Company Registration Number: 02401127
ANNUAL REPORT
29 DECEMBER 2023
Kendrick Resources
PLC
1
CONTENTS
Page
Directors and advisers 2
Chairman’s Statement 3
Operational Financial Corporate and Strategy Reviews 5
Strategic report 13
Board of Directors 19
Directors’ Remuneration Report 22
Corporate Governance Statement 26
Directors’ report 32
Statement of Directors’ responsibilities 35
Independent Auditor’s Report 36
Group Statement of Comprehensive Income 44
Group Statement of Financial Position 45
Company Statement of Financial Position 46
Group Statement of Cash Flow 47
Company Statement of Cash Flow 48
Group Statement of Changes in Equity 49
Company Statement of Changes in Equity 50
Notes to the Financial Statements 51 - 83
Kendrick Resources
PLC
2
DIRECTORS AND ADVISERS
DIRECTORS
C Bird Chairman
M A Borrelli Non-Executive Director
K Thygesen Non-Executive Director
E Kirby – Non-Executive Director
M Churchouse – Managing Director (appointed 31 January 2023)
COMPANY SECRETARY
N A C Lott
REGISTERED AND HEAD OFFICE
7/8 Kendrick Mews
London SW7 3HG
Registered No. 02401127
AUDITORS
Moore Kingston Smith LLP
6
th
Floor, 9 Appold Street
London EC2A 2AP
FINANCIAL ADVISER AND JOINT BROKER
Novum Securities Limited
7-10 Chandos Street
London W1G 9DQ
LEGAL ADVISERS
Edwin Coe LLP
2 Stone Buildings, Lincoln’s Inn
London WC2A 3TH
JOINT BROKERS
Shard Capital LLP
3
rd
Floor, 70 St Mary Axe
London EC3A 8BE
REGISTRARS
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands B62 8HD
Kendrick Resources
PLC
CHAIRMAN’S STATEMENT
3
WEBSITE www.kendrickresources.com
Dear Shareholder,
The year under review has seen significant progress, with drilling work carried out at our existing
major Airijoki and Espedalen projects, and the acquisition of the Mjovattnet and Njuggtraskliden
nickel, copper and PGM licences (“Swedish Nickel”).
Results from an extension drill programme at the Airijoki Project in Northern Sweden and the
results suggested that we have the potential to at least double the current 44million tonne resource
at similar grades.
During the year, Wardell Armstrong carried out metallurgical test work with the objectives of
building on previous work on maintaining concentrate grade, whilst increasing vanadium
recovery. The work was very successful and the results revealed much about the geo-metallurgy
of the orebody, which we will incorporate into future mine planning.
Global production of vanadium is currently just over 100,000 tonnes per year with China and
Russia responsible for about 65% and 20% of production respectively. Steelmaking has been
responsible for over 90% of vanadium consumption and demand has been strong due to global
adoption of higher strength rebar specifications and increasing use of vanadium containing steel
by the automotive industry. The use of vanadium in REDOX vanadium storage batteries is
increasing with the focus on alternative energy sources. We have no doubt that power storage
will command much more importance as the decade continues.
We mounted a significant drilling programme in Norway at our Espedalen nickel complex,
reporting good intersection of over 1% nickel, which will be described in the operation section.
The nickel complex is showing itself to be highly prospective with at least 10 untested targets.
The prognosis for significant increase in nickel tonnage is very good and we intend to carry out
further drilling programmes during Q4 2024. In reviewing all historical information available on
the project, we identified a potentially significant magnetic anomaly, which may represent the
high-grade roots to the overall system.
In July we acquired from EMX Royalties the Mjovattnet and Njuggtraskliden nickel, copper and
PGM licences (“Swedish Nickel”). A number of boreholes will be reviewed in the operational
review, but we are very pleased with this acquisition based on its history and potential. Between
the two projects, we have some 25km potential strike to investigate. The geological environment
of the project is being likened to the Thompson Nickel belt in Manitoba, Canada, which is a major
nickel supplier in Canada. The acquisition is made even more interesting by its proximity to
battery manufacturing facilities and the eastern coast of mid-Sweden, together with Boliden’s
nickel refinery, which is some 100km by sea away.
The initial part of the reporting period was spent in establishing a management team that is able
to work within the cost regimes we are accustomed to and, also previous experience of working
the Scandinavian geological environment.
Kendrick Resources
PLC
CHAIRMAN’S STATEMENT
4
Towards the end of the period, it became obvious that a new awareness was emerging in
Scandinavia and with high recognition that if the planet is free from pollution, then critical mining
has to take place. Indeed the southern coast of Norway is becoming known as the “Battery Coast”
by industry pundits.
We believe that we have a good portfolio in the much sought after commodities at a time when
Scandinavia may well undergo a mining renaissance and are well positioned among our peers.
I look forward to adding more value to our projects during the coming year and give thanks to
my fellow board members and management team, who have made an excellent job of placing
Kendrick in what might well be a rapidly evolving new Scandinavian mining arena.
Results for the year
The Group reported a loss before taxation for the year of £1,099,162 (2022: £1,043,466) mainly
due to administrative costs of £580,287 (2022: £418,294), including professional, consulting and
directors’ fees and an impairment of £448,904 (2022: £Nil) against licences we relinquished to
focus on our Airijoki, Espedalen and Swedish Nickel projects. In 2022 listing related costs were
£606,575. Net assets at 29 December 2023 amounted to £4,577,999 (2022: £5,567,673) including
exploration and evaluation assets of £4,756,879 (2022: £3,932,973) and cash of £199,992 (2022:
£1,817,706).
AGM and Resolutions
The resolutions for the forthcoming Annual General Meeting will be contained in a separate
Notice which will be made available to shareholders and on the
website www.kendrickresources.com. The Directors will recommend shareholders to vote in
favour of all the resolutions and a form of proxy will be dispatched to all shareholders for this
purpose.
Colin Bird
Chairman
29 April 2024
Kendrick Resources
PLC
Operational Financial Corporate and Strategy Reviews
5
INTRODUCTION
Kendrick Resources Plc was admitted to the Standard Segment of the Main Market of the London
Stock Exchange (“Admission”) on 6 May 2022 and its principal activity is that of mining
exploration and development and it has nickel, vanadium and copper projects in Norway, Sweden
and Finland (the “Projects”).
The Directors are required to provide a year-end report in accordance with the Financial Conduct
Authorities ("FCA") Disclosure Guidance and Transparency Rules ("DTR"). The Directors
consider this Financial, Corporate and Operational Review along with the Chairman’s Report, the
Strategic Review and the Director’s Report provides details of the important events which have
occurred during the period and their impact on the financial statements as well as the outlook for
the Company going forward.
The Company’s strategy is to build a top tier energy metals production business focused on nickel,
vanadium and copper mineral resources projects in Scandinavia and its short to medium term
strategic objectives are to enhance the value of its mineral resource Projects through exploration
and technical studies conducted by the Company or through joint venture or other arrangements
with a view to establishing the Projects can be economically mined for profit. With a positive
outlook for energy metals in Europe and energy security, the Directors believe that the Projects
provide a base from which the Company can help Europe enable its energy transformation.
Operational Review
Acquisition during the year
On 7 August 2023 the Company acquired EV Metals AB a Swedish company that owns the
Njuggtraskliden and Mjovattnet exploration licences (the “Swedish Nickel Projects”)
hosting drill-defined magmatic nickel–copper–cobalt–platinum group metal mineralisation
along the Swedish Nickel Line (see note 13).
At the year end the Group decided that in light of the Group's exploration commitment in
relation to the Swedish nickel projects and their relative lack of prospectivity not to continue
with the Signal and Hosanger nickel exploration projects in Norway. This decision does not
affect the Group’s Espedalen Project, which has always been the Company’s principal project
in Norway and currently contains the following two nickel deposits:
• _Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co and classified as
Inferred in accordance with JORC (2012); and
• _Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and classified as
Inferred in accordance with JORC (2012).
During the year the Group as part of ongoing licence management, it was decided not to
renew the Kramsta 100 licence in Sweden and the Karhujupukka North & Karhujupukka
North licences in Finland which were assessed to have relatively low prospectivity compared
to the Group’s remaining licences.
Technical review of Projects: Following Admission and having acquired its projects in
Sweden, Finland and exercised its option in relation to its Norwegian projects, the Group
commenced technical reviews and / or programmes on its portfolio. The primary metal in the
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Operational Financial Corporate and Strategy Reviews
6
Swedish and Finnish projects is vanadium and nickel for the Norwegian projects. The Group
used this information in 2023 to determine its exploration strategy in 2023.
Summary of Projects: The Projects are a portfolio of early to advanced stage exploration
projects covering a combined area of 658 km2 in Scandinavia. The most advanced of these
Projects are the Airijoki and Koitelainen vanadium projects in Sweden and Finland respectively
and the Espedalen nickel copper project in Norway. The other projects are:
• Sweden – the Njuggtraskliden and Mjovattnet exploration (“Swedish Nickel
Projects”)
• Sweden – the Kullberget, Simesvallen and Sumåssjön exploration projects in Sweden
(collectively the “Central Sweden Project”)
The Airijoki vanadium copper project in Sweden comprising seven contiguous exploration
permits covering 39.41 km
2
and is supported by an Inferred Mineral Resource comprising 44.3
Mt at an in-situ grade of 0.4% V
2
O
5
, containing 5.9 Mt of magnetite averaging 1.7% V
2
O
5
(in
magnetite concentrate) for 100,800 t of contained V
2
O
5
based on a 13.3% mass recovery of
magnetite concentrate and a 0.7% V
2
O
5
cut-off grade, on a 100% equity basis (and net attributable
basis).
The Koitelainen vanadium copper project in Finland comprising a single granted exploration
licence covering 13.72 km2 with an Inferred Mineral Resource has been defined at the
Koitelainen Vosa Prospect comprising 116.4Mt, containing 5.8 million tonnes of magnetite @
2.3% V2O5 (in magnetite concentrate), for 131,000 tonnes of V2O5 based on 5.0% Mass
Recovery of magnetite concentrate and a cut-off of 0.5% V. The Inferred Mineral Resource was
estimated in accordance with JORC (2012), utilising data from 3,784m of drilling from 27
historical drill holes.
The Espedalen nickel copper project in Norway comprising 16 contiguous exploration permits
covering a combined area of 139.89 km2 and currently contains the following two nickel deposits
with associated Mineral Resource estimates together with other prospects and was the subject of
a successful drill programme during 2023:
• Stormyra deposit comprising 1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co and classified as
Inferred in accordance with JORC (2012)
• Dalen deposit comprising 7.8Mt @ 0.3% Ni, 0.12% Cu & 0.02% Co and classified as
Inferred in accordance with JORC (2012)
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Operational Financial Corporate and Strategy Reviews
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Figure 1. Map showing location of Kendricks’ Scandinavian license portfolio.
Norway Projects summary:
The Group’s review has identified significant opportunities within the Espedalen nickel project
in Norway.
Our priority Norwegian nickel target, the Espedalen Project and more specifically the Stormyra
prospect (1.16Mt @ 1% Ni, 0.42% Cu & 0.04% Co) was drilled in March 2023 with 19 holes
completed for a total of 1,650 metres of drilling over an initial 1,200m of strike length. The results
of the programme were announced on 20 April 2023, 4 May 2023 and 24 May 2023 including
several drill intercept highlights:
• Hole ES2302 – 6.85% Ni Eq. over 1.25m from 38.20m
• Hole ES2303 - 2.64% Ni Eq. over 3.75m from 44.45m
o incl. 9.28% Ni Eq. over 0.75m from 47.45m
o and 1.53% Ni Eq. over 5.80m from 51.80m
o incl. 5.33% Ni Eq. over 0.9m from 56.7m
• Hole ES2305 – 1.30% Ni Eq. over 4.60m from 76.70m
o incl. 2.59% Ni Eq. over 2.10m from 79.20m
• Hole ES2306 – 0.71% Ni Eq. over 10.6m from 96.50m
o Incl. 2.18% Ni Eq. over 1.70m from 99.20m
and 1.03% Ni Eq. over 2.65m from 104.45m
Hole ESP2308 - 3.39% Ni Eq. over 11.60m from 52.40m including 5.80% Ni Eq
over 4.9m from 59.1m
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PLC
Operational Financial Corporate and Strategy Reviews
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• Hole ESP2307 – 2.59% Ni Eq. over 3.65m from 37.80m including 4.85% Ni Eq. over 1.80m from
38.50m
• Hole ESP2312 – 2.29% Ni Eq. over 4.15m from 92.35m
• Hole ESP2313 – 1.98% Ni Eq. over 3.55m from 79.60m including 3.86% Ni Eq. over 1.70m from
79.60m
• Hole ESP2317 – 2.18% Ni Eq. over 3.50m from 61.50m
• Hole ESP2318 – 0.41% Ni Eq. over 9.20m from 31.50m incl. 1.15% Ni Eq. over 0.90m from
35.20m
• Hole ESP2319 – 2.43% Ni Eq. over 2.10m from 53.60m incl. 5.53% Ni Eq. over 0.65m from
54.35m and 1.33% Ni Eq. over 2.70m from 62.20m
Geophysics and interpretation of drilling indicates a further extension to known mineralisation of
approximately 500m along the southern limit of the current orebody which is expected to increase
the Mineral Resource.
The drill programme over Stormyra was very successful with impressive peak intercepts that
provide all the motivation the Group needs to both test the projected extension of the Stormyra
mineralised trend and assess with further drilling multiple other targets (some of which have been
drilled and intersected Ni mineralisation) across the Espedalen project area.
Thanks to our local team, we have managed to build a healthy relationship with the local
stakeholders and we will continue to communicate with interested and affected parties and we are
sufficiently confident of the continuity of mineralisation to formally engage external engineering
advice for the review of future plant design.
Swedish & Finnish Projects summary:
The main field exploration focus during the year was a 1,500 metre exploration drill program at
the Airijoki vanadium copper project in Sweden with the objective of significantly increasing the
existing vanadium Mineral Resource; completion of an ionic leach soil sampling programme over
recently awarded additional Airijoki licences where extensions to known vanadium and copper
mineralisation may occur; and the completion of an ionic leach soil sampling programme over
the recently acquired Mjovattnet Nickel-Copper-PGM licence.
In reviewing the Airijoki project in Sweden, significant copper anomalism has been identified
and will be tested as part of the ongoing technical review. Where present, copper is considered a
valid exploration target and may complement any future vanadium mine development or could
be a stand-alone deposit in its own right. The Group has engaged Wardell Armstrong International
to carry out metallurgical test work in order to assess scope for increased vanadium recoveries,
whilst maintaining magnetite vanadium grade. The Group is preparing plans to conduct further
test work to advance the processing to the end product vanadium electrolytes.
Post the year end on 8 February 2024 the Group announced the results of its 2023 drill programme
at the Airijoki Vanadium project the highlights of which included:
Highlights
• Results have been received for whole rock and vanadium magnetite concentrates produced from
eight holes drilled north of the existing Airijoki vanadium JORC Mineral Resource containing
44.3 Mt @ 0.4% V
2
O
5
, in-situ, containing 5.9 Mt of magnetite averaging 1.7% V
2
O
5
.
• Seven out of eight holes drilled intersected vanadium mineralisation.
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Operational Financial Corporate and Strategy Reviews
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• Notable intercepts included:
o 0.52% V
2
O
5
- whole rock (1.77% V
2
O
5
- magnetite concentrate) over 28.80m from
77.55m in hole AIR23-003, incl.
0.72% V
2
O
5
- whole rock (2.15% V
2
O
5
– magnetite concentrate) over 12.00m
from 89.50m
o 0.43% V
2
O
5
– whole rock (1.44% V
2
O
5
– magnetite concentrate) over 19.15m from
75.85m in hole AIR23-008
o 0.32% V
2
O
5
– whole rock (1.42% V
2
O
5
– magnetite concentrate) over 28.65m from
174.50m in AIR23-002
incl. 0.40% V
2
O
5
– whole rock (1.75% V
2
O
5
-magnetite concentrate) over 12 m
from 186.5m
• Endorsement by the Board of the development of a strategy aimed at building a sustainable
vanadium business in Scandinavia to deliver into future vanadium demand for battery
production.
• Drilling has now been undertaken on two of the Airijoki licences within the greater land package
of seven contiguous licences and the 5 remaining licences are prospective for both vanadium and
copper.
During the period the Company acquired EV Metals AB and its two Swedish Nickel Projects Mjovattnet
and Njuggtraskliden highlights of which are:
Mjovattnet Licence
• 2 drill-defined zones of mineralisation (Mjovattnet and Brannorna Prospects)
• 15km of prospective strike
• PGE value historically overlooked
• Mjovattnet in-house non-JORC compliant drill-defined resource of 0.17Mt @ 1.29% Ni, 0.19%
Cu & 0.02% Co
• Open at depth
• Peak shallow drill intercepts for the Brannora Prospect include:
Hole
(Brannorna)
From
(m)
To
(m)
Width
(m)
Ni
(%)
BRA-75015
65.80
77.40
11.60
0.82
BRA-07001
59.00
84.73
25.73
0.58
BRA-77024
40.30
68.00
27.70
0.64
BRA-07002
29.30
105.48
76.18
0.60
Njuggtraskliden Licence
• Historic non-JORC compliant mineral Resource of 0 575 Mt @ 0.71% Ni, 0.26% Cu & 0.04%
Co
• 10km of prospective strike
• Mineralised system remains open at depth
• Drill-defined nickel sulphide mineralisation developed along more than 10km of strike extent
• Peak shallow drill intercepts at Njuggtraskliden include:
Hole
From
(m)
To
(m)
Width
(m)
Ni
(%)
Cu
(%)
Pt
(ppm)
Pd
(ppm)
Au
(ppm)
NJU07001
63.40
87.75
24.35
1.01
0.51
1.08
0.56
0.14
NJU79016
15.90
21.69
5.79
1.06
0.31
0.11
0.11
0.05
NJU79031
66.55
89.56
23.01
1.04
0.60
0.51
0.23
0.02
NJU82003E
156.75
161.62
4.87
0.65
0.31
0.15
0.88
-
NJU90006
44.00
56.30
12.30
0.90
0.79
0.30
5.34
0.24
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Operational Financial Corporate and Strategy Reviews
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• Swedish Geological Survey report suggests extensions to mineralisation at depth and along strike
at all prospects on both licences
• Both prospects host significant massive sulphide mineralisation not typical of other nickel
deposits in the region indicating scope for further accumulations of locally massive sulphide
located in a nickel-rich district, analogous to the Thompson nickel Belt in Manitoba, Canada
• 100km by sea from Boliden’s Kokkola nickel smelter in Finland
Financial Review
Financial highlights:
• £1.1m loss before tax (2022: £1.04m)
• Approximately £200K cash at bank at the period end (2022: £1.818m).
• The loss per share of 0.45 pence (2022: loss 0.68 pence) has been calculated on the basis of the
loss of £1,099,162 (2022: loss £1,043,466) and on 242,565,645 (2022: 153,882,205) ordinary
shares, being the weighted average number of ordinary shares in issue during the year ended 29
December 2023.
• The net asset value as at period end was £4.58m (2022 (£5.57m).
Fundraisings and issues of shares and options
The Company did not undertake any fundraising during the year as it utilised the balance of the
£3,250,000 (before expenses) raised at Admission (the “Fundraise”).
During the period 4,144,395 ordinary shares were issued on 26 April 2023 in relation to the
Company’s acquisition of the Espedalen, Hosanger and Sigdal nickel-copper-cobalt
exploration projects in Norway from EMX Scandinavia AB (see note 17).
On 4 August 2023 the Company issued 15 million 5 year options to EMX Royalty
Corporation in connection with the acquisition of EV Metals AB a Swedish company that
owns the Njuggtraskliden and Mjovattnet exploration licences (the “Swedish Nickel
Projects”) hosting drill-defined magmatic nickel–copper–cobalt–platinum group metal
mineralisation along the Swedish Nickel Line (see note 13).
22,550,000 options over ordinary shares expiring on 3 February 2031 with an exercise price
of 3.5 pence were granted on 2 February 2023 pursuant to the Share Option Scheme approved
at the AGM on 4 February 2021 (“Share Option Scheme Options”). Of the 22,550,000 Share
Option Scheme Options, 13,750,000 were awarded to directors of the Company, as detailed
further below and the balance of 8,800,000 to other eligible participants. The Company has
not previously issued any Share Option Scheme Options.
Executive Directors:
No. of Options
Colin Bird Executive Chairman
6,000,000
Martyn Churchouse
5,000,000
Non Executive Directors:
Alex Borrelli
1,000,000
Evan Kirby
1,000,000
Kjeld Thygesen
750,000
Total Directors
13,750,000
The Company did not issue any warrants during the period.
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Operational Financial Corporate and Strategy Reviews
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Corporate Review
Company Board: The Board of the Company at the date of this report comprises Colin Bird,
Executive Chairman, Martyn Churchouse Managing Director and Non- executive directors Kjeld
Thygesen, Evan Kirby and Alex Borrelli.
Admission: The Company was admitted to the Official List (Standard Segment) and commenced
trading on the Main Market for listed securities of the London Stock Exchange on 6 May 2022.
Corporate Acquisitions
On 12 August 2022 the Company announced that it has completed the acquisition of the
“Norwegian Projects” from EMX Scandinavia AB (previously named Eurasian Minerals Sweden
AB) (“EMX”) by acquiring Caledonian Minerals AS. The consideration paid to EMX for the
exercise of the option was U$81,949 and the issue of 20,226,757 Ordinary Shares (“EMX Option
Shares”) and further ordinary shares were due to be issued to EMX by 27 April 2023 in relation
to the acquisition of the Norwegian Projects (“EMX 2023 Shares”). On 24 April 2023 the
Company announced it had issued a further 4,144,395 ordinary shares in relation to the
acquisition of the Norwegian Projects to meet its obligation to issue the EMX 2023 Shares.
On 4 August 2023 the Company signed a Share Sale and Purchase Agreement with EMX Royalty
Corporation (EMX) to acquire 100% of EV Metals AB a Swedish company that owns the
Njuggtraskliden and Mjovattnet exploration licences (the “Swedish Nickel Projects”) hosting
drill-defined magmatic nickel–copper–cobalt–platinum group metal mineralisation along the
Swedish “Nickel Line”. The consideration paid to acquire EV Metals AB was SEK110,780
(approx. £8,200) and the issue of 15 million 5 year options to EMX to acquire ordinary shares in
the Company at 1.3 pence per ordinary share.
Lock Up and Orderly Market arrangements at IPO:
At Admission the Directors and their related parties, in aggregate, held 47,294,860 Ordinary
Shares, representing 21.62% of the Enlarged Share Capital. The Directors agreed with the
Company and Novum Securities Limited (“Novum”) its Joint Broker, except for certain standard
exceptions, not to dispose of any interest in the Ordinary Shares held by them for a period of 12
months following Admission (Lock-In Period) and then for the following 12 months until 6 May
2024 not to dispose of their Ordinary Shares without first consulting the Company and Novum in
order to maintain an orderly market for the Shares.
Strategy Review
The Group is looking to build a long-term energy metals business in Scandinavia which delivers
energy metals to Europe to help enable its renewable energy transformation by building a top tier
energy metals production business focused on quality vanadium and nickel mineral resources in
Scandinavia. The Group’s short to medium term strategic objectives are to enhance the value of
its mineral resource projects through exploration and technical studies conducted by the Group
or in conjunction with other parties with a view to establishing these projects so they can be
economically mined for profit. With a positive global outlook for energy metals, the Directors
believe that its projects provide a base from which the Group will seek to add significant value
through the application of structured and disciplined exploration.
The Group may in the future, if such opportunity arises, acquire other mineral resource projects
whose value can similarly be enhanced. Further projects may be considered where assets in
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Operational Financial Corporate and Strategy Reviews
12
strategic commodities are either: (i) geologically prospective but undervalued; (ii) where
technical knowledge and experience could be applied to add or unlock upside potential; (iii)
where the assets may be synergistic to the current portfolio; or (iv) where project diversification
will add strategic growth opportunities within an appropriate time frame.
Outlook
There appears a new realisation that if clean energy targets are to be met then critical mining has
to take place. Indeed the southern coast of Norway is becoming known as the “Battery Coast”
by industry pundits and the Board believes we have a good portfolio in the much sought after
commodities at a time when Scandinavia may well undergo a mining renaissance.
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STRATEGIC REPORT
13
The Directors present their strategic report for the year ended 29 December 2023.
PRINCIPAL ACTIVITIES
GOING CONCERN
As disclosed in Note 3, the Group currently has no income and meets its working capital
requirements through raising development finance. In common with many businesses
engaged in exploration and evaluation activities prior to production and sale of minerals
the Group will require additional funds and/or funding facilities in order to fully develop
its business plan.
Ultimately the viability of the Group is dependent on future liquidity in the exploration
period and this, in turn, depends on the Group’s ability to raise funds to provide
additional working capital to finance its ongoing activities. Management has
successfully raised funds in the past, but there is no guarantee that adequate funds will
be available when needed in the future.
As at 29 December 2023, the Group had net assets of £4.58m and cash and cash
equivalents of £200k. An operating loss is expected in the year subsequent to the date
of these financial statements and as a result the Group will need to raise funding to
provide additional working capital to finance its ongoing activities.
On 22 April 2024 the Company announced it had entered into an unsecured convertible
loan funding facility (the “Facility”) for £500,000 with Sanderson Capital Partners Ltd
(the “Lender”), a long term shareholder in the Company. The Facility is convertible at
0.75 pence per ordinary share (“Shares”) and can be drawn down in 4 tranches of
£125,000 each (“Loan Tranches”). The Facility is a standby facility as a potential
additional source of working capital for the Group in a period when the funding market
for junior exploration companies is subject to market volatility (see Note 22 for further
details).
Based on its current reserves and the Board's assessment that the Group will be able to
raise additional funds, as and when required, to meet its working capital and capital
expenditure requirements, the Board have concluded that they have a reasonable
expectation that the Company and Group can continue in operational existence for the
foreseeable future and at least for a period of 12 months from the date of approval of these
financial statements.
For these reasons the financial statements have been prepared on the going concern
basis, which contemplates continuity of normal business activities and the realisation of
assets and discharge of liabilities in the normal course of business.
Kendrick Resources
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STRATEGIC REPORT
14
ENERGY CONSUMPTION
The Company consumed less than 40MWh during the period and as such is a Low Energy
User as defined in the Environmental Reporting Guidelines Including streamlined energy and
carbon reporting guidance March 2019 (Updated Introduction and Chapters 1) and as such is
not required to provide detailed disclosures of energy and carbon information.
PROMOTION OF THE COMPANY FOR THE BENEFIT OF THE MEMBERS AS A WHOLE
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 required by s172 of the Companies Act 2006 as
detailed below.
The requirements of s172 are for the Directors to:
- Consider the likely consequences of any decision in the long term;
- Act fairly between the members of the Company;
- Maintain a reputation for high standards of business conduct;
- Consider the interests of the Company’s employees;
- Foster the Company’s relationships with suppliers, customers, and others; and
- Consider the impact of the Company’s operations on the community and the environment.
Our Board of Directors remain aware of their responsibilities both within and outside of the
Group. Within the limitations of a Group with so few employees we endeavour to follow these
principles, and examples of the application of the s172 are summarised and demonstrated
below.
The Company operates as a mining exploration and development company which is
speculative in nature and at times may be dependent upon fund-raising for its continued
operation. The nature of the business is well understood by the Company’s members,
employees and suppliers, and the Directors are transparent about the cash position and funding
requirements.
The Company is investing time in developing and fostering its relationships with its key
suppliers.
As a mining exploration company with future operations based in Scandinavia, the Board
takes seriously its ethical responsibilities to the communities and environment in which it
works.
The interests of future employees and consultants are a primary consideration for the Board,
and we have introduced an inclusive share-option programme allowing them to share in the
future success of the Company. Personal development opportunities are encouraged and
supported.
Kendrick Resources
PLC
STRATEGIC REPORT
15
KEY PERFORMANCE INDICATORS
Key performance indicators for the Group as a measure of financial control are as follows:
Year ended
Year ended
29 December
29 December
2023
2022
£
£
Total assets
5,006,709
5,851,611
Net assets
4,577,999
5,567,673
Cash and cash equivalents
199,992
1,817,706
Trade and other payables
(428,710)
(247,673)
Loss before tax for the year
(1,099,162)
(1,043,466)
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is subject to various risks similar to all exploration companies operating in overseas
locations relating to political, economic, legal, industry and financial conditions, not all of
which are within its control. The Group identifies and monitors the key risks and uncertainties
affecting the Group and runs its business in a way that minimises the impact of such risks
where possible.
The following risks factors, which are not exhaustive, are particularly relevant to the Group’s
current and future business activities:
Licensing and title risk
Governmental approvals, licences and permits are, as a practical matter, subject to the
discretion of the applicable governments or government offices. The Group must generally
and specifically in relation to future projects comply with known standards, existing laws and
regulations that may entail greater or lesser costs and delays depending on the nature of the
activity to be permitted and the interpretation of the laws and regulations by the permitting
authorities. New laws and regulations, amendments to existing laws and regulations, or more
stringent enforcement could have a material adverse impact on the Group’s result of operations
and financial condition. The Group’s exploration activities are dependent upon the grant of
appropriate licences, concessions, leases, permits and regulatory consents which may be
withdrawn or made subject to limitation.
There is a risk that negotiations with the relevant government in relation to the renewal or
extension of a licence may not result in the renewal or grant taking effect prior to the expiry
of the previous licence and there can be no assurance as to the terms of any extension, renewal
or grant. This is a risk that all resource companies are subject to, particularly when their assets
are in emerging markets. The Group continually seeks to do everything within its control to
ensure that the terms of each licence are met and adhered to.
Dependency on key personnel
Kendrick’s management comprises a small team of experienced and qualified executives. The
Directors believe that the loss of any key individuals in the team or the inability to attract
appropriate personnel could impact Kendrick’s performance.
Kendrick Resources
PLC
STRATEGIC REPORT
16
Although Kendrick has entered into contractual arrangements to secure the services of its key
personnel, the retention of these services and the future costs associated therewith cannot be
guaranteed.
Royalty arrangement and the Kabwe plant
Prior to the Company Listing on 6 May 2022 and acquiring the Nordic Projects the Company
had an interest in the Kabwe Project which has been fully provided against. As reported in the
2020 accounts Jubilee Metals Group PLC ("Jubilee") is the sole operator of the Kabwe Project
and has full control of the execution methodology. In addition, Jubilee has agreed to fund the
Kabwe Project by way of debt finance without dilution to Kendrick's shareholding which
amounted to a fixed 11% and has been converted to an 11% royalty. Jubilee is currently
actively engaged in copper refining through its purpose-designed refinery at Kabwe. The zinc
price has been extremely volatile and the zinc tailings at Kabwe may be metallurgically
complex, giving way to copper production, being the best alternative to the refinery. Against
the aforementioned, the Board has no expectation of any royalty income in the midterm.
Legal risk
The legal systems in the countries in which Kendrick’s operations are currently and
prospectively located are different to that of the UK. This could result in risks such as: (i)
potential difficulties in obtaining effective legal redress in the courts of such jurisdictions,
whether in respect of a breach of law or regulation, or in an ownership dispute; (ii) a higher
degree of discretion on the part of governmental authorities; (iii) the lack of judicial or
administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies
or conflicts between and within various laws, regulation, decrees, orders and resolutions; and
(v) relative inexperience of the judiciary and courts in such matters.
In certain jurisdictions the commitment of local business people, government officials and
agencies and the judicial system to abide by legal requirements and negotiated agreements
may be more uncertain. In particular, agreements in place may be susceptible to revision or
cancellation and legal redress may be uncertain or delayed. There can be no assurance that
joint ventures, licences, licence applications or other legal arrangements will not be adversely
affected by the actions of government authorities or others and the effectiveness of and
enforcement of such arrangements in these jurisdictions cannot be assured.
Liquidity and financing risk
Although the Directors consider that Kendrick has sufficient funding in place, there can be no
guarantee that further funding will be available and on terms that are acceptable to Kendrick
should additional costs or delays arise. Nor can there be any guarantee that the additional
funding will be available to allow Kendrick to obtain and develop additional projects in the
necessary timeframe.
The Directors review Kendrick’s funding requirements on a regular basis, and take such action
as may be necessary to either curtail expenditures and / or raise additional funds from available
sources including asset sales and the issuance of debt or equity.
Kendrick Resources
PLC
STRATEGIC REPORT
17
Governmental approvals, licences and permits
Governmental approvals, licences and permits are, as a practical matter, subject to the
discretion of the applicable governments or government offices. Kendrick must comply with
known standards and existing laws and regulations, any of which may entail greater or lesser
costs and delays depending on the nature of the activity to be permitted and the interpretation
of the laws and regulations by the permitting authorities. Delays in granting such approvals,
licences and permits, new laws and regulations, amendments to existing laws and regulations,
or more stringent enforcement could have a material adverse impact on Kendrick’s result of
operations and financial condition. Kendrick’s activities are dependent upon the grant of
appropriate licences, concessions, leases, permits and regulatory consents which may be
withdrawn or made subject to limitation.
There is a risk that negotiations with the relevant government in relation to the renewal or
extension of a licence may not result in the renewal or grant taking effect prior to the expiry
of the previous licence and there can be no assurance as to the terms of any extension, renewal
or grant.
Liability and insurance
The nature of Kendrick’s business means that Kendrick may be exposed to potentially
substantial liability for environmental damages. There can be no assurance that necessary
insurance cover will be available to Kendrick at an acceptable cost, if at all, nor that, in the
event of any claim, the level of insurance carried by Kendrick now or in the future will be
adequate.
Kendrick’s operations are also subject to environmental and safety laws and regulations,
including those governing the use of hazardous materials. The cost of compliance with these
and similar future regulations could be substantial and the risk of accidental contamination or
injury from hazardous materials with which it works cannot be eliminated. If an accident or
contamination were to occur, Kendrick would likely incur significant costs associated with
civil damages and penalties or criminal fines and in complying with environmental laws and
regulations. Kendrick’s insurance may not be adequate to cover the damages, penalties and
fines that could result from an accident or contamination and Kendrick may not be able to
obtain adequate insurance at an acceptable cost or at all.
Currency risk
The Company expects to present its financial information in Sterling although part or all of its
business may be conducted in other currencies. As a result, it will be subject to foreign
currency exchange risk due to exchange rate movements which will affect Kendrick’s
transaction costs and the translation of its results. The majority of the payments were in Euros
and SEK (Swedish Korna), but while there were significant fluctuations in the year the
payments were not significant at this early stage as there were limited operations.
Economic, political, judicial, administrative, taxation or other regulatory factors
Kendrick may be adversely affected by changes in economic, political, judicial,
administrative, taxation or other regulatory factors, in the territories in which Kendrick will
operate particularly in the Scandinavian region.
Kendrick Resources
PLC
STRATEGIC REPORT
18
Taxation
Any change in Kendrick’s tax status or the tax applicable to holding Ordinary Shares or in
taxation legislation or its interpretation, could affect the value of the investments or assets held
by the Company, which in turn could affect Kendrick’s ability to provide returns to
Shareholders and/or alter the post-tax returns to Shareholders. Statements in this document
concerning the taxation of Kendrick and its investors are based upon current tax law and
practice which may be subject to change.
Approved by the Board of Directors and signed on behalf of the Board.
C Bird
Chairman
29 April 2024
Kendrick Resources
PLC
BOARD OF DIRECTORS
19
Colin Bird
Executive Chairman Colin is a chartered mining engineer and a Fellow of the Institute of
Materials, Minerals and Mining with more than 40 years’ experience in resource operations
management, corporate management, and finance. Colin has multi commodity mine
management experience in Africa, Spain, Latin America and the Middle East. He has been
the prime mover in a number of public company listings in the UK, Canada and South Africa.
His most notable achievement was founding Kiwara Resources Plc and selling its prime asset,
a copper property in Northern Zambia, to First Quantum Minerals for US$260 million in
November 2009.
Other current directorships
Includes African Pioneer Plc, Bezant Resources Plc, Bird Leisure and Admin (Pty) Ltd,
Galileo Resources Plc, Galileo Resources South Africa (Pty) Ltd, Glenover Phosphate (Pty)
Ltd, Holyrood Platinum (Pty) Ltd, Lion Mining Finance Ltd , Mitte Resources Investment
Ltd, New Age Metals Inc, Revelo Resources Corp, Sandown Holdings, Shamrock Holdings
Inc, Tiger Resource Finance Plc, Umhlanga Lighthouse Café CC, Virgo Business Solutions
(Pty) Ltd, Xtract Resources Plc, Camel Valley Holdings Inc, Crocus-Serv Resources (Pty)
Ltd, Africibum (Pty) Ltd, Enviro Zambia Ltd, and Eureka Mine International Ltd.
Former directorships in the last 5 years
Braemore Resources Ltd, Camel Valley Holdings Inc, Crocus-Serv Resources (Pty)
Ltd, Dullstroom Plats (Pty) Ltd, Enviro Mining Ltd, Enviro Processing Ltd, Enviro Props Ltd,
Galagen (Pty) Ltd, Kabwe Operations Mauritius, Maude Mining & Exploration (Pty) Ltd,
NewPlats (Tjate) (Pty) Ltd, Newmarket Holdings, Tjate Platinum Corporation (Pty) Ltd,
Windsor Platinum Investments (Pty) Ltd, Windsor SA Pty Ltd, Tara Bar and Restaurant CC,
Add X Trading 810 CC, Afminco (Pty) Ltd, Dialyn Café CC, Emanual Mining and
Exploration (Pty) Ltd, Europa Metals Ltd, Isigidi Trading 413 CC, Jubilee Metals Group Plc,
Jubilee Smelting & Refining (Pty) Ltd, Jubilee Tailings Treatment Company (Pty) Ltd, M.I.T.
Ventures Group, Mokopane Mining & Exploration (Pty) Ltd, NDN Properties CC, Orogen
Gold Plc, Pilanesberg Mining Co (Pty) Ltd, Pioneer Coal (Pty) Ltd, PowerAlt (Pty) Ltd,
SacOil Holdings Ltd, Sovereign Energy Plc, Thos Begbie Holdings (Pty) Ltd, Mistral
Resource Development Corporation ltd, Galileo Resources South Africa (Pty) Ltd and
Holyroood platinum (Pty) Ltd.
Martyn Churchouse: (appointed 31 January 2023)
Martyn Churchouse is a Geologist and consultant with over 40 years’ experience working in
the mining industry. He graduated from the University of London with a BSc in Geology and
also has a MSc in Mining & Exploration from the Camborne School of Mines. Martyn has
had experience as a board director and founder of many AIM listed mining and resource
companies. Since the beginning of 2022 Martyn has been a consultant to an exploration
company with oversight of exploration and mine development programmes covering multiple
targets and resources on the African sub-continent.
Kendrick Resources
PLC
BOARD OF DIRECTORS
20
Other current directorships
Bybrook Community Concierge Ltd, Ford Flyfishers Limited and M Churchouse Consultancy
Limited.
Former directorships in the last 5 years
Caerus Mineral Resources Plc and New Cyprus Copper P.A. Ltd.
Kjeld Thygesen
Non-Executive Director Kjeld Thygesen is a mining investment veteran of more than 45
years. After being a mining analyst at James Capel in the latter half of the 1970’s he was
manager of the commodities department at Rothschild Asset Management between 1980-89.
In 1990 he formed Lion Resource Advisors as a specialist adviser in the mining and natural
resource sectors. LRA was the advisor to the Midas Fund in the US between 1992-2000,
which was one of the top performing funds during that period. From 2002-2008 he was
Investment director of Resources Investment Trust, a London listed investment trust which
returned a threefold investment during that period. He has served on several mining company
boards over the past twenty years.
Alex Borrelli
Non-Executive Director Alex Borrelli, FCA, initially studied medicine and then qualified as
a chartered accountant with Deloitte, Haskins & Sells, London in 1982. He then worked in
corporate finance at Guinness Mahon, Samuel Montagu and as a corporate finance and main
board director at Charterhouse. Through his investment banking career, he has acted on a wide
variety of corporate transactions in a senior role for over 20 years, including flotations,
takeovers, mergers, and acquisitions for private and quoted companies. For the last 15 years,
he has been acting as chairman and director of various listed companies, and is currently a
director of AIM-listed Greatland Gold PLC, Tiger Royalties and Investments PLC, Bradda
Head Lithium Limited and Red Rock Resources PLC.
Evan Kirby
Dr Kirby, is a metallurgist with over 40 years of international involvement. He worked
initially in South Africa for Impala Platinum, Rand Mines and then Rustenburg Platinum
Mines. Then in 1992, he moved to Australia to work for Minproc Engineers and then Bechtel
Corporation. After leaving Bechtel in 2002, he established his own consulting company to
continue with his ongoing mining project involvement. Evan’s personal “hands on”
experience covers the financial, technical, engineering and environmental issues associated
with a wide range of mining and processing projects.
Other current directorships
Non-executive director of Europa Metals Ltd (listed on AIM and AltX of the JSE) and Bezant
Resources Plc (AIM listed), and Director of private company, Metallurgical Management
Services Pty Ltd.
Kendrick Resources
PLC
BOARD OF DIRECTORS
21
Former directorships in the last 5 years
Technical director of Jubilee Metals Group PLC (Aim listed), Balama Resources Pty Ltd
(Private Company, formerly ASX listed New Energy Minerals Limited and originally
Mustang Resources Limited).
Former directorships in the last 5 years
Balama resources Pty Ltd, New Energy Minerals Limited (formerly Mustang Resources
Limited and ASX listed).
Kendrick Resources
PLC
DIRECTORS REMUNERATION REPORT
22
This Directors’ Remuneration Report sets out the Company’s policy on the remuneration of
Directors, together with details of Directors’ remuneration packages and service contracts for the
year ended 29 December 2023.
The Company’s policy is to maintain levels of remuneration to attract, motivate, and retain
Directors and Senior Executives of the highest calibre who can contribute their experience to
deliver industry-leading performance with the Company’s operations. The Company is
nonetheless mindful of the need to balance this objective with the fact that it is pre-revenue.
Since listing on 6 May 2022, the Company’s Directors have largely remunerated through a
combination of modest salaries and/or fees, share options and where relevant, equity positions as
founders and as a result the total salaries and fees payable to directors has been relatively modest.
As the Company grows, and increasingly makes hires, it will become necessary to move to a more
long-term and sustainable policy, which continues to align the interests of Directors and senior
staff with those of shareholders while recognising that new hires will not initially have a
significant equity position.
Accordingly, it is likely that compensation packages for Executive Directors will need to move
over time to a level more consistent with the market. Currently, Directors’ remuneration is not
subject to specific performance targets. The Company is sufficiently small that the Board does
not consider that it is necessary to impose such targets as a matter of principle but believes that
exceptional performance can be rewarded on an ad hoc basis.
The 2021 AGM approved a share option scheme which is to incentivise both Executive, non-
Executive Directors, and consultants as well individuals holding positions of responsibility in the
Company (“Share Option Scheme”). On 2 February 2023 the Company announced that pursuant
to the Share Option Scheme 22,550,000 options over Ordinary Shares (“Options”) were
awarded, 13,750,000 of the Options were awarded to directors of the Company, as detailed
further in Note 23 and the balance of 8,800,000 Options to other eligible participants. The
Company had not previously issued any Options under the Share Option Scheme.
The 2022 General Meeting also approved the Company establishing new incentive schemes to
more closely align the interest of directors, officers, employees and consultants with those of
shareholders by providing for the payment of short-term, annual and transaction incentive
awards in cash or Company shares (the “Proposed Incentive Schemes”). Awards under the
Proposed Incentive Schemes are not intended to replace the Share Option Scheme arrangements
and the Proposed Incentive Schemes, shall continue in place until the Board of the Company
have put an alternative incentive scheme to the Company’s shareholders which the Company’s
shareholders have approved.
The Board considers the remuneration of Directors and senior staff and their employment terms
and makes recommendations to the Board of Directors on the overall remuneration packages. No
Director takes part in any decision directly affecting their own remuneration.
Kendrick Resources
PLC
DIRECTORS REMUNERATION REPORT
23
There has been no correspondence to date from shareholders relating to Directors’ remuneration
matters and therefore no such matters have been considered by the Board in formulating the
Company’s remuneration policy.
In determining Executive Director remuneration policy and practices, the Board aims to address
the following factors:
• Clarity - remuneration arrangements should be transparent and promote effective
engagement with shareholders and the workforce;
• Simplicity - remuneration structures should avoid complexity and their rationale and
operation should be easy to understand;
• Risk - remuneration arrangements should ensure reputational and other risks from
excessive rewards, and risks that can arise from target-based incentive plans, are identified
and mitigated;
• Predictability - the range of possible values of rewards to individual directors and any
other limits or discretions are identified and explained at the time of approving the policy;
• Proportionality – the clarity of the link between individual awards, the delivery of
strategy and the long-term performance of the company should be clear; and
• Alignment to culture - incentive schemes, when implemented will drive behaviours
consistent with company purpose, values and strategy.
Directors’ remuneration
Remuneration of the Directors for the years ended 29 December 2023 and 2022 was as follows:
2023
Directors’
Fees
Salary and
Consulting
Fees
Total
fees year
ended
£
£
£
C Bird
18,000
30,000
48,000
K Thygesen
18,000
-
18,000
M A Borrelli
(1)
18,000
-
18,000
E Kirby
18,000
-
18,000
M. Churchouse
(2)
22,000
-
22,000
Total
94,000
30,000
124,000
(1)
M A Borrelli resigned as a director on 8 October 2020 and was reappointed on 9 February 2022. He was paid
£Nil for providing corporate and company secretarial services during 2023 (2022: £1,315).
(2)
M Churchouse was appointed a director on 31 January 2023 and in 2023 prior to his appointment was paid
consultancy fees of £2,000 (2022:£14,000). Note 20 provides details of Director’s Letters of Appointment and
Service Agreements.
On 2 February 2023 the Directors were, pursuant to the Executive Share Option Scheme approved
at the AGM on 4 February 2021, granted 13,750,000 options over ordinary shares expiring on 3
February 2031 with an exercise price of 3.5 pence (“Share Option Scheme Options”). Further
details of the Share Option Scheme Options issued to Directors are provided in the Directors’
Report on page 33.
Kendrick Resources
PLC
DIRECTORS REMUNERATION REPORT
24
2022
Directors’
Fees
Salary and
Consulting
Fees
Total
fees year
ended
£
£
£
C Bird
18,000
30,000
48,000
K Thygesen
18,000
-
18,000
M A Borrelli
(1)
14,700
1,315
16,015
E Kirby
(3)
12,000
-
12,000
Total
62,700
31,315
94,015
(1)
M A Borrelli resigned as a director on 8 October 2020 and was reappointed on 9 February 2022. He was paid
£Nil for providing corporate and company secretarial services during 2023 (2022: £1,315).
(2)
M Churchouse was appointed a director on 31 January 2023 and in 2023 prior to his appointment was paid
consultancy fees of £2,000 (2022 £14,000).
(3)
E Kirby was appointed a director on 9 February 2022.
Note 20 provides details of Director’s Letters of Appointment and Service Agreements.
Pension arrangements
There were no pensions or other similar arrangements in place with any of the Directors during
the years ended 29 December 2023 or 2022.
Directors’ Interests
The interests (as defined in the Companies Act) of the Directors holding office during the period
to date in the share capital are shown below:
29 December 2023
29 December 2022
Director
Number of
Ordinary
Shares
Percentage
of issued
ordinary
share capital
Number of
Ordinary
Shares
Percentage
of issued
ordinary
share
capital
Colin Bird *
45,069,227
18.48%
45,069,227
18.80%
Martyn Churchouse
-
-
-
-
Kjeld Thygesen
2,142,857
0.88%
2,142,857
0.89%
Alex Borrelli
82,777
0.03%
82,777
0.03%
Evan Kirby
-
-
-
-
* Includes 3,695,238 shares held by Lion Mining Finance Ltd and 33,428,571 shares held by Camden Park
Trading Ltd, companies controlled by Colin Bird.
Kendrick Resources
PLC
DIRECTORS REMUNERATION REPORT
25
13,750,000 options over ordinary shares expiring on 3 February 2031 with an exercise price of
3.5 pence were granted to Directors on 2 February 2023 pursuant to the Share Option Scheme
approved at the AGM on 4 February 2021 (“Share Option Scheme Options”). Further details of
the Share Option Scheme Options issued to Directors are provided in the Directors’ Report on
page 32 and in note 18.
No warrants were issued to Directors in 2023, at Admission on 6 May 2021 the warrants in the
table below over ordinary shares in the issued share capital of the Company were issued to
Directors in office at the period end. The Convertible Note Warrants expired on 6 November 2023
and the Fundraising Warrants expire on 6 May 2025. None of the warrants were exercised during
the period.
Director
Number of
Warrants
Exercise
price (pence)
Expiry Date
Colin Bird
Fundraising Warrants
1,571,400
6.0
Expire on 6 May 25
Convertible Note Warrants *
3,238,095
3.5
Expired 6 Nov 23
Kjeld Thygesen
-
Fundraising Warrants
1,000,000
6.0
Expire on 6 May 25
Convertible Note Warrants
1,142,857
3.5
Expired 6 Nov 23
Alex Borrelli
-
-
-
Evan Kirby
-
-
-
Martyn Churchouse
-
-
-
* Includes 1,409,524 Convertible Note Warrants issued to Lion Mining Finance Limited a company controlled by
Colin Bird
Other than as set out above, none of the Directors as at 29 December 2023 held any interest in
shares of the Company during the year.
This report was approved by the Board on 29 April 2024 and signed on its behalf by:
C Bird
Chairman
29 April 2024
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
26
The Company is managed under the direction and supervision of the Board of Directors. Among
other things, the Board sets the vision and strategy for the Company in order to effectively
implement the Company’s business model.
Good corporate governance creates shareholder value by improving performance while
reducing or mitigating risks that the Company faces as we seek to create sustainable growth
over the medium to long-term. It is my role as Chairman to lead the Board effectively and to
oversee the adoption, delivery and communication of the Company’s corporate governance
model.
The Listing Rules require all companies admitted to the Standard Segment of the FCA’s Official
List to adopt and comply with a recognised corporate governance code, the Board has adopted
the Quoted Companies Alliance Corporate Governance Code (the “Code”). It was decided that
the Code was more appropriate for the Company’s size and stage of development than the more
prescriptive Financial Reporting Council’s UK Corporate Governance Code.
The Company will hold timely board meetings as issues arise which require the attention of the
Board. The Board is responsible for the management of the business of the Company, setting the
strategic direction of the Company and establishing the policies of the Company. It is the
Directors’ responsibility to oversee the financial position of the Company and monitor the
business and affairs of the Company, on behalf of the Shareholders, to whom they are
accountable. The primary duty of the Directors is to act in the best interests of the Company at all
times. The Board also addresses issues relating to internal control and the Company’s approach
to risk management and has formally adopted an anti-corruption and bribery policy.
The Directors have established an audit committee and a remuneration committee with formally
delegated duties and responsibilities. There is no separate Nomination Committee given the size
of the Board and, during the year, no such committee met. All Director appointments are approved
by the Board as a whole.
Evan Kirby and Kjeld Thygesen are considered by the Board to be independent Non-Executive
Directors.
Audit Committee
The Audit Committee, which currently comprises Alex Borrelli (Chairman of the Audit
Committee), Evan Kirby and Kjeld Thygesen and has the primary responsibility for monitoring
the quality of internal control and ensuring that the financial performance of the Company is
properly measured and reported on and for reviewing reports from the Company’s auditors
relating to the Company’s accounting and internal controls. The committee is also responsible for
making recommendations to the Board on the appointment of auditors and the audit fee and for
ensuring the financial performance of the Company is properly monitored and reported. The audit
committee will meet not less than three times a year. Given the size of the Company it does not
have an internal audit function and the auditors take this into consideration in planning their audit
of the Company’s financial statements.
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
27
Remuneration Committee
The Remuneration Committee, which currently comprises Evan Kirby (Chairman of the
Remuneration Committee), Kjeld Thygesen and Alex Borrelli and is responsible for the review
and recommendation of the scale and structure of remuneration for senior management, including
any bonus arrangements or the award of share options with due regard to the interests of the
Shareholders and the performance of the Company.
Share Dealing Code
The Company has adopted, with effect from Admission, a share dealing policy regulating trading
and confidentiality of inside information for the Directors and other persons discharging
managerial responsibilities (and their persons closely associated) which contains provisions
appropriate for a company whose shares are admitted to trading on the Official List (particularly
relating to dealing during closed periods which will be in line with the Market Abuse Regulation).
The Company will take all reasonable steps to ensure compliance by the Directors and any
relevant employees with the terms of that share dealing policy. None of the Directors dealt in the
Company’s shares during the period.
Meetings of the Directors
The number of meetings of the board of directors of the Company and its committees held during
the year ended 29 December 2023 and the number of meetings attended by each director is tabled
below. The Audit Committee was only formed on 6 May 2022.
2023
Meetings whilst in office
No. of meetings attended
Board
Audit
Board
Audit
C. Bird
2
n.a.
2
n.a.
M.A. Borrelli
2
2
2
2
E. Kirby
2
2
2
2
K Thygesen
2
2
2
2
M Churchouse **
2
n.a.
2
n.a.
** Appointed 31 January 2023
2022
Meetings whilst in office
No. of meetings attended
Board
Audit
Board
Audit
C. Bird
2
n.a.
2
n.a.
M.A. Borrelli *
2
1
2
1
E. Kirby
2
1
2
1
K Thygesen *
2
1
2
1
M Churchouse **
n.a.
n.a.
n.a.
n.a.
* Appointed 9 February 2022
** Appointed 31 January 2023
Diversity Policy
The Board operates a policy whereby Directors and other individuals considered for employment
and professional services across the Group are selected on the basis of their experience,
professional qualifications and ability and as such the Company does not discriminate on aspects
such as age, gender or educational and professional background.
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
28
The Company is a small exploration company and the Company’s only employees comprise the
five Board Directors four of whom have been in office since Admission on 6 May 2022 and were
the Board members on the basis of whose experience and expertise investors invested in the
Company at the time of the Listing. The Company has at the date of these accounts not met the
following targets on board diversity
(i) at least 40% of the individuals on its board of directors are women;
(ii) at least one of the following senior positions on its board of directors is held by a
woman (A) the chair; (B) the chief executive; (C) the senior independent director; or
(D) the chief financial officer; and
(iii) at least one individual on its board of directors is from a minority ethnic background.
The diversity composition of the Board is shown in the table below:
Number of
board
members
Percentage
of the board
Number of senior
positions on the board
(1)
Number in
executive
management
Percentage of
executive
management
Men 5
100 %
3
2
100%
Women -
-
-
-
Nil
(1)
(CEO, SID and Chair)
Ethnic Background of Board members
Number
of board
members
Percent
age of
the
board
Number of
senior
positions on
the board
(1)
Number in
executive
management
Percentage of
executive
management
White British or other
White (including
minority-white groups)
5
100%
3
2
40%
Mixed/Multiple Ethnic
Groups
-
-
-
-
-
Asian/Asian British
-
-
-
-
-
Black/African/Caribbean/
Black British
-
-
-
-
-
Other ethnic group,
including Arab
-
-
-
-
-
Not specified/ prefer not
to say
-
-
-
(1)
(CEO, SID and Chair)
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
29
Internal control
The Board is responsible for establishing and maintaining the Group’s system of internal control.
Internal control systems manage rather than eliminate the risks to which the Group is exposed
and such systems, by their nature, can provide reasonable but not absolute assurance against
misstatement or loss.
There is a continuous process for identifying, evaluating and managing the significant risks faced
by the Group. The key procedures which the Directors have established with a view to providing
effective internal control, are as follows:
¨Identification and control of business risks The Board identifies the major business risks
faced by the Group and determines the appropriate course of action to manage those risks.
¨ Budgets and business plans Each year the Board approves the business plan and annual
budget. Performance is monitored and relevant action taken throughout the year through
the regular reporting to the Board of changes to the business forecasts.
¨ Investment appraisal Capital expenditure is controlled by budgetary process and
authorisation levels. For expenditure beyond specified levels, detailed written proposals
must be submitted to the Board. Appropriate due diligence work is carried out if a business
or asset is to be acquired.
Environment, health, safety and community statement
The Group is committed to providing a safe working environment for all its employees and to
responsibly manage all of the environmental interactions of its business. Its objective is to perform
and achieve at a level notably in excess of the regulatory minimum required by the host countries
in which it does business.
The following specific principles in relation to Health & Safety, Environment and Communities
are adhered to by the Group:
Health & Safety
• Provision of health and safety training to all employees;
• All necessary measures are taken to minimise workplace injuries; and
• Establishment of management and advisory programmes for the prevention of
transmissible diseases.
Environment
The Group prides itself on being a skilled and responsible operator. It functions with the clear
mandate of being in full compliance with corporate standards, applicable environmental laws,
regulations and permit requirements. It has an internal monitoring programme in place that plays
a critical role in continuously improving its environmental performance.
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
30
The Group strives to minimise its environmental effects wherever and to:
• Comply with applicable laws, regulations and commitments wherever it operates;
• Ensure it has the necessary resources, procedures, training programmes and
responsibilities in place to achieve its environmental objectives;
• Strive to protect air and water quality, minimise consumption of water and energy, and
protect natural habitats and biodiversity;
• Promote an ongoing environmental dialogue with its stakeholders in the communities
where it conducts business;
• Collaborate with stakeholders to define environmental priorities and to protect the
environment; and
• Consider the requirement for environmental protection in all aspects of exploration and
development.
Communities
As well as recognising the need to protect the natural environment the Group will follow Best
Practices in:
• its interactions with local communities;
• respecting customs and cultural practices; and
• minimising intrusion upon lifestyles and traditions.
The Group will not violate human rights and will, wherever possible, favour employment for
local people when it recruits. It will strive to be recognised as a socially aware and responsible
business.
Task Force on Climate-related Financial Disclosures (TCFD)
The Group has not included climate-related financial disclosures consistent with any of the TCFD
Recommendations and Recommended Disclosures, as required by Listing Rule 14.3.27, neither
in this annual financial report or any other document as it has not yet established the metrics and
obtained the data to do this. Set out below is a summary of the Group's activities and how the
Group proposes to align with the TCFD recommendations. The Group will provide an update of
its alignment with the TCFD recommendations in next year's Annual Report.
The Group’s business strategy is to deliver energy metals to Europe to help enable its renewable
energy transformation by building a top tier energy metals production a business focused on
quality of vanadium and nickel mineral resources in Scandinavia. As an organisation, we
recognise the growing importance of understanding the impact of climate change on the
environment in which we operate and its potential impact on the business.
TCFD was established in 2015 to improve and increase reporting of climate-related financial
information and to provide information to investors about the actions companies are taking to
mitigate the risks of climate change, as well as to provide increased clarity on the way in which
they are governed.
The Group’s exploration activities are “asset” light as the Group does not own its drilling and
exploration equipment and instead uses contractors and it is a standard operating procedure for
exploration activities to be conducted in accordance with applicable environmental regulations.
The effect of this is that the Group’s demand for and use of carbon fuels is very low though its
contractors will use carbon fuels. An opportunity arising for the Group’s from climate change is
Kendrick Resources
PLC
CORPORATE GOVERNANCE STATEMENT
31
that copper is projected to increase in response to the global green energy transition in particular
for electric vehicles, charging stations and the generation and distribution of renewable energy.
The Group is planning to adopt the TCFD framework and recommendations to the extent that it
is appropriate given the size of the company and its activities. The framework is useful as a guide
to understand how climate change could impact a broad range of business drivers and will provide
a structured approach for the Group, to work towards embedding climate into our decision-
making and will enable us to learn from and apply best practice on reporting and disclosures.
We see this as a means to increase the quality and transparency in our climate related disclosures
whilst taking the first steps on the roadmap of TCFD reporting. We aim to ensure our stakeholders
will have a better understanding of the Group’s operational and business resilience to climate
change and how we will incorporate the consideration of climate-related risks and opportunities
in our business model. The table below provides a brief statement on our current thought process
to understand and begin aligning with the TCFD recommendations.
Governance: The Group’s governance relating to climate-related risks and opportunities is
the responsibility of the Board.
Strategy: The actual and potential impacts of climate-related risks and opportunities will have
effects on the business policies, strategy and financial planning of the Group.
Risk Management: The financial director is responsible for the Group’s risk assessment and
identifying, assessing, and managing climate related risks is part of that function.
Metrics & Targets: The formulation of metrics and targets used to assess and manage relevant
climate related risks and opportunities will be considered.
Kendrick Resources
PLC
DIRECTORS’ REPORT
32
The Directors present their report together with the audited financial statements, for the year
ended 29 December 2023.
RESULTS AND DIVIDENDS
The results for the period are set out in the Statement of Comprehensive Income on page
44. The Directors do not recommend the payment of a dividend on the ordinary shares
(2022: nil).
DIRECTORS
The names of the Directors who served throughout the period and subsequent to the year
end, except where shown otherwise, are as follows:
C Bird
K Thygesen
M A Borrelli
E Kirby
M Churchouse (appointed 31 January 2023)
DIRECTORS’ REMUNERATION
The Directors’ remuneration is detailed in the Directors’ Remuneration Report on pages 22
to 25.
DIRECTORS’ AND OFFICERS’ INDEMNITY INSURANCE
The Group has purchased Directors’ and Officers’ liability insurance which provides cover
against liabilities arising against them in that capacity.
ISSUES OF SHARES, OPTIONS AND WARRANTS
During the period 4,144,395 ordinary shares were issued on 26 April 2023 in relation to the
Company’s acquisition of the Espedalen, Hosanger and Sigdal nickel-copper-cobalt
exploration projects in Norway from EMX Scandinavia AB (see note 17).
On 4 August 2023 the Company issued 15 million 5 year options to EMX Royalty
Corporation in connection with the acquisition of EV Metals AB a Swedish company that
owns the Njuggtraskliden and Mjovattnet exploration licences (the “Swedish Nickel
Projects”) hosting drill-defined magmatic nickel–copper–cobalt–platinum group metal
mineralisation along the Swedish Nickel Line (see note 13).
22,550,000 options over ordinary shares expiring on 3 February 2031 with an exercise price
of 3.5 pence were granted on 2 February 2023 pursuant to the Share Option Scheme
approved at the AGM on 4 February 2021 (“Share Option Scheme Options”). Of the
22,550,000 Share Option Scheme Options, 13,750,000 were awarded to directors of the
Company, as detailed in the table below and the balance of 8,800,000 to other eligible
participants. The Company has not previously issued any Share Option Scheme Options.
Kendrick Resources
PLC
DIRECTORS’ REPORT
33
Executive Directors
No. of Options
Colin Bird Executive Chairman
6,000,000
Martyn Churchouse
5,000,000
Non Executive Directors:
Alex Borrelli
1,000,000
Evan Kirby
1,000,000
Kjeld Thygesen
750,000
Total Directors
13,750,000
The Company did not issue any warrants during the period.
FINANCIAL INSTRUMENTS
An explanation of the Group’s financial risk management objectives, policies and strategies
is set out in note 19.
IMPACT OF UKRAINE CONFLICT
The Directors consider as a result of the Ukraine conflict and related sanctions there is no impact
on the Company as it has no assets or business activities or suppliers with links in Ukraine or
Russia and is not aware of any persons sanctioned in relation to the Ukraine conflict owning
shares in the Company. Finland has joined NATO and Sweden have announced its intention to
join NATO.
EVENTS AFTER THE REPORTING DATE
Events after the reporting date have been disclosed in note 22 to the financial statements.
STATEMENT AS TO THE DISCLOSURE OF INFORMATION TO THE AUDITORS
The Directors, who were in office at the date of approval of this report, confirm that, so far
as they are aware, there is no relevant audit information of which the Company’s auditor is
unaware and that they have taken all reasonable steps to make themselves aware of any
relevant audit information and to establish that the Company’s auditor is aware of that
information.
The Directors are responsible for preparing the financial statements in accordance with the
Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority
(“DTR”) and with UK adopted International Accounting Standards.
The Directors confirm to the best of their knowledge that:
• the financial statements have been prepared in accordance with the relevant financial
reporting framework and give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group and the Company; and
• the Strategic Report and Directors’ Report include a fair review of the development and
performance of the business and the financial position of the Group and the Company,
together with a description of the principal risks and uncertainties that it faces; and
Kendrick Resources
PLC
DIRECTORS’ REPORT
34
• the annual report and financial statements, taken as a whole, are fair, balanced, and
understandable and provide the information necessary for shareholders to assess the
Group’s position, performance, business model and strategy.
This confirmation is given and should be interpreted in accordance with the provisions of
Section 418 of the Companies Act 2006.
AUDITORS
Moore Kingston Smith LLP were appointed as auditors in 2023 and have expressed their
willingness to continue in office as auditors.
A resolution proposing the re-appointment of the auditors Moore Kingston Smith LLP will
be put to shareholders at the Annual General Meeting.
Approved by the Board of Directors and signed on behalf of the Board.
C Bird
Chairman
29 April 2024
Kendrick Resources
PLC
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
35
The Directors are responsible for preparing the Annual Report and the financial statements
in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the directors have prepared financial statements in accordance with UK
adopted International Accounting Standards (IFRSs).
The financial statements are required by law and IFRSs as adopted by the UK to present
fairly the financial position of the Company and the financial performance of the Company.
The Companies Act 2006 provides in relation to such financial statements that references in
the relevant part of that Act to financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Company and of the
profit or loss of the Company for that period.
In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any
material departures disclosure and explained in the financial statements;
• prepare the Strategic Report and Directors’ Report which comply with the requirements
of the Companies Act 2006; and
• prepare financial statements on the going concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for the maintenance and integrity of the corporate and
financial information included on the Kendrick Resources PLC website
www.kendrickresources.com.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
36
Opinion
We have audited the financial statements of Kendrick Resources Plc (‘the Company’) and its subsidiaries
(‘the Group’) for the year ended 29 December 2023 which comprise the Group Statement of
Comprehensive Income, the Group and Company Statements of Financial Position, the Group and
Company Statements of Changes in Equity, the Group and Company Statements of Cash Flows, and notes
to the financial statements, including significant accounting policies. The financial reporting framework
that has been applied in their preparation is applicable law and UK adopted International Accounting
Standards.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and the Company’s
affairs as at 29 December 2023 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards;
• the Company financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards and as applied in accordance with the provisions of the
Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the audit of the financial statements section of our report. We are independent of the
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.
Our approach to the audit
Our audit approach was a risk-based approach founded on a thorough understanding of the Group’s
business, its environment and risk profile. We conducted substantive audit procedures and evaluated the
Group’s internal control environment. The components of the Group were evaluated by the Group audit
team based on a measure of materiality, considering each component as a percentage of the Group’s total
assets, current assets and loss before tax, which allowed the Group audit team to assess the significance
of each component and determine the planned audit response.
In order to address the audit risks in respect of the group and company financial statements identified
during our planning procedures, we performed a full scope audit of the financial statements of the parent
company. We evaluated the controls in place by performing walkthroughs over the financial reporting
systems identified as part of our risk assessment. We also reviewed the accounts production process and
addressed critical accounting matters. We then undertook substantive testing on significant classes of
transactions and material account balances. Specified audit procedures were performed on the financial
statements of the subsidiaries determined as significant and non-significant to the group.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
37
Key audit matters
Key audit matters are those matters that, in our professional judgement, 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
audit 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.
Key audit matter – Group
How the key audit matter was addressed
in the audit - Group
Going concern
Refer to note 3 on page 52 in the consolidated financial
statements.
The Group has incurred a loss of £1.10m for the year
(2022: £1.04m
) and the net assets disclosed in the
Consolidated Statement of Financial Position at 29
December 2023 are £4.58m representin
g a decrease
from £5.57m at 29 December 2022.
The directors have prepared cashflow forecasts that
show that the Group will be able to meet its ongoing
liabilities as they fall due for at least twelve months
from the date of signing of these financial statements.
Given the trading performance in the year, including the
decrease in cash funds from £1.82m at 29 December
2022 to £0.20m at 29 December 2023, and the absence
of any further debt or equity financing, the ability of the
company to continue in business as a going concern was
considered to be a key audit risk area.
Our audit work and conclusions in respect of
going concern have been detailed in the
‘Material uncertainty related to going
concern section of our audit report’.
Key audit matter – Group and Company
How the key audit matter was addressed
in the audit – Group and Company
Valuation of exploration and evaluation assets
The carrying value of exploration and evaluation assets
recognised in the Group Statement of Financial Position
at 29 December 2023 was £4.7m
(2022:£3.93m) and
£0.64m
(2022:£0.70m) recognised in the Company
Statement of Financial Position at 29 December 2023.
The Group is pre-
revenue and has impaired the
exploration and evaluation assets by £0.45m in the year
reflecting management decision not to renew certain
licences.
The disclosures in respect of exploration and evaluation
assets are shown in note 12 to the financial statements.
Our audit work included, but was not
restricted to:
Confirmation that the Group has valid title to
the applicable
exploration licences and has
fulfilled any specific conditions therein;
Critically assessing and substantively testing
capitalised exploration and evaluation
expenditure including consideration of its
appropriateness for capitalisation under IFRS
6;
Obtaining an understanding of the design and
implementation assessments of systems and
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
38
controls relevant to impairment assessments
of exploration and evaluation assets;
Critical assessment of the progress of the
individual projects during the year and post
year end;
Consideration of management’s impairment
reviews and subsequent impairment in light of
any impairment indicators identified in
accordance with IFRS 6, including
corroboration and challenge therein; and
Evaluating the accounting policy and detailed
disclosures included in the financial
statements to confirm whether information
provided in the financial statements is
compliant with the requirements of UK
adopted International Accounting Standards.
Key observations
Based on the work performed we have gained
reasonable assurance that the carrying value of
exploration and evaluation assets is not
materially misstated and management’s
assertion that no further impairment was
required was appropriate.
We consider that the disclosures in the
financial statements relating to this area are
adequate.
Key audit matter - Company
How the key audit matter was addressed
in the audit - Company
Valuation of investments in subsidiaries
The carrying value of investments recognised in the
Company Statement of Financial Position at 29
December 2023 was £4.33m (2022:£3.29m).
The directors are required to make an assessment to
determine whether the carrying value of investments
are recoverable. Due to the size of the amounts in
question in the context of the Company Statement of
Financial Position, the carrying value of investments
was considered to be key risk areas for the audit of the
Company.
The Company’s disclosures in respect of investments
are shown in note 14 to the financial statements.
Our audit work included, but was not
restricted to:
Consideration of management’s impairment
reviews and subsequent impairment in light
of any impairment indicators identified in
accordance with IFRS 6, including
corroboration and challenge therein; and
Evaluating the accounting policy and detailed
disclosures included in the financial
statements to confirm whether information
provided in the financial statements is
compliant with the requirements of UK
adopted International Accounting Standards.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
39
Key audit matter - Company
How the key audit matter was addressed
in the audit - Company
Key observations
Based on our audit testing we concluded that
we agreed with management’s assertion that
an impairment of the carrying value of
investments was required and that a provision
of £0.32m (2022: £nil) was required against
investments.
We consider the disclosures in the financial
statements relating to this area are adequate.
Our application of materiality
The scope and focus of our audit was influenced by our assessment and application of materiality. We
define materiality as the magnitude of misstatement that could reasonably be expected to influence the
readers and the economic decisions of the users of the financial statements. We use materiality to
determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate
the effect of misstatements, both individually and on the financial statements as a whole.
Due to the nature of the Group we considered gross assets to be the main focus for the readers of the
financial statements, accordingly this consideration influenced our judgement of materiality. Based on our
professional judgement, we determined materiality for the Group to be £54,000 based on a percentage of
gross assets (1%). Based on our professional judgement, we determined materiality for the Company to
be £51,000 based on a percentage of total expenditure (1%).
On the basis of our risk assessment, together with our assessment of the overall control environment, our
judgement was that performance materiality (i.e. our tolerance for misstatement in an individual account
or balance) for the Group and Company was 50% of materiality, namely £27,000 and £25,500
respectively.
We agreed to report to the Audit Committee all audit differences in respect of the Group and Company in
excess of £2,700 and £2,550 respectively and, as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also reported to the Audit Committee on disclosure matters
that we identified when assessing the overall presentation of the financial statements.
Material uncertainty relating to going concern
We draw attention to note 3 to the financial statements, which indicates that the Group will need to raise
additional debt or equity funding in order to continue in business and meet its liabilities as they fall due
for at least twelve months from the date of approval of the financial statements.
Although the directors are confident that the Group will be able to obtain further debt or equity financing,
there can be no certainty in this respect and a failure to obtain such debt or equity financing would be
material to the Group.
These events or conditions indicate that a material uncertainty exists that may cast significant doubt on
the Group's and Company’s ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the financial statements, we have concluded that the use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
40
assessment of the Group’s and Company’s ability to continue to adopt the going concern basis of
accounting included:
• a critical assessment of the detailed cash flow projections prepared by the directors. The cash
flow projections are based on the directors’ current expectations of the level of expenditure
required for the Group’s ongoing projects;
• a critical assessment and challenge of the appropriateness of the assumptions underpinning them;
• understanding what forecast expenditure is committed and what is discretionary;
• considering the availability of further equity and debt funding to the Group and Company
including the impact of the post year end; and
• considering the adequacy and appropriateness of the disclosures within the financial statements.
We have obtained an understanding of all relevant uncertainties, and have factored these into our analysis
of the risks affecting the ability of the Company and Group to continue in business and meet its liabilities
as they fall due for at least twelve months from the date of approval of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the 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.
In connection with our audit of the financial statements, 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 there is 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 the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with 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 period 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.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
41
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report
or the Directors’ Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us
to report to you if, in our opinion:
• adequate accounting records have not been kept by the Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the Company financial statements and the part of the directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit; or
• a corporate governance statement has not been prepared by the Company.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 35, the directors are
responsible for the preparation of the 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 financial statements, the directors are responsible for assessing the Group’s and
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities is available on the FRC’s website at
https://wwww.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-
fi/description-of-the-auditor's-responsibilities-for
This description forms part of our auditor’s report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
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.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
42
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement
of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the
assessed risks of material misstatement due to fraud, through designing and implementing appropriate
responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud
identified during the audit. However, the primary responsibility for the prevention and detection of fraud
rests with both management and those charged with governance of the Company.
Our approach was as follows:
• We obtained an understanding of the legal and regulatory requirements applicable to the Company
and considered that the most significant are the Companies Act 2006, UK adopted International
Accounting Standards, the Listing Rules, the Disclosure Guidance and Transparency Rules, and UK
taxation legislation.
• We obtained an understanding of how the Company complies with these requirements by discussions
with management and those charged with governance.
• We assessed the risk of material misstatement of the financial statements, including the risk of material
misstatement due to fraud and how it might occur, by holding discussions with management and those
charged with governance.
• We inquired of management and those charged with governance as to any known instances of non-
compliance or suspected non-compliance with laws and regulations.
• Based on this understanding, we designed specific appropriate audit procedures to identify instances
of non-compliance with laws and regulations. This included making enquiries of management and
those charged with governance and obtaining additional corroborative evidence as required.
• We evaluated managements’ incentives to fraudulently manipulate the financial statements and
determined that the principal risks related to management bias in accounting estimates and
judgemental areas of the financial statements. We challenged the assumptions and judgements made
by management in respect of the significant areas of estimation, as described in the key audit matters
section.
There are inherent limitations in the audit procedures described above. We are less likely to become aware
of instances of non-compliance with laws and regulations that are not closely related to events and
transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Other matters which we are required to address
We were appointed by the Audit Committee on 22 November 2023 to audit the financial statements for
the year ended 29 December 2023. Our total uninterrupted period of engagement is one year, covering the
29 December 2023 period only.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or
Company and we remain independent of the Group and the Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Kendrick Resources
PLC
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
KENDRICK RESOURCES PLC
43
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 for no purpose other than to draw to the
attention of the Company’s members those matters which we are required to include in an auditor’s report
addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to
any party other than the Company and Company’s members as a body, for our work, for this report, or for
the opinions we have formed.
Matthew Banton (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP, Statutory Auditor
6
th
Floor
9 Appold Street
London 29 April 2024
Kendrick Resources
PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
44
Year ended 29 December 2023
Notes
Year to | Year to | ||
| 29 December | 29 December | ||
| 2023 | 2022 | ||
£ | £ | ||
Administrative expenses | ( | ( | |
Share based option charge | ( | ||
Listing costs | ( | ||
Realised loss on disposal of investments | ( | ||
Loss in fair value of investment | ( | ( | |
Impairment charge on exploration and evaluation | |||
assets | 12 | ( | |
Operating loss | 5 | ( | ( |
Finance expense | 5 | ( | ( |
Loss before tax | ( | ( | |
Taxation | 8 | ||
Loss for the period | ( | ( | |
Other comprehensive loss: | |||
Foreign currency difference on translation of foreign operations | ( | ( | |
Total comprehensive loss for the year | ( | ( | |
Basic loss per share | 9 | ( | ( |
Diluted loss per share | 9 | ( | ( |
The notes on page 51 to 83 form part of these financial statements.
All amounts are derived from continuing operations.
Kendrick Resources
PLC
GROUP STATEMENT OF FINANCIAL POSITION
45
As at 29 December 2023
Company No. 02401127
Notes
29 December | 29 December | ||
| 2023 | 2022 | ||
£ | £ | ||
Assets | |||
Non-current assets | |||
Property, plant and equipment | 10 | ||
Exploration and evaluation assets | 12 | ||
Current assets | |||
Current asset investment | 11 | ||
Trade and other receivables | 15 | ||
Cash and cash equivalents | |||
Total assets | |||
Liabilities | |||
Current liabilities | |||
Trade and other payables | 16 | ||
Deferred Share Consideration | 12 | ||
Total liabilities | |||
Net assets | |||
Equity | |||
Share capital | 17 | ||
Share premium | 17 | ||
Share based payment reserve | |||
Merger reserve | |||
Translation reserve | ( | ||
Retained earnings | ( | ( | |
Total equity |
Kendrick Resources
PLC
COMPANY STATEMENT OF FINANCIAL POSITION
46
As at 29 December 2023
Notes
29 December
2023
£
29 December
2022
£
Assets
Non-current assets
Property, plant and equipment
10
-
-
Exploration and evaluation assets
12
637,639
704,730
Investment in subsidiaries
14
4,333,226
3,285,999
4,970,865
3,990,729
Current assets
Current asset investment
11
1,798
8,174
Trade and other receivables
15
36,814
86,880
Cash and cash equivalents
39,953
1,769,719
78,565
1,864,773
Total assets
5,049,430
5,855,502
Liabilities
Current liabilities
Trade and other payables
16
428,589
247,673
Deferred Share Consideration
12
-
36,265
Total liabilities
428,589
283,938
Net assets
4,620,841
5,571,564
Equity
Share capital
17
22,999,551
22,998,307
Share premium
17
31,845,128
31,810,107
Share based payment reserve
100,258
-
Merger reserve
1,824,000
1,824,000
Accumulated losses
(52,148,096)
(51,060,850)
Total equity
4,620,841
5,571,564
The loss for the year for the Company was £1,087,246 (2022: £1,043,466). The financial
statements were approved by the Board of Directors and authorised for issue on 29 April 2024
and were signed on its behalf by
C Bird Chairman
Kendrick Resources
PLC
GROUP STATEMENT OF CASH FLOW
47
for the year ended 29 December 2023
Year to 29 | Year to 29 | ||
| December | December | ||
| 2023 | 2022 | ||
£ | £ | ||
Cash flows from operating activities | |||
Loss before tax | ( | ( | |
Adjustments to reconcile net losses to cash utilised : | |||
Depreciation of property, plant and equipment | 10 | ||
Impairment charge | 12 | ||
Share based payment charge | |||
Listing costs paid in previous year | 12 | ||
Loss on disposal of investment shares | |||
Loss in fair value of investment at reporting date | |||
Operating cash outflows before movements in working capital | ( | ( | |
Changes in: | |||
Trade and other receivables | ( | ||
Trade and other payables | ( | ||
Net cash outflow from operating activities | ( | ( | |
Investing activities | |||
Proceeds on disposal of investments | 11 | ||
Exploration & Evaluation assets | 12 | ( | ( |
Net cash outflow from investing activities: | ( | ( | |
Cash flows from financing activities | |||
Proceeds from issue of shares, net of issue costs | |||
Net cash inflow from financing activities | |||
Net (decrease)/increase in cash and cash equivalents | ( | ||
Effect of foreign exchange rate changes | ( | ( | |
Cash and cash equivalents at beginning of period | |||
Cash and cash equivalents at end of period |
Kendrick Resources
PLC
COMPANY STATEMENT OF CASH FLOW
48
for the year ended 29 December 2023
Year to 29
December
2023
£
Year to 29
December
2022
£
Cash flows from operating activities
Loss before tax
(1,087,246)
(1,043,466)
Adjustments to reconcile net losses to cash utilised :
Depreciation of property, plant and equipment
10
-
2,050
Impairment charge
12
448,904
-
Listing costs paid in previous year
12
-
216,537
Share based payment charge
59,758
-
Loss on disposal of investments
-
10,872
Loss in fair value of investment
6,376
5,314
Operating cash outflows before movements in
working capital
(572,208)
(808,693)
Changes in:
Trade and other receivables
50,066
2,609
Trade and other payables
180,916
(194,286)
Net cash outflow from operating activities
(341,226)
(1,000,370)
Investing activities
Proceeds of sale of Investment shares
-
78,573
Investment in subsidiaries
14
(1,330,006)
(632,669)
Exploration & Evaluation assets
12
(58,534)
(73,230)
Net cash outflow from investing activities:
(1,388,540)
(627,326)
Cash flows from financing activities
Proceeds from issue of shares, net of issue costs
-
3,380,544
Net cash inflow from financing activities
-
3,380,544
Net (decrease)/increase in cash and cash equivalents
(1,729,766)
1,752,848
Cash and cash equivalents at beginning of period
1,769,719
16,871
Cash and cash equivalents at end of period
39,953
1,769,719
Kendrick Resources
PLC
GROUP STATEMENT OF CHANGES IN EQUITY
49
Year ended 29 December 2023
Share | |||||||
| Share capital | Share | based | Merger | Translation | Retained | Total | |
premium | Payment | reserve | reserve | earnings | equity | ||
reserve | |||||||
£ | £ | £ | £ | £ | £ | £ | |
As at 29 December 2021 | ( | ( | |||||
Total comprehensive loss for the year | (1,0 47,357) | ( | |||||
Total comprehensive loss for the year | ( | ( | |||||
Net proceeds from shares issued | |||||||
Acquisition of subsidiaries | |||||||
Loan notes converted into shares | |||||||
Acquisition of Norwegian projects | |||||||
from EMX Scandinavia AB | |||||||
As at 29 December 2022 | ( | ||||||
Loss for the year | ( | ( | |||||
Other comprehensive income | |||||||
Translation reserve | ( | ( | |||||
Total comprehensive loss for the year | ( | ( | ( | ||||
Issue of shares to settle share deferred | |||||||
consideration (note 17) | |||||||
Share based payment charge (note 17) | |||||||
As at 29 December 2023 | ( | ( |
=
Reserves Description and purpose
Share capital - amount subscribed for share capital at nominal value
Share premium - amounts subscribed for share capital in excess of nominal value
Merger reserve - amount arising from the issue of shares for non-cash consideration
Translation reserve - amounts arising on re-translating the net assets of overseas operations into the presentational
currency
Retained earnings - cumulative net gains and losses recognised in the consolidated income statement
Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the
statement of financial position date.
Kendrick Resources
PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
50
Year ended 29 December 2023
Share
capital
Share
premium
Share
based
payment
reserve
Merger
reserve
Retained
earnings
Total
equity
£
£
£
£
£
£
As at 29 December 2021
22,929,743
25,027,278
-
1,824,000
(50,017,384)
(236,363)
Total comprehensive loss for the year
-
-
-
-
(1,043,466)
(1,043,466)
Total comprehensive loss for the year
-
-
-
-
(1,043,466)
(1,043,466)
Net proceeds from shares issued
30,773
3,349,771
-
-
-
3,380,544
Acquisition of subsidiaries
23,357
2,201,643
-
-
-
2,225,000
Loan notes converted into shares
8,366
671,134
-
-
-
679,500
Acquisition of Norwegian projects
from EMX Scandinavia AB
6,068
560,281
-
-
-
566,349
As at 29 December 2022
22,998,307
31,810,107
-
1,824,000
(51,060,850)
5,571,564
Total comprehensive loss for the year
-
-
-
-
(1,087,246)
(1,087,246)
Other comprehensive income
-
-
-
-
-
-
Total comprehensive loss for the year
-
-
-
-
(1,087,246)
(1,087,246)
Issue of shares to settle Share deferred
consideration (note 17)
1,244
35,021
-
-
-
36,265
Share based payment reserve (note 17)
-
-
100,258
-
-
100,258
As at 29 December 2022
22,999,551
31,845,128
100,258
1,824,000
(52,148,096)
4,620,841
Reserves Description and purpose
Share capital - amount subscribed for share capital at nominal value
Share premium - amounts subscribed for share capital in excess of nominal value
Merger reserve - amount arising from the issue of shares for non-cash consideration
Retained earnings - cumulative net gains and losses recognised in the consolidated income statement
Share based payment reserve - amount arising on the issue of warrants and share options which are exercisable at the
statement of financial position date.
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
51
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
52
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
53
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
54
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
55
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
56
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
57
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
58
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
59
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
60
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
61
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
62
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
63
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
64
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
65
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
66
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
67
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
68
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
69
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
70
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
71
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
72
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
73
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
74
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
75
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
76
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
77
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
78
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
79
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
80
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
81
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
82
Kendrick Resources
PLC
NOTES TO THE FINANCIAL STATEMENTS (Continued)
Year ended 29 December 2023
83