I am pleased to be joining Metals Exploration at what is an exciting milestone in the Company's growth trajectory.

2023 proved a defining year for the business with an array of new records broken at its Runruno project, including record annual gold revenues of US$167 million directly on the back of a record production of 85,194 ounces. This, we are proud to relate, exceeded the upper revised production guidance for the year.

I am also very pleased to report to shareholders that for the year ended 31 December 2023, your Company made a profit before interest, tax, depreciation and amortisation (EBITDA) of US$180.3 million (2022: US$43.7 million) and an EBITDA adjusted for impairment charges/reversals of US$82.6 million (2022: US$44.9 million).

This outstanding achievement is a testament to the recent corporate turnaround implemented by management following the new leadership appointments in 2019 and the subsequent hard work and dedication of the entire workforce in the Philippines. These strong results have culminated in an entire deleveraging of the balance sheet transferring value from lenders to equity shareholders.

Shareholders will undoubtedly be pleased to know we are now essentially debt free, a pivotal moment for Company: for the first time in Metals Exploration history, we can talk meaningfully about growth. With only three/four years of life-of-mine left on the Runruno project, Metals Exploration has turned its attention to ensuring the longevity of the business and continued value creation for you, our shareholders. Future cash flow will be directed to investing in growth opportunities, initially in the Philippines beyond our Runruno project.

This is already well underway with our recent proposed acquisition of 72.5% of the issued share capital of Yamang Mineral Corporation, and 100% of the issued share capital of Yamang Corporation Pte Ltd, which includes the "Abra Project". The project comprises an exploration licence over an area of 16,200 hectares in the Abra region, approximately 200km north of MTL's existing operations in Runruno. The acquisition, subject to lender and shareholder approval, will provide exploration potential, with the initial exploration programme to focus on the Lacub and Manikbel areas.

This growth strategy is yet another illustration of the exceptional turnaround strategy so clearly evident in the 2023 year-end financial performance. 

In the short space of time I have been at Metals Exploration, I have been impressed by the operations and the 'Metals Exploration' way of working. The Company has, under the guidance of CEO Darren Bowden, not only nurtured a robust social licence to operate but also built a respected brand in the Philippines.

Having visited the Runruno site for the first-time last month, I can personally attest to the fact this change has reverberated across the Company in its entirety, having a profound effect at each level. This is a case study in the making and has progressed the Company dramatically, from underperforming to exceeding its own revised production guidance in just a few years.

Metals Exploration has been successfully operating in the Philippines for the past 15 years. Naturally, the Company is proud to have developed and maintained strong relationships amongst all our stakeholders, from the central Government down to the local communities. Our position as a successful and ESG complaint operator is decidedly advantageous as we embark on our strategy to acquire more assets in the Philippines, and potentially the wider region, and to mirror the success we have realised with our Runruno project.

Throughout our record-breaking performance this year, Metals Exploration is proud to have maintained an exemplary operational and environmental track record. Metals Exploration continues to be active in promoting responsible mining practices, combined with numerous environmental protection and enhancement programmes. These are in addition to our Community & Social Development programme, which continues to focus on health, education, capacity building and enterprise development.

The Company's strong sustainability performance has been recognised by the Philippine Government Awards: Metals Exploration was honoured to receive the Presidential Mineral Industry Environmental Award (PMIEA) in the Surface Mining Operation Category for the second year in a row in 2023, the highest government mining award attainable in the Philippines. We also received 3^rd Runner-up for the Best Mining Forest Contest in the Metallic Category, an acknowledgement of the team's diligent efforts to uphold the highest environmental standards. These awards are a particularly notable achievement as an indication of support from local communities and government agencies. In the ASEAN Mineral Awards 2023, the Company was pleased to place as the 1^st Runner-up in recognition of outstanding best practices in Sustainable Mineral Development (Mineral Mining - Metallic). ESG and the communities that we work in remain at the forefront of everything that we do at Metals Exploration.

Looking ahead to FY2024, my first month at Metals Exploration has given me every confidence that our production guidance of 74,000-80,000 ounces is well within reach. The continuing strong cash flow from operations at Runruno, without any ongoing debt repayments, will catalyse the Company's transformative growth period, providing us with opportunities to deliver significant shareholder value as well as looking at organic growth and M&A opportunities.

I am excited to continue nurturing the stakeholder relationships in the Philippines that serve as a cornerstone for the next chapter in the Company's trajectory, and, importantly, working diligently to continue the work begun by the accomplished team I have joined.

Nick von Schirnding

Independent Non-Executive Chairman

22 May 2024

CHIEF EXECUTIVE OFFICER'S REPORT

The Group is pleased to report on what was a stellar year with record gold production, record gold sale revenue and record operating and net profits for the year. Pleasingly, the Group closed out the year with gold production exceeding its published, and re-stated, gold production guidance for the year.

With the Group's robust business fundamentals providing a strong platform from which to grow, we go into 2024 focused on opportunities to transform the Group into a multi-project company.

Most importantly, the Group continues to create a net-positive impact for its stakeholders and local communities. Our environmental, sustainability and social programmes continue to be of a very high standard, ensuring the Company continues to be accountable, transparent, and responsible in its corporate purpose.

SAFETY AND HEALTH

Safety remains at the core of the Group's business. During the year there were no material safety and health incidents throughout all Group operations. A safe working culture is actively promoted by a dedicated occupational safety and health department and is embraced across the Group and by all departments. All staff recognise their individual responsibilities for their own safety and the safety of others.

Evidence of adhering to these values is the excellent safety record that the Group's employees and contractors have achieved. As at the date of this report the Group has achieved in excess of 22.7 million man-hours with no lost time incidents occurring since the last lost time incident in December 2016. This is a remarkable achievement for an operation of this nature, and all employees and contractors are to be congratulated on this outstanding record.

FINANCIAL YEAR 2023 ("FY2023") OVERVIEW

Operational profit was US$29.2 million (FY2022: US$23.8 million) following record gold production for FY2023 of 85,194 ounces, being significantly higher than FY2022's production of 72,537 ounces. The gold production was achieved with average gold recovery improving to 88.7% from 85.7% in FY2022. The all-in-sustaining-cost ('AISC') for FY2023 was US$1,126 per ounce (FY2022: US$1,235 per ounce), which was slightly above the lower FY2023 AISC guidance of US$1,120 per ounce.

During FY2023 the gold price remained strong resulting in an average sales price of US$1,944 per ounce (FY2022: US$1,797 per ounce). Total sales for FY2023 were US$166.7 million (FY2022: US$124.4 million).

During FY2023 the cash generated from operations was US$74.6 million (FY2022: US$38.2 million). This enabled the Group to make US$64.8 million in debt interest/principal repayments during FY2023 (FY2022: US$33.8 million).

Management's operational focus during FY2023 was to consolidate plant performance improvements and operational reliability. Mill throughput was maintained above nameplate design levels, while numerous modifications and equipment upgrades throughout the process circuit have improved general performance and reliability of the plant.

GROUP DEBT

In October 2020 the Group completed a debt restructuring with Runruno Holdings Limited and D & A Holdings Limited (together the "RHL Group") and MTL (Luxembourg) S.à r.l. ("MTL Lux"). In the period to November 2022 the Group made regular monthly senior loan repayments such that, except for a nominal US$2,586, the senior debt was fully repaid. This nominal amount had been left unpaid to ensure various securities remained in place until the mezzanine loans were elevated to the status of secured borrowings (the "Elevation"). The Elevation process required completion of complex and multi-country documentation and the registration of new security arrangements in numerous jurisdictions. Although the necessary material documentation was agreed by all parties it has not been executed due to a dispute in relation to the applicable rate of interest applying to, and hence, the quantum of the remaining mezzanine debt.

The October 2020 debt restructuring agreements envisaged the interest rate applicable to the mezzanine debt being reduced from 15% pa to 7% pa once the senior debt is repaid and the elevation of the mezzanine debt to "new" senior debt is complete.  The Company's position was that the intent of the October 2020 debt restructure was that the interest rate applicable to the mezzanine debt should have reduced from 15% pa to 7% pa in November 2022.

The Company's position was that the final payment due to the lenders under the Company's mezzanine debt facilities was made on 25 March 2024, on the basis of the lower interest rate of 7% (as opposed to 15%) applying from 3 November 2022, which the Company believed should apply under such facilities. 

The Company's minority 29.3% mezzanine debt lenders, the RHL Group, disputed that the interest rate applicable to their portion of the mezzanine debt reduced from 15% to 7% from 3 November 2022. Further, the RHL Group claimed that several events of default have occurred under the Group's senior and mezzanine facilities, such that the relevant default interest rate (being a total of 12% under the senior debt facility and 20% under the mezzanine debt facilities) should apply with effect from 5 October 2023. The Company disputed these allegations.

In light of the RHL Group's position in respect of the application of 15% interest to its loans under the mezzanine facilities, MTL Lux. (holding 70.7% of the mezzanine debt), contrary to historical assurances otherwise, sought to receive this interest rate on its own loans to the Company. MTL Lux has formally recorded that it does not believe penalty interest should apply.

After a detailed consideration of the Company's legal position in this matter, and associated issues such as the cost of an ongoing dispute with the Company's two largest shareholders, the Company has attempted to resolve this matter by making a payment, in May 2024, of approximately 50% of the total quantum currently under dispute.

However, as this dispute has not been fully resolved, the Company has, at 31 December 2023, created a provision for possible increased interest of US$2.6 million, being the remaining difference between 15% per annum and 7% per annum on the mezzanine loans for the period 3 November 2022 to 31 December 2023.

The Company continues to negotiate with MTL Lux and the RHL Group on this matter.

RUNRUNO MINE

Mining Operations

Total material moved during FY2023 was above budget at 12.4Mt (million tonnes) (FY2022: 13.7Mt).

Mining operations during FY2023 were concentrated in Stages 3 and 4. In-pit backfilling, which will reduce closure and environmental restoration costs upon the eventual closure of the mine, continues in Stages 1 and 2, with resultant reduced haulage times.

During FY2023, a drill programme was undertaken with the aim of discovering additional economic resources outside of the current mine plan pit-shell, especially to the north, east and west of the current Stage 5 pit design. The objective was to discover new economically mineable ounces that would increase the Runruno life of mine ("LOM"). The area drilled encountered evidence of significant mining having been conducted by the illegal small-scale miners that delayed the Group's access to these areas. Unfortunately, no material new resources were discovered from this drill programme.

All relevant permits for operations remain in place for the Runruno mine.

Gold Reserve Statement

As the resource extension drilling was not successful there has been no calculation of an updated ore reserve statement.

The most recent gold reserve statement was issued in February 2022, based on data as at 1 August 2021, as follows:

Table 1 - Ore Reserve estimate - published in February 2022

Using a Surpac block model, the Group modelled an internal estimation of the subsequent depletion of ore due to mining that has occurred since the above model was calculated (the period 1 August 2021 to 31 December 2023). The estimated resource depletion and the resulting depleted reserve statement (note that these calculations have not been independently verified) as at 31 December 2023 are:

Table 2 - Ore depletion estimate

Table 3 - December 2023 Depleted Ore Reserve estimate

Process Plant

Plant performance in FY2023 continued to show improvement in gold recovery from both the flotation and BIOX® circuits. During FY2023, the Group achieved an overall gold recovery of 88.7%, an improvement upon FY2022 which was 85.7%. Total gold produced in FY2023 was 85,194 ounces compared to 72,537 ounces in FY2022.

During FY2023, further upgrades to the process plant return water and BIOX® tank cooling systems were undertaken, improving plant availability and throughput rates. This upgrade also improved the ability to control BIOX® temperatures with further marginal production gains in BIOX® anticipated. These modifications combined with a largely uninterrupted supply of power during FY2023 resulted in a stable operating environment leading to the record average gold recoveries achieved over the year.

Unplanned downtime during FY2023 resulted mainly from tails line failures and repairs to the SAG mill girth gear, conveyor belts and return water line. Overall unplanned downtime has reduced through the Group's programme of proactive maintenance.

Notwithstanding the above, the process plant operated above design throughput with the following points of note:

·     The crushing and grinding circuit operated above design throughput, achieving a utilisation rate of 91.8% (FY2022: 86.5%) and processing 2.10Mt of ore (FY2022: 2.07Mt);

·    The gravity circuit achieved a recovery of 28.5% (FY2022: 27.9%);

·     Fine-tuning of the flotation circuit resulted in incremental increases in recovery to 93% (FY22: 91%);

·    The CIL circuit achieved an overall CIL recovery of 91.6% (FY2022: 89.9%);

·     A major upgrade to the cooling water circuit was completed providing greater control of temperatures in the BIOX®; improving sulphur oxidation to 76.1% (FY2022: 67.5%); and

·    The other plant circuits and ancillary systems all operated adequately.

Residual Storage Impoundment (RSI)

The Group's tailings products are delivered to a residual storage impoundment (RSI) structure. This structure has been designed and is being constructed to international standards that relate to water storage dams. The standard to which the RSI is being constructed far exceeds international standards that apply to traditional mining tailings dam structures.

The final scheduled lift to the RSI has been completed, with construction of the in-rock final spill-way underway. This final in-rock spillway will ensure the RSI has the capacity to cope with a 'Probable Maximum Flood' event.

The RSI remains in compliance with local guidelines and local development requirements, although it has not reached the final design stage of being capable of successfully coping with a 'Probable Maximum Flood' event. The in-rock final spillway is expected to be completed in Q1 2025.

The performance of the RSI is continuously monitored by independent international consulting engineers.

Government Industry Awards

During Q4 2023, the Group was awarded the following Philippine Government awards:

·     Presidential Mineral Industry Environmental Award (PMIEA) in the Surface Mining Operation Category 2023, awarded for the second year in a row.

·     3^rd Runner-up, Best Mining Forest Contest - Metallic Category 2023.

·     Ronald Wayan, Safety Officer, was the winner on the Best Safety Inspector (Surface Award).

In addition, the Group was selected to represent the Philippines at the third ASEAN Mineral Awards. At these awards the Group was awarded:

·     1^st Runner-up in recognition of outstanding best practices in Sustainable Mineral Development (Mineral Mining - Metallic).

·     2^nd Runner-up in recognition of outstanding best practices in Sustainable Mineral Development (Mineral Processing - Metallic).

These awards are given to mining companies in recognition of outstanding levels of dedication, initiatives and innovations in the pursuit of excellence in environmental protection, health & safety management and social/community development. Winning the Presidential award is the highest Government mining award attainable in the Philippines.

NEW PROJECTS

As noted in our 2022 Annual Report, it was the Gorup's strategy to investigate acquiring other mining opportunities in the Philippines. A number of Philippines located projects have been reviewed and in January 2024 the Company announced an initial acquisition of the Abra project, subject to lender and shareholder approval, has been made. Other Philippines located projects continue to be assessed for suitability.

Abra

In January 2024 the Company agreed to acquire a controlling interest in the YMC group, subject to lender and shareholder approval. The YMC group holds an extensive exploration tenement in the Abra region of Luzon, Philippines. The purchase price is US$1.6 million (offset by approximately US$1.1 million cash held by the YMC group) and the issue of options to subscribe for up to 41 million new ordinary shares of £0.0001 each in the capital of the Company.

The Abra tenement covers 16,200 hectares on Luzon, Philippines, approximately 200km north of the Company's Runruno mine, in the Cordillera region, which is a prolific gold belt in the Philippines, with proven mineral endowment, having produced over 40Moz of gold historically.

OUTLOOK

Annual production guidance for FY2024 for the Runruno mine has been set at 74,000 - 80,000 ounces at an AISC of between US$1,175 - US$1,275 per ounce. FY2024 operations are expected to maintain the general operational results produced during FY2023, such that free cash flow is maintained from a stable consistent level of mining and gold production.

The Group's positive operational cash-flows in Q1 2024 have been utilised to finalise, subject to resolving the interest rate matter, the full repayment of the Group's external debt. Free cash flow for the remainder of 2024 will be accumulated and applied to accelerate exploration of new projects and/or to acquire addition exploration and development opportunities, initially focused on the Philippines and potentially the wider region.

Darren Bowden, Chief Executive Officer

22 May 2024

Competent Persons' Statement

The information contained in this report that relates to the Gold Reserves Estimate, issued in February 2022, was compiled by Paola Tuyor of Metals Exploration and reviewed and verified by Grant Walker of Xenith Consulting.  Mr Walker is a Member of The Australasian Institute of Mining and Metallurgy and is a Competent Person as defined by the JORC Code, 2012 Edition, having five years' experience that is relevant to the style of mineralisation and type of deposit described in the Report.

Mr Darren Bowden, a director of the Company, a Member of the Australasian Institute of Mining and Metallurgy and who has been involved in the mining industry for more than 25 years, has compiled, read and approved the technical disclosure in this regulatory announcement in accordance with the AIM Rules - Note for Mining and Oil & Gas Companies.

Forward Looking Statements

Certain statements relating to the estimated or expected future production, operating results, cash flows and costs and financial condition of Metals Exploration plc and the Group, planned work at the Company's projects and the expected results of such work contained herein are forward-looking statements which are based on current expectations, estimates and projections about the potential returns of the Group, industry and markets in which the Group operates in, the Directors' beliefs and assumptions made by the Directors. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: "expects", "plans", "anticipates", "forecasts", "believes", "intends", "estimates", "projects", "assumes", "potential" or variations of such words and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when a project is actually developed.

These statements are not guarantees of future performance or the ability to identify and consummate investments and involve certain risks, uncertainties and assumptions that are difficult to predict, qualify or quantify. Among the factors that could cause actual results or projections to differ materially include, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfil projections/expectations and realise the perceived potential of the Company's projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Company's projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold and other risks and uncertainties.

The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.

AUDIT COMMITTEE REPORT

Dear Shareholders,

I am pleased to report to you on behalf of the Audit Committee.

Since April 2021, the Audit Committee has been comprised of only non-lender appointed, non-executive directors, which has consolidated the Group's commitment to improved corporate governance.

The Group's established financial reporting structures have continued to perform effectively in the year, and the Committee has continued to oversee the proper maintenance of these structures. The Group's robust framework of internal controls facilitated a smooth external audit process, helping to ensure the integrity of the 2023 Annual Report.

Aims of the Audit Committee

The overall aim of the Audit Committee is to assist the Board in discharging its duties regarding the financial statements, to ensure that a robust framework of accounting policies is in place and enacted, and to oversee the maintenance of proper internal financial controls and risk management. The Committee monitors the integrity of the Financial Statements of the Interim and Annual Reports and formal announcements relating to the Group's financial performance, including advising the Board that the Annual Report taken as a whole is fair, balanced and understandable.

The Committee reviews significant financial reporting issues, key judgements and accounting policies and disclosures in financial reports, reviews the effectiveness of the Group's internal control procedures and risk management systems and considers how the Group's internal audit requirements shall be satisfied, making recommendations to the Board. It reviews the independent auditor's audit strategy and implementation plan and its findings in relation to the Annual Report and Interim Financial Statements. It monitors the relationship with the Group's independent auditor including the consideration of audit fees and independence.

Membership and attendance

The Audit Committee consisted of myself, Andrew Chubb, as the Chair, together with two other Non-Executive Directors, David Cather and Tim Livesey, until September 2023 when Mr Cather resigned as a director of the Company. On 18 March 2024, Mr von Schirnding was appointed as the third committee member in replacement of Mr Cather.

The Committee aims to meet at least three times each year. The external audit team and the Chief Financial Officer are invited to attend meetings of the Committee, and I am satisfied that we were presented with papers of good quality, and in a timely manner. Attendances at committee meetings during the year were:

The external auditors, for the relevant periods they acted in that role, attended all committee meetings held during the year.

Key responsibilities

The main responsibilities of the Audit Committee are contained within its terms of reference that have been approved by the Board and are available on our website. The terms of reference and the key responsibilities of the Audit Committee are set out below:

·          Maintain the integrity of the annual and interim financial statements of the Company and review any significant reporting matters they contain;

·          Review the Annual Report and Accounts and other financial reports;

·          Maintain the accuracy and fairness of the Company's financial statements, including through ensuring compliance with applicable accounting standards and the AIM Rules;

·          Review the adequacy and effectiveness of the Company's internal control environment and risk management systems;

·           Review the adequacy and effectiveness of the Company's Whistleblowing policies;

·           To consider the need for, and to oversee, internal audit activities; and

·          Oversee the relationship with, and the remuneration of, the external auditor, reviewing their performance and advising the Board members on their appointment.

Activities of the Audit Committee during the year

On behalf of the Board, the Audit Committee has closely monitored the maintenance of internal controls and risk management during the year. Key financial risks are reported during each Audit Committee meeting, including developments and progress made towards mitigating these risks.

The Committee received regular reports from the Chief Financial Officer throughout the year and was satisfied with the effectiveness of internal controls and risk mitigation. The Committee also received and considered reports from the external auditor, PKF Littlejohn LLC ("PKF"), and prior to their resignation from CLA Evelyn Partners Limited ("EP"), which included control findings relevant to their audit.

Significant reporting matters

The Audit Committee has reviewed management's assessment of critical accounting judgements and key sources of estimating uncertainty disclosed in note 2.

As part of the review, the Committee considered whether:

·           There are any material or sensitive omissions from the Annual Report narrative;

·           The Annual Report narrative is a true and balanced reflection of events and performance in the year;

·           There is consistency throughout the Annual Report and Financial Statements; and

·           There is a clear explanation of key performance indicators, their link to performance and strategy and equal prominence of statutory performance measures.

The Committee is satisfied that management have considered these matters appropriately and that a reasonable conclusion has been reached, and appropriate disclosure made, based on the information available to the Group. The Committee is not aware of any significant failings or weaknesses in the Company's existing system of internal controls. The Committee has determined that an internal audit function is not an appropriate mechanism for the Company in the context of the Company's current level of complexity of its operations.

Going concern

The Directors consider the continuing strong operating and financial performance of the Group provides ample evidence that there currently is no material uncertainty surrounding the Company and the Group's ability to continue as a going concern.

Accordingly, the Company and Group financial statements are prepared on a going concern basis. Further detail regarding the reasoning behind this conclusion can be found in the Directors' Report on page 32.

External audit

The Audit Committee considers various matters when reviewing the appointment of an external auditor including their performance in conducting the audit and its scope, terms of engagement including remuneration and their independence and objectivity. Details of auditor's fees are included in the notes to the financial statements.

Since the Company's incorporation CLA Evelyn Partners Limited ("EP") (formerly Smith & Williamson) had acted as the Group and Company auditor. During this period, EP had also provided corporate tax services. After considering primarily the length of time EP had served as audit partners, as well as  the potential for possible independence issues relating to additional services, it was mutually agreed with EP that they should be replaced as Group and Company auditor.

On 1 December 2023, following a thorough tender process run by the Audit Committee and the CFO, PKF Littlejohn LLC were appointed as Group and Company auditor.

The Audit Committee has confirmed it is satisfied with PKF's industry experience, knowledge of the Company and its effectiveness as external auditor. PKF does not provide any non-audit services to the Group or the Company. As such the Audit Committee has recommended the reappointment of PKF to the Board. There will be a resolution to this effect at the forthcoming annual general meeting.

The year ahead

The Audit Committee remains focussed on ensuring that the robust framework of internal controls and risk management currently in place throughout the Group is maintained. Financial risk management will continue to be closely monitored, and any potential risks mitigated where appropriate.

The Audit Committee will also continue its close dialogue with the Company's external auditors, highlighting any emerging financial risks or matters facing the Company throughout the coming year and ensuring that the Company's financial reporting mechanisms continue to be constantly updated in line with best practice and subjected to scrutiny and challenge.

Andrew Chubb, Chair of the Audit Committee

22 May 2024

REMUNERATION COMMITTEE REPORT

Dear Shareholders,

It is my pleasure to report to you on behalf of the Remuneration Committee.

As part of the Group's commitment to improved corporate governance, only non-lender, appointed non-executive directors have been members of the Remuneration Committee since April 2021.

Throughout 2023 the Committee has continued to focus on aligning reward with performance and providing incentives, such that the Company's remuneration framework best facilitated an environment that delivered the swift repayment of the Group's external debt. This allowed the Group to focus on strategic opportunities to grow the Group's activities. Certain covenants within the Group's debt documents require lender approvals of any equity incentive schemes and the Committee's efforts in seeking a lender approved acceptable long-term incentive programme continue.

Aims of the Remuneration Committee

The Committee's overall aim is to align employee remuneration with the successful delivery of long-term shareholder value. Our core principles that enable us to achieve this goal are:

1. To offer competitive remuneration to executive management that attracts, retains and motivates highly skilled individuals;

2. To align remuneration packages with performance-related metrics that mirror our short and long-term business strategies; and,

3. To encourage accountability in the workplace and link reward with success.

The Group currently operates the following remuneration framework:

·           Annual salary and associated benefits; and

·          Discretionary bonuses that are granted following the Committee's assessment of performance against certain key business indicators.

Membership and attendance

The Remuneration Committee consisted of myself, Tim Livesey, as the Chair, together with two other Non-Executive Directors, David Cather and Andrew Chubb, until September 2023 when Mr Cather resigned as a director of the Company. On 18 March 2024, Mr von Schirnding was appointed as the third committee member in replacement of Mr Cather.

The Committee aims to meet at least two times each year. Attendances at Committee meetings during the year were:

No Director is involved in any decisions relating to their own remuneration. None of the Committee has any personal financial interest, conflicts of interests arising from cross-directorships, or day-to-day involvement in running the business.

Terms of reference

The terms of reference of the Remuneration Committee, that have been approved by the Board and are available on our website, are set out below:

·          Determine and propose to the Board the Company's overall remuneration policy and monitor the efficacy of the policy on an ongoing basis;

·          Determine and propose to the Board the remuneration of the Executive Directors and senior management;

·          Determine the objectives and headline targets for any performance-related bonus or incentive schemes;

·           Monitor, review and approve the remuneration framework for other senior employees; and,

·          Review and approve any termination payment, such that these are appropriate for both the individual and the Company.

Executive remuneration package and service contracts

There was no change to the CEO's base remuneration and no material changes to other executive remuneration packages during the year. The Group's remuneration framework includes payment of an annual salary and short term bonus. At present there is no long-term incentive programme in place. Executives are provided with life assurance cover equivalent to two times their base salary (capped at £500,000). There are no pension/superannuation schemes in place for executives or non-executive directors. Termination of executive contracts are subject to a three month notice period or an in lieu base salary termination payment.

Management Incentive Programme ("MIP") - 2023 Performance

The CEO and other senior executives are eligible to participate in a MIP. The MIP awards an annual short-term bonus based on performance achieved against pre-determined key performance indicators ("KPIs"). Given the Group priority on being cash generative to reduce external debt, the KPIs are focused on operations and productivity performance.

The following table details the KPIs adopted by the Committee in its assessment of the Group's performance and the quantum of the MIP bonus, which were applied to FY2023.

Glossary:

KPI - Key performance indicator; LTI - Lost time injury; TRIFR - Total reportable injury frequency rate

FTAA - Financial and Technical Assistance Agreement; RSI - Residual storage impoundment

Of the total MIP bonus, 15% is satisfied by an issue of new Ordinary Shares, at an issue price equal to the 30-day VWAP market value prior to the date the MIP bonus is approved by the Board (subject to shareholder approval).

Shareholders will be asked, at a shareholder meeting, to approve the future issue of 3,785,447 new Ordinary Shares to executives as part of the 2023 MIP bonus award. In June 2023, following the 2023 AGM, 7,147,850 new Ordinary Shares were issued to management as part of the 2022 MIP award.

Non-executive director remuneration

All non-executive directors are appointed under a letter of engagement that sets out the terms, responsibilities and remuneration attaching to their appointment. The remuneration of lender nominated non-executive directors is governed by the terms of a revolving credit facility and relationship agreements between the Company and the two major shareholders. The remuneration of non-lender nominated non-executive directors is determined by the full board.

Director remuneration

The Directors' remuneration for the year was as follows:

Notes:

¹ Includes consulting fees paid to private consulting companies.

² Fees paid in accordance with a Services Agreement between the Company and MTL (Luxembourg) Sarl.

³ Restated to eliminate 2022 year-end bonus accruals were cancelled during FY2023.

No element of the Directors' remuneration (other than the share options and shares issued as part of the MIP bonus as noted above) is currently related to the Company's future share price.

Director interests in shares and options

No directors own any shares in the Company apart from Mr Bowden who owns 8,257,355 Ordinary Shares.

Directors' beneficial interests in unissued ordinary shares granted by the Company under share options as at FY2023 year-end are as follows:

Vesting/exercise conditions

Provided the option-holder remains a director of the Company,

1      the remaining 2,200,000 options will vest on 17 June 2024.

The relevant Non-Executive Directors' independence is not considered to be compromised due to holding these options as the level of share options are deemed to be sufficiently immaterial. 

The year ahead/Long-term incentive programme

Under the Group's debt finance agreements material changes to the Group's remuneration policies and the level of executive and senior management remuneration requires the approval of the Group's two lenders in accordance with the various loan agreements. 

It is hoped that a resolution to approve a long-term incentive programme, that has the support of the Company's lenders and major shareholders, will soon be proposed for shareholder approval at a Company general meeting.

Other than the introduction of a long-term incentive programme for executives and senior management, it is not proposed to make any change to remuneration policy.

Tim Livesey, Chair of the Remuneration Committee

22 May 2024

SUSTAINABILITY REPORT

In accordance with Philippine Government requirements, the Group issues a biennial in-depth sustainability report. Shareholders are recommended to access the most recent biennial sustainability report, titled 'Charting a Legacy', issued in May 2024, covering the 2022 and 2023 calendar years, which is available on the Company website at www.metalsexploration.com/esg.

The report is prepared in accordance with the Global Reporting Initiative (GRI) Standards and provides stakeholders with a transparent account and comprehensive information on our sustainability performance and governance and climate-risk related disclosures.

RISK MANAGEMENT

The Group's Code of Conduct enumerates its ethics. Operational procedural standards, aligned with legal requirements, have been established for all activities we undertake. Operations are certified with ISO 14001:2015 compliance and the Group is a member of the Chamber of Mines of the Philippines "Towards Sustainable Mining" initiative. The reporting of any infractions, particularly on safety concerns and potential environmental non-compliance, is participatory and cuts across all employees regardless of position.

COMMUNITY AND SOCIAL DEVELOPMENT

As part of our commitment to enriching the lives of local communities, the Group allocates 1.5% of direct mining and processing costs to be applied in its Social Development and Management Program ("SDMP"). Through the SDMP the Group partners with local communities to identify and implement impactful socio-economic programmes that drive sustainable development in our host and neighbouring areas. Implementation of the SDMP passes through a series of community consultations to identify appropriate socio-economic programmes. The Group's SDMP programmes are focused on:

·     Health;

·     Education;

·     Capacity building;

·     Community development and empowerment;

·     Enterprise development, improvement and networking;

·     Infrastructure development; and

·     Preservation and respect of socio-cultural values.

Total community programme expenditure for FY2023 was US$1.4 million, up from US$1.3 million for FY2022 programmes. The reach of the programmes extends to assist the residents of the Barangay of Runruno and surrounding Barangays, the Municipality of Quezon and the Province of Nueva Vizcaya.

The Community Relations Department, the community interface arm of the Group, maintains strong partnerships with various national agencies and local governments from Barangay to Provincial level. They are primarily engaged in managing the implementation of identified and prioritised projects within the mandated SDMP and other programmes under them as a component of the Group's commitment to its Corporate Social Responsibility ("CSR").

SAFETY AND HEALTH

A safety and health programme is created each year to establish a robust foundation for the implementation of measures that prioritise the well-being and protection of workers. This ensures that workers are provided with a just, safe, and humane working environment. It is updated annually to ensure that the programme remains up-to-date and sufficiently addresses the evolving hazards and risks of the operations.

There were no material safety and health incidents throughout the project site. A safe working culture is actively promoted by a dedicated occupational safety and health department. To date the operation has accumulated in excess of 22.7 million man-hours with no lost time incidents.

HUMAN CAPITAL

Employees are the lifeblood of our operations. Without their dedication to exemplary performance, and a work ethic that aligns with the values of our Company, the growth and development that the Group has achieved through the years will not be attained. It is therefore crucial for our Company to invest in our people to be able to power the business and continue operations, as well as support them in their journey towards a rewarding career and achievement of success that ripples through their lives and their communities.

Our policy is to recruit and retain the most talented and high-performing people who share the Group's commitment to sustainable development. Great care is taken in every step of the employment process with an emphasis on equality, diversity, work-place safety and employee welfare.

ENVIRONMENT

The Group is active in promoting and implementing "responsible mining" practices. It is a leader in the Philippine mining industry in its environmental and environmental rehabilitation practices, having received numerous government/industry awards in this area over a number of years. The Group implements innovative technologies to enhance the efficiency and effectiveness of existing programmes across all operational facets, including our environment-related projects. Use of technologies like low-cost hydroseeding technology combined with a zero waste initiative, and maintaining a tree nursery and a clonal tree nursery research facility, are essential for the sustainability of our environmental restoration efforts.

WASTE MANAGEMENT

Safe management of tailings and other waste products are crucial to the safety of our communities and longevity of our operations. All tailings are sent to the residual storage impoundment facility (RSI) which has been constructed to international standards applicable to water storage dams, which are much higher than international standards applicable to mining tailings.

While the Group has a strong waste management record to date, it understands the risks associated with tailings management are a particular concern to our stakeholders and the Group is determined to maintain high levels of safe tailings management.

REFORESTATION AND REHABILITATION

The Group acts positively to reduce the potential environmental impacts of its operations. It undertakes this obligation through immediate and continuous rehabilitation activities, by the re-greening of disturbed areas, the establishment of protection forests and the provision of habitat for wildlife within the FTAA area.

These programmes demonstrably improve the environment within and surrounding the Group's operations and are designed for beautification, stabilisation and to off-set green-house gas emissions and the impacts of the Group's operations. Through its various programmes, the Group has been responsible for planting over 2 million endemic and cash crop trees.

A total of 5.21 hectares within the FTAA area were rehabilitated during FY2023 (FY2022: 7.17 hectares) to bring the total area rehabilitated since commencement of mining to 49.34 hectares.

In addition, the Group participates in the National Forest Programme and the National Greening Programme. During FY2023, the Group was responsible for a further 195 hectares of reforestation (FY2022: 241 hectares).

As a manifestation of our unwavering and exemplary commitment, the Group has received the Presidential Mineral Industry Environmental Award (PMIEA) in the Surface Mining Operation Category for the second year in a row.

WATER MANAGEMENT

Mining activities require a large and constant supply of water, and the Group recognises that access to safe water is a fundamental right for local communities.

The Group operates a dynamic water management programme to avoid possible impacts on the downstream water quantity, quality and aquatic environment. The ASTER technology contained in the final segment of the process plant destroys all cyanide species from tailings before the tailings are pumped into the RSI.

Th Group aims to reduce its monthly average water consumption by at least 1% per annum.

ANTI-SLAVERY AND HUMAN TRAFFICKING

Our anti-slavery policy reflects our commitment to acting ethically and with integrity in all our business relationships and to implementing and enforcing effective systems and controls to ensure slavery and human trafficking are not taking place anywhere in our supply chains. Our Company abides by various legislation and frameworks, including the UK Modern Slavery Act 2015, the Philippine Anti-discrimination Act of 2011, Republic Act 7877, the Philippine Anti-Sexual Harassment Act of 1995, and the United Nations Guiding Principles on Business and Human Rights.

CLIMATE CHANGE REPORTING

The Group recognises its social responsibility to align its efforts to contribute to global climate change goals and targets including net-zero emissions by 2050. Policies to minimise the Group's greenhouse gas emissions ("GHG"), are followed, as far as economically practicable.

Task Force on Climate-related Financial Disclosures

The Group is committed to managing the impact of its operations on the planet and the impact of climate change on its operations, particularly to ensure continued operational and financial resilience in a changing world and marketplace. The Group understands the importance of these matters to its investors, partners, and regulatory authorities and as required by the Listing Rules, has adopted the Task Force on Climate-related Financial Disclosure's framework for communicating climate related financial risks.

This is the first year the Group has published a report in line with the TCFD Recommendations and the Group has endeavoured to make disclosures consistent with the TCFD recommended disclosures taking into consideration the short remaining mine life at the Runruno mine and the size and complexity of the Group as a whole. The Group will continue to develop and enhance its infrastructure, strategies, structures, resources and tools to manage the risks and opportunities presented by climate change.

TCFD PILLAR - Governance

Board Oversight

The Group recognises the threats and impacts posed by climate change. As a responsible mining company, the Group recognises its crucial role in the transition to a low-carbon economy. The Group aims to align our efforts to contribute to global climate goals and targets. One of the ambitious goals of the Company is to become the first carbon neutral mining operator in the Philippines.

Management Oversight

Management is involved in identifying and evaluating risks that may affect the operations. These risks are constantly assessed to prevent potential environmental, economic and sociocultural impacts to our stakeholders. Within the Group's operations the use of renewable energy is supported by purchasing our power from a hydroelectric power company. In addition, the Group has adopted methods and technologies that increase the efficiency of its operations without causing significant harm to the environment. The Group initiates efforts to include stakeholders in its programs and initiatives in mitigating and addressing the impacts of climate change.

TCFD PILLAR - Strategy

Identified climate-related risks and opportunities

The identified key climate-related threats include increased risk of potential emergencies such as earthquakes, floods, typhoons and dam failures. In response to these identified threats, the Group has developed an emergency control plan (ECP) to ensure preparedness for these potential emergency situations. The ECP is shared with local communities to facilitate a planned effective and timely response, aiming to mitigate threats and minimise consequences to life, environment, and property.

Impact of climate-related risks and opportunities on strategy and planning

The Group continues to investigate opportunities to reduce its GHG emissions while seeking to minimise the potential effects of longer-term risk to power sources from potential climate-related risks.

Resilience of strategy

Management has incorporated climate scenarios into the Group's strategic operational planning and review process. The Board encourages senior management to assess principal and emerging climate-related risks on a regular basis. Any changes in risks identified are to be reported to and discussed at Board level and incorporated into the strategy and planning of the Group.

TCFD Pillar - Risk Management

Processes for identifying and assessing climate-related risks

The Company's Risk Management Plan is designed to identify, assess and mitigate risks to minimise and control any potential impacts.

Processes for managing climate-related risks

The Board and Senior management co-ordinate the Group's analysis and planning of the effects of climate change on our business. The Board regularly discusses the impact of any risks identified through the organisation. The mitigation of GHG emissions and identification of climate related risks has been integrated into our corporate policy, project and procurement evaluation criteria to ensure it is consistently applied and managed. The Group continuously monitors and reports key performance indications relating to environmental matters.

Process for integrating climate-related risks into the overall risk management

New or evolving climate change risks identified by both senior and local management are reported to and discussed at Board level and incorporated into the strategy, planning and climate policy of the Group. Where possible, plans to mitigate the effect of climate change on our operations and our local communities will be integrated into the Group's environmental management and social and labour plans.

TCFD Pillar - Metrics and Targets

Metrics used by the Group

The Group annually sets targets to move forward towards its net-zero ambition. Targets are set for the reduction of water, diesel, and electricity consumption, and waste generation. Further, a target to increase reforestation and restoration is also set.

Greenhouse Gas Emissions

The Group is committed to measuring and reporting our scope 1 and 2 greenhouse gas emissions as noted below. Scope 3 emissions are not currently measured given the size and life of Group's mine.

Targets used by the Group

The Group has only the single Philippine located operation, with a remaining life of mine of approximately three/four years. In the short term, the Group's continues to evaluate areas where GHG emissions can be further reduced. Once the Group has identified the scope of further potential reductions, their time, capital cost and practicability of implementation, as short-term targets for the Group will be assessed.

Over the long term, as part of the Group's business strategy, the Board continues to evaluate opportunities to diversify its business activities, which in turn will involve the consideration of climate-related risks.

GREENHOUSE GAS EMISSIONS

Scope 1 GHG emissions from operations refers to direct activities that are owned or controlled by the Group; primarily emissions from fuel consumed by haul trucks, other vehicles and stationary plant at the Runruno project.

The calculation of GHG emissions is based on activity data, i.e. monitoring of fuel consumption rates, fuel composition, etc multiplied by industry produced conversion factors.

Scope 2 GHG emissions are indirect emissions from the generation of purchased electricity consumed by operations that are owned or controlled by the Group. Group Scope 2 emissions have been calculated using Philippine government recorded supplier-specific emission factors. Within our operations we support the use of renewable energy by purchasing our electricity from a hydroelectric company.

These Scope 1 and 2 GHG emissions are regularly reported to the Philippines mines department.

The Group's total carbon footprint (generated outside of the UK) was measured as follows:

* restated

ENVIRONMENTAL MONITORING

The Group maintains very high compliance standards and employs industry leading initiatives to ensure the highest environmental performance. The Group conducts regular internal comprehensive environmental monitoring to ensure compliance with its licence provisions, Philippine Regulations and any appropriate contemporary standards. This monitoring extends to reference sites outside the immediate operational area. The Government undertakes quarterly monitoring by an independent, community based Multipartite Monitoring Team; while an independent third-party consultant group specialising in environment monitoring services is also engaged to independently monitor the Group's environmental performance.

LEGAL COMPLIANCE

High compliance standards are practiced across the Group. A large site-based team is dedicated to managing the high levels of compliance mandated within the Philippines. The site is regularly audited with upwards of 60 audits, verifications or reviews of its operations undertaken annually by the various regulators. The wide range of permits to operate in the Philippines are secured from more than a dozen Government agencies and regulators.

CORPORATE GOVERNANCE STATEMENT

The Board has chosen to adopt the Quoted Companies Alliance's Corporate Governance Code for small and mid-size quoted companies (the "QCA Code").

The QCA Code identifies ten principles that focus on the pursuit of medium to long-term value for shareholders without stifling the entrepreneurial spirit in which the Company was created. The principles of the QCA Code are embedded into the Company's internal reporting and governance structures to the extent expected of a company of Metals Exploration's size, stage of development and resources.

The Company's governance structures are further governed by the Company's Articles of Association ("Articles") together with relationship agreements (the "Relationship Agreements") and a revolving credit facility (the "RCF") with the Company's two largest shareholders, MTL (Luxembourg) S.à r.l. ("MTL Lux") and Runruno Holdings Limited ("RHL").

The Relationship Agreements regulate the relationship between the Company and its two largest shareholders to ensure, amongst other things, that the Company and its business shall be managed for the benefit of the shareholders of the Company as a whole. The Relationship Agreements grant each shareholder the right to appoint one director, for so long as it (together with its successors or assignees) continues to hold more than 10% of the voting rights of the Company.

The RCF sets out the remuneration payable to directors nominated by the two largest shareholders. Further, the RCF requires the prior consent of both these shareholders (together with its successors or assignees) for the Company to undertake a number of operational decisions.

The Company's current compliance, or otherwise, with each of the ten principles of the QCA Code are detailed below.

DIRECTORS' REPORT

The Directors present their Annual Report together with the audited financial statements of Metals Exploration plc (the "Company") and its subsidiary undertakings (the "Group"), for the year ended 31 December 2023.

PRINCIPAL ACTIVITIES

The principal activity of the Group is to identify, acquire, explore and develop mining and processing projects, mining companies, businesses or opportunities with particular emphasis on precious and base metals mining opportunities in the Philippines.

The Company was incorporated on 8 April 2004 under the Companies Act 1985 (now Companies Act 2006) and is registered in England and Wales with registered number 05098945. The Company was admitted to trading on AIM in October 2004.

The principal activity of the Company is that of a holding company for its subsidiary undertakings, which are set out in note 14 of the financial statements.

FINANCIAL RESULTS

For the year ended 31 December 2023 the profit before tax of the Group for the year was US$119.6 million (2022: US$8.7 million). This result included a net impairment of assets reversal of US$97.7 million (2022: impairment expense of US$1.2 million).

DIVIDENDS

The Directors do not recommend the payment of a dividend for the year ended 31 December 2023 (2022: US$nil).

BUSINESS REVIEW AND FUTURE DEVELOPMENTS

A review of the current and future development of the Group's business is given in the Chairman's Statement on page 3 and the Chief Executive Officer's Report on page 5.

NOMINATED ADVISER & CORPORATE BROKER

The Company's nominated adviser is Strand Hanson Limited. The Company's corporate broker is Hannam & Partners ("H&P Advisory Limited").

AUDITOR

PKF Littlejohn LLP were appointed as auditor of the Company on 1 December 2023, in accordance with Section 485 of the Companies Act 2006 following the resignation of CLA Evelyn Partners Limited. It is proposed that PKF Littlejohn LLP be re-appointed as auditor of the Company at the Company's forthcoming Annual General Meeting.

DIRECTORS & DIRECTORS' INTERESTS

The Directors of the Company during the year and since the year end were:

Nick Von Schirnding           (Independent Non-Executive Chairman), appointed 18 March 2024

Darren Bowden                  (Chief Executive Officer and Executive Director)

Andrew Chubb                    (Non-Executive Director)

Tim Livesey                          (Independent Non-Executive Director)

Steven Smith                        (Non-Executive Director)

Guy Walker                          (Non-Executive Director)

David Cather                       (Independent Chairman and Non-Executive Director), resigned 18 September 2023

Refer to the Remuneration Report for details of Directors' beneficial interests in unissued ordinary shares granted by the Company under share options.

ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES

There was no issue of securities to directors during FY2023, however, during FY2022, the Company issued:

·     6,600,000 options to acquire new ordinary shares to Mr Livesey. These options are subject to vesting conditions as noted in the Remuneration Report.

·     8,257,335 new ordinary shares to Mr Bowden in lieu of a cash payment of a portion of his management incentive bonus award.

Apart from outstanding share options, a full summary of which is disclosed in the Remuneration Report, there are no other arrangements entered into to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS' INTEREST IN CONTRACTS OF SIGNIFICANCE

No contract of significance to which the Company, or any of its subsidiary companies was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the financial year or at any time during the year; other than:

·     Steven Smith is a 10% shareholder in MTL Guernsey Limited ("MTLG"), which has a nominal amount still owing to it under the Senior Debt Facility.

·     Andrew Chubb is a partner of Hannam & Partners, the Company's broker and financial adviser.

PRINCIPAL RISKS AND UNCERTAINTIES FACING THE GROUP

The Board of Directors review the principal risks and uncertainties facing the Group on an ongoing and regular basis. Assessments are made as to how to manage these and mitigate as much risk as possible through various controls. Many of these risks and uncertainties are common to all mining projects. The principal risks and uncertainties facing the Group are identified as follows:

Market risk

The profitability of the Group's projects is impacted by the risks associated with the gold market. Profitability can be affected by factors beyond the Group's control, such as a prolonged decline in world gold prices. The Group regularly tracks gold prices and regularly refines its models on financial profitability in order to have available for the Board at all times, a current view on the future financial viability of its active projects. The Group has attempted to mitigate this risk by entering into limited hedge arrangements in relation to future gold prices. Refer note 20.

The Group is exposed to currency risks in its operations; particularly in relation to Philippine domestic peso currency exposure from costs associated with mining and gold recovery. Currency exposures are carefully monitored, and forward contracts are in place to insure against major adverse currency movement risk. Refer note 20.

Nature of mining, resource estimation and mineral processing

Mineral resource and reserves estimation provides no assurance that the potential tonnage and grades will be achieved. The exploration of mineral rights is speculative in nature and any published results are expressions of judgement developed using industry tested measuring techniques, none of which can be relied upon with complete certainty. Each set of published results builds upon the previous published information and includes any new and reliable information from systematic drill results, mining, and recovery and reconciliation activities and is independently verified by qualified persons. However, this still involves experience, judgement, skill and estimation, all of which are imprecise, interpretative and open to challenge. The actual results of mining may differ upwards or downwards from the published reserves upon which the Group relies in its business projections.

The size of the deposit, its grade, depth and type of orebody, are only some of the particular attributes which determine the costs and recovery methods required to be employed. There is also the length of haul to the processing plant, age and maintenance programmes for plant and equipment, land access, environmental protection and community relations, capital costs, reclamation and closure costs and labour and host community relations. The quantities, costs and assumptions used to identify and interpret these variables can be modelled to the lowest level of detail possible, but they do not provide absolute certainty that the expected cost of mining will be achieved.

The metallurgy of the Group's ore requires a complex set of processes to extract economic levels of gold doré. Maintaining efficient processing operations requires specialised equipment and consumables, combined with an experienced and motivated processing team. It is also subject to numerous factors some of which are within the Group's ability to control, and some that are external factors outside the control of the Group.

Reserves and life of mine

Based upon the Group's current delineated gold reserves and planned mining schedule it is predicted that the Runruno project's remaining life of mine is approximately 3-4 years.

Exploration and development of mineral deposits involve a wide range of significant risks and require a significant investment over an extended period of time. These risks are seldom constant with new types invariably arising and adding to the industry's and Group's challenges.

Exploration success that results in the discovery of new gold resources that can be developed into new economic gold mineral reserves that in turn can extend the Runruno project life of mine is not guaranteed.

Mining regulatory risk

Mining investors are exposed to a high level of regulatory risk under the governing bodies responsible for the Philippine mining sector. There is a wide array of 'rules and regulations' ("Rules") that govern the regulatory regime for foreign mining investment in the Philippines and the Rules are created and enforced by several layers of government and government agencies nationally, provincially and locally. The Philippines mining industry is subject to frequent audit and review activity by regulatory agencies.

Failure to receive, extend or amend any Regulatory Approval, or delays in receiving, extending or amending any Regulatory Approval may adversely affect the properties, business or operations of the Group including, but not limited to, increasing the costs of the Group's activities; limiting the Group's capacity to produce gold; delaying the implementation of any planned changes to the Group's activities; or requiring the full or partial suspension of the Group's operations.

The Group has almost 500 approvals, licences and permits to conduct mining, processing and related activities at its Runruno Gold Project in the Philippines (collectively "Regulatory Approvals") and is routinely required to obtain new permits and Regulatory Approvals or to amend, renew or extend its existing permits and Regulatory Approvals.

As at the date of this Report, neither the Group nor the Runruno project is subject to any suspension or closure order. The Group has applied for, or is in the process of, applying for the issue, extension or renewal of a number of Regulatory Approvals and cannot be certain that they will be issued, extended or renewed on acceptable terms or within the required timeframes.

Key personnel

The Group's future success is substantially dependent upon the continued service of senior management, and it's highly skilled and trained personnel at all levels of management, however the retention of relevant members of staff cannot be guaranteed. There can be no certainty that the Group can recruit suitably qualified or skilled employees in a competitive, highly skilled, specialist industry and it is possible the Group will face periods of varying lengths of management and skills shortages.

Where key personnel cannot be retained in the medium to long term, the Group's commercial production could be compromised at various intervals.

Environmental risk

Mining operations are by nature environmentally risky ventures. As a responsible miner the Group takes its environmental responsibilities very seriously and is subject to stringent rules and regulations before, during and after its period of exploration and mining development. Open pit mining is mining on a large-scale and has the potential to become entangled in environmental disputes. The Group employs every effort to avoid and mitigate even the most minor of damage to the environment, but it is aware it will always be exposed to these risks for as long as it is present at Runruno.

Any breach of its environmental code or obligations to the environment as dictated in its Financial or Technical Assistance Agreement ("FTAA") or its Environmental Compliance Certificate may result in a temporary suspension of operations, fines, and even the possibility of closure of mining operations at Runruno. The Group is aware there may be further environmental standards imposed throughout the life of its mining operations which will involve further costs, time and compromises to be compliant.

Political and country risk

The Philippines is a challenging jurisdiction for foreign mining companies to succeed. The Mining industry's percentage contribution to the country's GDP has dropped significantly over the last 30-40 years. Philippine political and country perceived risk issues have hindered the development of a world class Philippine mining industry. The Group has no control or influence in these matters and these risks are a constant.

In an effort to reduce these risks, the Group applied for and was granted a FTAA, a contract in law with the government. The 1995 Mining Act allows 100% foreign ownership of mining entities where there is a US$50 million investment or higher, through the ownership of a FTAA. Mines operating under a FTAA have recourse for disputes to be arbitrated offshore. Despite opposition to the 1995 Mining Act successive Presidents have supported the framework.

Access to tenement areas

The Group now has full access to all stages of the mining plan, having finalised the removal of illegal gold miners, and their structures from Stages 3, 4 and 5 of the Runruno mine. No further delays to the Group's mining schedule are expected due to tenement access issues.

RSI integrity

The Group's tailings waste is directed to a residual storage impoundment ("RSI") facility. The RSI is being constructed to standards applicable to international water dam construction, which has significantly higher standards than normal mine tailings facilities. However, the failure of the RSI would be catastrophic, and as such the continued integrity of this structure is of the utmost importance.

Third party audits of the design and construction integrity of the RSI are conducted, and the RSI remains in compliance with local guidelines and local development requirements. Construction of the final in-rock spillway commenced in Q1 2023 and is expected to be completed during Q1 2025. This final in-rock spillway will ensure the RSI has the capacity to cope with a 'Probable Maximum Flood' event.

The performance of the RSI is continuously monitored by an independent international consulting group.

GOING CONCERN

The consolidated financial statements of the Group have been prepared on a going concern basis, which contemplates the continuity of business activities and the realisation of assets and the settlement of liabilities in the normal course of business.

Although the Group's current liabilities exceeded its current assets, this is primarily due to the external borrowings as at 31 December 2023.

The Board of Directors believe that the Runruno mine will continue to operate successfully and produce positive cash flows ensuring the continuing viability of the Group and its ability to operate as a going concern, meeting its commitments as and when they fall due.

As a result, the Directors believe there is no material uncertainty over the Group's going concern and that it is appropriate that the financial statements should be prepared on a going concern basis.

KEY PERFORMANCE INDICATORS

The Directors monitor the performance of the Group through the following key performance indicators:

·     Safety - Safety is at the core of the Group's business. The Group aspires to a world class TRIFR target of <0.95, which was achieved both in FY2023 and FY2022. Indeed, the focus on safety has been successful with over 22.7 million work-hours being recorded since the last lost-time incident. Maintaining a safe working environment at all times, for all employees and contractors, is of paramount importance to the Group. Safety is the lead item for consideration at all management meetings, with safety briefings and safety protocol reviews regularly undertaken. Management remains determined to minimise and where possible eliminate potential safety risks.

·     Environment/permit compliance - The Group aims to have no major environmental/permitting incidents and <3 minor reportable environmental/permitting incidents per annum. This target was achieved during both FY2023 and FY2022. Operations are subject to numerous environmental and permit obligations and regulations. A dedicated department monitors the Group's performance in this regard. Regular reporting of compliance with these obligations and regulations is strictly adhered to. The Group is confident of its satisfaction of the compliance obligations imposed on its operations and its ability to maintain and renew permits as required.

·     Gold recovery - Overall gold recovery measured against budget reflects the outcome of ongoing technical work undertaken to improve operational performance. The average gold recovery in FY2023 was 88.7% (FY2022: 85.7%) surpassing the average gold recovery target. Gold recoveries are continuously monitored providing detailed information on day-to-day performance, and for ongoing studies into improving gold recovery even further.

·     Free cash flow - Given the Group's historical high debt level the amount of free cash flow produced to pay down Group debt has been of paramount importance; and performance is determined by comparison of actual results against budget. The cost efficiencies of operations are measured against budgets and forecasts on a weekly and monthly basis. Detailed annual budgets are approved by the Board. Free cash generated from operations of US$74.6 million (FY2022: US$38.2 million) exceeded budget.

·     Total expenditure - Total operating cost and CAPEX expenditure is measured against budget on a weekly, monthly and annual basis. Projected costs are re-forecast at regular intervals. Total operating cost and CAPEX expenditure, excluding excise tax, for FY2023 of US$87.6 million (FY2022: US$89.7 million) was slightly in excess of budget.

·     Total movement of material - Actual physical mining performance, both ore and waste, compared to budget is a key driver to ongoing mining operations. Mine schedules are constantly being reviewed to ensure sufficient ore is delivered to the process plant on a timely basis at an economic grade. Actual tonnes mined during the year was 10.4% above budget at 12.4Mt (FY2022: 13.7Mt).

·     Mill throughput - Actual tonnes milled of 2.1Mt (FY2022: 2.1Mt) compared to the 1.75Mt name-plant design of the process plant indicates the degree of success plant modifications have made on the Group's ability to increase production rates above original design expectations.

EVENTS AFTER THE BALANCE SHEET DATE

Details of significant events occurring after the balance sheet date are set out in note 36 to the financial statements.

FINANCIAL RISK MANAGEMENT

Details of the Group's policies with respect to financial risk management are given in note 34 to the financial statements.

Although monitoring financial risk falls within the terms of reference of the audit committee, this matter is a standard agenda item at all board meetings. The Group's finance departments implement policies set by the Board of Directors.

CORPORATE RESPONSIBILITY AND ENVIRONMENTAL POLICY

The Group's policy is to conduct operations in a safe and environmentally responsible manner to industry best practice standards, to respect the indigenous culture of the mining project areas, to promote social and economic development and to offer employment and training opportunities to those who live in the mining project areas.

POLITICAL CONTRIBUTIONS AND CHARITABLE CONTRIBUTIONS

During FY2023, the Group did not make any political or charitable contributions (FY2022: $nil).

ANNUAL GENERAL MEETING

This report and the financial statements will be presented to shareholders for their approval at the Annual General Meeting ("AGM").

The Company's AGM is expected to be held on 28 June 2024 at the offices of Armstrong Teasdale LLP in London. The Notice of the AGM will be issued shortly.

In accordance with the Company's Articles of Association, Messrs von Schirnding, Bowden, Chubb, and Livesey will retire and will offer themselves for re-election at the AGM.

SHARE CAPITAL

On 31 December 2023, there were 2,098,144,271 ordinary shares of £0.0001 each in the capital of the Company in issue.

SIGNIFICANT SHAREHOLDINGS

As at 31 December 2023, the Company is either aware of or has been notified of the following shareholders who hold disclosable interests of 3% or more of the nominal value of the Company's ordinary shares:

BOARD ENGAGEMENT WITH STAKEHOLDERS - SECTION 172 STATEMENT

Section 172 of the Companies Act 2006 requires a Director of a company to act in the way he or she considers, in good faith, and would be most likely to promote the success of the company for the benefit of its members as a whole. In doing this, section 172 requires a Director to have regard, among other matters, to: the likely consequences of any decision in the long term; the interests of the company's employees; the need to foster the company's business relationships with suppliers, customers and others; the impact of the company's operations on the community and the environment; the desirability of the company maintaining a reputation for high standards of business conduct; and the need to act fairly with members of the company.

The Directors use the Board meetings as a mechanism for giving careful consideration to the factors set out above in discharging their duties under section 172.

Stakeholder engagement

Key stakeholder groups we engage with are listed below, together with an explanation of why we focus on them and how we engage them.

Employees

The success of the Group is dependent upon the hard work and dedication of all our employees. The Board ensures a continuing investment in existing employees who are supported through professional, technical and on-the-job training relevant to their functional areas. The Board directs executives and senior managers to keep staff informed of the progress and development of the Group on a regular basis through formal and informal operational updates, meetings and other regular communications. In addition, the Board ensures funds are provided for regular events to encourage employee participation in local community initiatives.

The Group strives to create an equal opportunity work environment where employees can be safe and healthy at all times, while feeling valued and supported. Employees are encouraged to speak out about anything that impacts their performance and/or safety.

The Board is conscious of its social obligation to impart skills and knowledge onto local Philippine employees. Accordingly, over 98% of the Group's workforce is Philippine. Workforce gender diversity policies are actively followed with approximately 28% of the workforce being female.

Government Agencies & Local Communities

The Group operates in the highly regulated mining business in the Philippines. The Board ensures the Company adopts a positive focus on maintaining productive relations with local communities and all levels of government. As a result, the Chief Executive Officer and senior managers regularly conduct consultations with multi-levels of government agencies to ensure that all regulatory approvals and permits remain in good order. Development of local community improvement programmes are undertaken with consultation of local government and community representatives.

Contractors & Suppliers

Our contractors and suppliers are key business partners, and the quality of goods and services we receive are essential to supporting operations and to provide the Group with the opportunity to produce positive cash flows.

As directed by the Board, management collaborates and continually works with our contractors and the full supply chain, sharing best practice and seeking out synergies to improve performance.

Lenders

For the entire reporting period, the CEO and the CFO, on behalf of the Board, were in regular contact with its lenders regarding the Group's performance in an endeavour to manage expectations.

Customers

The Group's business in mining and selling gold doré means it only deals with a small number of end customers, being refiners of doré and/or gold concentrate. The Board ensures a close relationship is maintained with senior personnel at each customer group.

Investors

Investors are considered key stakeholders, and consequently investor relations are a focus area for Directors. Where possible the Board engages investors on Group performance following trading updates and results announcements.

DISCLOSURE OF INFORMATION TO THE AUDITORS

The Directors at the date of approval of this Annual Report individually confirm that:

·     so far as the Director is aware, there is no relevant audit information of which the Group's auditors are unaware; and

·     the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

This confirmation is given and should be interpreted in accordance with the provision of Section 418 of the Companies Act 2006.

Approved by the Board of Directors and signed on behalf of the Board

Darren Bowden, Chief Executive Officer

22 May 2024

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Corporate Governance Report, Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with applicable law and in accordance with UK-adopted international accounting standards. Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

·     select suitable accounting policies and then apply them consistently;

·     make judgments and accounting estimates that are reasonable and prudent;

·     state whether UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business.

The Directors are responsible for:

·     keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities;

·     ensuring that they meet their responsibilities under the AIM Rules; and

·     the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF METALS EXPLORATION PLC

Opinion

We have audited the financial statements of Metals Exploration Plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Total Comprehensive Income, the Consolidated and Company Statements of Financial Position, 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 parent 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 parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended;

·     the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;

·     the parent 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 parent 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.

Conclusions relating to going concern

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 parent company's ability to continue to adopt the going concern basis of accounting included:

·     Testing the integrity of management's forecast model for a period of 12 months from the date of approval of the financial statements and further, checking the mathematical accuracy of the model, including challenging the appropriateness of key assumptions and inputs with reference to empirical data and external evidence with specific focus on the following key assumptions: gold price, production, costs, gold grade, recoveries and assessed their consistency with approved budgets and the mine development plan, as applicable;

·     Comparing budgets to actual figures achieved to assess the reliability of management's forecasts;

·     Evaluating management's sensitivity analysis and performing our own sensitivity analysis in respect of the key assumptions and inputs underpinning the forecasts. We assessed the validity of any mitigating actions identified by management;

·     Confirming the terms of all borrowing facilities in place and that the terms are not breached and reviewing the repayments of loans and ensuring that they were reflected in the cash flow forecast; and

·     Assessing if the going concern disclosures in the financial statements are appropriate and in accordance with the revised ISA UK 570 going concern standard.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures.

We determined materiality for the group and parent financial statements to be:

In determining group materiality, we consider revenue to be the primary measure used by the shareholders in assessing the performance of the group, driving profitability within the group and revenue is expected to provide a more stable measure year on year.  The percentage applied to this benchmark of 1% has been selected to bring into scope all significant classes of transactions, account balances and disclosures relevant for the shareholders, and also to ensure that matters that would have a significant impact on the reported profit were appropriately considered.

In determining parent materiality, we consider profit before tax to be the primary measure used by the shareholders in assessing the performance of the company.  The parent is generating consultancy revenue from its subsidiaries, and holds little fixed assets for these reasons.  The percentage applied to this benchmark of 5% has been selected to bring into scope all significant classes of transactions, account balances and disclosures relevant for the shareholders, and also to ensure that matters that would have a significant impact on the reported profit were appropriately considered. 

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures. We set the performance materiality at 60% of materiality.

In determining performance materiality, we considered the following factors:

·     Our knowledge of the group and parent and its environment, including industry specific trends;

·     Significant transactions during the year; and

·     The level of judgement required in respect of the key accounting estimates.

We agreed with the audit committee that we would report all individual audit differences identified for the group during the course of our audit in excess of $84,450 ($82,700 for the parent) together with any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

We determined materiality for the significant component to be:

We applied the concept of materiality in planning and performing our audit and in evaluating the effects of misstatement.

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, aspects subject to significant management judgement as well as greatest complexity, risk and size.

As part of designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the directors and considered future events that are inherently uncertain.

These areas of estimate and judgement included:

·     Valuation of property, plant and equipment 

·     Revenue recognition

·     Recoverability of investments in subsidiaries and receivables from subsidiaries

·     Valuation of inventory

·     Accuracy and completeness of rehabilitation provision

·     Valuation and classification of loan payable

·     Accuracy and valuation of retirement benefit obligations

·     Accuracy and valuation of shared-based payments

We also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Of the group's 7 components, including the parent company, 2 were considered material (including parent company - audited by PKF-Littlejohn), financially significant and subject to full scope audit for group purposes. The remaining components were not considered material and we performed a limited scope analytical review together with substantive testing, as appropriate.

A full scope audit was performed for the one significant component in the Philippines.  In establishing our overall approach to the Group audit, we determined the scope, direction of the audit process, and the type of work that needed to be undertaken by the component team. We determined the appropriate level of involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole.  We carried out a site visit to the Philippines in April 2024 and performed an on-site file review of the work performed by the component auditor. 

The key audit matters and how these were addressed are outlined below.

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.

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

We have nothing to report in respect of the following matters 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 parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·     the parent 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 directors' responsibilities statement, the directors are responsible for the preparation of the group and parent 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 parent company financial statements, the directors are responsible for assessing the group and the parent 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 parent 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 company and the sector in which it operates 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, and our expertise of the sector.

·     We determined the principal laws and regulations relevant to the company in this regard to be those arising from Companies Act 2006, UK-adopted international accounting standards, the AIM Rules for Companies, as well as local laws and regulations in the jurisdiction in which the group and parent company operate.

·     Compliance with laws and regulations at the subsidiary level was ensured through enquiry of management, communication with component auditors and correspondence for any instances of non-compliance.

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

o  conducting enquiries of management regarding potential instances of non-compliance;

o  reviewing RNS announcements;

o  reviewing legal and professional fees for evidence of any litigation or claims against the company; and

o  reviewing board minutes and other correspondence from management.

·     We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, whether key management judgements could include management bias in relation:

o  Valuation of property, plant and equipment as outlined in the Key audit matters section above

o  Recoverability of investments in subsidiaries and receivables from subsidiaries

o  Valuation of inventory

o  Accuracy and completeness of rehabilitation provision

o  Accuracy and valuation of retirement benefit obligations

o  Accuracy and valuation of shared-based payments

·     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; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

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.

Joseph Archer (Senior Statutory Auditor)                                                                      15 Westferry Circus

For and on behalf of PKF Littlejohn LLP                                                                                    Canary Wharf

Statutory Auditor                                                                                                                      London E14 4HD

22 May 2024

CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2023

CONSOLIDATED BALANCE SHEET

AS AT 31 DECEMBER 2023

The financial statements were approved by the Board of Directors on 22 May 2024 and were signed on its behalf by:

Darren Bowden, Chief Executive Officer

22 May 2024