and to convert funds to Ghanaian Cedi as and when required.

The exchange rates converted to United States Dollars affecting the Group were as follows: