Altona Rare Earths Plc

Annual Report • Nov 4, 2024

COMPANY REGISTRATION NUMBER: 05350512 ALTONA RARE EARTHS PLC ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2024 2 Table of Contents CORPORATE INFORMATION...................................................................................................................... 3 CHAIRMAN’S STATEMENT ......................................................................................................................... 4 CEO’S STATEMENT ..................................................................................................................................... 5 OPERATIONS REVIEW ................................................................................................................................ 7 GROUP STRATEGIC REPORT .................................................................................................................. 16 CORPORATE GOVERNANCE REPORT ................................................................................................... 22 DIRECTORS’ REPORT ............................................................................................................................... 37 STATEMENT OF DIRECTORS’ RESPONSIBILITIES ............................................................................... 39 REMUNERATION REPORT ....................................................................................................................... 41 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTONA RARE EARTHS PLC ............ 48 STATEMENT OF CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ..... 55 STATEMENT OF CONSOLIDATED FINANCIAL POSITION ..................................................................... 56 PARENT COMPANY STATEMENT OF FINANCIAL POSITION ................................................................ 57 STATEMENT OF CONSOLIDATED CASH FLOWS .................................................................................. 58 PARENT COMPANY STATEMENT OF CASH FLOWS ............................................................................. 59 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ..................................................................... 60 PARENT COMPANY STATEMENT OF CHANGES IN EQUITY ................................................................ 61 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................... 62 3 CORPORATE INFORMATION DIRECTORS Simon Charles - (Non-Executive Director) Cédric Simonet - (Director - Chief Executive Officer) Louise Adrian - (Director – Chief Financial Officer) Kristoffer Andersson – (Non-Executive Director) COMPANY SECRETARY Orana Corporate LLP REGISTERED OFFICE Eccleston Yards 25 Eccleston Place London SW1W 9NF INDEPENDENT AUDITOR PKF Littlejohn LLP 15 Westferry Circus London E14 4HD CORPORATE ADVISOR Novum Securities Ltd 2 nd Floor, 7-10 Chandos Street, London W1G 9DQ BANKERS HSBC Bank Plc 39 Tottenham Court Road London W1T 2AR LAWYERS Mildwaters Consulting LLP Walton House 25 Bilton Road, Rugby Warwickshire CV22 7AG REGISTRARS Share Registrars Limited 3 the Millennium Centre Crosby way, Farnham Surrey GU9 7XX 4 CHAIRMAN’S STATEMENT Our Company’s results for the year ended 30 June 2024 cover a period of further change, development and progress for our Company, consistent with our strategy. Having listed on the Official List in June 2023, we believe this step has improved our standing in the eyes of potential partners and counterparties. It has enabled us to access the capital markets more effectively. We have undertaken fundraises to support the plan for Monte Muambe, and we have welcomed new shareholders on to our register. Progress has occurred at Monte Muambe, with our interest having increased to 51% and our formal application having been made for a 25 year mining concession for that project. The scoping study results were encouraging and positive. 2023/2024 saw output for rare earths rise globally, demand for rare earth elements softened due to the global economic downturn, and competition in production has brought further pressure on producers. The equity markets have been difficult for junior miners, especially for those of us still in the exploration phase. Nonetheless, we take a long term view, and believe our strategy to create and to nurture a diversified portfolio of mineral assets in Africa to be the right one. During the period under review, we acquired a copper project in the Mufumbe district in Zambia, and entered into an option to acquire a copper and silver exploration licence in Botswana – the Sesana project. These acquisitions are consistent with our strategy, and we continue to look for appropriate acquisition opportunities. We face the future with determination to deliver on our strategy, with a focus on its implementation, and with resolve to generate value for our shareholders. Your board is cohesive, aligned, and single minded about delivering results. Our work continues. Simon Charles Chair Altona Rare Earths Plc 5 CEO’S STATEMENT The Financial Year 2024 was a year of significant value building for Altona. The Company’s focused exploration approach at the Monte Muambe rare earths and fluorspar project led to the production of a maiden JORC mineral resource estimate (“MRE”) and of a positive scoping study barely 2 years after the acquisition of the project. With 13.6 million tons at 2.42% TREO, out of which almost 60% is already in the Indicated category, this MRE forms a solid base for further increase and for a future ore reserve statement. As a result of the completion of this milestone, Altona’s ownership of this important rare earths resource increased from 20% to 51%. The project is now at prefeasibility study level. According to Adamas Intelligence 1 , the global consumption of NdBeB magnets rose by 13.3% in 2023. This largely reflects the increasing permanent magnets demand for electric vehicles drive trains, and wind turbines, driven by the green energy transition. The same analyst forecasts the demand to grow at a compound annual growth rate (“CAGR”) of 8.7% from 2024 through 2040, whereas the supply is expected to grow at a CAGR of 5.1% over the same period. This underpins strong long-term market fundamentals, pushed by both decarbonisation and robotics applications, the latter being expected to become the largest global demand driver for permanent magnets by 2040. Rare earths prices, however, after a peak in 2021 and 2022, have failed to meet analysts’ previsions and fell to their current level (about USD 75 per kg for Neodymium-Praseodymium alloy). Such prices have delayed or hindered the development and funding of many rare earths projects. Cognisant of these facts, in early 2024, the Company announced and started to implement an expansion and diversification strategy in order to mitigate its exposure to rare earths only, and to build a portfolio of critical raw materials projects which we hope will open opportunities for early monetisation of these assets. The Board defined clear selection criteria covering a limited number of commodities in tier 1 African jurisdictions and narrowing down on low acquisition cost and low initial exploration cost opportunities. The acquisition of the Kabompo South copper project in Zambia in March 2024 and the option to acquire the Sesana copper-silver project in Botswana in April 2024, (this option being exercised post year end in July 2024) marked the start of this strategy’s implementation. The Sesana project, located in the heart of the emerging Kalahari Copper Belt (“KCB”), and in a jurisdiction widely regarded as the most mining-friendly in Africa, is particularly exciting. The Sesana licence covers a well identified geological feature, the D’Kar – Ngwako Pan formations contact, which is known to host copper mineralisation in the KCB. It is located just about 25km from MMG’s Khoemacau Zone 5 underground copper-silver mine, where production capacity is currently being increased. As part of the implementation of this strategy, Altona has also initiated a review of the fluorspar production potential of Monte Muambe. This includes the possibility of rapidly putting the low- tonnage / high-grade (50% to 70% CaF 2 ) fluorspar veins located in the Western part of the intrusion into production, thus generating much needed cash flow for the Company. I am particularly excited by this opportunity to turn an existing asset into a profit centre in the short term. 1 https://www.adamasintel.com/new-report-rare-earth-magnet-market-outlook-to-2040/ 6 Fluorspar is a little-known but very important critical raw material. Fluorspar demand and prices have been steadily increasing over recent years and are expected to increase further as green energy transition applications such as the manufacturing of electric vehicles batteries require significant amounts of fluorspar. High-grade fluorspar veins lend themselves to the production of metallurgical grade fluorspar through simple extraction, comminution and gravity concentration methods. In the meantime, the Company will continue derisking the Monte Muambe rare earths project in order to unlock the tremendous value it created through 3 years of investment in this project. This will be done through focused spending on priority activities such as securing a 25 year mining concession (which is expected to be granted before the end of this year) and on-going metallurgical testing, as well as continuing to seek a strategic investor involved in the rare earths supply chain. Dr Cédric Simonet CEO Altona Rare Earths Plc 7 OPERATIONS REVIEW Financial Year 2024 activities - Monte Muambe Rare Earths and Fluorspar project Maiden JORC Mineral Resource Estimate On 25 September 2023, Altona published Monte Muambe’s maiden JORC Mineral Resource Estimate, reported in the table below using a 1.5% TREO cut-off. Notes: • Million tonnes are rounded to one decimal place. Grades are rounded to two decimal places for % and whole numbers for ppm. • The MRE has been reported in consideration of reasonable prospects for eventual economic extraction (RPEEE) using a pit shell based on a 1.5% TREO cut-off, revenue of 24.65 USD/kg TREO MREC and average total recovery to MREC of 48%. • Mineral resources are reported as dry tonnes on an in-situ basis. • Rare earth elements are inclusive of the TREO and not additional to it. • “NdPr Oxide” is the sum of Nd2O3 and Pr6O11. The MRE’s tonnage and grade compares favourably to Ore Reserve Statements of more advanced carbonatite REE-projects in Monte Muambe’s peer group in Africa and in Australia. The MRE covers two (Target 1 and Target 4) of 11 identified REE targets at Monte Muambe and there is considerable scope to increase its size. As part of the Prefeasibility Study, the Company intends to increase the tonnage and the level of confidence of the existing MRE through: • In-fill drilling at Target 1 and Target 4 (to take the MRE on these two mineralised bodies to Measured and Indicated levels); • Down-dip drilling at Target 1 and Target 4 (to increase the tonnage); • A re-evaluation of the potential viability of Target 6, which has known high-grade mineralisation at a depth of 30 to 50m below the surface; • Resource drilling at Targets 3, 9 and 11 among others. Scoping Study On 18 October 2023, Altona published an updated CPR including a Scoping Study (the “Study”) for the Monte Muambe project. The Study was prepared by geology and mining consultancy firm Snowden-Optiro, to assess the potential viability of an open pit mining and MREC production operation, to assess project development options, and to give sufficient confidence to the Company to advance to the Prefeasibility Study stage. 8 The Study is preliminary in nature and includes material assumptions outlined in the CPR, including product price assumptions. Capex estimates qualify as Class 4 estimates as per the Association for the Advancement of Cost Engineering (AACE) Recommended Practice 47R- 11. The accuracy of the opex and of the initial capex estimate is assessed at +35 % to −30 %. The base case includes an indicative life of mine extraction and production schedule, which is based on a Mineral Resource Estimate, 58% of which classified as Indicated and 42% as Inferred. The Study takes into consideration open-pit mining of Target 1 and Target 4, at a Life of Mine (“LOM”) strip ratio of 1.6, over a period of 18 years. An anticipated 750,000 tonnes of ore per annum will be extracted and processed through a beneficiation plant to produce a rare earths concentrate. The beneficiation process will include crushing, milling and flotation. The concentrate will then be processed through a hydrometallurgical plant to produce an average of about 15,000 tonnes of MREC per annum. The hydrometallurgical process will involve a weak acid gangue leach, followed by rare earths leaching and purification. The MREC product will be packaged and transported via existing road infrastructure to the port of Beira, in Mozambique, for export. Schematic layout of the Monte Muambe project Base Case Technical and Economic parameters are summarised in the table below: Parameter Unit V alue Ore processed Mt 13.5 MREC produced kt 270.7 Initial Capex M US$ 276.3 Sustaining Capex M US$ 63.0 Opex LoM M US$ 1,519 Opex per ton MREC US$/t 5,613 Target 1 Open pit Target 4 Open pit Plant Tailings Storage Facility Waste Dump Waste Dump 9 Gross Revenue LoM M US$ 3,670 Net Revenue LoM M US$ 3,193 EBITDA LoM M US$ 1,674 Revenue per ton MREC US$/t 13,558 Payback from first MREC years 2.5 Post tax NPV 8 M US$ 283.3 Post tax NPV 10 M US$ 207.0 Post tax NPV 8 (Upside Scenario) M US$ 409.9 Post tax IRR % 25% Operating margin % 42% Using an NPV of US$283.3 million with an applied real discount rate of 8%, the Project is most sensitive to revenue (price, recovery, grade and exchange rates), less sensitive to opex and least sensitive to capex. Project sensitivity analysis The Scoping Study demonstrates the potential for Monte Muambe to become a viable mining operation. Considerable upside potential has been identified in the Scoping Study and will be developed further in the Prefeasibility Study (“PFS”). This includes: • Increase of the resource base, as well as of the LoM and/or ore extraction rate; • Mining parameters optimisation; • Processing and Metallurgy, both for the beneficiation and hydrometallurgical plants; • Energy sources mix and logistics options; • Evaluation of the possibility of doing further onsite, in-country or regional separation and refining; • Setting up Responsible Sourcing systems. Completion of Phase 2 and holding increase to 51% On 24 October, in accordance with the Farm-Out Agreement, the Company notified the original shareholders of Monte Muambe Mining Lda of the successful completion of Phase 2 10 and of its intention to proceed to Phase 3. This triggered the transfer of an additional 31% of Monte Muambe Mining Lda, which was completed on 5 December 2023 and received the formal approval from the Minister on 14 December 2023. On 14 December 2023, Monte Muambe Mining Lda applied for a Mining Concession over the area of Prospecting Licence 7573L for a duration of 25 years. At the date of this report, the application is in the final stages of its process and the Mining Concession is expected to be granted shortly. Phase 3 – Prefeasibility Study During the 3 rd quarter of 2023, the Company carried out additional drilling (10 RC holes totalling 790m) and trenching at Monte Muambe, with a view to define better the mineralised envelope at Target 4, and to test Target 3. Significant intercepts, based on on-site p-XRF assays, include: Hole Target From (m) To (m) Length (m) TREO% (1) MM086 T4 25 67 42 1.570 MM102 T4 33 84.4 51.4 2.620 MM103 T4 Surface 80 80 1.897 MM105 T4 Surface 76 76 3.426 MM106 T4 Surface 28 28 1.590 MM107 T4 27 70 43 1.865 MM090 T4 44 77.5 33.5 1.675 MM110 T3 Surface 30 30 2.735 (1) Sum of La, Ce, Nd, Pr and Y from Altona’s pXRF assays, in oxide percent. Other Prefeasibility Study activities carried out during the financial year include the thorough mineralogical characterisation of a representative 100kg ore sample from Target 1, which was sent to SGS Lakefields in Canada. Financial Year 2024 activities – Other projects In February 2024, the Company carried out a review of its strategy and announced its intention to expand and diversify its portfolio of projects in Africa into other critical raw materials. The Company started assessing potential new opportunities with a focus on projects having a low entry-cost and a clear pathway to early results and to majority ownership. During the financial year, the Company advanced on the acquisition of two projects: the Kabompo South copper project in Zambia and the Sesana copper-silver project in Botswana. Kabompo South Copper project, Zambia On 28 March 2024, the Company announced entering into an agreement with Sustineri Group Ltd and with the beneficial owners of Phelps Dodge Mining (Zambia) Limited to acquire the entire issued share capital of Phelps Dodge Mining (Zambia) Limited, the registered holder of Large Scale Exploration Licence 21403-HQ-LEL ("the Kabompo South Licence"), located in the Mufumbe District of Northwestern Province of Zambia. The Kabompo South Licence has a surface area of approximately 616 km2 and is valid for copper, cobalt, nickel, lead, zinc, gold and diamonds. The Licence is located 4 km west of 11 the Kamweji copper mine, and 60 km southwest of the Mufumbwe copper mine (22 million tonnes at 1.6% Cu), along strike. The Kabompo South Licence was previously held by copper giant Freeport McMoRan until this company's strategic decision to exit Zambia in April 2020. The Kabompo South Licence has seen prior grassroot exploration including 4,000 line kilometre of ground magnetometer survey and a partial leach soil geochemistry survey over a 4 kilometre square grid. This work highlighted the presence of a large copper gold silver anomaly in the Northeastern part of the licence area, overlapping a possible demagnetised zone. Sesana Copper-Silver project, Botswana On 9 April 2024, the Company announced that it entered into a binding option agreement (“BOA") with Ignate African Mining P/L, with respect to exploration for copper and silver on Prospecting Licence PL2329/2023 (the "Sesana Licence"), located in the Northwest District of Botswana. This option was exercised post year end and at the date of this document the parties are in the process of finalising the final agreement. The Sesana Licence is located in the heart of the highly prospective Kalahari Copper Belt ("KCB"), close to major copper-silver discoveries. The Project is located 25 km from the producing Khoemacau underground copper-silver mine and situated in an active exploration area of the KCB (Khoemacau, Galileo Resources, ARC Minerals). Recent airborne geophysical data interpretation shows prospective geological structures for copper-silver mineralisation passing through the Tenement. Botswana is considered one of the most attractive mining investment jurisdictions in Africa, and indeed, in the world. The Sesana Licence has a surface area of about 274 km2 and is valid until 31 March 2026, after which it can be renewed twice for periods of up to 2 years each. It is valid for copper, cobalt, gold, silver, lead, zinc, aluminium, chromium, iron, titanium and platinum group metals. Renowned Kalahari Copper Belt expert David Catterall was subsequently hired to guide and advise the Company with respect to its exploration program for the Sesana Licence. Post-Financial Year activities Monte Muambe Rare Earths and Fluorspar The Company’s post-financial year activities are focused on continuing to derisk the project, through the grant of the Mining Concession, and through key metallurgical testing activities. As at the date of this report, the process of the Mining Concession application is believed to be in its final stage. The representative ore sample sent to SGS Lakefields is currently undergoing metallurgical testing, with a focus on flotation rougher tests. Initial test results, received in September 2024, are highly encouraging and show a rare earth recovery of 69.3%, and a good selectivity between rare earths and fluorspar. On-going flotation metallurgical testing is expected to improve the characteristics of the rare earths concentrate which will be produced on site and subsequently processed through a hydrometallurgy plant, also on site, to produce Mixed Rare Earths Carbonate. 12 This is expected to lead to a significant reduction of the hydrometallurgy plant opex and capex, and to an improvement of the financial results outlined in the scoping study. In October 2024, the Company started a re-assessment of the potential of Monte Muambe for fluorspar production. Disseminated fluorspar in rare earth ore from Target 1 and Target 4 is considered as a potential by-product of future rare earths mining and is covered in the scope of current metallurgical testing. In addition, low-tonnage high-grade hydrothermal fluorspar veins located in the western part of the carbonatite intrusion may lend themselves to short-term development into a producing mine. Kabompo South Copper A field visit was undertaken by the Company’s CEO and lead geologist Cedric Simonet in September 2024. Subsequently, geophysical consultant Earthmaps Consulting was hired to carry out the reprocessing and interpretation of legacy geophysical data to generate soil geochemistry follow up for copper and possibly for diamonds. Sesana Copper and Silver On 29 July 2024 the Company announced that it notified Ignate African Mining P/L of the exercise of the option over the Sesana Project. At the date of this document the parties are in the process of finalising the final agreement. Outlook 2024 has been an important year for Altona, which saw the completion of key milestones for the Monte Muambe Rare Earths and Fluorspar project, including a maiden JORC MRE, a scoping study, an application for a 25 year Mining Concession, and the increase of the Company’s ownership of the project from 20% to 51%. The Company also made a strategic decision to expand and diversify its portfolio of critical raw materials projects in Africa, targeting opportunities which: • Are located in tier 1 African mining jurisdictions • Have a low acquisition cost and a clear path to majority ownership • Have a low initial exploration cost and can be fast-tracked • Will contribute to building a portfolio of assets widening monetization and early revenue options The acquisition of the Kabompo South copper project in Zambia and the Sesana copper-silver project in Botswana were two important steps towards the implementation of this strategy. Over the past year, green energy transition driven demand for rare earths has tremendously increased. The supply chain remains largely dominated by China, but alternative supply chains are steadily developing in Europe, America, Australia and Asia. Neodymium and praseodymium prices, however, remain depressed, well below the peak levels of late 2021 and early 2022. In this situation, the Company is convinced that its diversification strategy is sound and appropriate. Over the next year, Altona will continue to build a balanced portfolio of assets in accordance with the above strategy, through carefully selected acquisitions and targeted exploration. This is expected to open up early monetisation opportunities, through disposal or through short- term development of suitable assets. 13 The Company will continue to derisk Monte Muambe through investment in priority activities including the completion of the Mining Concession process, an application for land rights, the on-going metallurgical studies, as well as securing a strategic investor involved in the rare earths mid-stream or down-stream value chain for the project. The Company has also started to review the potential for fluorspar production at Monte Muambe. Fluorspar is an important critical raw material which is used in many industrial manufacturing processes, including for the production of electric vehicles batteries. Because fluorspar has been used in many other application, its price is not subject to the sharp variations that rare earths have experienced over the past years. Fluorspar is often associated to rare earths in carbonatites. At Monte Muambe fluorspar occurs both in disseminated form in the rare earths ore (on-going metallurgical testing is also aimed at recovering fluorspar as a by-product of rare earths), but also in low-tonnage high-grade fluorspar veins. The high-grade fluorspar veins will be the object of a conceptual study to assess the possible short-term development of a fluorspar mining operation at Monte Muambe, thus opening up the possibility for early cash flow from this asset. The Company will also commence exploration activities at Kabompo South and Sesana, with the aim of rapidly building the value of these two assets. Dr Cédric Simonet CEO Altona Rare Earths Plc 14 CORPORATE REVIEW Financial Review Statement of Financial Position During the financial year to 30 June 2024, the Company experienced growth in key areas, reflecting strategic investments and capital expenditures. Investments increased from £1.6 million to £2.1 million, driven by an increase in ownership in the underlying asset, Monte Muambe Mining Lda, from 20% to 51%, and additional capital contributions to fund the ongoing development of this asset. Intangible assets also grew from £1.3 million to £1.6 million, primarily due to continued expenditure on the mining asset, demonstrating the Company's commitment to developing and enhancing its core operations. Trade receivables and payables remained stable, while loans increased by £0.4 million, reflecting additional financing secured during the year. Equity saw a slight increase during the year, rising from £25.2 million to £25.4 million. Post year end equity increased by a further £0.8 million to reflect the equity raise of £0.4 million, the conversion of outstanding CLNs of £0.3m and the settlement of creditors through shares in lieu of cash payment of £0.1 million. Income Statement The Company's income statement highlights a stable operating performance, with the operating loss remaining steady at £1.1 million for both 2023 and 2024. However, finance costs increased significantly from £0.2 million to £0.5 million, primarily due to the finance costs associated with the increased debt taken on in the year and the warrants issued with respect to this raising of finance. This increase in finance costs underscores the impact of the Company's financing strategies on its overall financial performance. During the year the Company renegotiated the outstanding CLNs which led to the conversion, post year end, of £0.3 million debt into equity, improving the Company’s balance sheet and another £0.2 million of CLNs being reprofiled as debt with a repayment date of 30 October 2025. Liquidity and Cash Flow The Company's liquidity position saw a reduction in cash reserves, decreasing from £1.1 million to £0.4 million by year end. This reduction was mainly due to the corporate costs of being a public company and the ongoing capital expenditure on the mining asset at MMM. The Company received a further £0.3 million in loans during the year and as mentioned above renegotiated/reprofiled its existing CLNs. It also received subscription funds of £0.3 million for equity that was issued post year end. Despite this decrease in the cash position, the Company strengthened its liquidity position with a new loan package of £0.9 million from two investors with a fixed interest rate of 12% and repayment date of 30 October 2025. This money is being received in 8 tranches with £0.1 million received before year end. This investment will allow the Company to enhance its asset base, manage its financial obligations, and position itself for future growth while maintaining stability in its core operations . Board Changes There were no Board changes during the financial year. However, post year end the Board saw a significant revision with the resignation of Audrey Mothupi on the 1 August 2024 and Martin Wood, the Chair on 10 August 2024. 15 The Company appointed Kristoffer Andersson on the 1 August 2024, as a Non-Executive Director and we were pleased that Simon Charles was willing to step up to fill the Chair’s position, effective from 10 August 2024. Post Balance Sheet Events On 19 July 2024, the Company announced the issue of 76,248,759 new ordinary shares as follows. • 39,400,000 Shares were issued to raise funds of £394,000 • 33,300,000 Shares were issued for the conversion of existing convertible loan notes of £303,000; and • 3,548,759 Shares were issued to certain Directors in lieu of fees and to various other creditors. On 29 July 2024, the Company announced it had exercised its option to acquire a 51% share in the prospecting licence PL2329/2023, in Botswana from Ignate African Mineral (Pty) Ltd for an initial consideration of USD$10,000 in cash and USD$50,000 in shares. The minimum expenditure commitment is USD$100,000 for a 12 month period. Louise Adrian CFO Altona Rare Earths Plc 16 GROUP STRATEGIC REPORT The Directors present their strategic report on the Company and its subsidiary undertakings (which together comprise the “Group”) for the year ended 30 June 2024. Principal Activity The Company’s principal activity is focused on the discovery and development of Critical Raw Materials mining projects in Africa. Review of Strategy and Business Model The Company’s strategy is to identify, acquire, explore and develop Critical Raw Materials on the Africa continent, with the aims of delivering value to its shareholders and to its countries and communities of operations, and of supporting the development of Critical Raw Materials supply chains critical to the Green Energy Transition. Delivering shareholders’ value may involve, depending on the project, developing it into production, entering into strategic partnerships to develop it, or selling it. The Company has chosen Africa as its main geography of operation, due to its long mining history which provides suitable regulatory frameworks, workable infrastructures and experienced workforces. The Continent’s varied geology also created a favourable environment for exploration, with different geological types of rare earths deposits being well documented, including carbonatites, alkaline complexes, ionic adsorption clay deposits, and hydrothermal veins. The Company also recognises the need, underpinned by recent policy changes in Africa, to develop value addition and economic and social beneficiation locally, and takes it into consideration in its mining projects. The Company is currently developing Monte Muambe, its flagship Magnet Rare Earths Project, located in Northwest Mozambique. The Project was acquired in June 2021, and the Company has so far drilled over 7,800m, and defined a maiden JORC Mineral Resource Estimate of 13.6 million tons at 2.42% TREO. A Competent Person Report including the Scoping Study for Monte Muambe was published on 18 October 2023. The Project is now at Prefeasibility Study stage, with a focus on metallurgical testing and process. The Company’s holding in Monte Muambe is currently 51% and is expected to grow to 70% by Q3 2025. Altona is presently diversifying its portfolio by acquiring a limited number of critical raw material projects to complement Monte Muambe. The acquisition of the Kabompo South copper project in Zambia and of the Sesana copper-silver project in Botswana represents the first steps towards the implementation of this expanded strategy. Business Review The developments during the year are detailed in the CEO Statement and the Operations review on pages 5 to 13. Financial Performance of the Group The loss of the Group for the year ended 30 June 2024 before taxation amounts was £1.7m (2023: loss of £1.3m). The Board monitors the activities and performance of the Group on a regular basis. The Board uses financial indicators based on budget versus actual to assess the performance of the Group. The indicators set out below will continue to be used by the Board to assess performance over the year to 30 June 2025. 17 The Group is committed to best practice in energy consumption, social, community and human rights issues and these are discussed further in our ESG statement below. The three main financial KPIs for the Group are as follows: Key Performance Indicators 2024 2023 Cash and cash equivalents £392,000 £1,130,000 A dministrative expenses as a percentage of total assets 38% 39% Exploration costs capitalised during the yea r £250,000 £460,000 These allow the Group to monitor costs and plan future exploration and development activities. Cash has been used to fund the Group’s operations and facilitate its investment activities (refer to the Statement of Cash Flows on page 58). Administrative expenses are the expenses related to the Group’s ability to run the corporate functions to ensure they can perform their operational commitments. Exploration costs capitalised during the year consist of exploration expenditure on the Group’s exploration licences, net of foreign exchange rate movements and excludes any fair value uplift of acquisitions. Other standard industry key performance indicators that will only become relevant in the coming years and therefore are not currently considered by the Directors are: • Production of a Pre-Feasibility Study and a Bankable Feasibility Study (“BFS”) • Adhering to strict ESG standards – as determined by the jurisdiction and nature of the mining project • Securing off-take partners ahead of commencement of mining • Securing mine finance ahead of commencement of mining Gender of Directors and Employees The Board of Directors consists of one male and one female executive and two male non- executive Directors. Principal Risks and Uncertainties The principal risks and uncertainties lie in the commercial viability of the continuing development of the Monte Muambe Asset and whether this will add shareholder value, though the recent publication of a JORC Mineral Resource Estimate and Scoping Study reduced the Project’s level of risk. The Directors also consider the key risk for the Group to be the maintenance of its reserves of cash and cash equivalents to meet this ongoing development of assets. The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors consider the following risk factors are of particular relevance to the Group’s activities and to any investment in the Group. It should be noted that the list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply. 18 The risk factors are summarised in the table below: Description Impact Mitigation Strategic risks • Over reliance on the outcome of a single asset and the continuing value of said asset that may not result in a commercial development and there is no certainty of success. Successful acquisition of future opportunities to build shareholder value, the generation of future income streams or net asset growth may not materialise. • Competitors with significantly greater financial and technical resources will be able to outbid the Company on future upstream opportunities. • The Company is dependent on key executives. The future success of the Company depends partially on the expertise of the CEO, as the Company’s leading geologist. The loss of his services could damage the Company’s business. • Risk to strategic and business model due to political instability, expropriation, and government interference, especially when operating in one country only. High • The Company is focused on acquiring majority stakes in a number of mining assets in different African countries with regards to the exploration, development and extraction of rare earth metals. • The Company also seeks to mitigate the development risk through actively diversifying its portfolio, which was achieved post year end through the acquisition of a copper licence in Botswana. • The Company has a strong shareholder base, with 2 significant shareholders supporting the company through equity and debt. • The CEO has a notice period of no less than three months to ensure efficient time to hand over responsibilities in the event of a departure. The Remuneration Committee regularly evaluates compensation and incentivisation schemes to ensure that the Company’s package is competitive. The Company is looking to put a share option plan in place to reward executive directors for increasing shareholder value. • The Board analyses the risks and rewards of a country before any investment is made and also engages with local partners who understand the local political risk. The Company’s recent expansion into Botswana and Zambia, is seen as mitigating some Country and Political risk as both countries are viewed as stable for minin g opportunities. Financial risks • Difficulty raising external funding for new investment opportunities and exploration activities in volatile capital markets. The future availability of such financing is uncertain. • Cost escalation and budget overruns may lead to faster use of cash resources than originally planned. • Risk of high inflation, transfer and conversion of currency, which could significantly increase exploration and development costs and so affect valuation of future acquisitions. High • Regular review of cashflow, working capital and funding options are performed by the Board to ensure the Company remains a Going Concern. • Build strong and sustainable relationships with key shareholders. Experienced advisers have been hired to ensure the capital market is accessible to the Company. • Prudent approach to budgeting and strong financial stewardship - managing commitments and liquidity to ensure the Group has sufficient 19 capital to meet spending commitments. • Establish local bank accounts and negotiate contracts in US dollar value where practicable. • Enter negotiations with a Strategic Investor to ensure reliability of funding for the completion of the PFS at Monte Muambe. Environmental, social and governance risks • ESG is key to the company’s legal and social license to operate. Non-compliances, or ESG-related social issues may prevent the development or operation of the Company’s Projects. • ESG reporting is constantly evolving and is a risk for the majority of exploration and development companies. The Company must seek to improve diversity, equity and inclusion as well as be aware of the urgent priorities to address climate change. All stakeholders have increased expectations of the Company’s ESG reporting and the Company must meet these demands. • Human resources and management are critical to the success of the Company as it develops its operations in Africa and lack of quality personnel available could lead to issues in completing projects in a timely and cost efficient manner. Medium • ESG is part of the Company’s longer- term, more strategic view and the Board will consider ESG at each board meeting and understand how their decisions will meet the various stakeholder demands. • Policies and processes are being further enhanced to ensure there is a more rigorous reporting cycle in which requirements are identified and met before giving rise to any issues. • The Company seeks to employ local personnel where possible and has joined with local educational establishments to ensure training is of a high level. Legal and compliance risks • Compliance with local laws and regulations. • Difficulties in obtaining approvals and licences in connection with new and existing assets. • Bribery and corruption. • London Stock Exchange or the Financial Conduct Authority Rule breaches Medium • The CEO has over 20 years’ experience working on mineral and energy projects in Africa, including 10 in Mozambique. • The Company also ensures local legal advice is obtained when new assets are to be purchased and these professionals are retained to ensure regular compliance is adhered to. • The Company follows the 2018 QCA code of corporate governance (aspiring to adhere to the 2023 version) and this is set out in this annual report and accounts. The Company also has the various policies in place which are overseen by the Audit Committee and reviewed on a regular basis: o Anti Bribery and Corruption Policy o Whistle Blowing Policy o Anti Money Laundering Policy • The board contains Directors with professional qualifications in law and accountin g . It is also able to consult 20 with outside advisers to ensure full compliance. The Directors regularly monitor these risks, using information obtained or developed from external and internal sources and will take actions as appropriate to mitigate them. Effective risk mitigation may be critical to the Company in achieving its strategic objectives and protecting its assets, personnel and reputation. The Company assesses its risk on an ongoing basis to ensure it identifies key business risks and takes measures to mitigate these. Other steps include regular Board review of the business, monthly management reporting, financial operating procedures and anti-bribery management systems. The Company reviews its business risks and management systems on a regular basis. Section 172(1) statement and stakeholder engagement The Directors believe they have acted in the way most likely to promote the success of the Company for the benefit of its members as a whole, as required by s172 of the Companies Act 2006. The specific requirements of s172 are set out below, along with the approach adopted by the Directors to ensure they meet these requirements: Consider the likely consequences of any decision on the long-term The Company announced on 19 February 2024 that the time was right for the Company to expand and diversify its portfolio of projects in Africa to include both rare earths and non-rare earths critical raw materials. This updated corporate strategy has begun to take shape with the announcement on 18 July 2024 of the acquisition of the Sesana copper licence in Botswana. It is also in the process of actively assessing other potential new opportunities which it believes will help to both strength and diversify its existing portfolio. The Company has also announced that it is actively seeking a strategic investor to support the ongoing work on the PFS at Monte Muambe which will continue to derisk this project and add stability to the Group going forward. Consider the interests of the Company’s employees The Company currently has both permanent and temporary employees in Mozambique and only Directors and Senior Management in the UK. It is committed to the fair and ethical treatment of all of its staff and has implemented training programmes and direct relationships with local educational establishments in Mozambique to ensure it creates a local workforce for the future. Foster the Company’s business relationships with suppliers, customers and others In order to progress its projects in Mozambique and Botswana, the Company is reliant on the support of its key suppliers (drilling contractors, suppliers of local equipment and materials and security). It is therefore a key part of the Company’s strategy to develop these relationships to ensure the Company maintains a strong and secure relationship with these suppliers. Consider the impact of the Company’s operations on the community and the environment The Company is aware of the potential impact that its operations may have on the environment and local community. It has been working closely with the community at Monte Muambe to establish a borehole for a local water source and build stable communication infrastructure in the area. It has also installed solar panels on site and will be engaging an environmental 21 consultant in the next stage of the project to ensure the impact of its operations are adequately addressed and views are heard from the effected communities. The Company is also preparing to undertake an Environmental Impact Assessment (EIA) for the planned activities in Botswana. This assessment is aimed at ensuring that all operational work is carried out with due consideration for the environment, local ecosystems, and the well- being of surrounding communities. By proactively addressing potential environmental and social impacts, the Company aims to minimise any adverse effects and promote sustainable practices that align with both regulatory requirements and the Company’s corporate values. Maintain a reputation for high standards of business conduct The Company has established a number of policies and procedures that guide its operations and corporate conduct. As the business continues to grow, these policies are regularly reviewed and refined to ensure they remain aligned with the evolving regulatory environment and the Company’s long-term strategic objectives. In addition, the Company is committed to adhering to the Quoted Companies Alliance (QCA) Code on corporate governance. As disclosed in the Corporate Governance Report included in this set of accounts, the Company has also taken proactive steps to adopt the revised QCA Code ahead of the required timelines, demonstrating its dedication to maintaining high standards of transparency and stakeholder engagement. Act fairly between members of the Company The Directors and Senior Management hold 10% of the shares of the Company with the remainder held by a range of individuals and companies. The Company extended the expiry date of various warrants in the year to ensure all shareholders were treated equitably. 30 October 2024 Approved on behalf of the Board: Dr Cédric Simonet CEO, Altona Rare Earths Plc 22 CORPORATE GOVERNANCE REPORT Principles of corporate governance The Board of Directors recognises the importance of sound corporate governance and applies The Quoted Company Alliance Corporate Governance Code (2018) (the ‘QCA Code’), which it believes is the most appropriate recognised governance code for a Group, of its size, with a listing on the London Stock Exchange. The Board acknowledges the recent revision to the QCA Code, which introduces significant enhancements aimed at promoting stronger governance practices among small and mid-sized companies. As a Company committed to maintaining high standards of corporate governance, we recognise the importance of these updates in ensuring transparency, accountability, and long-term value creation for our shareholders and stakeholders. While we have not yet fully implemented the new provisions of the revised QCA Code, we are committed to reviewing and adopting these best practices over the coming year. Our goal is to align our governance framework with the revised Code to the greatest extent possible, taking into account our financial and personnel constraints as a small company. We believe that a robust governance structure is crucial for our ongoing success and are dedicated to making continuous improvements in this area as resources allow. The revised Code continues to be based on 10 core principles and a set of supporting disclosures. It sets out what the QCA considers to be appropriate arrangements for growing companies and asks companies, by means of the prescribed disclosures, to explain how they are meeting those principles. We have considered how we apply each principle and a full description of our compliance with the QCA code is set out below and can also be found on our website https://www.altonaRE.com These revised principles are: 1. Establish a purpose, strategy and business model which promote long-term value for shareholders; 2. Promote a corporate culture that is based on ethical values and behaviours; 3. Seek to understand and meet shareholder needs and expectations; 4. Take into account wider stakeholder interest, including social and environmental responsibilities and their implications for long term success; 5. Embed effective risk management, internal controls and assurance activities, considering both opportunities and threats, throughout the organisation; 6. Establish and maintain the board as a well-functioning, balanced team led by the chair; 7. Maintain appropriate governance structures and ensure that individually and collectively the directors have the necessary up-to-date experience, skills and capabilities; 8. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement; 9. Establish a remuneration policy which is supportive of long-term value creation and the company’s purpose, strategy and culture; and 10. Communicate how the Group is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders. The Chairman has overall responsibility for implementing an appropriate governance framework at the Group and the Board is committed to ensuring that this framework is adhered to. Below follows a short explanation of how the Board will apply each of the principles, and how the key updates are being considered: 23 Principle One Purpose, Business Model and Strategy The Company is driven by a clear purpose: to identify, acquire, explore, and develop Critical Raw Materials (CRMs) across Africa in support of the global Green Energy Transition. The Company's business model is centred on delivering long-term value to shareholders while contributing to the economic and social development of the local communities and countries in which it operates. This is achieved through the responsible and sustainable development of raw material supply chains crucial for the future of renewable energy technologies. The Company’s strategy is built on diversification to reduce exposure to fluctuating rare earth element (REE) prices and to enhance its portfolio with other CRMs such as copper and fluorspar. The Company's approach to project selection is guided by strict criteria, including resource quality, low entry and exploration costs, and alignment with global demand for critical materials. This strategy also aims to increase growth opportunities, create more frequent news flow, and diversify jurisdictional risk. The Company's flagship project, Monte Muambe, located in Northwest Mozambique, exemplifies its integrated purpose, business model, and strategy. Acquired in 2021, Monte Muambe is a magnet rare earth project with a defined JORC Mineral Resource Estimate of 13.6 million tons at 2.42% Total Rare Earth Oxides (TREO). Now at the prefeasibility study stage, Monte Muambe underscores Altona’s focus on developing high-quality CRM assets that align with its broader strategic goals. In line with its diversification strategy, Altona is also expanding into complementary projects in the copper sector, with the acquisition of the Kabompo South copper project in Zambia and the Sesana copper-silver project in Botswana. These acquisitions represent the first steps in executing the Company’s expanded strategy, reducing its reliance on rare earth prices and increasing opportunities for sustainable growth and value creation. Principle Two (previously eight) Corporate Culture The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The revised Code now places a greater emphasis on a company’s purpose and related ethical values and behaviours. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed. Issues of bribery and corruption are taken seriously, The Group has a zero-tolerance approach to bribery and corruption and has an anti-bribery and corruption policy in place to protect the Group, its employees and those third parties to which the business engages with. The policy is provided to staff upon joining the business and training is provided to ensure that all employees within the business are aware of the importance of preventing bribery and corruption. Each employment contract specifies that the employee will comply with the policies. There are strong financial controls across the business to ensure ongoing monitoring and early detection. Principle Three (previously two) Understanding Shareholder Needs and Expectations 24 All shareholders are encouraged to attend the Company’s Annual General Meetings in person where they can meet and directly communicate with the Board. After the close of business at the Annual General Meeting, the Chairman, or one of the other Directors will open the floor to questions from shareholders. Shareholders are also welcome to contact the Company with any specific queries. The Company also provides regulatory news through the Regulatory News Service (RNS). In addition, other financial and business news updates are provided through various media channels such as Twitter and UK online investor platforms. Shareholders also have access to information through the Company’s website, www.altonaRE.com which is updated on a regular basis. Contact details are also provided on the website. The revised Code encourages proactive engagement with shareholders. The Company has made regular use of the interactive interview platforms “Investor Meet Company” to allow this higher level of interaction with shareholders. Principle Four (previously three) Considering wider stakeholder and social responsibilities The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. The Group has a written policy on Corporate Social Responsibility. The Board will seek to integrate this policy into its strategy to protect the interests of the Group’s stakeholders through individual policies and through ethical and transparent actions. The Company engages positively with regulatory authorities and stakeholders in its project locations and encourages feedback through this engagement. Through this process the Company identifies the key resources and fosters the relationships on which the business relies. The revised Code places a much greater focus on ESG considerations, with the explicit requirement for a more detailed qualitative and quantitative disclosures on ESG matters. The Board is very aware of its ESG commitments and our approach to this is described in more detail on pages 33 to 36. Principle Five (previously four) Risk Management The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed out in the Strategic Report together with risk mitigation strategies employed by the Board. The Board is committed to integrating environmental and social issues, including climate change into their Risk management to ensure it meets the revised QCA Code requirements. The Group does not currently have an internal audit function due to the small size of the Group and limited resources available. The requirement for an internal audit function is kept under review. Principle Six (previously five) A Well-Functioning Board 25 The Board’s role is to agree the Group’s long-term direction and strategy and monitor achievement of its business objectives. The Board meets for these purposes as and when required with a minimum of 12 meetings per year. The Board receives reports for consideration on all significant strategic, operational and financial matters. The Board is supported by the Audit, Remuneration and Compliance Committees, details of which can be found in Principle 7 below. The Board currently comprises of the Chief Executive (Cédric Simonet), the Chief Financial Officer (Louise Adrian), and Non-Executive Directors (Kristoffer Andersson and Simon Charles), who are based in South Africa and the UK respectively. The Board considers one of the two Non-Executive Directors (NEDs) to be independent. Kristoffer Andersson, is not considered independent due to his significant business relationship with a major shareholder. However, the Board does not view this as a concern, as Kristoffer remains fully aligned with the Company’s business model and strategy, with a strong focus on creating shareholder value. Simon Charles holds a minor number of ordinary shares in the Company, which the Board does not consider to affect his independence. The revised QCA Code recommends that at least half of the Board consist of independent NEDs and that key board committees aim to be fully independent. Currently, only one out of four Directors on our Board is independent, and due to the small size of the Company, we do not have sufficient personnel to fill key board committees with entirely independent members. Additionally, implementing these recommendations would incur significant costs, which may not be feasible for a company of our size at this stage. However, we recognise the importance of independence and will consider expanding the number of independent Directors on the Board and in key committees as the Company grows. As part of its annual performance evaluation process, the Board, in conjunction with the Remuneration Committee, keeps its structure under review in order to maintain an appropriate balance of executive and non-executive experience and skills. The revised Code also recommends that shareholders vote annually on the re-election of all board members, the Company will not be resubmitting the entire Board each year. Our Articles require one-third of the Board to be submitted for re-election annually, which is rounded up. With four directors, this means half of the Board is already resubmitted each year. Resubmitting the entire Board could cause unnecessary disruption, so while we acknowledge the new recommendation, we will continue with our current approach. Attendance at Board and Committee Meetings The Board will report annually in the Directors’ Report on the number of Board and committee meetings held during the year and the attendance record of individual Directors. Directors meet formally and informally both in person and by telephone. To date there have been 12 formal monthly meetings during the year ended 30 June 2024, and the volume and frequency of such meetings is expected to continue at this rate. A summary of attendance at Board meetings in the year to date is set out below: Director Independent Board Audit Remuneration Compliance Cédric Simonet NO 12 - - - Louise Adrian NO 12 - - 1 Audrey Mothupi YES 10 2 1 - Simon Charles YES 12 2 1 1 Martin Wood YES 12 1 1 1 Resigned 1 st August 2024 Resigned 10 th August 2024 26 Kristoffer Andersson was appointed 1 st August 2024, after the year end reported above and so is not included in this table. Principle Seven (previously six and nine) Maintenance of Governance Structures and Processes and Appropriate Skills and Experience of the Directors The Board has overall responsibility for all aspects of the business. The Non-Executive Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board’s decision-making, and that the NEDs are properly briefed on all operational and financial matters. The Chairman and CEO have overall responsibility for corporate governance matters in the Group. The CEO has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed, and applicable rules and regulations are complied with. Key operational and financial decisions are reserved for the Board on an ad hoc basis where required. The two NEDs are responsible for bringing independent and objective judgment to Board decisions. The Board has established Audit, Remuneration and Compliance Committees with formally delegated duties and responsibilities. Due to the small size of the Company, Nominations are dealt with by the Board as a whole. Following the appointment of Simon Charles to Chair, Kristoffer Andersson has been appointed as the Chair of all the Committees except the Compliance Committee. However, Simon has remained a member of the other Committees in addition to his role as Chair. The Company has made the decision that given the Company is small and faces both financial and personnel constraints, this is the best use of the Company’s resources. Audit Committee Kristoffer Andersson is currently the chair of the Audit Committee and Simon Charles is also a member of the committee. (Martin Wood and Audrey Mothupi were both members of this Committee during the reporting period). The Audit Committee will receive and review reports from management and from the Company relating to the interim and annual accounts and to the system of internal financial control. The Audit Committee is responsible for assisting the Board’s oversight of the integrity of the financial statements and other financial reporting, the independence and performance of the Company, the regulation and risk profile of the Group and the review and approval of any related party transactions. The Audit Committee may hold private sessions with management and/or without management present. Further, the Audit Committee is responsible for making recommendations to the Board on the appointment of the Company’s auditors and the audit fee, and reviews reports from management on the financial accounts and internal control systems used throughout the Company and the Group. The Audit Committee will meet at least two times a year and is responsible for ensuring that the Group’s financial performance is properly monitored, controlled and reported. The Audit Committee is responsible for the scope and effectiveness of the external audit and compliance by the Group with statutory and other regulatory requirements. The Company Secretary will prepare the minutes and circulate agendas for meetings. The auditors will be invited to meetings when required, at least once annually ahead of the approval of the annual financial statements. Remuneration Committee Kristoffer Andersson is currently the chair of the Remuneration Committee and Simon Charles 27 is also a member of the committee. (Martin Wood and Audrey Mothupi were both members of this Committee during the reporting period). The Remuneration Committee is responsible for considering all material elements of remuneration policy, the remuneration and incentivisation of Executive Directors and senior management (as appropriate) and to make recommendations to the Board on the framework for executive remuneration and its cost. The role of the Remuneration Committee is to keep under review the Company’s remuneration policies to ensure that the Company attracts, retains and motivates the most qualified talent who will contribute to the long-term success of the Company. The Remuneration Committee also reviews the performance of the CEO and CFO and sets the scale and structure of their remuneration, including the implementation of any bonus arrangements, with due regard to the interests of shareholders. The Remuneration Committee will also be responsible for the recommendations of the valuation of any options granted under the Company’s Share Option Plan and, in particular, the price per share and the application of the performance standards which may apply to any grant, ensuring in determining such remuneration packages and arrangements, due regard is given to any relevant legal requirements, the provisions and recommendations in the revised QCA Corporate Governance Code 2023. The committee will meet up to twice per annum. Appointments to the committee will be made by recommendation of the Board. No further appointments are expected until the number of NEDs on the Board increases. Compliance Committee Simon Charles is the chair of the Compliance Committee and Louise Adrian and Kristoffer Andersson are members of the committee. (Mr Andersson joining on his appointment to the Board and Martin). Martin Wood was a member of this Committee during the reporting period. The principal purpose of the Compliance Committee is to ensure that the Company complies with its obligations under the Listing Rules and, in particular, makes timely and accurate disclosure of all information that is required to be disclosed to meet its disclosure obligations arising from the admission of its shares to trading on the Official List. The Compliance Committee will meet as required and is responsible for ensuring that the Group’s compliance is proactive and properly monitored, controlled and undertaken. The Compliance Committee is responsible for the scope and effectiveness of the compliance by the Group with statutory and regulatory requirements. The Company Secretary will prepare the minutes and circulate agendas for meetings. The skills and experience of the members of the Board are set out in their biographical details below. Since its move to the LSE the balance of the Board grew to have more gender and ethnic diversity and although the Board meets the diversity targets as detailed out in Policy Statement PS 22/3 of the Listing Rules and DTR requirements, on gender, it no longer meets this target for ethnicity. The Board believes it has achieved a good balance of experience in financial and operational matters and believes it has the skills and experience necessary to execute the Company’s strategy and business plan and discharge its duties effectively. On listing all of the Directors received training from their corporate advisers on the continuing obligations of a company admitted to the Official List (equity shares (transition)) category and a copy of the QCA Code and the Group’s Financial Position and Prospects Procedures memorandum (FPPP) which sets out the policies and procedures that the Directors are expected to follow. More recently, the Board has read the revised QCA Code and is ensuring that it becomes, where appropriate, embedded in the Company’s policies and procedures. 28 All Directors have access to the Corporate Advisers, Novum Securities Ltd, and Company Secretary, Orana Corporate LLP, who are able to keep the Directors informed of developments in relevant legislation, regulations and best practice, when requested. The CEO provides information and updates on the geology and technical matters and the CFO provides regular guidance on changes in financial reporting. All Directors are encouraged to raise their personal development or training needs with the Chair or through the Board evaluation process. As a Member of the European Geologist Federation, the CEO must meet annual continuous professional development (CPD) targets to maintain his EurGeol title and the CFO, as a member of the ICAEW must also meet annual CPD targets. Board Advice During the Period The Board did not receive any advice during the period except from its Corporate Finance Advisers, Novum, regarding the process involved in the secondary raise. Biographies of the Board are as included below. Cédric Valery Gerard Simonet (Chief Executive Officer) Cédric Simonet holds a PhD in Geology and has 25 years’ experience exploring, developing and mining mineral deposits in Africa and in France. He was Head Geologist and Open Pit Manager at SOGEREM fluorspar mine (Alcan, France) and Africa Region Manager with IGE Resources AB. He was the Head of Drilling at AAA Drilling Ltd and General Manager of NuEnergy Gas Ltd during the same period between 2013 and 2014, before holding the role of General Manager at NuAfrica Gas between 2014 and 2017. He is a co-founder of Akili Minerals Services Ltd., a Nairobi based exploration services company, and has been involved in several exploration projects on REE-carbonatites in Kenya including Ruri, Homa Mountain, Buru and Mrima. He is also a former Chairman of the Kenya Chamber of Mines, and well experienced in operating in this and many other African countries. Cédric is a member of the European Geologists Federation (Eur Geol no 739). He qualifies to act as a Competent Person (JORC) and as a Qualified Person (NI43-101) on REE-carbonatite exploration projects. Louise Adrian (Chief Financial Officer) Louise Adrian has worked as Altona’s accountant for 4 years helping to strengthen both the accounting and corporate governance reporting. She graduated from Oxford University with an MA in Theology and is a member of the Institute of Chartered Accountants in England and Wales. She started her career at Arthur Andersen in London where she gained experience with global energy companies, auditing accounts, reviewing financial and budgetary controls, and critiquing operational strategies. Since 2020, Louise has been a consultant for Orana Corporate LLP (“Orana”), a corporate advisory and services practice, where she has worked with established and newly listed companies, creating corporate governance protocols, producing annual report and accounts, group consolidations and cash flow analysis. Louise also holds a PGCE in secondary education and is a Finance Trustee for a Multi Academy Trust where she has helped to establish a framework for good governance and risk management. Louise joined the Board at listing to strengthen its financial reporting processes and to bring her experience of group reporting and corporate governance protocols to the Company. 29 Simon Charles (Non-Executive Director/Chair) Simon is a solicitor and is a senior partner at City solicitors Marriott Harrison LLP, having joined the firm in 2004. He specialises in company law, with a particular emphasis on acquisitions and disposals, directors’ duties, equity and debt fundraises and shareholders’ rights, in each case in relation to private and public companies. He has previously worked at Dechert LLP and a US law firm in the City. Immediately prior to joining Marriott Harrison LLP he spent a number of years in the corporate finance department of Numis Securities Limited (now Deutsche Numis) where he advised private and public companies on debt and equity fundraises, acquisitions and restructurings. Simon joined the board at listing to head up the various committees and bring his legal, compliance and corporate finance experience to the Company. Kristoffer Andersson (Non-Executive Director) – appointed on 1 st August 2024 Mr Andersson is an economist with extensive experience in the renewable energies, mining, commodity trading and natural resources sectors, as well as investment banking in emerging markets in Latin America and Africa. He has served on the Board of Directors for both private and public companies across various industries, and co-founded Ashmont Resources Corp, a Canadian private company focusing on high-value mineral assets in Colombia. Mr Andersson is currently the CEO of Ironveld Plc, a mining company and speciality metals producer based in South Africa, listed on the AIM Market of the London Stock Exchange. Principle Eight (previously seven) Evaluation of Board Performance The ultimate measure of the effectiveness of the Board is the Company’s progress against the long-term strategy and aims of the business. Appraisals are expected to take place in the coming year for the Executive Board and key corporate targets as well as personal targets appropriate to each Director are to be set by the Remuneration Committee. Evaluation of the NEDs will be undertaken on an ad-hoc basis and the Board intend to set up a process for peer appraisal and introduce a board effectiveness questionnaire in the coming year. Principle Nine (new principle) Establish a remuneration policy which is supportive of long-term value creation The revised QCA Code emphasises the importance of aligning remuneration policies with the Company’s purpose, strategy, and culture, ensuring they incentivise management to focus on long-term sustainable growth. It also recommends that shareholders have a voice in remuneration policies and reporting. The Remuneration Committee will take this new principle into account as it sets Board remuneration for the coming year. The Committee believes that its new long-term incentive scheme is consistent with Principle 9 of the QCA Code, ensuring that remuneration structures are transparent and support long-term value creation for shareholders. Principle Ten Shareholder Communication The Company actively engages with its shareholders, who form its key stakeholder group, and encourages open communication and feedback. The Company’s website is regularly updated 30 to ensure shareholders have access to the latest information. Cedric Simonet, the Company’s CEO, is responsible for managing shareholder communications, and his contact details are available on the website for any shareholder or stakeholder inquiries. Additionally, shareholders can engage with the CEO through the Investor Hub platform to raise questions and seek clarification on recent Regulatory News Service (RNS) announcements. The Company’s website also hosts a comprehensive range of key documents, including financial reports, Notices of General Meetings, and Voting Results, ensuring shareholders have easy access to all relevant updates and information. REPORT OF THE AUDIT COMMITTEE This report is prepared in accordance with the Quoted Companies Alliance (QCA) corporate governance code for small and mid-sized quoted companies, revised in April 2018 and revised in 2023. A summary of the Committee’s role and membership can be found in the Governance section of this Annual Report. Committee meetings are held at least twice a year, and the external accountant is invited to attend together with the external auditor. During the 2023/4, two meetings of the Committee were held, and the following significant issues were considered: Si g nificant issue Summar y of si g nificant issue Actions and conclusion Valuation of Exploration and Evaluation assets The carrying value of intangible assets related to exploration and evaluation assets amounted to £1.6m as at 30 June 2024 and as such, is material. The value of these assets is dependent on the successful development of the areas of mineral interest and production of the mineral. The exploration and evaluation assets recognised are in respect of the Monte Muambe Licence. Management is required to assess by reference to IFRS 6 Exploration and Evaluation Assets, whether there are potential indicators of impairment of the Group’s exploration and evaluation assets at each reporting date and, if potential indicators of impairment are identified, management are required to perform a full assessment of the recoverable value of the exploration and evaluation assets in accordance with IAS 36 Impairment of Assets. Given the inherent judgement involved in the assessment of whether there are indications of impairment in exploration and evaluation assets, as required by IFRS 6, there is a risk the carrying amount of exploration and evaluation assets are overstated and should be impaired. The Company has a legal right to explore the licence at Monte Muambe and have applied for a mining licence which is expected to be issued by the government in the near future. Management prepared an assessment of impairment indicators and considered whether there are any of the indicators of impairment in line with the criteria set out in IFRS 6. This did not highlight any impairment indicators and as such an IAS 36 impairment assessment was not required. No exploration costs were capitalised with respect to the additional exploration licences which were acquired after the year end. 31 Valuation of Investments in subsidiaries and recoverability of intercompany receivables (Company) The parent company holds material investments as at 30 June 2024 of £346,000 (2023: £208,000). There is also a material intragroup loan of £1,705,000 (2023: £1,425,000) as the parent company funds exploration activity in Mozambique. Given that Monte Muambe Mining, LDA (“MMM”) with reference to the underlying flagship project “Monte Muambe” is loss making and the other subsidiaries are either insubstantial or dormant, there is a risk that the investment in subsidiaries and intra group receivables, where intangible assets under development are the main assets of the subsidiaries, may not be fully recoverable. The exploration programme at MMM has entered Phase 3 and the Company now own 51% of MMM. The MRE and Scoping Study, published in the second half of 2023, both indicate the value of the MMM asset to be far more significant than either its current carrying value or intragroup balance. The Directors concluded that the investment and intragroup balances are expected to be fully recoverable. See also the impairment assessment noted above. Going concern Assessment of the Groups’ ability to continue as a going concern as part of the preparation of the financial statements. This includes considering whether the Group has adequate resources to continue in operation for the foreseeable future from the date of anticipated signing of the financial statements. The assessment of going concern covers a period of at least 12 months from the date of signing the financial statements. On 19 July 2024, the Company converted the majority of its outstanding pre-IPO CLN and raised further funds of £394,000 from the issue of shares and £900,000 in debt facilities. These funds are expected to provide the Group with enough working capital to fund it through to the end of the first quarter of 2025. As a result, the Group will need to raise funding to provide additional working capital within the next 12 months. The ability of the Group to meet its projected expenditure is dependent on these further equity injections and/or the raising of cash through bank loans or other debt instruments/government grants or exercise of warrants. These conditions necessarily indicate that a material uncertainty exists that may cast significant doubt over the Group’s ability to continue as a going concern and therefore their ability to realise their assets and discharge their liabilities in the normal course of business. Whilst acknowledging this material uncertainty, the Directors remain confident of raising finance, through one of the means stated above, and therefore, the Directors consider it appropriate to prepare the consolidated financial statements on a going concern basis. Warrants (disclosure and valuation) During the year a material number of warrants were issued in order to pay for services received for the raising of finance. The valuation of the warrants is a significant accounting estimate and highly judgemental in nature. There is a risk that the warrants are valued and disclosed incorrectly in the financial statements. Management used inputs from external sources in order to appropriately calculate the value of these warrants issued and ensure that the cost of these were properly accounted for as part of finance costs. 32 Carrying value and recoverability of VAT debtor The group has a material VAT receivable balance as at 30 June 2024. This is a long standing receivable and therefore there is a risk that the balance is no longer receivable and therefore overstated in the financial statements. Management has engaged local tax specialists who have confirmed the high likelihood of recoverability of the majority of this balance. Therefore, the Directors have confident that the majority of this balance is not impaired and have provided against 23% of the total. External Auditor’s Fees for Non-Audit Services The external auditor is acting as the Company’s Reporting Accountant. This was approved by the Committee as they have concluded that it did not affect the independence or objectivity of the external auditor and is considered to be one-off non-recurring work. Fees paid during the year for audit and non-audit services may be found in note 5 to the accounts. Objectivity and Independence The Committee continues to monitor the Auditor’s objectivity and independence and is satisfied that PKF and the Company have appropriate policies and procedures in place to ensure that these requirements are not compromised. Re-appointment of External Auditor The Committee recommends to the Board the re-appointment of PKF Littlejohn LLP as Auditor at the forthcoming 2024 Annual General Meeting (AGM), and PKF Littlejohn LLP has expressed its willingness to continue in office. Internal controls/audit The Directors acknowledge their responsibility for the Groups’ system of internal control and for reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Group and ensure the reliability of financial information for both internal use and external publication. Whilst the Directors are aware no system can provide absolute assurance against material misstatement or loss, regular review or internal controls are undertaken to ensure that they are adequate and effective. The Group does not currently have an internal audit function due to the small size of the Group and limited resources available. The requirement for an internal audit function is kept under review. Whistleblowing The Group has adopted a formal whistleblowing policy which aims to promote a very open dialogue with all its employees which gives every opportunity for employees to raise concerns about possible improprieties in financial reporting or other matters. The Bribery Act 2010 The Board is committed to acting ethically, fairly and with integrity in all its endeavours and compliance of the code is closely monitored. Market Abuse Regulations The Group is required to comply with article 18(2) of the Market Abuse Regulation (“MAR”) with reference to insider dealing and unlawful disclosure of inside information. The FCA requires traded companies to maintain insider lists as set out in the MAR. The Board has put in place a MAR compliance process and has established a Compliance Committee. This and the Company’s regulatory announcements are overseen by the Board of Directors. 33 ENVIRONMENT, SOCIAL AND GOVERNANCE STATEMENT Environmental Minimise our footprint and strive to be a leader in environmental sustainability by bringing rare earths to the world in a manner that minimises or eliminates environmental impacts. Social Protect our workers through good health and safety and develop our people through training, inclusion and retention. Hiring and training local people were possible. Governance Application of sound corporate governance as set out on pages 22 to 32 of this report. The Group strives to be a leader in environmental sustainability and believes that a successful future for our business and the customers we serve depends on the sustainability of the environment, communities and economies in which we operate. Altona undertakes its exploration activities in a manner that minimises or eliminates negative environmental impacts and maximises positive impacts of an environmental nature. Altona believes that the environmental impact associated with its activities should be kept to the minimum. To ensure proper environmental stewardship on its projects, and compliance with applicable legislation, Altona conducts preliminary assessments and environmental management plans prior to starting exploration activities and ensures that areas explored are properly maintained and rehabilitated. We are committed to minimising the impact of our operations on the environment and to demonstrating leadership by integrating environmental considerations into all our business practices. Our employees are the driving force behind our exploration activities. We seek to treat our people fairly and with respect and ensure they have the opportunity to develop and reach their potential. We comply with the labour legislation where we work. Most of our staff is employed from the local community. Learning and training activities are central to staff engagement and we provide on-the-job training. In the FY 2023, this included equipment operation and quality management (standard operating procedures) training, as well as first-aid training for all employees. In the FY 2024, the employees took part in Drilling Sampling SOP training, to ensure that they were all able to implement the new sampling procedure and Measurement Instrument training was provided for technical staff, which focused on laboratory analyses and RTK survey information. Other local stakeholders include our contractors, suppliers, business partners, local communities and government authorities, including all individuals who live in proximity to our operations or who may be impacted by our business relationships. The Company endeavours to support and make as much use as possible of local service suppliers. Climate-Related Financial Disclosures The Group recognises that climate change represents one of the most significant challenges facing the world today. Under the Listing Rules compliance with the Task Force on Climate- Related Financial Disclosures (TCFD) is required for all listed companies on a comply or disclose basis. TCFD Purpose In contrast to the Streamlined Energy and Carbon Reporting (SECR) disclosures which requires listed companies to disclose their greenhouse gases emissions, CO 2 and energy usage, TCFD is primarily designed to protect shareholders from the impacts of climate change by ensuring 34 companies disclose key information within these areas and communicate how they’re thinking about and assessing climate-related risks and opportunities as part of their resilience and risk assessment processes. TCFD adherence requires disclosure of greenhouse gas (GHG) emissions as part of the Metrics and Targets section. This creates a degree of overlap with SECR requirements, however TCFD’s focus is understanding how GHG emissions may expose a company to future changes in law, regulation or market dynamics which penalise higher polluting industry sectors, sub sectors or companies. Climate Change Risks and Opportunities The following table includes our TCFD disclosures and where necessary explanations why the Group has not fully met them and the Board’s plans to implement these in future. Governance, Strategy, Risk Management, Metrics and Targets Governance Management of climate-related risks and opportunities Board’s oversight The Company does not currently have a climate risk committee although climate risk is discussed at board meetings when relevant. A climate risk committee will be implemented when deemed necessary, most likely once a development project reaches DFS stage, prior to financing and implementation. Since our purpose, strategy and business plan are to capitalise on climate change by providing the materials the world needs to reduce its impact, we understand that climate change opportunity is embedded in our activity and that we need to ensure that the raw materials we produce or will produce are delivered in the least damaging way. Assessment and management The Board have started to consider the carbon footprint of its future products at MM and ways to reduce it. This is conceptual at this stage, but it is important to start early in order to integrate low emissions and climate change reduction options in all relevant parts of the project (energy mix, procurement, carbon credits). MMM will engage environmental consultants as part of regulatory compliance for its operations: EMPs, environmental audits, EIAs. It has also engaged a consultant to do a Fatal Flaw Analysis as part of the Scoping Study. Strategy Approach to both the actual and potential impacts of climate-related risks and opportunities Risks and opportunities Climate related issues identified and discussed include: Opportunities (mostly medium-long term) 1. Producing rare earths to enable the world’s energy transition. 2. Supplying products that can satisfy Responsible Sourcing demand (including certification and auditing). 3. Net zero objective (ambitious). Risks (some are short term) 1. Competition with China, which is aggressively acquiring raw material sources in Africa. 2. Non-Climate Change environmental and social impact that also need to be mitigated. 3. Availability of a suitable downstream supply chain to ensure the project’s sustainability including on Climate Change matters. 35 Strategy Climate Change actions are integrated in studies from an early stage. Risk Management How the Group identifies, assesses and manages climate-related risks Risk identification The Company has identified key climate change related risks as follows: 1. Competition for minerals projects. 2. Competition for equity capital. 3. Climate change physical impacts on jurisdiction and regions where metals and minerals deposits are located. 4. Potential for higher input costs, notably for fossil fuels and building materials such as cement and steel. 5. Reduced demand for metal concentrates which have been produced using higher than average GHG emissions energy such as coal fired power. 6. Non Climate Change environmental risks. Processes and management The Company’s strategy is to acquire and develop rare earths mining projects which will enable the world’s transition to renewable energy. A key part of the mine development process is the Pre-Feasibility Study (PFS), which includes investigations into mine emissions (gases and fluids) and waste (including tailings). The PFS also includes: 1. Investigations into the use of new technologies (especially renewable sources of energy such as solar). 2. Environmental baseline studies. 3. Water supply studies, rainfall pattern change, and regional hydrogeology. 4. Climate and weather patterns including average monthly temperatures. The PFS is authored by independent technical experts and managed by senior management and board members. For new project acquisitions, the company’s due diligence processes include a desktop review which cover all the above potential risks and opportunities. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities GHG metrics The Company’s GHG emissions are currently low due to the nature of operations. During the period under review the main GHG emitters were: 1. International/domestic travel to and from site in Mozambique and Botswana and international travel for fund raising. 2. Employee / contractor accommodation and associated energy use. 3. Exploration drilling and associated logistics. As noted in the Company’s SECR disclosure below, energy usage was below 40,000 kWh and as a result complete Scope 1, 2 and 3 GHG data was not collected. During 2024/5 the Group will implement improved GHG data collection methodology at the Company and subsidiary levels although it expects GHG emissions and energy usage to remain relatively low. Climate related physical risks The Company’s exposure to physical risk relates to changes to the environment where its exploration operations are based. The 36 Company is working to identify these physical risks and then will be able to provide metrics and targets to monitor this risk. At the UK Company level, the Directors ensure that climate change risks and opportunities are embedded in strategy. The Directors are of the view that the global demand for rare earth elements will continue to rise, driven by the world’s transition to renewable energies and hence its own strategy to explore for and develop these minerals is aligned to TCFD opportunities and will result in share price appreciation. Governance will be strengthened to ensure reporting on these climate related risks is meaningful and transparent. Risk Management will include a process for identifying, assessing, and managing climate-related risks and the Group will establish various metrics and targets to assess climate-related risks and opportunities. Streamlined Energy and Carbon Reporting (SECR) The Group’s current operations are limited to exploration activities in Mozambique and due diligence activities in various other jurisdictions (including Botswana for 2024/25) where it has and will continue to assess potential development projects for investment. An estimation of GHG emissions is based on: - Fuel consumption (journey distance in miles for international air travel, domestic air and land travel); - Energy use at the camp in Mozambique can be calculated on a daily basis for when the camp is in operation, based on fuel and cooking gas consumption. Much of the energy used is already generated by solar which has zero GHG emissions. The operations here employed an average of 8 people (2023: 14 people), sharing accommodation and using one vehicle; and - Other significant GHG emissions related to contractor drilling activity which consisted of one drill rig operating for a combined period of 184 hours and transportation of raw materials to Canada for metallurgical work (2023: 550 hours and transportation of raw materials to Australia for assay). One of the requirements of the SECR initiative is to report energy use that is used to calculate the GHG emissions reported in the Directors’ Report. This needs to be provided in kilowatt hours (kWh). However, only quoted companies and large unquoted companies that have consumed more than 40,000 kilowatt-hours (kWh) of energy in the reporting period must include energy and carbon information within their Directors’ report. The Company does not currently exceed this threshold and is therefore presently exempt from the SECR reporting requirements. The Group will work to minimise its contribution to GHG and will maintain this focus in all future operations. The Group intends to publish GHG and energy emissions data in line with the SECR regulations as the Group’s projects develop. As explained in the TCFD disclosure the company will be implementing improved GHG data collection processes throughout the Group during 2024/5. Approved on behalf of the Board of Directors. Simon Charles Non-Executive Chair 37 DIRECTORS’ REPORT The Directors present their report, together with the audited consolidated financial statements, for the year ended 30 June 2024. Company Information Altona Rare Earths Plc (the “Company”) is a publicly listed company incorporated and domiciled in England & Wales. Its registered offices are at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF. On 9 June 2023, the Company announced the admission of the Company’s entire issued share capital to the Official List of the Financial Conduct Authority by way of a Standard Listing under Chapter 14 of the Listing Rules and to trading on the London Stock Exchange's Main Market for listed securities ("Admission"). The Company’s shares are listed under the new ticker “REE”. From 29 July 2024, this two tier system was replaced and the Company is now in the “Equity Shares - Transition” category. The Company’s principal activity is focused on the discovery and development of Critical Raw Materials mining projects in Africa. Results And Dividends The loss for the year before taxation amounted to £1,672,000 (2023: loss of £1,296,000). The Directors do not recommend the payment of a dividend (2023: £Nil). The nature of the Company’s business means that it is unlikely that the Directors will recommend a dividend in the near future. The Directors believe the Company should seek to generate capital growth for its Shareholders. The Company may recommend distributions at some future date when it becomes commercially prudent to do so, having regard to the availability of the Company’s distributable profits and the retention of funds required to finance future growth. Financial Risk Management Note 3 of the financial statements details the financial risk factors affecting the Group and summarises the Group’s policies for mitigating such risks through holding and issuing financial instruments. These policies have been followed during the current and prior year. Directors’ And Officers’ Indemnity Insurance During the financial year, the Group maintained insurance cover for its Directors and Officers under a Directors’ and Officers’ liability insurance policy. The Group has not provided any qualifying indemnity cover for the Directors. Business Review, Future Developments And Key Performance Indicators A review of the business, future developments and key performance indicators are outlined in the Chairman’s Report and the Strategic and Corporate Governance Report. Directors And Directors’ Interests The Directors who held office during the year under review, and as at the date of this report, were as follows: Louise Adrian Cédric Simonet Kristoffer Andersson (appointed 1 August 2024) Simon Charles 38 Audrey Mothupi (resigned 1 August 2024) Martin Wood (resigned 10 August 2024) The beneficial interests of the Directors who held office at 30 June 2024 and their connected parties in the share capital of the Company is included in the Remuneration Report on pages 41 - 47. Substantial Shareholders The Company has been notified of the following interests of 3 per cent. or more in its issued share capital as 1 October 2024. Number of Ordinary shares Percentage of holding Tracarta Ltd 32,500,000 19.94% Hargreaves Lansdown Stockbrokers 13,408,316 8.23% RS & CA Jennings 11,650,000 7.15% Optiva Securities Limited 11,042,367 6.77% Spreadex Limited 7,950,000 4.88% Halifax Share Dealin g Limited 6,286,429 3.86% Christian Ta y lor – Wilkinson 6,271,437 3.85% SI Capital Ltd 5,585,954 3.43% IG Markets Limited 5,382,482 3.30% Directors’ Remuneration Directors’ remuneration is disclosed in the Directors’ Remuneration Report on pages 41 - 47. Post Reporting Date Events Details of post reporting date events are disclosed in Note 22 of the financial statements. Environmental And Social Governance (“ESG”) And Streamlined Energy And Carbon Reporting This is referred to in the Corporate Governance Report on pages 33 to 36. Political And Charitable Contributions No charitable or political donations were made in either year. Going Concern The Group and Company raise money for exploration and capital projects as and when required. There can be no assurance that the Group and/or Company’s projects will be fully developed in accordance with current plans or completed on time or to budget. Future work on the development of these projects, the levels of production and financial returns arising therefrom, may be adversely affected by factors outside the control of the Group or Company. An operating loss is expected in the 12 months subsequent to the date of these financial statements. As a result the Group and Company will need to raise funding to provide additional working capital within the next 12 months. The ability of the Group and Company to meet its projected expenditure is dependent on these further equity injections and / or the raising of cash through bank loans or other debt instruments/and or government grants and/or loans. These conditions necessarily indicate that a material uncertainty exists that may cast significant doubt over the Group and Company’s ability to continue as a going concern and therefore their ability to realise their assets and discharge their liabilities in the normal course of business. Whilst acknowledging this material uncertainty, the Directors remain confident of raising finance and therefore, the Directors consider it appropriate to prepare the consolidated and parent company financial statements on a going concern basis. The consolidated and 39 parent company financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern. Provision Of Information To Auditor The Directors who held office at the date of approval of this Report of the Directors confirm that, so far as they are individually aware, there is no relevant audit information of which the Company’s auditor is unaware; and each Director has taken all the steps that they ought to have taken as Director to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Auditor PKF Littlejohn LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting. Annual General Meeting This report and the Financial Statements will be presented to shareholders for their approval at the Company’s Annual General Meeting (“AGM”). The Notice and date of the AGM will be notified to the shareholders on the website and through an RNS. Corporate Governance A report on Corporate Governance can be found in the Corporate Governance Report on page 22 to 36 of these financial statements. The Corporate Governance Report forms part of this directors’ report and is incorporated into it by cross reference. Website Publication The Directors are responsible for ensuring the Annual Report and the financial statements are made available on its website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein. Statement Of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report, Report of the Directors 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 Group and Company financial statements 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 Group and Company and of the Group profit or loss 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 applicable 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 Group and Company will continue in business. 40 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 Group and 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 Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for 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 the financial statements may differ from legislation in other jurisdictions. Directors’ Responsibility Statement Pursuant To Disclosure And Transparent Rules Each of the Directors, whose names and functions are listed on page 3 confirm that, to the best of their knowledge and belief: • The Financial Statements prepared in accordance with UK adopted international accounting standards and give a true and fair view of the assets, liabilities, financial position and loss of the Group and Company; and • the Annual Report and Financial Statements, including the Business review, includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that they face. This report was approved and authorised for issue by the board on 30 October 2024 and signed on its behalf by: Dr Cédric Simonet CEO Altona Rare Earths Plc 41 REMUNERATION REPORT PART 1 – INTRODUCTION On behalf of the Board, I am pleased to present the Company’s Remuneration Committee Report, which sets out the remuneration policy and the Directors’ remuneration for the year ended 30 June 2024. The Company has resolved to comply with the provisions of the Quoted Companies Alliance Corporate Governance Code (QCA Code) so far as is practicable given the Company’s size, nature and stage of development and has prepared this report with regard to the QCA Remuneration & Nominations Committee Guide for small and mid-sized quoted companies, revised in 2018. It will also take into account the revised QCA Code 2023 in its remuneration decisions made in the coming year. A summary of the Remuneration Committee’s role and membership can be found in the Governance section of this annual report. Remuneration Policy The Remuneration Policy is intended to fit the current size and profile of the Group, to support the achievement of the Group’s operational, business, financial and strategic objectives and align the interests of the Directors with shareholders over the short and longer term. To achieve our goals, the Group seeks to provide competitive overall pay, split between fixed and performance-related elements. The Company also intends to operate a structured long-term incentive strategy entailing awards of options granted annually subject to relative shareholder return and corporate targets. Remuneration Committee Remuneration Committee meetings are expected to be held at least twice during the year. Additionally, matters for its consideration were discussed at Board meetings on several occasions. On each occasion, no Director was present while matters concerning him or her were discussed, and all decisions were taken by Non-Executive Directors, in accordance with the Remuneration Committee’s Terms of Reference. The Remuneration Committee comprises Kristoffer Andersson (Chair) and Simon Charles, both of whom have been deemed by the Board to be independent. Context within which remuneration managed As detailed elsewhere in this annual report, during the financial year the Company achieved its objectives of increasing its ownership in Monte Muambe to 51% (in December 2023), the publication of the MRE (in September 2023) and Scoping Study (in October 2023). The Company also announced its portfolio expansion and diversification strategy in February 2024 and made its first step towards this on 29 July 2024 when it exercised its option to acquire an interest in the prospecting licence PL2329/2023 located in Botswana. Principal actions and decisions during the year The principal decisions in respect of remuneration taken during the year were: • During 2023/4, due to the continued focus on cashflow management, the Company responded by agreeing with its Executive and Non-Executive Directors, with effect from 1 November 2023, that 50% of their salary/remuneration would be deferred until the cash position of the Company improved. In July 2024, it was agreed that 60% of this deferred remuneration for all Non-Executives would be paid in Ordinary Shares in the Company, reducing the Company’s accrued cash salary costs. 42 • The Finance Director has agreed to continue to take her net salary in shares. This part of the salary will be paid by the issue of ordinary shares of the Company quarterly in arrears priced at the 10-day VWAP immediately prior to the end of the relevant quarter (being August, November, February and May) and will continue until economic conditions allow the full salary to be paid in cash. • Reduction of Chair’s remuneration from £60,000 to £37,500 per annum to reflect the increased experience of the Executive Board and a more commercial rebase of the basic Chair remuneration. PART 2 - REMUNERATION POLICY The ongoing policy of the Remuneration Committee is to provide competitive remuneration packages to enable the Group to retain and motivate its key Executives and to cost-effectively incentivise them to deliver long-term shareholder value. The Remuneration Committee keeps itself informed of relevant developments and best practice in the field of remuneration and seeks advice where appropriate from external advisers. It maintains oversight of the remuneration of all employees, which is the responsibility of the Chief Executive Officer. The remuneration policy for the Non-Executive Directors is determined by the Board, considering best practice and the Articles of Association. It is the aim of the Remuneration Committee to reward key Executives for delivering value for the Group and for shareholders. The Remuneration Committee also applies the broader principle that the Company’s Executive remuneration should be competitive with the remuneration of directors of comparable companies. Components of the remuneration package: The main components of the remuneration package for Executive Directors and Senior Management are: • Base salary; • Pension and other benefits; • Performance-related annual bonus scheme; and • Long-term incentive plan (“LTIP’’). Base salary The policy is to pay a fair and reasonable base salary, supports the recruitment and retention of Executive Directors of the calibre required to fulfil the role without paying more than necessary. Reflects skills, experience, role. The base salary is reviewed at least annually by the Remuneration Committee, having regard to the performance of the Company and economic conditions and taking note of any changes to an individual’s job scope. Pension and other benefits The Company pays for a pension contribution of 3% of base salary for eligible Executive Directors and Senior Management. Performance-related bonus scheme (not yet implemented) Rewards and incentivises the achievement of annual objectives for Executive Directors and Key Senior Employees. The annual objectives are aligned with key strategic goals and supports the enhancement of shareholder value. Maximum potential values will not exceed 50% of base salary in any year. 43 Existing arrangements are set out in the annual report section below. Pre-defined operational, financial and/ or other targets are set to be achieved by specified dates triggering the payment of specified amounts. Weighting of individual KPIs remaining at 60% and the weighting of corporate KPIs remaining at 40% of the total. Awards subject to targets may be set at any time and are not set on an annual basis. Annual bonus is calculated based on the achievement of each objective. Bonuses are non- pensionable. Bonuses may be paid in cash or in shares at the Committee’s discretion. Long term incentive plan Incentivises Executives and Senior employees to achieve the Company’s long term strategy and create sustainable shareholder value. Aligns with shareholder interests through the potential delivery of shares. Award of options under a share award plan which vest subject to operational, financial and or share price targets to be achieved by specified dates triggering the payment of specified amounts. Non-Executive fees Fees for Non-Executive Directors are set at an appropriate level to recruit and retain directors of a sufficient calibre without paying more than is necessary to do so. Fees are set taking into account the following factors: the time commitment required to fulfil the role, typical practice at other companies of a similar size, and salary levels of employees throughout the Group. Fees are reviewed at appropriate intervals (normally once every year) by the Board with reference to individual experience, the external market and the expected time commitment required of the Director. Non-Executive share awards To help attract, retain, and motivate Non-Executive Directors with the necessary skills, and to align their interests with those of shareholders, the Company intends to grant one-time awards of options. The exercise price will be determined by the Board at an appropriate level. The options will vest immediately, with no performance conditions other than continued service, and will expire three years after the date of grant. Description of KPIs for the year ending 30 June 2025 For 2024/5, the KPIs for the Executives and Senior Management are in the process of being reset to align with the Company’s objectives for the year ended 30 June 2025 at both corporate and individual levels. The KPIs will be based on financial and work programme and cost management. They are expected to be weighted at 40% for individual performance and 60% for overall company performance. Executive Directors’ Service Contracts Executive Director Appointment date Service period Other information Cédric Simonet 30 May 2023 90 days notice in writing Contract updated to replace COO contract, effective 9 June 2023. Annual salar y £120,000 Louise Adrian 30 May 2023 90 days notice in writing Effective 9 June 2023. Annual salary of £24,000 to be satisfied quarterly in shares (based on a minimum of 2 days per week). Louise also works as a consultant for Orana Corporate LLP who provide the Company with accounting and bookkeeping services (see related parties note 20 ) . 44 No payments have been made for compensation for loss of office. The Company has not paid out any excess retirement benefits to any Directors or past Directors. The Company has not paid any compensation to past Directors. Non-Executive Directors’ Service Contracts The Non-Executive Directors signed letters of appointment with the Company upon appointment for the provision of Non-Executive Directors’ services, terminable by 3 months written notice given by either party. The appointments are all intended to be for a term of 3 years. Non-Executive Director Appointment date Other information Martin Wood 26 October 2020 Salary reduced from £70,000 to £60,000 effective 9 June 2023 to be paid quarterly in cash and/or shares. Resigned 10 August 2024. Simon Charles 30 May 2023 Annual salary reduced from £35,000 to £28,000, effective 1 May 2024. Appointment of Chair, effective 11 August 2024, with a salary of £37,500. Audrey Mothupi 5 February 2021 Annual salary of £24,000. Resigned 1 August 2024. Kristoffer Andersson 1 August 2024 Annual salary of £28,000. Shares are to be issued quarterly in arrears, at an issue price equal to the 10-day VWAP at the end of such quarter. The Non-Executive Directors’ remuneration (including that of the Chairman) reflects the anticipated time commitment to fulfil their duties. Non-Executive Directors do not receive benefits, a pension or compensation on termination of their appointments. In the future, they could receive a set number of options relating to the Company’s LTIP. When recruiting a new Non-Executive Director, the Remuneration and Nominations Committee will follow the policy set out in the table above. The letters of appointment do not include any provisions for the payment of pre-determined compensation upon termination of appointment and notice may be served by either party. All appointments are subject to the Company’s Articles of Association (Articles) and re-election by shareholders in accordance with the provisions contained in the Articles. If the Board is contemplating a transaction that requires more work than would normally be expected of Non-Executive Directors, their fees may be increased by up to 100%, to a level to be determined by the Board at that time. The Directors have responsibility to review, monitor and make recommendations to the Board regarding the orientation and education of directors which includes an annual review of the Directors’ compensation programme. Payment for loss of office The Committee will honour all Director’s contractual entitlements. Service contracts do not contain liquidated damages clauses. If a contract is to be terminated, the Committee will determine such mitigation as it considers fair and reasonable in each case. There is no agreement between the Company and its Directors or employees, providing for compensation for loss of office or employment that occurs because of a takeover bid. The Committee reserves the right to make additional payments where such payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation); or by way of settlement or compromise of any claim arising in connection with the termination of an Executive Director’s office or employment. 45 PART 3 – REMUNERATION REPORT (AUDITED) Directors’ Remuneration Year ended 30 June 2024 Year ended 30 June 2023 % Change in total salary from prior y ea r Salar y /Fees Total Total £ £ £ Non-Executive Directors Simon Charles 33,833 33,833 2,139 N/ A A udre y Mothupi 1 24,000 24,000 24,000 0% Martin Wood 2 60,000 60,000 69,583 ( 13.8% ) Simon Tucker 3 - - 2,000 N/ A Sub-tota l 117,83 3 117,83 3 97,72 2 Executive Directors Louise Adrian 24,000 24,000 1,467 N/ A Cédric Simonet 120,000 120,000 132,000 ( 9.1% ) Christian Ta y lor-Wilkinson 4 - - 181,821 N/ A Sub-tota l 144,000 144,000 315,288 - Total 261,833 261,833 413,010 ( 36.6% ) 1 Resigned 1 August 2024 2 Resigned 10 August 2024 3 Resigned 1 st August 2022 4 Resigned 9 th June 2023 No Bonus or Pension was paid to the Directors during the year Directors’ interests in shares The Directors who held office at the end of the year had the following interests in the Ordinary Shares of the Company: 30 June 2024 30 June 2023 Non-Executive Directors Simon Charles - - A udre y Mothupi - - Martin Wood 1,580,056 1,388,462 Sub-tota l 1,580,056 1,388,46 2 Executive Directors Louise Adrian 405,306 300,000 Cédric Simonet 925,711 855,711 Sub-tota l 1,331,017 1,155,711 Senior Mana g ement Christian Ta y lor-Wilkinson 6,086,844 3,862,371 Total 8,997,917 6,406,544 The Directors and Senior Management held 10.37% of the total share capital of the Company at 30 June 2024 (2023: 7.77%). The shares issued to the Directors during the year were due to both their involvement in the Placing and the issue of shares in lieu of cash payment for the equivalent of 3 months salaries. As at the date of this report the Directors had the following interests in the Ordinary Shares of the Company: 46 Shares held % held Louise Adrian 3,313,274 2.03% Simon Charles 602,000 0.37% Cédric Simonet 1,925,711 1.18% Total 5,840,985 3.58% Directors’ interests in warrants The Directors who held office at the end of the year had the following interests in warrants to acquire Ordinary Shares of the Company: 30 June 2024 30 June 2023 Non-Executive Directors Simon Charles - - A udre y Mothupi - 100,000 Martin Wood 1,000,000 1,250,000 Sub-tota l 1,000,000 1,350,000 Executive Directors Louise Adrian 600,000 600,000 Cédric Simonet - 100,000 Sub-tota l 600,000 700,000 Senior Mana g ement Christian Ta y lor-Wilkinson 2,400,000 2,850,000 Total 4,000,000 4,900,000 Grant date Expir y date Life Numbe r Exercise price £ 10 March 2021 10 March 2024 ( expired durin g the y ear ) 3 y ears 900,000 £0.12 9 June 2023 9 June 2025 2 y ears 2,000,000 £0.10 9 June 2023 9 June 2025 2 y ears 2,000,000 £0.20 4,900,000 piggyback warrants – see note 17 for further details Relative importance of spend on pay The table below illustrates the year-on-year change in total remuneration compared to distributions to shareholders and operational cash flow for the financial periods ended 30 June 2024 and 2023: Distributions to shareholders Total directors and emplo y ee pa y Operational cash outflow £ £ £ Year ended 30 June 2024 Nil 490,000 1,061,000 Year ended 30 June 2023 Nil 518,000 649,000 Total employee pay includes wages and salaries, social security costs and pension costs for employees in continuing operations. Further details on employee remuneration are provided in note 6. Operational cash outflow has been shown in the table above as cash flow monitoring and forecasting is an important consideration for the Remuneration Committee and Board of Directors when determining cash-based remuneration for directors and employees. Historical share price performance comparison The Directors have considered the requirement for a UK performance graph comparing the Company’s relative shareholder return with that of a comparable indicator and have concluded that it would not give a meaningful comparison as the Company has only been trading on the London Stock Exchange since 9 June 2023. 47 Consideration of shareholder views The Board considers shareholder feedback received and guidance from shareholder bodies. This feedback, plus any additional feedback received from time to time, is considered as part of the Company’s annual policy on remuneration. Approved on behalf of the Board of Directors. Kristoffer Andersson, Chair of the Remuneration Committee 48 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ALTONA RARE EARTHS PLC Opinion We have audited the financial statements of Altona Rare Earths plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2024 which comprise the Statement of Consolidated Profit or Loss and Other Comprehensive Income, the Statement of Consolidated Financial Position and the Parent Company Statement of Financial Position, the Statement of Consolidated Cash Flows and the Parent Company Statement of Cash Flows, the Consolidated Statement of Changes in Equity and the Parent Company Statement of Changes in Equity 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 30 June 2024 and of the group’s loss for the year then ended; • the group financial statements have been properly prepared in accordance with UK- adopted international accounting standards; • the 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 public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Material uncertainty related to going concern We draw attention to note 1 in the financial statements, the ability of the Group to meet its projected expenditure is dependent on these further equity injections and / or the raising of cash through bank loans or other debt instruments, and/or government grants, and/or loans. These conditions indicate that a material uncertainty exists that may cast significant doubt over the Group’s ability to continue as a going concern and therefore their ability to realise their assets and discharge their liabilities in the normal course of business. Our opinion is not modified in respect of this matter. In auditing the financial statements, we have concluded that the director’s 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 company’s ability to continue to adopt the going concern basis of accounting included: 49 • Reviewing the cashflow forecast and budgets for the going concern period being twelve months from the anticipated date of signing the financial statements and the corresponding key assumptions and inputs used. This included inflows from capital fundraises that management anticipate being achieved in the going concern period; • Discussing with management regarding the future plans of the group; • Comparing actual results for the year to forecasts to assess management’s forecasting abilities and the accuracy of its forecasts; • Challenging management’s key assumptions and inputs of forecast cash receipts from fundraising and cash outflows in respect of committed costs; • Testing the arithmetical accuracy of the cashflow forecasts; and, • Performing a sensitivity analysis on the key assumptions and inputs. 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. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined the materiality thresholds for the financial statements as follows: Group financial statements Parent company financial statements Material for the financial statements as a whole £55,000 (2023: £58,000) £37,500 (2023: £55,000) Performance materiality £38,500 (2023: £40,600) £26,250 (2023: £38,570) Basis for materiality for the financial statements as a whole 5% (2023: 3%) of the group’s net assets 3% (2023: 3%) of the parent company’s net assets Rationale The group is still in the exploration stage and is not revenue generating. Net assets are therefore viewed as the key area of relevance to stakeholders in assessing the financial performance of the group in its early years of exploration, as the net asset value is driven by the exploration assets which will ultimately drive future profitability of the group. The percentage applied to the benchmark has been selected to bring into scope all significant classes of transactions, account balances and disclosures relevant for the members, and also to ensure that matters that would have a significant impact on the results were appropriately considered. 50 Performance materiality has been set at 70% (2023: 70%) of materiality for the financial statements as a whole, for both the group and company. The percentage applied was determined based on our risk assessment of the control environment and our cumulative knowledge of the group and company. We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. The audit of Monte Muambe Mining, Lda, the wholly owned subsidiary, was performed by a component auditor, with materiality set by us at £45,000 (2023: £26,000). Performance materiality was set at £31,500 (2023: £18,200). We agreed with the audit committee that we would report to them misstatements identified during our audit above £2,250 (2023: £1,300) for the group audit and £1,875 (2023: £2,755) for the company audit, as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. Our approach to the audit The group includes the listed parent company and its subsidiary. We tailored the scope of our audit to ensure that the planned procedures allowed us to gain sufficient appropriate audit evidence to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the parent company, the accounting processes, and the industry in which they operate. As part of our planning, we assessed the risk of material misstatement including those that required significant auditor consideration at the component and group level. In particular, we looked at areas of estimation, for example in respect of the valuation of exploration and evaluation assets, the valuation of investments in subsidiaries and the matters set out in the material uncertainty related to going concern paragraph above. We performed procedures to address the risks identified and for the most significant assessed risks of misstatement, the procedures performed are outlined below in the key audit matters section of this report. An audit was performed on the financial information of the group’s significant operating components which, for the period ended 30 June 2024, were located in the United Kingdom and Mozambique. The component in Mozambique was audited by a component auditor operating under our instruction to undertake a full scope audit. We communicated regularly with the component auditors and we were responsible for the scope and oversight of the audit process. This, in conjunction with additional procedures performed by us, provided sufficient appropriate audit evidence for our opinion on the group and parent company financial statements. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section of our report, we have determined the matters described below to be the key audit matters to be communicated in our report. 51 Key Audit Matter How our scope addressed this matter Valuation of investment in subsidiary (parent company) (note 10) The parent company holds a material investment in Monte Muambe Mining, LDA (“MMM”) as at 30 June 2024 of £2,051,000, the balance of which includes loans reclassified as capital contributions to its subsidiary. Given that MMM is loss making and the exploration and evaluation assets are the main assets of the group, there is a risk that the investment and intragroup loan balance may not be recoverable. Consequently, the valuation of these balances is considered to be a key audit matter. Our work in this area included: • Obtaining management’s impairment review for all investments held and challenging the key assumptions; • Confirming the ownership of MMM, including evidence of the additional 31% acquired during the year; • Reviewing the accounting and disclosure of the additional share capital purchased in MMM; • Ensuring that no impairment indicators exist in accordance with IAS 36 Impairment of Assets; • Challenging the judgements and estimates used by management to assess the recoverability of the investment including the reclassified intragroup loans; and • Considering the recoverability of investments and intragroup loans by comparing these to underlying asset values and exploration projects. Key observations We found management’s assessment of the valuation of investments including the reclassified intragroup loans to be reasonable. Valuation of exploration and evaluation assets (note 11) The group has material intangible assets of £1,607,000, being capitalised exploration costs in respect of exploration and evaluation activities in Mozambique. There is a risk that these assets have been incorrectly capitalised in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources and that there could be indicators of impairment as at 30 June 2024. Management's assessment of the IFRS 6 indicators of involves judgement, particularly in early-stage exploration projects. Our audit work included: • Confirming, through the review of the component auditor’s files, that the group has good title to the applicable exploration licence; • Reviewing the terms and conditions of the exploration licence; • Reviewing the component auditor’s work over capitalised costs including consideration of appropriateness for capitalisation under IFRS 6; • Assessing the progress of the project during the period and post year-end and reviewing forward- looking exploration budgets; • Reviewing and challenging management’s indicator of impairment assessment; and • Reviewing the JORC Mineral Resource Estimate and Scoping Study to assess the IFRS 6 indicators of impairment. 52 There is a risk that the carrying value of these intangible assets are overstated. Given that exploration and evaluation assets are subject to judgement and estimation, this area is considered to be a key audit matter. Key observations Based on the audit procedures performed, we are satisfied that management’s assessment of the valuation of intangible assets is reasonable. However, we draw attention to the disclosure within notes 11 and 2a, which state that the group’s existing exploration licence will expire in May 2025 and that the group has applied for a mining licence in December 2023. Should the application not be successful, this may result in impairment to the carrying value of the exploration and evaluation assets and to the investment in MMM. 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 and the part of the directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or, 53 • 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 Statement of Directors’ Responsibilities, 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’s 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 parent company and the natural resources sector 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 detailed discussions with management about and potential instances of non-compliance with laws and regulations both in the UK and in Mozambique. We also selected a specific audit team based on experience with auditing entities of a similar size within this industry. • We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from: o Listing Rules and Disclosure Guidance and Transparency Rules listing rules o Quoted Companies Alliance (QCA) Corporate Governance code o Anti-Bribery and Money Laundering Regulations o Local industry regulations in Mozambique o Local tax laws in the UK and Mozambique • 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: enquiries of management and discussions with the component auditor, review of board minutes and a review of legal expenses and review of Regulatory News Services (RNS) announcements. • 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, that the potential for management bias was 54 identified in relation to the valuation of investment in a subsidiary and the valuation of exploration and evaluation assets as described in the Key Audit Matters section above. We addressed this by challenging the assumptions and judgements made by management when auditing these significant accounting estimates and ensuring that there were adequate disclosures included in the respective notes of the financial statements. • 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. • Compliance with laws and regulations at the subsidiary level was ensured through conducting enquiries of management and reviewing correspondence for any instances of non-compliance. 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. Other matters which we are required to address We were appointed by the directors of Altona Rare Earths plc on 24 June 2021 to audit the financial statements for the period ending 30 June 2021 and subsequent financial periods. Our total uninterrupted period of engagement is 4 years, covering the periods ending 30 June 2021 to 30 June 2024. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit. Our audit opinion is consistent with the additional report to the audit committee. 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. Daniel Hutson (Senior Statutory Auditor) 15 Westferry Circus For and on behalf of PKF Littlejohn LLP Canary Wharf Statutory Auditor London E14 4HD 30 October 2024 55 STATEMENT OF CONSOLIDATED PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the year ended 30 June 2024 Notes 2024 £’000 2023 £’000 Continuing operations: Administrative expenses (971) (1,068) Exploration costs (not capitalised) (102) - Fundraise costs (72) (48) Operating loss 5 (1,145) (1,116) Finance costs 8 (527) (180) Loss before taxation (1,672) (1,296) Income tax 9 - - Loss for the year from continuing operations (1,672) (1,296) Total loss for the year attributable to: Owners of Altona Rare Earths Plc (1,618) (1,221) Non-controlling interests (54) (75) (1,672) (1,296) Other comprehensive income Items that may be reclassified subsequently to profit and loss: Exchange differences on translation of foreign operations 15 17 (1,657) (1,279) Total comprehensive loss attributable to: Owners of Altona Rare Earths Plc (1,606) (1,205) Non-controlling interests (51) (74) (1,657) (1,279) Earnings per share (expressed in pence per share) - Total Basic and Diluted earnings per share 7 (1.97)p (3.23)p The accounting policies and notes on pages 62 to 87 form part of these consolidated financial statements. 56 STATEMENT OF CONSOLIDATED FINANCIAL POSITION As at 30 June 2024 Notes 2024 £’000 2023 £’000 ASSETS Non-current assets Intangible assets 11 1,607 1,290 Tangible assets 12 117 146 Total non-current assets 1,724 1,436 Current assets Trade and other receivables 13 174 168 Cash and cash equivalents 392 1,130 Total current assets 566 1,298 TOTAL ASSETS 2,290 2,734 LIABILITIES Non-current liabilities Loans 15 (322) - Total non-current liabilities (322) - Current liabilities Trade and other payables 14 (585) (593) Convertible loan notes 14 (362) (256) Total current liabilities (947) (849) TOTAL LIABILITIES (1,269) (849) NET ASSETS 1,021 1,885 EQUITY Share capital 16 2,283 2,239 Share premium 16 23,072 22,950 Paid in share capital to issue 16 345 - Share-based payment reserve 17 474 121 Other equity – CLN reserve 12 12 Foreign exchange reserve 29 17 Retained deficit (25,097) (23,360) 1,118 1,979 Non-controlling interest (97) (94) TOTAL EQUITY 1,021 1,885 The financial statements were approved by the Board and authorised for issue on 30 October 2024 and signed on its behalf by: Cédric Simonet – Chief Executive The accounting policies and notes on pages 62 to 87 form part of these consolidated financial statements. 57 PARENT COMPANY STATEMENT OF FINANCIAL POSITION COMPANY REGISTRATION NUMBER: 05350512 As at 30 June 2024 Notes 2024 £’000 2023 £’000 ASSETS Non-current assets Tangible assets 12 3 4 Investment in subsidiaries 10 2,051 1,633 Total non-current assets 2,054 1,637 Current assets Trade and other receivables 13 124 106 Cash and cash equivalents 391 1,109 Total current assets 515 1,215 TOTAL ASSETS 2,569 2,852 LIABILITIES Non-current liabilities Loans 15 (322) - Total non-current liabilities (322) - Current liabilities Trade and other payables 14 (573) (590) Convertible loan notes 14 (362) (256) Total current liabilities (935) (846) TOTAL LIABILITIES (1,257) (846) NET ASSETS 1,312 2,006 EQUITY Share capital 16 2,283 2,239 Share premium 16 23,072 22,950 Paid in share capital to issue 16 345 - Share-based payment reserve 17 474 121 Other equity – CLN reserve 12 12 Retained deficit (24,874) (23,316) TOTAL EQUITY 1,312 2,006 The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present its individual Company Statement of Comprehensive Income. The Company’s loss for the year from operations is £1,558,000 (2023: loss of £1,190,000 ). The financial statements were approved by the Board and authorised for issue on 30 October 2024 and signed on its behalf by: Cédric Simonet – Chief Executive The accounting policies and notes on pages 62 to 87 form part of these financial statements. 58 STATEMENT OF CONSOLIDATED CASH FLOWS For the year ended 30 June 2024 Notes 2024 £’000 2023 £’000 Cash flows from operating activities Loss for the year before taxation (1,672) (1,296) Adjustments for: Shares/warrants issued for fees and services 487 306 Interest paid and payable 157 65 Depreciation 12 40 24 Foreign exchange movements 15 25 Operating cashflows before movements in workin g ca p ital ( 973 ) ( 876 ) Decrease in trade and other receivables (6) (49) (Decrease)/increase in trade and other payables (8) 277 (14) 228 Net cash used in operating activities (987) (648) Cash flows from investing activities Payment for additional equity in subsidiary 10 (107) (40) Purchases of property, plant and equipment 12 (11) (3) Purchases of intangible assets 11 (250) (462) Net cash used in investing activities (368) (505) Cash flows from financing activities Proceeds from issue of shares (paid in not issued) 16 345 2,000 Costs of issue - (207) Proceeds from convertible loan notes 14 - 275 Costs of convertible loan notes - (28) Proceeds from loans 15 313 150 Repayment of loans - (150) Interest paid 14 (41) (40) Net cash generated from financing activities 617 2,000 Net (decrease)/increase in cash and cash (738) 847 Cash and cash equivalents at beginning of the year 1,130 283 Cash and cash equivalents at the end of the year 392 1,130 Significant non-cash transactions The significant non-cash transactions were the issue of shares detailed in note 16 and warrants issued in note 18. The accounting policies and notes on pages 62 to 87 form part of these financial statements. 59 PARENT COMPANY STATEMENT OF CASH FLOWS For the year ended 30 June 2024 Notes 2024 £’000 2023 £’000 Cash flows from operating activities Loss for the year before taxation (1,558) (1,190) Adjustments for: Shares/warrants issued for fees and services 487 306 Interest paid and payable 157 65 Depreciation 12 1 2 Operating cashflows before movements in working ca p ital ( 913 ) ( 817 ) Increase/(decrease) in trade and other receivables 20 (75) (Decrease)/increase in trade and other payables (17) 278 3 203 Net cash used in operating activities (910) (614) Cash flows from investing activities Payment for additional equity in subsidiary 10 (107) (40) Loans granted to subsidiary undertakings (318) (468) Receipts of plant, property and equipment 12 - 1 Net cash used in investing activities (425) (507) Cash flows from financing activities Proceeds from issue of shares (paid in not issued) 16 345 2,000 Costs of share issue - (207) Proceeds from convertible loan notes 14 - 275 Costs of convertible loan notes - (28) Proceeds from loans 15 313 150 Repayment of loans - (150) Interest paid 14 (41) (40) Net cash generated from financing activities 617 2,000 Net (decrease)/ increase in cash and cash (718) 879 Cash and cash equivalents at beginning of the year 1,109 230 Cash and cash equivalents at the end of the year 391 1,109 Significant non-cash transactions The significant non-cash transactions were the issue of shares detailed in note 16 and warrants issued in note 18. The accounting policies and notes on pages 62 to 87 form part of these financial statements 60 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2024 Share capital Share premium Paid in share capital to be issued Foreign exchange reserve Share-based payment reserve CLN Issue Retained deficit NCI Total equity £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Balance at 30 June 2022 1,790 21,404 - 1 14 - (22,139) (20) 1,050 Comprehensive income Loss for the year - - - - - - (1,221) (75) (1,296) Currency translation - - - 17 - - - - 17 NCI share in translation difference - - - (1) - - - 1 - Total comprehensive income - - 16 - - (1,221) (74) (1,279) Transactions with owners recognised directly in equity Issue of shares 449 1,797 - - - - - - 2,246 Cost of shares issued - (251) - - 41 - - - (210) Share-based payments - - - - 66 - - - 66 CLN Issue - - - - - 12 - - 12 Total transactions with owners recognised directly in equity 449 1,546 - - 107 12 - - 2,114 Balance at 30 June 2023 2,239 22,950 - 17 121 12 (23,360) (94) 1,885 Comprehensive income Loss for the year - - - - - - (1,618) (54) (1,672) Currency translation - - - 12 - - - 3 15 Total comprehensive income - - - 12 - - (1,618) (51) (1,657) Transactions with owners recognised directly in equity Issue of shares 44 122 - - - - - - 166 Shares to be issued - - 345 - - - - - 345 Share-based payments - - - - 353 - - - 353 Additional transactions with NCI - - - - - - (119) 48 (70) Total transactions with owners recognised directly in equity 44 122 345 - 353 - (119) 48 793 Balance at 30 June 2024 2,283 23,072 345 29 474 12 (25,097) (97) 1,021 61 PARENT COMPANY STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2024 Share capital Share premium Paid in Share capital to be issued Share-based payment reserve CLN Reserve Retained deficit Total equity £’000 £’000 £’000 £’000 £’000 £’000 £’000 Balance at 30 June 2022 1,790 21,404 - 14 - (22,126) 1,082 Comprehensive income Loss for the year - - - - - (1,190) (1,190) Total comprehensive income - - - - - (1,190) (1,190) Transactions with owners recognised directly in equity Issue of shares 449 1,797 - - - - 2,246 Cost of shares issued - (251) - 41 - - (210) Share-based payments - - - 66 - - 66 CLN Issue - - - - 12 - 12 Total transactions with owners recognised directly in equity 449 1,546 - 107 12 - 2,114 Balance at 30 June 2023 2,239 22,950 - 121 12 (23,316) 2,006 Comprehensive income Loss for the year - - - - - (1,558) (1,558) Total comprehensive income - - - - - (1,558) (1,558) Transactions with owners recognised directly in equity Issue of shares 44 122 - - - - 166 Shares to be issued - - 345 - - - 345 Share-based payments - - - 353 - - 353 Total transactions with owners recognised directly in equity 44 122 345 353 - - 864 Balance at 30 June 2024 2,283 23,072 345 474 12 (24,874) 1,312 62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES GENERAL INFORMATION Altona Rare Earths Plc (the “Company”) is a publicly listed company incorporated and domiciled in England & Wales. Its registered offices are at Eccleston Yards, 25 Eccleston Place, London SW1W 9NF. On 9 June 2023, the Company announced the admission of the Company’s entire issued share capital to the Official List of the Financial Conduct Authority by way of a Standard Listing under Chapter 14 of the Listing Rules and to trading on the London Stock Exchange's Main Market for listed securities ("Admission"). The Company’s shares are listed under the new ticker “REE”. From 29 July 2024, this two tier system was replaced and the Company is now in the “Equity Shares - Transition” category. The Company’s principal activity is focused on the discovery and development of Critical Raw Materials mining projects in Africa. BASIS OF PREPARATION The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and the requirements of the Companies Act 2006. The principal accounting policies are summarised below. They have been applied consistently throughout the year. The financial statements have been prepared on the historical cost basis, except for the assets acquisition which was measured at fair value. The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. The functional currency of the parent company is Pounds Sterling (£) as this is the currency that finance is raised in. The functional currency of its main subsidiary is Mozambique Meticals (MTN) as this is the currency that mainly influences labour, material and other costs of providing services. The Group has chosen to present its consolidated financial statements in Pounds Sterling (£), as the Directors believe it is the most relevant presentational currency for users of the consolidated financial statements. All values are rounded to the nearest thousand pounds (£’000) unless otherwise stated. Foreign operations are included in accordance with the policies set out below. The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial information are disclosed in Note 2. GOING CONCERN The Group and Company raise money for exploration and capital projects as and when required. There can be no assurance that the Group and/or Company’s projects will be fully developed in accordance with current plans or completed on time or to budget. Future work on the development of these projects, the levels of production and financial returns arising therefrom, may be adversely affected by factors outside the control of the Group or Company. An operating loss is expected in the 12 months subsequent to the date of these financial statements. As a result the Group and Company will need to raise funding to provide additional 63 working capital within the next 12 months. The ability of the Group and Company to meet its projected expenditure is dependent on these further equity injections and / or the raising of cash through bank loans or other debt instruments/and or government grants and/or loans. These conditions necessarily indicate that a material uncertainty exists that may cast significant doubt over the Group and Company’s ability to continue as a going concern and therefore their ability to realise their assets and discharge their liabilities in the normal course of business. Whilst acknowledging this material uncertainty, the Directors remain confident of raising finance and therefore, the Directors consider it appropriate to prepare the consolidated and parent company financial statements on a going concern basis. The consolidated and parent company financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern. The Auditors have made reference to going concern by way of a material uncertainty within the financial statements. NEW STANDARDS AND INTERPRETATIONS a) New standards, amendments and interpretations adopted by the Group. There were no new or amended accounting standards that required the Group to change its accounting policies for the year ended 30 June 2024 and no new standards, amendments or interpretations were adopted by the Group. b) New standards, amendments and interpretations not yet adopted by the Group. The standards and interpretations that are relevant to the Group, issued, but not yet effective, up to the date of the Financial Statements are listed below. The Group intends to adopt these standards, if applicable, when they become effective. Standard Impact on initial application Effective date Amendments to IAS 1 - Classification of Liabilities as current or non- current Clarifies that the classification of liabilities as current or noncurrent should be based on rights that exist at the end of the reporting period. Annual periods beginning on or after 1 January 2024 Amendments to IAS 1 – Noncurrent Liabilities with Covenants Clarifies that only those covenants with which an entity must comply on or before the end of the reporting period affect the classification of a liability as current or non-current. Annual periods beginning on or after 1 January 2024 Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback 4 Specifies requirements relating to measuring the lease liability in a sale and leaseback transaction after the date of the transaction. Annual periods beginning on or after 1 January 2024 Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements 4 5 Requires an entity to provide additional disclosures about its supplier finance arrangements. Annual periods beginning on or after 1 January 2024 IAS 8 Accounting Policies - Changes in Accounting Estimates and Errors Requires disclosure of any new standards and interpretations that have been issued but are not yet effective and have not yet been applied in the financial statements, together with information relevant to assessing the possible impact when implemented for the first time. Unknown The Directors have evaluated the impact of transition to the above standards and do not consider that there will be a material impact of transition on the financial statements. 64 BASIS OF CONSOLIDATION The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 30 June each year. Per IFRS 10, control is achieved when the Company: • has the power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affects its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including: • the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders; • potential voting rights held by the Company, other vote holders or other parties; • rights arising from other contractual arrangements; and • any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the group’s accounting policies. The Group recognises any non-controlling interest in the acquired entity at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. 65 Asset Acquisitions Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business, and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset. Where an acquisition transaction constitutes the acquisition of an asset and not a business, the consideration paid is allocated to assets and liabilities acquired based on their relative fair values, with transaction costs capitalised. No gain or loss is recognised. Consideration paid in the form of equity instruments is measured by reference to the fair value of the asset acquired. The fair value of the assets acquired would be measured at the point control is obtained. The Group recognises the fair value of contingent consideration in respect to an asset acquisition, where it is probable that a liability has been incurred, and the amount of that liability can be reasonably estimated. Such contingent consideration is recognised at the time control of the underlying asset is obtained, and such an amount is included in the initial measurement of the cost of the acquired assets. FOREIGN CURRENCIES AND FOREIGN EXCHANGE RESERVE In preparing the financial statements of the Group entities, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Non- monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognised in profit or loss in the period in which they arise except for: • exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; • exchange differences on transactions entered into to hedge certain foreign currency risks (see below under financial instruments/hedge accounting); and • exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment. For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a foreign exchange translation reserve (attributed to non-controlling interests as appropriate). Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income. 66 SEGMENTAL REPORTING Operating segments are reported in a manner consistent with the internal reporting provided to the chief decision-maker. The chief decision-maker has been identified as the Executive Board, at which level strategic decisions are made. An operating segment is a component of the Group: • That engages in business activities from which it may earn revenues and earn expenses, • Whose operating results are regularly reviewed by the entity’s chief operating decision- maker to make decisions about resources to be allocated to the segment and assess its performance, and • For which discrete financial information is available. TAXATION Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date, in the countries where the Group operates. Deferred tax is accounted for using the liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit or loss. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. The Group has losses to be carried forward on which no deferred tax asset is recognised due to the uncertainty as to the timing of profit. INTANGIBLE ASSETS - EXPLORATION AND EVALUATION ASSETS Exploration and evaluation expenditure for each area of interest, other than that acquired from another entity, is charged to the consolidated statement of income as incurred, except when the Group has obtained the legal right to explore a specific area of interest. Once the right to explore is secured, expenditure is capitalised if it meets certain criteria and is expected to be recovered through successful development or sale of the area. Costs that are considered appropriate to capitalise include: - Directly Attributable Costs: This includes acquisition costs, geological and geophysical studies, exploratory drilling, and any other expenditure directly related to evaluating the technical feasibility and commercial viability of the resource. - Ongoing Active Operations: If significant exploration and evaluation activities are planned and continue, and the expenditure is expected to lead to commercially recoverable reserves, the Group capitalises the costs. If at the reporting period's end, the exploration has not yet reached a stage where the existence of commercially recoverable reserves can be reasonably assessed, the expenditure remains capitalised. Purchased exploration and evaluation assets are recognised at their fair value at acquisition. As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated. However, the capitalised amounts are subject to regular impairment assessments to ensure that their carrying value does not exceed their recoverable amount. 67 This assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas. IFRS 6 permits impairments of exploration and evaluation expenditure to be reversed should the conditions which led to the impairment improve. The Group continually monitors the position of the projects capitalised and impaired. (See note 2a for further comments on the evaluation of the recoverability of these assets). Whenever the exploration for and evaluation of mineral resources in cash generating units does not 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. PROPERTY, PLANT AND EQUIPMENT Property, plant, and equipment are stated at cost, less accumulated depreciation, and any provision for impairment losses. The asset’s residual values, useful lives and methods of depreciation /amortisation are reviewed at each reporting period and adjusted prospectively, if appropriate. Depreciation is charged on each part of an item of property, plant, and equipment to write off the cost of assets less the residual value over their estimated useful lives, using the straight– line method. Depreciation is charged to the income statement. The estimated useful lives are as follows: Buildings/Constructions – 25 years Heavy machinery and equipment – 8 years Precision machinery, computer and printers – 4 years Vehicles – 4 years FINANCIAL INSTRUMENTS Financial assets Classification The Group’s financial assets consist of financial assets held at amortised cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Financial assets held at amortised cost Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in the profit or loss and presented in other gains/ (losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss. They are included in current assets, except for maturities greater than 12 months after the reporting date, which are classified as non-current assets. The Group’s financial assets at amortised cost comprise trade and other receivables and cash and cash equivalents at the year end. Recognition and measurement Regular purchases and sales of financial assets are recognised on the trade date – the date on which the Group commits to purchasing or selling the asset. Financial assets are initially 68 measured at fair value plus transaction costs. Financial assets are de-recognised 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. Financial assets are subsequently carried at amortised cost using the effective interest method. Other receivables are recognised initially at the amount of consideration that is unconditional, unless they contain significant financing components when they are recognised at fair value. The other receivables in the accounts do not contain significant financing components. Impairment of financial assets The Group assesses, on a forward-looking basis, the expected credit losses associated with its financial assets carried at amortised cost. For trade and other receivable due within 12 months the Group applies the simplified approach permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but rather recognises a loss allowance based on the financial asset’s lifetime expected credit losses at each reporting date. A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably. The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. The criteria that the Group uses to determine that there is objective evidence of an impairment loss include: • Significant financial difficulty of the issuer or obligor; • A breach of contract, such as a default or delinquency in interest or principal repayments; • The Group, for economic or legal reasons relating the borrower’s financial difficulty, granting the borrower a concession that the lender would not otherwise consider; • It becomes probable that the borrower will enter bankruptcy or other financial reorganisation. The Group first assesses whether objective evidence of impairment exists. The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flow (excluding future credit losses that have not been incurred), discounted at the financial asset’s original effective interest rate. The asset’s carrying amount is reduced and the loss is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss. Financial liabilities at amortised cost Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. 69 Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method. Other financial liabilities are initially measured at fair value. They are subsequently measured at amortised cost using the effective interest method. Financial liabilities are de-recognised when the Group’s contractual obligations expire or are discharged or cancelled. INVESTMENTS IN SUBSIDIARIES The Company recognises its investments in subsidiaries at cost, less any provision for impairment. Capital contributions are measured at their value on the date on which the Company makes the contribution. The Company assesses the impairment of each subsidiary against the total cost (both acquisition costs and capital contributions) made. BORROWINGS For convertible loan notes (CLNs), the liability portion of the CLN is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the loan notes. The remainder of the proceeds is allocated to the equity component, which represents the conversion option. This is recognised and included in shareholders’ equity, under the convertible loan notes reserve (“CLN Reserve”), net of any income tax effects, In cases where the convertible loan notes contain embedded derivatives the treatment differs. IFRS 9 requires that the embedded derivative be separated from the host contract if it meets certain criteria, including that the economic characteristics and risks of the embedded derivative are not closely related to those of the host. The embedded derivative is then measured at fair value through profit or loss (FVTPL), with changes in its value recognised in the income statement. The host liability, after separating the embedded derivative, is still measured at amortised cost unless designated otherwise. Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs. Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. EQUITY INSTRUMENTS An equity instrument is any contract that evidences a residual interest in the assets of a Company after deducting all of its liabilities. Equity instruments issued are recorded at the proceeds received net of direct issue costs. Share capital represents the amount subscribed for shares at nominal value. The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. 70 The share-based payments reserve represents equity-settled shared-based employee remuneration for the fair value of the warrants issued. It also includes the warrants issued for services rendered accounted for in accordance with IFRS 2. The Convertible Loan Note "CLN” reserve represents the value of the conversion portion of the CLN, calculated as the proceeds, less amortised cost, less fair value. The foreign exchange translation reserve arises from the translation of the Group’s foreign operations at each year end. The assets and liabilities of these operations are translated at exchange rates prevailing on the reporting date and differences, if any, are recognised in this reserve. Retained deficit include all current and prior period results as disclosed in the Statement of Comprehensive Income, less dividends paid to the owners of the Company. The Non-Controlling Interest reserve shows the share of equity that belongs to others besides the parent company. SHARE BASED PAYMENTS The Company issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of grant. The equity-settled share- based payments are expensed to profit or loss or capitalised to investments or intangibles in the statement of financial position over a straight line basis over the vesting period based on the Company’s estimate of shares that will eventually vest. A corresponding entry is then made in the share-based payment reserve. The fair value of these share-based payments is determined using Black-Scholes option pricing models and the assumptions are included in note 17 to the financial statements. The Group has two types of share-based payments other than employee compensation. Warrants issued for services rendered which are accounted for in accordance with IFRS 2 recognising either the costs of the service if it can be reliably measured or the fair value of the warrant (using Black-Scholes option pricing models – see note 17). Warrants issued as part of share issues have been determined as equity instruments under IAS 32. Since the fair value of the shares issued at the same time is equal to the price paid, these warrants, by deduction, are considered to have been issued at nil value. EARNINGS PER SHARE Basic earnings per share is calculated by dividing: - the profit or loss attributable to the owners of the company, excluding any costs of servicing equity other than ordinary shares - by the weighted average number of ordinary shares outstanding during the financial year Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: - after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and 71 - weighted average number of ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS In applying the Group’s accounting policies, which are described in note 1, the Directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. a) Critical judgement in the recoverability of exploration and evaluation assets (see note 11) Exploration and evaluation assets include mineral rights and exploration and evaluation costs, including geophysical, topographical, geological and similar types of costs. Exploration and evaluation costs are capitalised if management concludes that future economic benefits are likely to be realised and determines that economically viable extraction operation can be established as a result of exploration activities and internal assessment of mineral resources. According to ‘IFRS 6 Exploration for and evaluation of mineral resources’, the potential indicators of impairment include: management’s plans to discontinue the exploration activities, lack of further substantial exploration expenditure planned, expiry of exploration licences in the period or in the nearest future, or existence of other data indicating the expenditure capitalised is not recoverable. At the end of each reporting period, management assesses whether such indicators exist for the exploration and evaluation assets capitalised, which requires significant judgement. The current exploration projects are actively being progressed and therefore the Company does not believe any circumstances have arisen to indicate these assets require impairment. b) Critical estimate in accounting for share-based payments (see note 17) The Group has issued various warrants to its service providers. These are valued in accordance with IFRS 2 “Share-based payments”. The grant date fair value of such share-based payments is calculated using a Black-Scholes model whose input assumptions are derived from market and other internal estimates. These are set out in note 17 to the accounts. Changes to these inputs may impact the related charge. c) Critical judgement in the recoverability of VAT (see note 13) At 30 June 2024, the Group recognised an amount of £91,000 (2023: £80,000) within other receivables which relates to VAT receivable from the Mozambique government. This includes a provision for 23% for non-recoverability. New legalisation in Mozambique has provided a path for companies operating in the mining sector to seek reimbursement of VAT prior to the production stage. Therefore, the Directors believe that this amount (including a 23% provision) will be recovered. 72 d) Company only - Critical judgement in the impairment assessment of investment in subsidiaries (see notes 10) In preparing the parent company financial statements, the Directors apply their judgement to decide if any or all of the Company’s investments (including capital contributions) in its subsidiaries should be impaired. In undertaking their review, the Directors consider the outcome of their impairment assessment of the exploration and evaluation assets as noted above. In view of the Maiden Resource Estimate published in September 2023, which shows the existence of substantial resources at the property, the Directors do not believe an impairment is appropriate in relation to the investments in this subsidiary. 3. FINANCIAL INSTRUMENTS – RISK MANAGEMENT The financial instruments were categorised as follows: Group Company 2024 £’000 2023 £’000 2024 £’000 2023 £’000 Financial assets measured at amortised cost: Trade and other receivables (note 13) 128 154 88 68 Cash and cash equivalents 392 1,130 391 1,109 520 1,284 479 1,177 Financial liabilities measured at amortised cost: Trade and other payables (note 14) 138 440 126 437 Convertible loan notes and loans (note 14 and 15) 684 256 684 256 822 696 810 693 The Group’s financial instruments comprise cash and sundry receivables (all of which are carried at amortised cost) and payables that arise directly from its operations. The main risks arising from financial instruments are credit risk, liquidity risk and currency risk. The Directors review and agree policies for managing these risks and these are summarised below. There have been no substantial changes to the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. There is no significant difference between the carrying value and fair value of receivables, cash and cash equivalents and payables. Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss. The Company has adopted a policy of only dealing with creditworthy counterparties, as assessed by the Directors using relevant available information. Credit risk also arises on cash and cash equivalents and deposits with banks and financial institutions. The Company’s cash deposits are only held in banks and financial institutions which are independently rated with a minimum credit agency rating of B. At year end 99% (2023: 98%) of the Group’s cash was held in the UK at HSBC (credit rating AA-) and 1% (2023: 2%) was held in 73 Mozambique at the Millennium Bank (credit rating B). There were no bad debts recognised during the year and there is no provision required at the reporting date nor any linked IFRS 9 disclosures. The balances are not material at year end and therefore no sensitivity analysis has been performed. Liquidity risk Liquidity risk arises from the management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. Short term payables are classified as those payables that are due within 30 days. The Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, it seeks to maintain liquid cash balances (or agreed facilities) to meet expected requirements for a period of at least 45 days. The undiscounted maturity analysis is shown below. Financial liabilities Less than 1 year 1-2 years Total £’000 £’000 £’000 Trade and other payables 585 - 585 Borrowings 362 322 684 947 322 1,269 Funding risk Funding risk is the possibility that the Group might not have access to the financing it needs. The Group’s continued future operations depend on the ability to raise sufficient working capital through the issue of equity share capital. The Directors are confident that adequate funding will be forthcoming with which to finance operations. The Directors have a strong track record of raising funds as required. Controls over expenditure are carefully managed and activities planned to ensure that the Group has sufficient funding. Foreign currency risk Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group reports in Pounds Sterling, but the functional currency of its subsidiary is the Mozambique Meticals (MTN). The Group does not currently hedge its exposure to other currencies. The Group’s cash and cash equivalents are held in Pounds Sterling and MTN. At 30 June 2024, less than 1% (2023: 2%) of the Group’s cash and cash equivalent were held in MTN. The balances are not material at year end and therefore no sensitivity analysis has been performed. Interest rate risk The Group finance operations through the issue of equity share capital. The Group manages the interest rate risk associated with the Group’s cash assets by ensuring that interest rates are as favourable as possible, whether this is through investment in floating or fixed interest rate deposits, whilst managing the access the Group requires to the funds for working capital purposes. At the reporting date, cash at bank floating interest rate is not subject to any interest receivable. The Group has not performed a sensitivity analysis in relation to the interest rate movements on financial assets as this is not considered to be material. Capital Management The Group considers its capital to comprise its ordinary share capital, share premium and accumulated retained losses. The Group’s objective when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders. 74 The Group meets its capital needs by equity financing. The Group sets the amount of capital it requires to fund the Group’s project evaluation costs and administration expenses. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. The Group do not have any derivative instruments or hedging instruments. It has been determined that a sensitivity analysis will not be representative of the Group’s position in relation to market risk and therefore, such an analysis has not been undertaken. 4. SEGMENTAL INFORMATION For the purpose of IFRS 8, the Chief Operating Decision Maker “CODM” takes the form of the Board of Directors. The directors are of the opinion that the business of the Group focused on three reportable segments as follows: • Head office, corporate and administrative, including parent company activities of raising finance and seeking new investment and exploration opportunities, all based in the UK; • Mineral exploration, all based in Mozambique, and • Other costs, mostly administrative activities, based in Mauritius and Africa. The geographical information is the same as the operational segmental information shown below. Year ended 30 June 2024 Corporate and Administrative (UK) Other Mineral exploration (Mozambique) Total £’000 £’000 £’000 £’000 Operating loss before and after taxation (1,557) (30) (85) (1,672) Segment total assets (net of investments in subsidiaries) 726 16 1,548 2,290 Segment liabilities (1,256) (2) (11) (1,269) Year ended 30 June 2023 Corporate and Administrative (UK) Other Mineral exploration (Mozambique) Total £’000 £’000 £’000 £’000 Operating loss before and after taxation 1,190 12 94 1,296 Segment total assets (net of investments in subsidiaries) 1,324 - 1,410 2,734 Segment liabilities (846) - (3) (849) 75 5. EXPENSES BY NATURE 2024 £’000 2023 £’000 Exploration expenditure (not capitalised) 102 - Fees payable to the Company’s Auditor and its associates in relation to the audit of the parent company and consolidated financial statements 55 53 Fees payable to the Company’s Auditor and its associates in relation to the audit of the Company’s subsidiaries 10 5 Fees payable to the Company’s Auditor for other services: Reporting Accountant services in respect to the Fundraise 48 8 Legal and professional fees 220 259 Depreciation 40 24 Listing costs 72 48 Wages and salaries 429 437 Insurance costs 37 37 Regulatory fees 81 17 Other 51 228 1,145 1,116 Exploration expenditure mainly comprises of amounts relating to pre-licence due diligence costs that have not yet resulted in the securing of licences. In line with IFRS 6, costs incurred before the legal right to explore a specific area is obtained must be expensed as they do not meet the criteria for capitalisation. IFRS 6 specifically excludes the capitalisation of any costs incurred prior to obtaining these exploration rights, which means such pre-right to explore costs are required to be immediately recognised as an expense in the income statement. 6. STAFF COSTS (INCLUDING DIRECTORS) 2024 £’000 2023 £’000 Salaries and fees 475 490 Pensions 1 1 Social security costs 14 27 Total staff costs 490 518 Amounts capitalised in intangibles (61) (81) 429 437 The average monthly number of employees (both permanent and temporary) during the year ended 30 June 2024 was 11 (2023: 17 employees) and is shown in the table below. The costs of the wages and salaries in MMM have been capitalised as part of the cost of exploration assets additions in the year. Key management and personnel are considered to be the Directors. 2024 2023 Management 3 3 Technical 7 10 76 Administration 1 4 11 17 7. EARNINGS PER SHARE The basic earnings per share is derived by dividing the loss for the period attributable to ordinary shareholders by the weighted average number of shares in issue. 2024 2023 Loss for the year (£’000) (1,672) (1,296) Weighted average number of shares – expressed in thousands 84,936 40,069 Basic earnings per share – expressed in pence (1.97p) (3.23p) As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be anti-dilutive and, as such, the diluted loss per share calculation is the same as the basic loss per share. On 19 July 2024 an additional 76,248,759 Ordinary Shares were issued, increasing the weighted average number of shares to 158,809,034. 8. FINANCE COSTS 2024 2023 £’000 £’000 Interest payable on the CLNs (note 14) 77 25 Share-based payment (warrant cost) of loans (note 17) 353 62 Shares issued for loan extension - 50 Interest payable on loans (note 15) 79 40 Foreign exchange/other interest 18 3 527 180 9. INCOME TAX The income and deferred tax charge for the year was £nil (2023:£nil) 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 2024 2023 £’000 £’000 Loss before tax (1,672) (1,296) Tax at the applicable rate of 30.1% (2023:24%) (495) (313) Expenses not deductible for tax purposes 112 73 Tax losses for which no deferred tax is recognised 383 240 Total tax charge - - 77 The weighted average applicable tax rate of 30.1% (2023: 24%) used is a combination of the 25% (2023: 19%) standard rate of corporation tax in the UK and 31% Mozambique corporation tax. The Group has total tax losses of £36,129,000 to carry forward against future profits (2023: £34,581,000 losses brought forward). No deferred tax asset on losses carried forward has been recognised on the grounds of uncertainty as to when profits will be generated against which to relieve said amount. 10. INVESTMENT IN SUBSIDIARIES COMPANY 2024 2023 £’000 £’000 Cost and net book value Investments in subsidiaries at beginning of year 1,633 168 Incorporation of subsidiaries - - Additional payments to acquire subsidiary 138 40 1,771 208 Loans reclassified to capital contributions in prior year - 956 Capital contributions in the year 280 469 280 1,425 Investments in subsidiaries at end of year 2,051 1,633 On 5 December 2023, the Company paid a further cash consideration of £40,000 (including registration fees) and one million shares valued at £31,000 using the share price on the day of issue, to the other shareholders of Monte Muambe Mining Lda (“MMM”), to acquire a further 31% of the subsidiary as set in the Farm-Out Agreement. This has been recognised as an additional cost of investment in the subsidiary. Other payments totalling £67,000 made to the other shareholders during the year for stage payments and extensions of phases were also capitalised as part of the cost of investment. During the financial year, the Group acquired an additional 31% equity interest in MMM increasing its total ownership from 20% to 51%. This transaction was accounted for as an equity transaction in accordance with IFRS 10, as the Group retained control over the subsidiary before and after the acquisition. The difference between the consideration paid of £71,000 and the carrying amount of the non-controlling interests acquired of (net liabilities of £48,000) has been recognised directly in equity as an adjustment to the parent’s equity. No goodwill or profit or loss has been recognised in relation to this transaction, as control was not affected. The Group is made up of the following subsidiaries: Subsidiaries of Altona Rare Earths Plc Country of Registration Date of Incorporation /Acquisition Registered Address Nature of Business and Holding Altona Rare Earths (Uganda) Limited Uganda 30 March 2021 Plot 2&4A Nakasero Road, Kampala, Uganda. 100% Mineral exploration and mining Altona Rare Earths (Tanzania) Limited Tanzania 5 August 2021 Plot No.466, Block 43, Mpakani A, Kinondoni, Tanzania. 100% Mineral exploration and mining 78 Altona Rare Earths Maurtius Ltd Mauritius 17 February 2022 c/o Griffon Solutions Ltd, C2-410, 4th Floor, Office Block C, Grand Baie, Mauritius 100% Business activities Monte Muambe Mining Lda Mozambique 23 June 2021 Avenida 24 de Julho, no 851 R/C, Maputo, Mozambique. 51% Mineral exploration and mining Altona Mozambique, Lda Mozambique 27 May 2022 c/o Griffon Solutions Ltd, C2-410, 4th Floor, Office Block C, Grand Baie, Mauritius 95% Mineral exploration and mining Altona Mozambique II, Lda Mozambique 27 May 2022 c/o Griffon Solutions Ltd, C2-410, 4th Floor, Office Block C, Grand Baie, Mauritius 95% Mineral exploration and mining Altona Mozambique III, Lda Mozambique 27 May 2022 c/o Griffon Solutions Ltd, C2-410, 4th Floor, Office Block C, Grand Baie, Mauritius 100% Mineral exploration and mining subsidiaries held indirectly through Altona Rare Earths Mauritius Ltd. On 25 July 2023, Cedric Simonet transferred the 0.1% of the share capital of Altona Mozambique, Lda and Altona Mozambique II, Lda that he was holding on behalf of Altona Rare Earths Mauritius Limited to Altona Rare Earths Mauritius Limited, (both for nil consideration), giving it a 100% total holding of the share capital in both companies. On the same day, Altona Rare Earths Mauritius Limited, transferred 5% of the share capital of Altona Mozambique, Lda and Altona Mozambique II Lda, (for nil consideration), to Ossanzaya Empreendimentos Lda, a company registered in Mozambique. ** In the prior year a decision was taken by the Board to reclassify the loans due from MMM to the Company into Investments (capital contributions) due to the nature of the Farm-Out Agreement. The Board now view this loan as a long term investment in the company rather than a non-interest bearing loan, repayable on demand. 11. INTANGIBLE ASSETS The intangible assets held by the Group increased primarily as a result of the acquisition of Monte Muambe Mining Lda (“MMM”) and the work carried out thereon. See note 10 for further information. Exploration and evaluation assets £’000 Cost and carrying amount At 1 July 2023 1,290 Exploration and evaluation assets additions (see note 10) 67 Additions to exploration assets 250 At 30 June 2024 1,607 On 25 September 2023, the Company published its Maiden Resource Estimate which reported that there is an estimated 13.6 million tons at 2.42% TREO with a cut-off grade of 1.5% TREO. The Scoping Study published on 18 October 2023 confirmed the potential viability of the 79 project and gave the Company sufficient confidence to proceed with the Prefeasibility Study and with Phase 3 of the Farm-Out Agreement. In accordance with IFRS 6, the Directors undertook an assessment of the following areas and circumstances which 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, and • Sufficient data exists to indicate that the book value may not be fully recovered from future development and production. Following their assessment, and the publication of the MRE and Scoping Study, with the potential economic viability of the project established therein, the Directors concluded that no impairment charge in respect to any licences held, was necessary for the year ended 30 June 2024 (2023: £nil). 12. TANGIBLE FIXED ASSETS GROUP Buildings £’000 Heavy machinery £’000 Precision machinery and office equipment £’000 Vehicles £’000 Total Assets £’000 Cost At 1 July 2023 31 86 33 24 174 Additions 4 3 4 - 11 At 30 June 2024 35 89 37 24 185 Accumulated At 1 July 2023 1 13 7 7 28 Depreciation charge 1 27 6 6 40 At 30 June 2024 2 40 13 13 68 Net book value At 30 June 2023 30 73 26 17 146 At 30 June 2024 33 49 24 11 117 COMPANY Precision machinery and office equipment £’000 Cost At 1 July 2023 7 At 30 June 2024 7 Accumulated depreciation At 1 July 2023 3 Depreciation charge for the year 1 At 30 June 2024 4 80 Net book value At 30 June 2023 4 At 30 June 2024 3 13. TRADE AND OTHER RECEIVABLES Group Company 2024 £’000 2023 £’000 2024 £’000 2023 £’000 Receivables due from related parties - - 62 24 Taxes & Social security receivable 128 154 26 68 Prepayments and other receivables 46 14 36 14 174 168 124 106 At 30 June 2024, the Group recognised an amount of £91,000 (2023: £80,000) within other receivables which relates to VAT receivable from the Mozambique government. This includes a provision for 23% (2023:25%) for non-recoverability. New legalisation in Mozambique has provided a path for companies operating in the mining sector to seek reimbursement of VAT prior to the production stage. Therefore, the Directors believe that the majority of this amount will be recovered and have provided only for a portion to cover any costs/uncertainty associated with the recovery of this receivable. 14. TRADE CREDITORS AND OTHER PAYABLES Group Company 2024 £’000 2023 £’000 2024 £’000 2023 £’000 Trade payables 127 257 118 255 Accruals and other payables 458 336 455 335 585 593 573 590 Convertible loan notes 292 256 292 256 Other loans (see note 15) 70 - 70 - 362 256 362 256 Trade and other payables are non-interest bearing and are normally settled on terms of 30 days from month end. The Directors consider that the carrying amount of financial liabilities recorded at amortised cost in the financial statements approximate to their fair value. CONVERTIBLE LOAN NOTES: On 1 February 2023, the Company issued 5.5 million 15% convertible loan notes (“notes”) for £275,000. These were convertible into ordinary shares of the entity, at the option of the holder, or repayable on or before 1 May 2025. The conversion rate is 20 shares for every £1 note held, which is based on the Fundraise issue price on 9th June 2023 of £0.05 per share. On 24 June 2024, the Noteholders passed a written resolution to delete the Maturity Date and convert these notes at a price of £0.01 per share. On 19 th July 2024, £263,000 of the total loan notes were converted and interest was calculated and paid up to the 30 June 2024. 81 The convertible loan notes are presented in the balance sheet as follows: £’000 Face value of notes issued 275 Less costs of issue (32) Other equity securities – value of conversion rights (12) 231 Interest expense 25 Interest paid - Balance as at 30 June 2023 256 Interest expense 77 Interest paid in the year (41) Balance as at 30 June 2024 292 *interest expense is calculated by applying the effective interest rate of 21.64% to the liability component. The initial fair value of the liability portion of the note was determined using a market interest rate for a short term loan at the issue date, with a similar risk profile. The liability is subsequently recognised on an amortised basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option and recognised in shareholders’ equity, and not subsequently remeasured. The note holder has the option of receiving the interest in cash or the equivalent value in shares which are priced at the VWAP for the previous 3 months. On conversion of the notes the note holders were entitled to 2 warrants per share, priced at £0.10 and £0.15. They expire 2 years after grant. Following the written resolution, the warrants were all repriced at £0.05 and extended to 31 December 2025. There is not a material difference between the initial fair value of the notes and their carrying amount, since the interest payable on those borrowings is close to the current market rate for such a loan. 15. LOANS Group Company 2024 £’000 2023 £’000 2024 £’000 2023 £’000 Loans 322 - 322 - Movement in loans: £’000 Balance as at 1 July 2023 - Convertible loan from CCL – 20 December 2023 225 Interest expense 45 270 New loan facility – draw downs 88 Interest charge on draw downs 34 82 Balance as at 30 June 2024 392 Balance due within one year (see note 14) (70) Balance due after one year 322 On 20 December 2023, the Company entered into a convertible loan note with Catalyse Capital Limited (“CCL”) for a Commitment Amount of £250,000, with a repayment date of 20 December 2024 and a fixed interest charge of £50,000 (20%) amended to £45,000 (18%) on 30 March 2024. The conversion price was set at the lower of £0.025 and the price of any subsequent equity raise (set post year end at £0.01). CCL were also granted 12 million warrants representing 100% of the Commitment Amount plus Fixed Interest divided by the subscription price of £0.025. £225,000 of this facility was drawn down during the year. The number of these warrants was increased to 30 million following the equity raise on the 19 July 2024. On 27 June 2024, the Company entered into a £300,000 debt facility with Mr Jennings, with a repayment date of 30 October 2025, and a fixed interest rate of 12%. The loan is to be drawn down in 8 tranches with £12,500 being drawn down before year end. £200,000 of the convertible loan from CCL was reprofiled to match the terms of this debt facility and the remaining £70,000 of this was converted into shares at a subscription price of £0.01 post year end (and reported in creditors due within one year). Mr Jennings was also granted 30 million warrants at a subscription price of £0.015. On 27 June 2024, the Company also entered into a £600,000 debt facility with Tracarta Ltd, with a repayment date of 30 October 2025, and a fixed interest rate of 12%. The loan is to be drawn down in 8 tranches with £75,000 being drawn down before year end. Tracarta Ltd was also granted 105 million warrants at a subscription price of £0.015. 16. SHARE CAPITAL 2024 2023 No. £’000 No. £’000 Ordinary Shares Ordinary shares at 1 July 82,403,199 824 37,484,999 375 Shares issued in the year 4,363,908 44 44,918,200 449 TOTAL ORDINARY SHARES at 30 June 86,767,107 868 82,403,199 824 Deferred Shares at 0.09p Deferred shares at 1 July 1,411,956,853 1,271 1,411,956,853 1,271 Movement during the year - - - - 1,411,956,853 1,271 1,411,956,853 1,271 Deferred Shares at 9p Deferred shares at 1 July 1,602,434 144 1,602,434 144 Movement during the year - - - - 1,602,434 144 1,602,434 144 TOTAL DEFERRED SHARES at 30 June 1,413,559,287 1,415 1,413,559,287 1,415 TOTAL SHARES at 30 June 1,500,326,394 2,283 1,495,962,486 2,239 83 ORDINARY SHARES Number of shares - ordinary Share Capital Share Premium Total No. £’000 £’000 £’000 As at 30 June 2022 37,484,999 375 21,404 21,779 Issued 9 June 2023 40,000,000 400 1,600 2,000 Issued 9 June 2023 4,918,200 49 197 246 Share issue costs - - (251) (251) As at 30 June 2023 82,403,199 824 22,950 23,774 Issued 11 July 2023 1,033,600 11 42 53 Issued 22 November 2023 1,008,935 10 22 32 Issued 9 January 2024 1,521,373 15 27 42 Issued 2 April 2024 800,000 8 32 40 Share issue costs - - (1) (1) 86,767,107 868 23,072 23,940 • On 11 July 2023, the Company issued 1,033,600 shares to creditors in lieu of cash settlement for fees of £53,000. • On 22 November 2023, the Company issued 1 million shares to the other owners of MMM for the acquisition of an additional 31% of MMM and 8,935 shares to a creditor in lieu of payment of cash interest on the loans outstanding in the year. • On 9 January 2024, the Company issued 1,521,373 shares to two Directors and one employee in lieu of cash settlement of salary and fees due of £42,000. • On 2 April 2024, the Company issued 800,000 shares to Sustineri Group Ltd for the transfer of the exclusivity over the Tenement licence in Zambia. PRIOR YEAR: • On 9 June 2023, the Company raised gross proceeds of £2,000,000 through the placing and subscription of 40 million ordinary shares of £0.01 each at a placing price of £0.05 per share. The Company also issued 4,918,200 ordinary shares of £0.01 each at the placing price of £0.05 to pay Directors and service providers in lieu of cash settlement. The deferred shares do not have any voting rights nor carry dividend and distribution rights, however, have the right on a return of assets on liquidation not exceeding the amount paid up on the deferred shares as may be available after payment to each holder of ordinary shares the sum of £10,000 per ordinary share. PAID IN SHARE CAPITAL TO ISSUE £345,000 was received in cash prior to the year end in relation to the fund raise which took place after year-end on the 10 July 2024. This amount is classified as equity rather than a liability because subscription documents have been obtained, confirming the investors’ commitment to equity participation. 17. WARRANTS AND SHARE-BASED PAYMENTS The Company has issued the following warrants, which are still in force at the date of this balance sheet. Date of Issue Reason for issue Number of Warrants Exercise Price Expiry date 84 Issued in 2021 Placing warrants 8,777,866 12p 31 March 2025 Issued 10 September 2021 Placing warrants 4,463,078 12p 31 March 2025 Issued 11 May 2022 Broker warrants 1 342,857 14p 6 October 2024 Issued 11 May 2022 Broker warrants 2 375,000 8p 24 April 2025 Issued 18 June 2022 Placing warrants 3,125,000 12p 31 March 2025 Issued 1 February 2023 CLN warrants 11,000,000 5p 31 December 2025 Issued 9 June 2023 Admission warrants 40,000,000 10p 9 June 2025 Issued 9 June 2023 Admission piggyback warrants* 40,000,000 15p 9 June 2026 Issued 9 June 2023 Broker warrants 3 2,512,760 5p 9 June 2025 Issued 9 June 2023 CCL warrants 1 7,500,000 5p 9 June 2026 Issued 9 June 2023 CLN Broker warrants 550,000 5p 9 June 2025 Issued 20 December 2023 CCL warrants 2 12,000,000 2.5p 20 December 2027 Issued 27 June 2024 Debt facility warrants 135,000,000 1.5p 27 June 2028 265,646,561 These piggyback warrants are conditional on the exercise of the Admission warrants. If they are exercised within 30 calendar days of the date on which the VWAP of the shares exceeds 10p. This piggyback warrant will allow the warrant holder to subscribe for one share per each piggyback warrant held. On 24 June 2024, the Noteholders passed a written resolution to convert their CLNs and to amend the warrants attached to these shares to reprice them at £0.05 and extend their expiry date to 31 December 2025. Following the adjusting event of the fund raise on 19 July 2024, the CCL warrants 1 and 2 were recalculated and repriced with respect to the equity raise price of £0.01, resulting in the replacement of these warrants with 67.5 million warrants with an exercise price of £0.01. The following table sets out the movement of warrants during the year, no warrants were exercised during either year: Number of warrants Exercise price (pence) As at 30 June 2022 18,183,801 8p to 14p Issued in the year 50,562,760 5p to 10p 68,746,561 Piggyback and CLN warrants 51,000,000 10p to 20p As at 30 June 2023 119,746,561 5p to 12p Issued in the year 147,000,000 1.5p to 2.5p Expired in the year (1,100,000) 12p As at 30 June 2024 265,646,561 1.5p to 20p Recalculated post year end – CCL Warrants 1 and 2 (19,500,000) 2.5p to 5p Recalculated post year end – CCL Warrants 3 67,500,000 1.0p 313,646,561 1p to 20p Following the equity raise on 19 July 2024, the CCL warrants 1 and 2 were recalculated and repriced with respect to the equity raise price of £0.01, as per the conditions of the contract. 85 The weighted average price of all warrants at the year end is £0.58 (2023: £0.11) and weighted average life of these warrants is 2.78 years (2023: 2.13 years). SHARE-BASED PAYMENTS Share-based payment reserve £’000 At 1 July 2022 14 Cost of shares issued 41 Share-based payment charge 66 At 30 June 2023 121 Share-based payment charge 353 At 30 June 2024 474 The debt facility warrants (£900,000 facility entered into on the 27 June 2024) were fair valued at £270,000. The CCL warrants 2 were initially fair valued at £46,000 and then following the adjustment in number and price were revalued at £73,000. The CCL warrants 1 were initially fair valued at £61,000 in the prior year and then following the adjusted number and price were revalued at £71,000 resulting in a further £10,000 charged to the profit and loss account. In accordance with IFRS 2, these warrants were classed as equity settled share-based payment transactions. These amounts are attributable to the cost of finance and therefore have been accounted for in the profit and loss account in the year. The fair values in the year were calculated using the Black Scholes model with inputs as detailed below: Debt facility warrants CCL warrants 2 initial CCL warrants 2 adjusted CLN warrants 1 adjusted Number of warrants 135,000,000 12,000,000 30,000,000 37,500,000 Share price 1.05p 2.25p 1.05p 1.05p Exercise price 1.5p 2.5p 1.0p 1.0p Expected life 4 years 4 years 3.5 years 2 years Volatility 57% 42% 57% 57% Risk-Free Interest rate 4.17% 4.03% 4.17% 4.17% Expected dividends - - - - Fair Values £270,000 £46,000 £73,000 £71,000 Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price. The fair value has been discounted by 50% to account for the early-stage development of the Company and limited liquidity due to its small capital nature. PRIOR YEAR The Placing and Admission warrants were issued to investors as part of new share placings. These investor warrants have been determined as equity instruments under IAS 32. Since the fair value of the shares issued at the same time is equal to the price paid, these warrants, by deduction, are considered to have been issued at nil value. The Broker 3 warrants are made up of 2,012,760 warrants and 500,000 performance warrants. The performance warrants are valued at the contracted value of £25,000 and the remaining warrants have been fair valued at £16,497 in accordance with IFRS 2 as equity settled share-based payment transactions. £16,497 has been recognised as the fair value of Broker warrants issued as part of the 86 share raise in the year. These amounts are attributable to the cost of shares issued and therefore have been accounted for in the Share Premium reserve. The CCL warrants 1 have been fair valued at £61,471 in accordance with IFRS 2 as equity settled share- based payment transactions. £61,471 has been recognised as the fair value of the cost of extending the CCL loan during the year. This amount is attributable to the cost of finance and therefore has been accounted for in the profit and loss account in the year. The CLN Broker warrants have been fair valued at £4,483 in accordance with IFRS 2 as equity settled share-based payment transactions. £4,483 has been recognised as the fair value of the cost of issue of the CLNs and has been net off the liability held in the balance sheet for these notes. The fair values in prior year were calculated using the Black Scholes model with inputs as detailed below: Broker warrants 1 Broker warrants 2 Broker warrants 3 CCL Warrants 1 CLN Broker warrants Number of warrants 342,857 375,000 2,012,760 7,500,000 550,000 Share price 11.5p 9p 5p 5p 6.1p Exercise price 14p 8p 5p 5p 5p Expected life 3 years 3 years 3 years 3 years 2 years Volatility 31% 31% 40% 40% 40% Risk-Free Interest rate 0.13% 0.13% 5.04% 5.04% 3.66% Expected dividends - - - - - Fair Values £5,613 £8,836 £16,497 £61,471 £4,483 18. RESERVES AND NCI The following describe the nature and purpose of each reserve within owners’ equity: Reserve Description and Purpose Share capital Amount subscribed for share capital at nominal value Share premium Amount subscribed for share capital in excess of nominal value. Paid in share capital to issue Money received in advance for share capital subscribed for at total value. Share-based payment reserve Reserve created to recognise share-based payments such as warrants used in lieu of cash settlement. Convertible loan note (CLN) reserve The value of the conversion portion of the CLN, calculated as the proceeds, less amortised cost, less fair value. Non-controlling Interest Reserve created to recognise the Non-controlling interest at year end. Retained deficit Cumulative net gains and losses recognised in the consolidated statement of comprehensive income. 19. COMMITMENTS AND CONTINGENT LIABILITIES As at 30 June 2024 the only significant capital commitments of the Group relate to the Farm-Out Agreement in Mozambique which sets out a minimum spend for each phase of the project. On 23 October 2023, the Company notified the original shareholders of Monte Muambe Mining Lda of the successful completion of Phase 2 and of its intention to proceed to Phase 3 of the Project. The committed minimum spend for this Phase 3 is $2m over 2 years. This Phase and the related capital commitments can be extended with further payments. 87 20. RELATED PARTY TRANSACTIONS Transactions with group undertakings: Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. Amounts owed to the parent company by subsidiaries are as follows: 2024 2023 £’000 £’000 Monte Muambe Mining Lda 1,705 1,425 Altona Rare Earths (Tanzania) Limited 4 5 Altona Rare Earths Mauritius Ltd 58 19 Transactions with key management: The key management personnel are considered to be the Directors. Details of their remuneration are included in the remuneration report. Remuneration was paid in shares and cash during the year. As at 30 June 2024, deferred salaries, fees and Employer’s NI in relation to Directors and Senior Management amounted to £199,000 (2023:£40,000) and was included in accrued expenses at year end. This was settled in cash and shares post year-end. Transactions with other related parties: Louise Adrian also works as a consultant for Orana Corporate LLP who provide the Company with accounting and bookkeeping services and are the corporate Company Secretary for the Company. During the year these services cost the Company £48,000 (2023: £48,000). 21. CONTROLLING PARTY The Directors consider that there is no single controlling party. 22. POST REPORTING DATE EVENTS On 19 July 2024, the Company announced the issue of 76,248,759 new ordinary shares as follows: • 39,400,000 Shares were issued to raise funds of £394,000; • 33,300,000 Shares were issued for the conversion of existing convertible loan notes of £303,000; and • 3,548,759 Shares were issued to certain Directors in lieu of fees and to various other creditors. On 29 July 2024, the Company announced it had exercised its option to acquire a 51% share in the prospecting licence PL2329/2023, in Botswana from Ignate African Mineral (Pty) Ltd for an initial consideration of USD$10,000 in cash and USD$50,000 in shares. 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