Notes to the Financial Statements

As at 31 December 2023

 

1.   General information

The principal activity of Bluejay Mining plc (the 'Company') and its subsidiaries (together the 'Group') is the exploration and development of precious and base metals. The Company's shares are listed on the AIM market of the London Stock Exchange and the open market of the Frankfurt Stock Exchange, as well as the OTC PINK in the US. The Company is incorporated and domiciled in England.

 

The address of its registered office is 6 Heddon Street, London W1B 4BT.

 

2.   Summary of significant Accounting Policies

The principal Accounting Policies applied in the preparation of these Consolidated Financial Statements are set out below. These Policies have been consistently applied to all the periods presented, unless otherwise stated.

 

2.1. Basis of preparation of Financial Statements

The Group and Company Financial Statements have been prepared in accordance with UK-adopted International Accounting Standards (UK adopted IAS) in accordance with the requirements of the Companies Act 2006. The Consolidated Financial Statements have also been prepared under the historical cost convention, except as modified for assets and liabilities recognised at fair value on business combination.

 

The Financial Statements are presented in Pound Sterling rounded to the nearest pound.

 

The preparation of financial statements in conformity with UK-adopted IAS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Accounting Policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 4.

 

2.2.         New and amended standards

 

i) New and amended standards mandatory for the first time for the financial periods beginning on or after 1 January 2023

 

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial

Reporting Standards and IFRIC interpretations. The amendments and revisions applicable for the period ended 31 December

2023 did not result in any material changes to the financial statements of the Group or Company.

 

ii) New standards, amendments and interpretations in issue but not yet effective or not yet endorsed and not early adopted

 

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

 

Standard	Impact on initial application	Effective date
IAS 1	Classification of liabilities with covenants	1 January 2024
IFRS 16 (Amendments)	Lease Liability in a Sale and Leaseback	1 January 2024
IFRS 7	Supplier finance arrangements	1 January 2024
IAS 7	Statement of cash flows	1 January 2024
IAS 21	The effects of changes in foreign exchange rates	1 January 2025

 

The Group is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the Group's results or shareholders' funds

 

2.3.         Basis of Consolidation

 

The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries made up to 31 December. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

 

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

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

·      Rights arising from other contractual arrangements; and

·      The Group's voting rights and potential voting rights

 

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

 

a)   Subsidiaries

 

Subsidiaries are entities over which the Group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the period are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

 

Investments in subsidiaries are accounted for at cost less impairment within the parent company financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group. All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

 

b)   Joint Venture

 

A joint venture (JV) is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement. Joint arrangements are accounted for using the equity method of accounting and are initially recognised at cost. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The aggregate of the Group's share of profit or loss of the JV is shown on the face of the statement of profit or loss and other comprehensive income as part of operating profit and represents profit or loss after tax. The financial statements of the JV are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.

 

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in the JV. At each reporting date, the Group determines whether there is objective evidence that the investment in the JV is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the JV and it's carrying value, then recognises the loss as 'Share of profit of a joint venture' in the statement of profit or loss and other comprehensive income.

 

c)   Reimbursement of the costs of the operator of the joint arrangement

 

When the Group, acting as lead operator or manager of a joint arrangement, receives reimbursement of direct costs recharged to the joint arrangement, such recharges represent reimbursements of costs that the operator incurred as an agent for the joint arrangement and therefore have no effect on profit or loss. When the Group charges a management fee (based on a fixed percentage of total costs incurred for the year) to cover other general costs incurred in carrying out the activities on behalf of the joint arrangement, it is not acting as an agent. Therefore, the general overhead expenses and the management fees are recognised in the statement of profit or loss and other comprehensive income as an expense and income respectively. The amount of income does not represent revenue from contracts with customers. Instead, it represents income

from collaborative partners and hence is outside the scope of IFRS 15.

 

2.4.         Going concern

The Consolidated Financial Statements have been prepared on a going concern basis. The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chairman's Statement and the Strategic Report.

 

As at 31 December 2023, the Group had cash and cash equivalents of £200,700 and in January 2024, the Group raised £1.2 million. The Directors have prepared cash flow forecasts to 30 June 2025 which take account of the cost and operational structure of the Group and Parent Company, planned exploration and evaluation expenditure, licence commitments and working capital requirements. These forecasts indicate that the Group and Parent Company's cash resources are not sufficient to cover the projected expenditure for the period for a period of 12 months from the date of approval of these financial statements.  These forecasts indicate that the Group and Parent Company, in order to meet their operational objectives, and meets their expected liabilities as they fall due, will be required to raise additional funds within the next 12 months.

 

In common with many exploration and evaluation entities, the Company will need to raise further funds within the next 12 months in order to meet its expected liabilities as they fall due, and progress the Group into definitive feasibility and then into construction and eventual production of revenues. The Directors are confident in the Company's ability to raise additional funds as required, from existing and/or new investors, within the next 12 months. The Company has demonstrated its access to financial resources, as evidenced by the successful completion of a Placing in January 2024 with an equity raising of £1.2 million. 

 

Given the Group and Parent Company's current cash position and its demonstrated ability to raise capital, the Directors have a reasonable expectation that the Group and Parent Company has adequate resources to continue in operational existence for the foreseeable future. 

 

Notwithstanding the above, these circumstances indicate that a material uncertainty exists that may cast significant doubt on the Group and Parent Company's ability to continue as a going concern and, therefore, that the Group and Parent Company may be unable to realise their assets or settle their liabilities in the ordinary course of business. As a result of their review, and despite the aforementioned material uncertainty, the Directors have confidence in the Group and Parent Company's forecasts and have a reasonable expectation that the Group and Parent Company will continue in operational existence for the going concern assessment period and have therefore used the going concern basis in preparing these consolidated and Parent Company financial statements.

 

2.5. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM). The CODM, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

 

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

 

2.6.         Foreign currencies

(a) Functional and presentation currency

Items included in the Financial Statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The functional currency of the UK parent entity and UK subsidiary is Pound Sterling, the functional currency of the Finnish subsidiaries is Euros and the functional currency of the Greenlandic subsidiaries is Danish Krone. The Financial Statements are presented in Pounds Sterling which is the Company's functional and Group's presentation currency.

 

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where such items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

 

(c)  Group companies

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

·    assets and liabilities for each period end date presented are translated at the period-end closing rate;

·    income and expenses for each Income Statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

·    all resulting exchange differences are recognised in other comprehensive income.

 

On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the Income Statement as part of the gain or loss on sale.

 

2.7. Intangible assets

Exploration and evaluation assets

The Group recognises expenditure as exploration and evaluation assets when it determines that those assets will be successful in finding specific mineral resources. Expenditure included in the initial measurement of exploration and evaluation assets and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production.

 

Exploration and evaluation assets are recorded and held at cost

 

Exploration and evaluation assets are not subject to amortisation, as such at the year-end all intangibles held have an indefinite life but are assessed annually for impairment. The assessment is carried out by allocating exploration and evaluation assets to cash generating units ('CGU's'), which are based on specific projects or geographical areas. The CGU's are then assessed for impairment using a variety of methods including those specified in IFRS 6.

Under IFRS 6, there are four indicators of impairment:

·    The period for which the Company has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed;

·    Substantive expenditures on further exploration for and evaluation of mineral resources in the specific area is neither budgeted or planned;

·    Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Company has decided to discontinue such activities in the specific area; and

·    Sufficient data exists to indicate, that although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

 

Whenever the exploration for and evaluation of mineral resources in cash generating units does not fulfil the requirements of IFRS 6 or lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Income Statement.

 

Exploration and evaluation assets recorded at fair-value on business combination

 

Exploration assets which are acquired as part of a business combination are recognised at fair value in accordance with IFRS 3. When a business combination results in the acquisition of an entity whose only significant assets are its exploration asset and/or rights to explore, the Directors consider that the fair value of the exploration assets is equal to the consideration. Any excess of the consideration over the capitalised exploration asset is attributed to the fair value of the exploration asset.

 

2.8.         Investments in subsidiaries and joint venture

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

 

Additional contributions by the JV Partner which increase the net assets in the joint venture, are shown as "increase in share of net assets" in the Income Statement. This is a non-cash adjustment and is to retain the Group's ownership in the Joint Venture at 49%.

 

2.9.         Property, plant and equipment

Property, Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided on all property, plant and equipment to write off the cost less estimated residual value of each asset over its expected useful economic life on a straight-line basis at the following annual rates:

 

Office Equipment - 5 years

Machinery and Equipment - 5 to 15 years

Software - 2 years

 

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

 

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.

 

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount. If an impairment review is conducted following an indicator of impairment, assets which are not able to be assessed for impairment individually are assessed in combination with other assets within a cash generating unit.

 

Gains and losses on disposal are determined by comparing the proceeds with the carrying amount and are recognised within 'Other (losses)/gains' in the Income Statement.

 

2.10.       Impairment of non-financial assets

Assets that have an indefinite useful life, for example, intangible assets not ready to use, and goodwill, are not subject to amortisation and are tested annually for impairment. Property, plant and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

 

2.11.       Financial assets

(a)   Classification

The Group classifies its financial assets at amortised cost and at fair value through the profit or loss or OCI. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

       

(b)   Recognition and measurement

Amortised cost

Regular purchases and sales of financial assets are recognised on the trade date at cost - the date on which the Group commits to purchasing or selling the asset. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Group has transferred substantially all of the risks and rewards of ownership. 

 

Fair value through the profit or loss

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured at FVTPL.

       

Financial assets at FTVPL, are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss. Fair value is determined by using market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the 'fair value hierarchy'):

 

- Level 1: Quoted prices in active markets for identical items (unadjusted)

- Level 2: Observable direct or indirect inputs other than Level 1 inputs

- Level 3: Unobservable inputs (i.e. not derived from market data).

 

The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.

 

(c)   Impairment of financial assets

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original EIR. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

 

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

 

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

 

The Group considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when past due for more than one year and not subject to enforcement activity.

 

At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

 

(d) Derecognition

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

 

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. This is the same treatment for a financial asset measured at fair value through profit or loss (FVTPL).

 

2.12.       Financial liabilities

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Group's financial liabilities include trade and other payables and loans.

 

Subsequent measurement

 

The measurement of financial liabilities depends on their classification, as described below:

 

Financial liabilities at fair value through profit or loss

 

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss and other comprehensive income.

 

Trade and other payables

 

After initial recognition, trade and other payables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of profit or loss and other comprehensive income when the liabilities are derecognised, as well as through the EIR amortisation process.

 

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss and other comprehensive income.

 

Derecognition

 

A financial liability is derecognised when the associated obligation is discharged or cancelled or expires.

 

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss and other comprehensive income.

 

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

 

Financial liabilities included in trade and other payables are recognised initially at fair value and subsequently at amortised cost.

 

2.13.       Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand.

 

2.14.       Equity

Equity comprises the following:

·      "Share capital" represents the nominal value of the Ordinary shares;

·      "Share Premium" represents consideration less nominal value of issued shares and costs directly attributable to the issue of new shares;

·      "Other reserves" represents the merger reserve, foreign currency translation reserve, redemption reserve and share option reserve where;

o  "Merger reserve" represents the difference between the fair value of an acquisition and the nominal value of the shares allotted in a share exchange;

o  "Foreign currency translation reserve" represents the translation differences arising from translating the financial statement items from functional currency to presentational currency;

o  "Reverse acquisition reserve" represents a non-distributable reserve arising on the acquisition of Finland Investments Limited;

o  " Capital redemption reserve" represents a non-distributable reserve made up of share capital;

o  "Share option reserve" represents share options awarded by the group;

·      "Retained earnings" represents retained losses.

 

2.15.       Share capital, share premium and deferred shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, net of tax, from the proceeds provided there is sufficient premium available. Should sufficient premium not be available placing costs are recognised in the Income Statement.

 

Deferred shares are classified as equity. Deferred shares have no rights to receive dividends, or to attend or vote at general meetings of the Company and are only entitled to a return of capital after payment to holders of new ordinary shares of £100,000 per each share held.

 

2.16.       Share based payments

The Group operates a number of equity-settled, share-based schemes, under which the Group receives services from employees or third party suppliers as consideration for equity instruments (options and warrants) of the Group. The fair value of the third party suppliers' services received in exchange for the grant of the options is recognised as an expense in the Income Statement or charged to equity depending on the nature of the service provided. The value of the employee services received is expensed in the Income Statement and its value is determined by reference to the fair value of the options granted:

 

·              including any market performance conditions;

·      excluding the impact of any service and non-market performance vesting conditions (for example, profitability or sales growth targets, or remaining an employee of the entity over a specified time period); and

·              including the impact of any non-vesting conditions.

 

The fair value of the share options and warrants are determined using the Black Scholes valuation model.

 

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense or charge is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Income Statement or equity as appropriate, with a corresponding adjustment to a separate reserve in equity.

 

When the options are exercised, the Group issues new shares. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium when the options are exercised.

 

2.17.       Taxation

No current tax is yet payable in view of the losses to date although during the year ended 31 December 2023, the Company received £61,343 in Research and Development ("R&D") tax credits.

 

Deferred tax is recognised using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill; deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

 

In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets (including those arising from investments in subsidiaries), are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

 

Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be used.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

 

Deferred tax is calculated at the tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply to the period when the deferred tax asset is realised or the deferred tax liability is settled.

 

Deferred tax assets and liabilities are not discounted.

 

3.   Financial risk management

3.1.         Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance. None of these risks are hedged.

 

Risk management is carried out by the London based management team under policies approved by the Board of Directors.

 

Market risk

(a) Foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro, Danish Krone and the British Pound. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

 

The Group negotiates all material contracts for activities in relation to its subsidiaries in either British Pounds, Euros, USD or Danish Krone. The Group does not hedge against the risks of fluctuations in exchange rates. The volume of transactions is not deemed sufficient to enter into forward contracts as most of the foreign exchange movements result from the retranslation of intercompany loans. The Group has sensitised the figures for fluctuations in foreign exchange rates, as the Directors acknowledge that, at the present time, the foreign exchange retranslations have resulted in rather higher than normal fluctuations which are separately disclosed and is predominantly due to the exceptional nature of the Euro exchange rate in the last two years in the current economic climate. Further detail is in note 3.3.

 

(b) Price risk

The Group is not exposed to commodity price risk as a result of its operations, which are still in the exploration phase. The Directors will revisit the appropriateness of this policy should the Group's operations change in size or nature.

 

The Group has exposure to equity securities price risk, as it holds listed equity investments.

 

Credit risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. Management does not expect any losses from non-performance of these receivables. The amount of exposure to any individual counter party is subject to a limit, which is assessed by the Board.

 

The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

 

Liquidity risk

In keeping with similar sized mineral exploration groups, the Group's continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital or debt. The Directors are reasonably confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.

 

With exception to deferred taxation, financial liabilities are all due within one year.

 

3.2.         Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the issue of shares or sell assets to reduce debts.

 

At 31 December 2023 the Group had borrowings of £nil (31 December 2022: £nil) and defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned exploration and evaluation activities and may issue new shares in order to raise further funds from time to time.

 

Given the Group's level of debt versus its cash at bank and cash equivalents, the gearing ratio is immaterial.

 

 

3.3.         Sensitivity analysis

On the assumption that all other variables were held constant, and in respect of the Group and the Company's expenses the potential impact of a 10% increase/decrease in the UK Sterling:Euro and UK Sterling:DKK Foreign exchange rates on the Group's loss for the period and on equity is as follows:

Potential impact on Euro expenses: 2023	(Loss)/profit before tax for the year ended 31 December 2023		Equity before tax for the year ended 31 December 2023
	Group	Company	Group	Company
Increase/(decrease) in foreign exchange rate	£	£	£	£
10%	(1,806,238)	(1,023,812)	39,827,251	45,265,863
-10%	(1,812,524)	(1,023,812)	38,926,003	45,265,863
Potential impact on DKK expenses: 2023	Loss before tax for the year ended 31 December 2023		Equity before tax for the year ended 31 December 2023
	Group	Company	Group	Company
Increase/(decrease) in foreign exchange rate	£	£	£	£
10%	(1,867,325)	(1,023,812)	39,944,064	45,265,863
-10%	(1,751,437)	(1,023,812)	38,809,190	45,265,863

 

 

4.   Critical accounting estimates and judgements

The preparation of the Financial Statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the period. Actual results may vary from the estimates used to produce these Financial Statements.

 

Estimates and judgements are regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

Items subject to such estimates and assumptions, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial years, include but are not limited to:

 

Impairment of intangible assets - exploration and evaluation costs

Exploration and evaluation costs have a carrying value at 31 December 2023 of £31,237,336 (2022: £31,850,128). Such assets have an indefinite useful life as the Group has a right to renew exploration licences and the asset is only amortised once extraction of the resource commences. Management tests for impairment annually whether exploration projects have future economic value in accordance with the accounting policy stated in Note 2.7. Each exploration project is subject to an annual review by either a consultant or senior company geologist to determine if the exploration results returned during the period warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long term metal prices, anticipated resource volumes and supply and demand outlook. In the event that a project does not represent an economic exploration target, results indicate there is no additional upside a decision will be made to discontinue exploration or impairment indicators under IFRS 6 are identified, an impairment charge will then be recognised in the Income Statement.

 

Useful economic lives of property, plant and equipment

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets, taking into account that the assets are not used throughout the whole year due to the seasonality of the licence locations. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on economic utilisation and the physical condition of the assets. See note 6 for the carrying amount of the property plant and equipment and note 2.9 for the useful economic lives for each class of assets.

 

Share based payment transactions

The Group has made awards of options and warrants over its unissued share capital to certain Directors as part of their remuneration package. Certain warrants have also been issued to shareholders as part of their subscription for shares and suppliers for various services received. In the year ended 31 December 2023, no share options were issued however during the year ended 31 December 2022, 17,000,000 share options were issued to Robert Edwards.

 

The valuation of these options and warrants involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 18.

 

5.   Segment information

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in three geographical segments: the United Kingdom, Greenland and Finland. Activities in the UK are mainly administrative in nature whilst the activities in Greenland and Finland relate to exploration and evaluation work.

 

The Group had no turnover during the period.

2023		Greenland £	Finland £	UK £	Total £
Revenue		-	-	-	-
Cost of sales		213,523	-	-	213,523
Administrative expenses		548,395	131,464	949,414	1,629,273
Impairment		-	-	3,535,254	3,535,254
Share of earnings from joint venture		13,779	-	-	13,779
Increase in share of net asset		(283,697)	-	-	(283,697)
Valuation losses on fair value through profit and loss equity investments		-	-	1,468,750	1,468,750
Other net gains		(20,719)	(4,365,970)	(44,830)	(4,431,519)
Foreign exchange		-	-	53,318	53,318
Finance expense		(3,503)	1,975	(5,511)	(7,039)
Other income		(219,825)	(101,100)	-	(320,925)
(Profit)/loss before tax per reportable segment		247,953	(4,333,631)	5,956,395	1,870,717
Additions to PP&E		87,815	-	13,425	101,240
Additions to intangible asset		2,875,772	707,184	-	3,582,956
Reportable segment assets		31,450,603	6,210,310	2,859,641	40,520,554

 

 

2022		Greenland £	Finland £	UK £	Total £
Revenue		-	-	-	-
Cost of sales		624,214	5,716	-	629,930
Administrative expenses		676,106	230,347	979,818	1,886,271
Share of earnings from joint venture		71,956	-	-	71,956
Increase in share of net asset		(2,457,596)	-	-	(2,457,596)
Other net gains		1,362	76	111,095	112,533
Foreign exchange		-	-	(103,543)	(103,543)
Finance expense		1,371	815	(4,839)	(2,653)
Other income		(1,641,536)	(114,616)	(45,287)	(1,801,439)
(Profit)/loss before tax per reportable segment		(2,724,123)	122,338	937,244	(1,664,541)
Additions to PP&E		238,908	-	14,891	253,799
Additions to intangible asset		4,634,039	110,651	-	4,744,690
Reportable segment assets		34,764,714	4,938,310	1,328,314	41,031,338

 

6.   Property, plant and equipment

Group
	Software £	Machinery & equipment £	Office equipment £	Total £
Cost
As at 1 January 2022	53,817	3,203,738	76,155	3,333,710
Exchange Differences	-	166,306	266	166,572
Additions	7,417	238,312	8,070	253,799
Disposals	-	(136,336)	-	(136,336)
As at 31 December 2022	61,234	3,472,020	84,491	3,617,745
As at 1 January 2023	61,234	3,472,020	84,491	3,617,745
Exchange Differences	-	(73,952)	(2,666)	(76,618)
Additions	-	87,815	13,425	101,240
Disposals	(43,819)	(104,731)	(45,539)	(194,089)
As at 31 December 2023	17,415	3,381,152	49,711	3,448,278
Depreciation
As at 1 January 2022	45,381	1,432,010	53,940	1,531,331
Charge for the year	8,435	350,402	10,877	369,714
Disposals	-	(87,825)	-	(87,825)
Exchange differences	-	85,839	349	86,188
As at 31 December 2022	53,816	1,780,426	65,166	1,899,408
As at 1 January 2023	53,816	1,780,426	65,166	1,899,408
Charge for the year	5,437	333,319	7,504	346,260
Disposals	(43,819)	(96,367)	(43,386)	(183,572)
Exchange differences	-	(39,144)	-	(39,144)
As at 31 December 2023	15,434	1,978,234	29,284	2,022,952
Net book value as at 31 December 2022	7,418	1,691,594	19,325	1,718,337
Net book value as at 31 December 2023	1,981	1,402,918	20,427	1,425,326

 

Depreciation expense of £346,260 (31 December 2022: £369,714) for the Group has been charged in administration expenses.

 

 

Company
	Software £		Office equipment £	Total £
Cost
As at 1 January 2022	53,817		68,872	122,689
Additions	7,417		7,474	14,891
Disposals	-		-	-
As at 31 December 2022	61,234		76,346	137,580
As at 1 January 2023	61,234		76,346	137,580
Additions	-		13,425	13,425
Disposals	(43,819)		(45,539)	(89,358)
As at 31 December 2023	17,415		44,232	61,647
Depreciation
As at 1 January 2022	45,381		46,657	92,038
Charge for the year	8,435		10,877	19,312
Disposals	-		-	-
As at 31 December 2022	53,816		57,534	111,350
As at 1 January 2023	53,816		57,534	111,350
Charge for the year	5,437		9,964	15,401
Disposals	(43,819)		(43,386)	(87,205)
As at 31 December 2023	15,434		24,112	39,546
Net book value as at 31 December 2022	7,418		18,812	26,230
Net book value as at 31 December 2023	1,981		20,120	22,101

 

Depreciation expense of £15,401 (31 December 2022: £19,312) for the Company has been charged in administration expenses.

7.   Intangible assets

Intangible assets comprise exploration and evaluation costs. Exploration and evaluation assets are measured at cost. Once the pre-production phase has been entered into, the exploration and evaluation assets will cease to be capitalised and commence amortisation.

 

	Group
Exploration & Evaluation Assets - Cost and Net Book Value	31 December 2023 £	31 December 2022 £
Cost
As at 1 January	40,723,713	36,796,174
Transfer of licence to JV	-	(2,085,147)
Additions	3,582,956	4,744,690
Disposal of Finnaust Mining Northern Oy (note 9)	(2,877,609)	-
Exchange differences	(660,494)	1,267,996
As at year end	40,768,566	40,723,713

 

 

Provision for impairment
As at 1 January	8,873,585	8,873,585
Disposal of Finnaust Mining Northern Oy (note 9)	(2,877,609)	-
Impairments	3,535,254	-
As at year end	9,531,230	8,873,585
Net book value	31,237,336	31,850,128

 

In the year ended 31 December 2018, the Directors concluded that an impairment charge of £2,877,609 was prudent in relation to the Finnaust Mining Northern Oy exploration assets. The impairment charge was recognised as being the difference between the fair value of the intangibles and the carrying amount. On 31 July 2023, the Company sold the entirety of its shareholding in Finnaust Mining Northern Oy to Metals One Plc and following the disposal, the impairment charge was reversed (note 9).

 

The Dundas project in Greenland has a current JORC compliant mineral resource of 29.7 million tonnes at 1.99% ilmenite (in-situ). Exploration projects in Finland and the Disko project in Greenland are at an early stage of development and there are no JORC (Joint Ore Reserves Committee) or non-JORC compliant resource estimates available to enable value in use calculations to be prepared. The Directors therefore undertook an assessment of the following areas and circumstances that could indicate the existence of impairment:

 

·      The Group's right to explore in an area has expired, or will expire in the near future without renewal;

·      No further exploration or evaluation is planned or budgeted for;

·      A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves; or

·      Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

 

Further, following an in-depth assessment of deficiencies in the 2022 work programs at Dundas, alongside consultations with various independent consultants, the Company has determined that there is sufficient evidence to warrant the reinstatement of the 2019 Mineral Resource Estimate (MRE) at the Dundas Ilmenite Project. After joining the Company in late December 2023, significant concerns were raised by the new management team regarding the accuracy and representativeness of the 2023 MRE. This decision to reinstate the 2019 MRE reflects the Company's well-informed position that the downgrade in the 2023 MRE was the result of multiple factors, including the use of unsuitable drilling methods. Post year end, the Company is now working on the preparation of the 2024 and 2025 work programmes designed to progress both government engagement and project development.

 

Following their assessment, the Directors concluded that an impairment charge of £3,535,254 was prudent in relation to the Disko exploration assets, Thunderstone and Kangerluarsuk, for the year ended 31 December 2023. The impairment charge was recognised as being the difference between the fair value of the intangibles and their carrying amounts. Disko will continue to focus on the joint venture with Kobold Metals.

 

Following their assessment, the Directors concluded that no further impairment charge was required as at 31 December 2023.

 

8.   Fair Value Through Profit And Loss Equity Investments

During the year ended 31 December 2023, Bluejay received shares 62,500,000 new Ordinary Shares in Metals One Plc following its admission to AIM.

 

	£
1 January 2023	-
Additions at cost	3,125,000
Change in fair value recognised in profit and loss	(1,468,750)
31 December 2023	1,656,250

 

Fair value through profit and loss equity investments include the following:

 

	31 December 2023 £
Quoted: Equity securities - United Kingdom	1,656,250
	1,656,250

 

The fair value of quoted securities is based on published market prices of £0.0265 as at 31 December 2023.

 

All assets and liabilities for which fair value is measured are categorised within the fair value hierarchy. The fair value hierarchy prioritises the inputs to valuation techniques used to measure fair value. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments and other assets and liabilities for which the fair value was used:

 

·      level 1: quoted prices in active markets for identical assets or liabilities;

·      level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and

·      level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

The following tables set forth, by level, equity investments measured at fair value on a recurring basis as 31 December 2023:

 

	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)   31 December 2023 £	Significant Other Observable Inputs   (Level 2)   31 December 2023 £	Significant Unobservable Inputs (Level 3)   31 December 2023 £
Description Equity securities:
31 December 2023	1,656,250	-	-

 

 

9.   Investments in subsidiary undertakings

	Company
	31 December 2023 £	31 December 2022 £
Shares in Group Undertakings
At beginning of period	558,342	558,342
At end of period	558,342	558,342
Loans to Group undertakings	42,000,536	42,458,182
Total	42,558,878	43,016,524

 

Investments in Group undertakings are stated at cost, which is the fair value of the consideration paid, less any impairment provision.

Subsidiaries

Name of subsidiary	Registered office address	Country of incorporation and place of business	Proportion of ordinary shares held by parent (%)	Proportion of ordinary shares held by the Group (%)	Nature of business
Centurion Mining Limited	6 Heddon Street, London, W1B 4BT	United Kingdom	100%	100%	Dormant
Centurion Universal Limited	6 Heddon Street, London, W1B 4BT	United Kingdom	100%	100%	Holding
Finland Investments Limited	6 Heddon Street, London, W1B 4BT	United Kingdom	100%	100%	Holding
FinnAust Mining Finland Oy (1)	Kummunkatu 23, FI-83500 Outokumpu, Finland	Finland	Nil	100%	Exploration
Disko Exploration Limited	6 Heddon Street, London, W1B 4BT	United Kingdom	100%	100%	Exploration
Dundas Titanium A/S	c/o Nuna Advokater ApS, Qullilerfik 2, 6, Postboks 59, Nuuk 3900, Greenland	Greenland	Nil	100%	Exploration

 

⁽¹⁾On 31 July 2023, the Company sold the entirety of its shareholding in Finnaust Mining Northern Oy to Metals One PLC ("Metals One"). The consideration for this transaction is £150,000 in cash, due no later than 18 months and 1 day subsequent to the date of completion, the allotment of 62,500,000 new ordinary shares in Metals One for a total value of £3,125,000 with a further allotment of new ordinary shares, equating to £1,000,000 at any time following completion and a warrant over 7,500,000 new ordinary shares at an exercise price of £0.09 exercisable for a period of 5 years from admission of Metals One to the AIM market.

 

All subsidiary undertakings are included in the consolidation.

 

The proportion of the voting rights in the subsidiary undertakings held directly by the parent company do not differ from the proportion of ordinary shares held.

 

10.  Investments in Joint Venture

During the 2021 financial year, Disko Exploration Ltd entered into a joint venture agreement with Kobold Metals to drill in Greenland for critical materials used in electric vehicles. On 1 February 2022, the joint venture company, Nikkeli Greenland AS ("Nikelli"), was incorporated and the specific licence's were transferred to Nikkeli.

			Proportion of ownership interest held
Name	Registered office address	Country of incorporation and place of business	31 December 2023	31 December 2022
Nikkeli Greenland A/S	c/o Nuna Advokater ApS, Qullilerfik 2, 6, Postboks 59, Nuuk 3900, Greenland	Greenland	49%	49%

 

	2023 £	2022 £
At 1 January	4,470,787	-
Interest in joint venture	-	2,085,147
Share of loss in joint venture	(13,779)	(71,956)
Increase in share of net asset	283,697	2,457,596
As at 31 December	4,740,705	4,470,787

 

Summarised financial information

	2023 £	2022 £
Opening net assets	9,124,054	-
Additions in Exploration assets	-	2,085,147
Additions in PPE	552,991	7,110,863
Loss for the period	(13,779)	(71,956)
Other comprehensive income	-	-
Foreign exchange differences	11,643	-
Closing net assets	9,674,909	9,124,054
Interest in joint venture at 49%	4,740,705	4,470,787
Carrying value	4,740,705	4,470,787
	2023 £	2022 £
Revenues	-	-
(Loss) after tax from continuing operations	(28,121)	(146,850)
	(28,121)	(146,850)
	2023 £	2022 £
Current assets	76,516	366,587
Non-current assets	9,598,393	8,928,292
Current liabilities	-	(170,825)
	9,674,909	9,124,054

The financial statements of the JV are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company (refer to note 2.3.b).

 

Increase in share of net assets is a non-cash adjustment to increase the Company's ownership in the Joint Venture to 49% from additional contributions by the JV Partner (refer to note 2.8).

 

Nikkeli Greenland A/S had no contingent liabilities or commitments as at 31 December 2023.

 

11.  Trade and other receivables

	Group			Company
Current	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
Receivable from related party	39,107	873,666		-	-
Amounts owed by Group undertakings	-	-		373,847	189,988
Prepayments	65,761	50,933		58,522	49,214
VAT receivable	19,281	31,109		-	10,702
Other receivables (note 9)	1,136,088	39,421		1,100,000	5,159
Total	1,260,237	995,129		1,532,369	255,063

 

Other receivables in both the Group and Company includes £1,100,000 of consideration payable by Metals One Plc following the disposal, by the Company, of Finnaust Mining Finland Oy during the year ended 31 December 2023 (note 9).

 

The fair value of all receivables is the same as their carrying values stated above.

 

At 31 December 2023 all trade and other receivables were fully performing. No ageing analysis is considered necessary as the Group has no significant trade receivable receivables which would require such an analysis to be disclosed under the requirements of IFRS 7. None of the amounts above are overdue or impaired.

 

The carrying amounts of the Group and Company's trade and other receivables are denominated in the following currencies:

 

	Group			Company
	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
UK Pounds	1,182,628	821,767		1,532,369	255,063
Euros	56,100	25,353		-	-
Danish Krone	21,509	148,009		-	-
	1,260,237	995,129		1,532,369	255,063

 

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security.

 

12.  Cash and cash equivalents

	Group			Company
	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
Cash at bank and in hand	200,700	1,996,957		17,550	1,366,568

 

All the UK entities cash at bank is held with institutions with an AA- credit rating. The Finland and Greenland entities cash at bank is held with institutions whose credit rating is unknown.

 

The carrying amounts of the Group and Company's cash and cash equivalents are denominated in the following currencies:

 

	Group			Company
	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
UK Pounds	92,906	1,835,746		17,550	1,366,568
Euros	53,304	35,197		-	-
Danish Krone	36,625	126,014		-	-
US Dollar	17,865	-		-	-
	200,700	1,996,957		17,550	1,366,568

 

13.  Deferred tax

An analysis of deferred tax liabilities is set out below.

	Group			Company
	2023 £	2022 £		2023 £	2022 £
Deferred tax liabilities
- Deferred tax liability after more than 12 months	496,045	496,045		-	-
Deferred tax liabilities	496,045	496,045		-	-

 

During the year ended 30 June 2016, a deferred tax liability of £373,343 arose as a result of a fair value adjustment on the assets acquired and liabilities assumed upon the acquisition of 60.37% of the share capital of Bluejay Mining Limited on 8 March 2016.

 

During the year ended 31 December 2017, a deferred tax liability of £122,702 arose as a result of a fair value adjustment on the assets acquired and liabilities assumed upon the acquisition of Disko Exploration Limited.

 

The Group has additional capital losses of approximately £8,550,740 (2022: £8,661,772) and other losses of approximately £7,425,016 (2022: £6,955,765) available to carry forward against future taxable profits. No deferred tax asset has been recognised in respect of these tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.

 

14.  Trade and other payables

	Group			Company
	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
Trade payables	250,040	141,615		344,120	172,378
Accrued expenses	268,050	256,439		164,092	98,361
Other creditors	129,792	126,232		13,073	10,850
	647,882	524,286		521,285	281,589

 

Trade payables include amounts due of £90,048 (31 December 2022: £397,302) in relation to exploration and evaluation activities.

 

The carrying amounts of the Group and Company's trade and other payables are denominated in the following currencies:

	Group			Company
	31 December 2023 £	31 December 2022 £		31 December 2023 £	31 December 2022 £
UK Pounds	338,529	63,649		363,765	120,065
Euros	123,161	132,952		3,082	27,461
Danish Krone	186,192	327,685		154,438	134,063
	647,882	524,286		521,285	281,589

 

15.  Share capital and premium

Group and Company	Number of shares		Share capital
	31 December 2023	31 December 2022	31 December 2023	31 December 2022
Ordinary shares	1,195,885,079	1,049,714,747	119,588	104,971
Deferred shares	558,104,193	558,104,193	558,104	558,104
Deferred A shares	68,289,656,190	68,289,656,190	6,828,966	6,828,966
Total	70,043,645,462	69,897,475,130	7,506,658	7,492,041

 

Issued at 0.01 pence per share	Number of Ordinary shares	Share capital £	Share premium £	Total £
As at 1 January 2022	972,857,613	97,285	55,705,882	55,803,167
Issue of new shares - 23 March 2022 (1)	76,857,134	7,686	5,198,113	5,205,799
As at 31 December 2022	1,049,714,747	104,971	60,903,995	61,008,966
As at 1 January 2023	1,049,714,747	104,971	60,903,995	61,008,966
Issue of new shares - 20 February 2023	5,800,000	580	-	580
Issue of new shares - 20 February 2023	3,798,911	380	179,620	180,000
Issue of new shares - 3 July 2023 (2)	74,285,707	7,429	1,234,298	1,241,727
Issue of new shares - 3 July 2023	571,429	57	9,943	10,000
Issue of new shares - 4 August 2023	1,714,285	171	29,829	30,000
Issue of new shares - 1 September 2023 (3)	60,000,000	6,000	558,000	564,000
As at 31 December 2023	1,195,885,079	119,588	62,915,685	63,035,273

 

(1)   Includes issue costs of £174,200

(2)   Includes issue costs of £58,272

(3)   Includes issue costs of £36,000

 

2022

On 23 March 2022, the Company issued and allotted 76,857,134 new Ordinary Shares at a price of 7 pence per share.

 

2023

On 20 February 2023, the Company issued and allotted 5,800,000 new Ordinary Shares at nominal value and 3,798,911 new Ordinary Shares at a price of 5 pence per share.

 

On 3 July 2023, the Company issued and allotted 74,285,707 new Ordinary Shares at a price of 1.75 pence per share and 571,429 new Ordinary Shares at a price of 1.75 pence per share in lieu of fees.

 

On 4 August 2023, the Company issued and allotted 1,714,285 new Ordinary Shares at a price of 1.75 pence per share.

 

On 1 September 2023, the Company issued and allotted 60,000,000 new Ordinary Shares at a price of 1 pence per share.

 

Deferred Shares (nominal value of 0.1 pence per share)	Number of Deferred shares	Share capital £
As at 1 January 2022	558,104,193	558,104
As at 31 December 2022	558,104,193	558,104
As at 1 January 2023	558,104,193	558,104
As at 31 December 2023	558,104,193	558,104

 

Deferred A Shares (nominal value of 0.1 pence per share)	Number of Deferred A shares	Share capital £
As at 1 January 2022	68,289,656,190	6,828,966
As at 31 December 2022	68,289,656,190	6,828,966
As at 1 January 2023	68,289,656,190	6,828,966
As at 31 December 2023	68,289,656,190	6,828,966

 

 

16.  Other reserves

			Group
	Merger reserve £	Foreign currency translation reserve £		Reverse acquisition reserve £	Redemption reserve £	Share option reserve £	Total £
At 1 January 2022	166,000	(434,596)		(8,071,001)	364,630	761,693	(7,213,274)
Currency translation differences	-	1,493,125		-	-	-	1,493,125
Expired Options	-	-		-	-	(33,771)	(33,771)
Issued Options	-	-		-	-	118,751	118,751
At 31 December 2022	166,000	1,058,529		(8,071,001)	364,630	846,673	(5,635,169)
At 1 January 2023	166,000	1,058,529		(8,071,001)	364,630	846,673	(5,635,169)
Currency translation differences	-	(731,885)		-	-	-	(731,885)
Forfeited options	-	-		-	-	(119,428)	(119,428)
Expired Options	-	-		-	-	(42,356)	(42,356)
At 31 December 2023	166,000	326,644		(8,071,001)	364,630	684,889	(6,528,838)

 

17.  Financial Instruments by Category

Group	31 December 2023			31 December 2022
	Amortised cost	FVTP	Total	Amortised cost	FVTP	Total
Assets per Statement of Financial Performance	£	£	£	£	£	£
Trade and other receivables (excluding prepayments)	194,476	1,000,000	1,194,476	944,196	-	944,196
Cash and cash equivalents	200,700	-	200,700	1,996,957	-	1,996,957
	395,176	1,000,000	1,395,176	2,941,153	-	2,941,153

 

Group	31 December 2023		31 December 2022
	Amortised cost	Total	Amortised cost	Total
Liabilities per Statement of Financial Performance	£	£	£	£
Trade and other payables (excluding non-financial liabilities)	647,882	647,882	524,286	524,286
	647,882	647,882	524,286	524,286

 

Company	31 December 2023			31 December 2022
	Amortised cost	FVTP	Total	Amortised cost	FVTP	Total
Assets per Statement of Financial Performance	£	£	£	£	£	£
Trade and other receivables (excluding prepayments)	473,847	1,000,000	1,473,847	205,849	-	205,849
Cash and cash equivalents	17,550	-	17,550	1,366,568	-	1,366,568
	491,397	1,000,000	1,491,397	1,572,417	-	1,572,417

 

 

Company	31 December 2023		31 December 2022
	Amortised cost	Total	Amortised cost	Total
Liabilities per Statement of Financial Performance	£	£	£	£
Trade and other payables (excluding non-financial liabilities)	521,285	521,285	281,591	281,591
	521,285	521,285	281,591	281,591

 

 

18.  Share based payments

The Company has established a share option scheme for Directors, employees and consultants to the Group. Share options and warrants outstanding and exercisable at the end of the period have the following expiry dates and exercise prices:

				Options & Warrants
Grant Date	Expiry Date	Exercise price in £ per share		31 December 2023	31 December 2022
23 July 2019	23 July 2023	0.10		-	5,200,000
23 July 2019	23 July 2023	0.15		-	5,200,000
23 July 2019	23 July 2023	0.20		-	5,600,000
10 July 2020	30 July 2025	0.10		4,400,000	4,400,000
10 July 2020	30 July 2025	0.15		1,100,000	1,100,000
15 February 2021	15 February 2025	0.15		11,000,000	11,000,000
15 February 2021	15 February 2025	0.20		11,000,000	11,000,000
15 February 2021	15 February 2025	0.25		11,000,000	11,000,000
24 October 2022	1 October 2023	0.10		-	1,500,000
24 October 2022	1 October 2024	0.15		-	3,000,000
24 October 2022	1 October 2025	0.20		-	4,500,000
24 October 2022	1 October 2026	0.25		-	8,000,000
				38,500,000	71,500,000

 

The Company and Group have no legal or constructive obligation to settle or repurchase the options or warrants in cash.

 

The fair value of the share options and warrants was determined using the Black Scholes valuation model. The parameters used are detailed below:                                                                                                          

	2019 Options	2019 Options	2019 Options	2020 Options
Granted on:	23/7/2019	23/7/2019	23/7/2019	10/7/2020
Life (years)	4 years	4 years	4 years	5 years
Share price (pence per share)	7.45p	7.45p	7.45p	6.16p
Risk free rate	0.5%	0.5%	0.5%	0.5%
Expected volatility	21.64%	21.64%	21.64%	30.24%
Expected dividend yield	-	-	-	-
Marketability discount	20%	20%	20%	20%
Total fair value (£000)	31	5	1	31

 

	2020 Options	2021 Options	2021 Options	2021 Options
Granted on:	10/7/2020	15/2/2021	15/2/2021	15/2/2021
Life (years)	5 years	4 years	4 years	4 years
Share price (pence per share)	6.16p	9.20p	9.20p	9.20p
Risk free rate	0.5%	0.5%	0.5%	0.5%
Expected volatility	30.24%	61.47%	30.24%	61.47%
Expected dividend yield	-	-	-	-
Marketability discount	20%	20%	20%	20%
Total fair value (£000)	5	270	173	213

 

	2022 Options	2022 Options	2022 Options	2022 Options
Granted on:	24/10/2022	24/10/2022	24/10/2022	24/10/2022
Life (years)	1 year	2 years	4 years	3 years
Share price (pence per share)	5.3p	5.3p	5.3p	5.3p
Risk free rate	3.26%	3.26%	3.26%	3.26%
Expected volatility	69.64%	69.64%	69.64%	69.64%
Expected dividend yield	-	-	-	-
Marketability discount	20%	20%	20%	20%
Total fair value (£000)	6,178	16,043	66,107	30,423

 

The expected volatility of the options is based on historical volatility for the six months prior to the date of granting.

 

The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.

 A reconciliation of options and warrants granted over the year to 31 December 2023 is shown below:

 

	2023			2022
	Number	Weighted average exercise price (£)		Number	Weighted average exercise price (£)
Outstanding at beginning of period	71,500,000	0.1888		57,275,000	0.1830
Expired	(17,500,000)	0.1469		(1,025,000)	0.1650
Forfeited	(15,500,000)	0.2161		(1,750,000)	0.1786
Granted	-	-		17,000,000	0.2058
Outstanding as at period end	38,500,000	0.1969		71,500,000	0.1888
Exercisable at period end	38,500,000	0.1969		71,500,000	0.1888

 

 

	2023					2022
Range of exercise prices (£)		Weighted average exercise price (£)	Number of shares	Weighted average remaining life expected (years)	Weighted average remaining life contracted (years)	Weighted average exercise price (£)	Number of shares	Weighted average remaining life expected (years)	Weighted average remaining life contracted (years)
0.05 - 2.00		0.1969	38,500,00	1.1943	1.1943	0.1888	71,500,000	1.9887	1.9887

 

During the period there was a credit of £119,428 (2022: charge £118,751) in respect of share options. 

 

19.  Expenses by nature

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Cost of Sales
Exploitation licence fees	161,642	624,214
Other	51,881	5,716
Total cost of sales	213,523	629,930
Administrative expenses
Employee expenses	421,869	495,425
Establishment expenses	39,625	70,184
Travel & subsistence	21,756	50,182
Professional & consultancy fees	765,716	573,035
IT & Software	24,644	25,671
Insurance	74,962	101,223
Depreciation	349,792	369,714
Share option expense	-	118,751
Share option credit	(119,428)	-
Other expenses	50,337	82,086
Total administrative expenses	1,629,273	1,886,271

 

Services provided by the Company's auditor and its associates

During the year, the Group (including overseas subsidiaries) obtained the following services from the Company's auditors and its associates:

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Fees payable to the Company's auditor and its associates for the audit of the Parent Company and Consolidated Financial Statements	72,500	67,751
Fees payable to the Company's auditor for other services	670	2,000

 

20.  Employee benefit expense

	Group			Company
Staff costs (excluding Directors)	Year ended 31 December 2023 £	Year ended 31 December 2022 £		Year ended 31 December 2023 £	Year ended 31 December 2022 £
Salaries and wages	210,446	186,994		297,520	128,618
Social security costs	40,447	38,191		38,905	34,753
Retirement benefit costs	3,640	11,324		3,640	11,324
Other employment costs	16,220	75,693		468	-
	270,753	312,202		340,533	174,695

 

The average monthly number of employees for the Group during the year was 14 (year ended 31 December 2022: 13) and the average monthly number of employees for the Company was 7 (year ended 31 December 2022: 6).

 

Of the above Group staff costs, £252,313 (year ended 31 December 2022: £105,459) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.

 

 

21.  Directors' remuneration

		Year ended 31 December 2023
		Short-term benefits	Accruals	Post-employment benefits	Share based payments	Total
		£	£	£	£	£
Executive Directors
Robert Edwards 1		60,185	57,669	2,658	-	120,512
Bo Møller Stensgaard 1		122,733	-	-	-	122,733
Eric Sondergaard 2		-	1,107	-	-	1,107
Non-executive Directors
Peter Waugh 1		10,000	14,000	222	-	24,222
Michael Hutchinson		12,500	-	-	-	12,500
Roderick McIllree 2		-	553	-	-	553
Harry Ansell 2		-	1,383	-	-	1,383
Troy Whittaker 2			553			553
		205,418	75,265	2,880	-	283,563

 

For the year ending 31 December 2023, a further £2,118 was paid to Bo Stensgaard during his non-directorship employment in the year. 

 

(1)   Resigned on 19 December 2023

(2)   Appointed on 19 December 2023

 

	Year ended 31 December 2022
		Short-term benefits	Post-employment benefits	Share based payments	Total
		£	£	£	£
Executive Directors
Roderick McIllree 3		200,212	9,250	-	209,462
Robert Edwards 4		19,067	587	118,751	138,405
Bo Møller Stensgaard		198,000	-	-	198,000
Eric Sondergaard 5		200,466	-	-	200,466
Non-executive Directors
Johannus Hansen 6		24,167	-	-	24,167
Peter Waugh		24,000	533	-	24,533
Michael Hutchinson		40,000	-	-	40,000
		705,912	10,370	118,751	835,033

 

For the year ending 31 December 2022, a further £13,408 was paid to Eric Sondergaard during his non-directorship employment in the year. 

 

(3)   Resigned on 22 June 2022

(4)   Appointed on 24 October 2022

(5)   Appointed 27 January 2022; resigned 2 November 2022

(6)   Resigned 26 October 2022

 

 

Of the above Group directors' remuneration, £129,567 (31 December 2022: £522,689) has been capitalised in accordance with IFRS 6 as exploratory related costs and are shown as an intangible addition in the year.

 

The above figures do not include employer portion of NIC. Directors NIC for the year ending 31 December 2023 was £9,292 (31 December 2022: £28,747). These have been included in Note 20.

 

Details of fees paid to Companies and Partnerships of which the Directors detailed above are Directors and Partners have been disclosed in Note 28.

 

The remuneration of Directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

 

22.  Other gain/(losses)

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Gain/(loss) on disposal of property, plant and equipment	20,291	(22,739)
Gain on disposal of Finnaust Mining Northern Oy (Note 9)	4,296,421	-
Valuation (losses) on fair value through profit and loss equity investments (Note 8)	(1,468,750)	-
Other gains/(losses)	114,807	(89,794)
Other gain/(losses)	2,962,769	(112,533)

 

23.  Finance income

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Interest income from cash and cash equivalents	7,039	2,653
Finance Income	7,039	2,653

 

 

24.  Other Income

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
Income from related parties	281,247	1,641,536
Other income	39,678	159,903
Other Income	320,925	1,801,439

 

Nikkeli Greenland A/S, joint venture company, was invoiced £224,141 during the year ended 31 December 2023 (31 December 2022: £1,641,536) for management services provided

 

25.  Income tax expense

No charge to taxation arises due to the losses incurred.

 

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to the losses of the consolidated entities as follows:

	Group
	Year ended 31 December 2023 £	Year ended 31 December 2022 £
(Loss)/profit before tax	(1,870,717)	1,664,541
Tax at the applicable rate of 25.08% (2022: 16.75%)	(469,251)	278,871
Effects of:
Expenditure not deductible for tax purposes	88,198	63,453
Depreciation in excess of/(less than) capital allowances	111,032	42,261
Net tax effect of losses carried forward	331,364	(384,585)
Tax (charge)/refund	61,343	-

 

The R&D tax credit is based on specific projects undertaken and claims submitted to HMRC. The reclaim for 2022, totalling of £61,343, was recognised and paid during the year ended 31 December 2023. Research and development tax credits are recognised upon receipt of payment from HMRC.

 

The weighted average applicable tax rate of 25.08% (2022: 16.75%) used is a combination of the 25% standard rate of corporation tax in the UK, 20% Finnish corporation tax and 25% Greenlandic corporation tax.

 

The Group has a potential deferred income tax asset of approximately £1,231,872 (2022: £900,508) due to tax losses available to carry forward against future taxable profits. The Company has tax losses of approximately £7,425,016 (2022: £6,955,765) available to carry forward against future taxable profits. No deferred tax asset has been recognised on accumulated tax losses because of uncertainty over the timing of future taxable profits against which the losses may be offset.

 

On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational top-up tax, effective for accounting periods starting on or after 31 December 2023. However, this legislation does not apply to the Group in the financial year beginning 1 January 2024 as its consolidated revenue does not meet the legislation requirements of being greater than €750m in two of the four preceding years, the group will continue to monitor the legislation in future years.

 

26.  Earnings per share

Group

The calculation of the total basic earnings per share of (0.16) pence (31 December 2022: 0.16 pence) is based on the loss attributable to equity holders of the parent company of £1,809,374 (31 December 2022: profit £1,664,541) and on the weighted average number of ordinary shares of 1,117,083,397 (31 December 2022: 1,032,448,213) in issue during the year.

 

In accordance with IAS 33, basic and diluted earnings per share are identical for the Group as the effect of the exercise of share options would be to decrease the earnings per share. Details of share options that could potentially dilute earnings per share in future periods are set out in Note 18.

 

27.  Commitments

License commitments

As at 31 December 2023, Bluejay owned 7 mineral exploration licenses and one exploitation licence in Greenland. Licence 2015/08, 2020/114 and 2021/08 is a part of the Dundas project and licences 2011/31, 2020/03, 2020/06, and 2020/22 are part of the Disko projects, Thunderstone and Kangerluarsuk, in Greenland. These licences include commitments to pay annual licence fees and minimum spend requirements.

 

As at 31 December 2023 these are as follows:

 

	Group
Group	License fees £	Minimum spend requirement £	Total £
Not later than one year	83,642	2,180,278	2,263,920
Later than one year and no later than five years	234,706	13,102,713	13,337,419
Total	318,348	15,282,991	15,601,339

 

 

28.  Related party transactions

Loans to/(from) Group undertakings

Amounts receivable as a result of loans granted to/(from) subsidiary undertakings are as follows:

 

	Company
	31 December 2023 £	31 December 2022 £
Finland Investments Ltd	(4,390,218)	-
FinnAust Mining Finland Oy (Note 9)	9,279,549	8,278,416
Centurion Mining Limited	345	345
Dundas Titanium A/S	32,139,516	29,470,669
Disko Exploration Limited	4,971,344	4,708,752
At 31 December (Note 9)	42,000,536	42,458,182

 

Loans granted to subsidiaries have increased during the year due to additional loans being granted to the subsidiaries, and foreign exchange loss of £941,103 (31 December 2022: £2,049,375), given that no loans were repaid during the year.

 

These amounts are unsecured and repayable in Euros and Danish Krone on demand from the Company.

 

All intra Group transactions are eliminated on consolidation.

 

Other transactions

The Group defines its key management personnel as the Directors of the Company as disclosed in the Directors' Report.

 

PMW Consultancy Services, operated by Peter Waugh as a sole trader, was paid a fee of £8,000 for the year ended 31 December 2023 (31 December 2022: £42,000) for consulting services to the Company. There was a balance of £nil owing at year end (31 December 2022: £5,000).

 

Egholm Consult, operated by Johannus Hansen, was paid a fee of £nil for the year ended 31 December 2023 (31 December 2022: £10,500) for consulting services to the Company. There was a balance of £nil owing at year end (31 December 2022: £nil).

 

Nikkeli Greenland A/S, joint venture company, was invoiced £224,141 during the year ended 31 December 2023 (31 December 2022: £1,641,536) for management services provided. There was a balance of £nil receivable at year end (31 December 2022: £873,666). Nikelli Greenland A/S show this balance as part of their contributed capital.

 

 

 

29.  Ultimate controlling party

The Directors believe there is no ultimate controlling party.

 

30.  Events after the reporting date

On 30 January 2024, the Company issued 150,145,715 Ordinary Shares at a price of 0.4 pence per share. On 6 February 2024, the Company issued 149,854,285 Ordinary Shares at a price of 0.4 pence per share and 10,178,810 Ordinary Shares at a price of 0.71 pence per share in lieu of Directors Settlement fees.

 

On 20 June 2024, the Company announced it had reached agreement with the major shareholder of White Flame Energy Ltd ("White Flame") to purchase the Company in two tranches. Subject to receiving the required acceptances from the balance of the White Flame shareholders, the Company will initially acquire up to 51% of the issued share capital of White Flame and will be granted a 3 year option to acquire the remaining 49% on the same terms.

 

For further information please visit http://www.bluejaymining.com or contact:

Eric Sondergaard	Bluejay Mining plc	enquiry@bluejaymining.com
Ewan Leggat / Adam Cowl	SP Angel Corporate Finance LLP (Nominated Adviser and Broker)	+44 (0) 20 3470 0470
Tim Blythe / Megan Ray / Said Izagaren	BlytheRay (Media Contact)	+44 (0) 20 7138 3205

 

About Bluejay Mining plc

Bluejay is listed on the London AIM market and Frankfurt Stock Exchange and its shares also trade on the Pink Market in the US. With multiple projects in Greenland and Finland, Bluejay offers both portfolio and commodity diversification focused on base and precious metals in Tier 1 jurisdictions.

Bluejay, through its wholly owned subsidiary Disko Exploration Ltd., has signed a definitive Joint Venture Agreement with KoBold Metals to guide exploration for new deposits rich in the critical materials required for the green energy transition and electric vehicles (the Disko-Nuussuaq nickel-copper-cobalt-PGE Project). This project is Bluejay's primary focus.

Disko Exploration Ltd holds two additional projects in Greenland - the 692 sq km Kangerluarsuk zinc-lead- silver project, where historical work has recovered grades of up to 45.4% zinc, 9.3% lead and 596 g/t silver; and the 920 sq km Thunderstone project which has the potential to host large-scale base metal and gold deposits. Bluejay also owns 100% of the fully permitted Dundas Ilmenite Project under its subsidiary Dundas Titanium A/S in northwest Greenland.

In Finland, Bluejay currently holds three large scale multi-metal projects through its wholly owned subsidiary FinnAust Mining Finland Oy. The Company has identified multiple drill ready targets at the Enonkoski nickel-copper-cobalt project in East Finland. Bluejay's Hammaslahti copper-zinc-gold-silver project hosts high-grade VMS mineralisation and extensions of historical ore lodes have been proven. The drill ready Outokumpu copper-nickel-cobalt-zinc-gold-silver project is located in a prolific geological belt that hosts several high-grade former mines. In August 2023, Bluejay successfully divested its Black Schist Projects in Finland to Metals One plc in a transaction worth £4.125 million (Bluejay currently owns c. 29% of the issued ordinary share capital of AIM listed Metals One plc).