Notes to the Consolidated Financial Statements

for the year ended 31 December 2021

All tabulated amounts stated in thousands of United States dollar (unless otherwise stated)

1.     General information

The principal activity of Cora Gold Limited (the 'Company') and its subsidiaries (together the 'Group') is the exploration and development of mineral projects, with a primary focus in West Africa. The Company is incorporated and domiciled in the British Virgin Islands. The address of its registered office is Rodus Building, Road Reef Marina, P.O. Box 3093, Road Town, Tortola VG1110, British Virgin Islands.

2.     Accounting policies

The principal accounting policies applied in the preparation of financial statements are set out below ('Accounting Policies' or 'Policies'). These Policies have been consistently applied to all the periods presented, unless otherwise stated.

2.1.  Basis of preparation

The consolidated financial statements of Cora Gold Limited have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IFRS Interpretations Committee ('IFRS IC') as adopted by the European Union ('EU'). The consolidated financial statements have been prepared under the historical cost convention.

The financial statements are presented in United States dollar (currency symbol: USD or US$), rounded to the nearest thousand, which is the Group's functional and presentational currency.

The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

(a)        New and amended standards mandatory for the first time for the financial period beginning 01 January 2021

No new standards and amendments to standards and interpretations were effective for the financial period beginning on or after 01 January 2021.

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

The following standards have been published and are mandatory for accounting periods beginning after 01 January 2022 but have not been early adopted by the Group or Company and could have impact on the Group and Company financial statements:

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

2.2.  Basis of consolidation

The consolidated financial statements incorporate those of the Company and its subsidiary undertakings for all periods presented.

Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The Group applies the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred unless they result from the issuance of shares, in which case they are offset against the premium on those shares within equity.

Where necessary, adjustments are made to the financial information of subsidiaries to bring the accounting policies used into line with those used by other members of the Group. All intercompany transactions and balances between Group entities are eliminated on consolidation.

As at 31 December 2021 and 2020 the Company held:

●   a 100% shareholding in Cora Gold Mali SARL (registered in the Republic of Mali; the address of its registered office is Rue 224 Porte 1279, Hippodrome 1, BP 2788, Bamako, Republic of Mali);

●   a 100% shareholding in Cora Exploration Mali SARL (the address of its registered office is Rue 224 Porte 1279, Hippodrome 1, BP 2788, Bamako, Republic of Mali); and

●   a 95% shareholding in Sankarani Ressources SARL (the address of its registered office is Rue 841 Porte 202, Faladiè SEMA, BP 366, Bamako, Republic of Mali);

and Cora Resources Mali SARL (registered in the Republic of Mali; the address of its registered office is Rue 841 Porte 202, Faladiè SEMA, BP 366, Bamako, Republic of Mali) was a wholly owned subsidiary of Sankarani Ressources SARL.

The remaining 5% of Sankarani Ressources SARL can be purchased from a third party for US$1 million.

2.3.  Interest in jointly controlled entities

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has joint control are referred to as jointly controlled entities. The results and assets and liabilities of jointly controlled entities are included in these financial statements for the period using the equity method of accounting.

2.4.  Going concern

Given the ongoing uncertainties created by the current COVID-19 pandemic the directors will continue to monitor its impact on the Group's activities and financial resources.

The financial statements have been prepared on a going concern basis. The directors have prepared cash flow forecasts for the period ending 30 June 2023. The forecasts include the costs of progressing the Group's projects, and the corporate and operational overheads of the Group. The forecasts demonstrate that the Group will require additional funds during the going concern period in order to undertake all the planned exploration and evaluation activities. The directors are confident in the ability of the Group to raise additional funding when required from the issue of equity or the sale of assets. Any delays in the timing and / or quantum of raising additional funds can be accommodated by deferring discretionary exploration and evaluation expenditure.

The directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

2.5.  Segment reporting

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

2.6.  Foreign currencies

(i)        Functional and presentational currency

Items included in the financial statements of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency'). The financial statements are presented in United States dollar, rounded to the nearest thousand, which is the Company's and Group's functional and presentational currency.

(ii)       Transactions and balances

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

2.7.  Investments

Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as an expense in the period in which the impairment is identified in the Company accounts. These investments are consolidated in the Group consolidated accounts.

2.8.  Intangible assets

The Group has adopted the provisions of IFRS 6 Exploration for and Evaluation of Mineral Resources.

The Group capitalises expenditure as project costs, categorised as intangible assets, when it determines that those costs will be successful in finding specific mineral resources. Expenditure included in the initial measurement of project costs and which are classified as intangible assets relate to the acquisition of rights to explore, topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities to evaluate the technical feasibility and commercial viability of extracting a mineral resource. Capitalisation of pre-production expenditure ceases when the mining property is capable of commercial production. Project costs are recorded and held at cost. An annual review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise and carry forward project costs in relation to that area of interest. Accumulated capitalised project costs in relation to (i) an expired permit, (ii) an abandoned area of interest and / or (iii) a joint venture over an area of interest which is now ceased, will be written off in full as an impairment to profit or loss in the year in which (i) the permit expired, (ii) the area of interest was abandoned and / or (iii) the joint venture ceased.

Exploration and evaluation costs are assessed for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.

2.9.  Financial assets

Classification

The Group's financial assets consist of financial assets held at amortised cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Financial assets held at amortised cost

Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains / (losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

They are included in current assets, except for maturities greater than 12 months after the reporting date, which are classified as non-current assets. The Group's financial assets at amortised cost comprise trade and other current assets and cash and cash equivalents at the year-end.

Recognition and measurement

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

Financial assets are subsequently carried at amortised cost using the effective interest method.

Impairment of financial assets

The Group assesses, on a forward-looking basis, the expected credit losses associated with its financial assets carried at amortised cost. For trade and other receivables due within 12 months the Group applies the simplified approach permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but rather recognises a loss allowance based on the financial asset's lifetime expected credit losses at each reporting date.

A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that can be estimated reliably. The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired.

The criteria that the Group uses to determine that there is objective evidence of an impairment loss include:

●  significant financial difficulty of the issuer or obligor;

●  a breach of contract, such as a default or delinquency in interest or principal repayments;

●  the Group, for economic or legal reasons relating to the borrower's financial difficulty, granting to the borrower a concession that the lender would not otherwise consider;

●  it becomes probable that the borrower will enter bankruptcy or other financial reorganisation.

The Group first assesses whether objective evidence of impairment exists.

The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate. The asset's carrying amount is reduced and the loss is recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss.

2.10.    Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, and are subject to an insignificant risk of changes in value.

2.11.    Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.12.    Reserves

Retained (deficit) / earnings - the retained (deficit) / earnings reserve includes all current and prior periods retained profit and losses, and share based payments.

2.13.    Financial liabilities at amortised cost

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value, and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities are initially measured at fair value. They are subsequently measured at amortised cost using the effective interest method.

Financial liabilities are de-recognised when the Group's contractual obligations expire or are discharged or cancelled.

2.14.    Provisions

The Group provides for the costs of restoring a site where a legal or constructive obligation exists. The estimated future costs for known restoration requirements are determined on a site-by-site basis and are calculated based on the present value of estimated future costs. All provisions are discounted to their present value.

2.15.    Taxation

Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

2.16.    Share based payments

Equity-settled share based payments with employees and others providing services are measured at the fair value of the equity instruments at the grant date. Fair value is measured by use of an appropriate pricing model. The Company has adopted the Black-Scholes Model for this purpose.

Equity-settled share based payment transactions with other parties are measured at the fair value of the goods and services, except where the fair value cannot be estimated reliably in which case they are valued at the fair value of the equity instrument granted.

3.     Financial risk management

3.1.  Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.

Risk management is carried out by the management team under policies approved by the board of directors.

(i)        Market risk

The Group is exposed to market risk, primarily relating to interest rate, foreign exchange and commodity prices. The Group does not hedge against market risks as the exposure is not deemed sufficient to enter into forward contracts. The Group has not sensitised the figures for fluctuations in interest rates, foreign exchange or commodity prices as the directors are of the opinion that these fluctuations would not have a significant impact on the financial statements of the Group at the present time. The directors will continue to assess the effect of movements in market risks on the Group's financial operations and initiate suitable risk management measures where necessary.

(ii)       Credit risk

Credit risk arises from cash and cash equivalents as well as outstanding receivables. To manage this risk, the Group periodically assesses the financial reliability of customers and counterparties.

The amount of exposure to any individual counterparty is subject to a limit, which is assessed by the board of directors.

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

(iii)       Liquidity risk

Cash flow and working capital forecasting is performed for all entities in the Group for regular reporting to the board of directors. The directors monitor these reports and forecasts to ensure the Group has sufficient cash to meet its operational needs.

3.2.  Capital risk management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, in order to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal capital structure to reduce the cost of capital.

The Group defines capital based on the total equity of the Company. The Group monitors its level of cash resources available against future planned operational activities and may issue new shares in order to raise further funds from time to time.

4.     Judgements and key sources of estimation uncertainty

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

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

Significant items subject to such estimates and assumptions include, but are not limited to:

(i)        Intangible assets (see Note 9)

An annual review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise and carry forward project costs in relation to that area of interest. Accumulated capitalised project costs in relation to (i) an expired permit, (ii) an abandoned area of interest and / or (iii) a joint venture over an area of interest which is now ceased, will be written off in full as an impairment to the statement of income in the year in which (i) the permit expired, (ii) the area of interest was abandoned and / or (iii) the joint venture ceased.

Each exploration project is subject to review by a senior Group geologist to determine if the exploration results returned to date warrant further exploration expenditure and have the potential to result in an economic discovery. This review takes into consideration long-term metal prices, anticipated resource volumes and grades, permitting and infrastructure. The directors have reviewed each project with reference to these criteria and have made adjustments for any impairment as necessary.

5.     Segmental analysis

The Group operates principally in the UK and West Africa, with operations managed on a project by project basis. Activities in the UK are administrative in nature whilst the activities in West Africa relate to exploration and evaluation.

An analysis of the Group's overhead costs, and reportable segment assets and liabilities is as follows:

6.     Expenses by nature

Employees' and directors' remuneration

The average monthly number of employees and directors was as follows:

Employees' and directors' remuneration comprised:

Auditor's remuneration

Expenditures relating to the Company's auditor, PKF Littlejohn LLP, in respect of both audit and non-audit services were as follows:

7.     Income tax

No current or deferred tax arose in either year.

The tax on the Group's loss before tax differs from the theoretical amount that would arise as follows:

8.     Earnings per share

The calculation of the basic and fully diluted earnings per share attributable to the equity shareholders is based on the following data:

As at 31 December 2021 and 2020 the Company's issued and outstanding capital structure comprised a number of ordinary shares and share options (see Note 14).

9.     Intangible assets

Intangible assets relate to exploration and evaluation project costs capitalised as at 31 December 2021 and 2020, less impairment.

Additions to project costs during the years ended 31 December 2021 and 2020 were in the following geographical areas:

Impairment of project costs during the years ended 31 December 2021 and 2020 relate to the following terminated projects:

Those projects which were terminated were considered by the directors to be no longer prospective.

Project costs capitalised as at 31 December 2021 and 2020 related to the following geographical areas:

10.   Trade and other receivables

11.   Cash and cash equivalents

Cash and cash equivalents held as at 31 December 2021 and 2020 were in the following currencies:

External ratings of cash at bank and short-term deposits as at 31 December 2021 and 2020 were as follows:

12.   Trade and other payables

13.       Financial instruments

14.   Share capital

The Company is authorised to issue an unlimited number of no par value shares of a single class.

As at 31 December 2019 the Company's issued and outstanding capital structure comprised:

●  129,676,567 ordinary shares;

●  warrants to subscribe for 30,714,285 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expiring on 30 September 2020;

●  warrants to subscribe for 320,575 ordinary shares in the capital of the Company at a price of 16.5 pence (British pound sterling) per ordinary share expiring on 09 October 2020;

●  share options over 1,900,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022; and

●  share options over 6,200,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023.

On 22 April 2020 the Company closed a subscription for 60,838,603 ordinary shares in the capital of the Company at a price of 4.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£2,889,833.66. Certain directors of the Company participated in this subscription (see Note 18).

Prior to expiry on 30 September 2020 warrants to subscribe for 14,866,989 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share were exercised for total gross proceeds of GBP£1,486,698.90. A director of the Company participated in this exercise of warrants (see Note 18). The balance of warrants to subscribe for 15,847,296 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share expired on 30 September 2020.

Warrants to subscribe for 320,575 ordinary shares in the capital of the Company at a price of 16.5 pence (British pound sterling) per ordinary share expired on 09 October 2020.

On 12 October 2020 the board of directors granted and approved share options over 7,200,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025.

As at 31 December 2020 the Company's issued and outstanding capital structure comprised:

●  205,382,159 ordinary shares;

●  share options over 1,900,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022;

●  share options over 6,200,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023; and

●  share options over 7,200,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025.

On 09 June 2021 the Company closed a subscription for 40,425,000 ordinary shares in the capital of the Company at a price of 7.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£3,132,937.50. Certain directors of the Company participated in this subscription (see Note 18).

On 06 September 2021 share options were exercised over 1,250,000 ordinary shares in the capital of the Company at a price of 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023 for total gross proceeds of GBP£106,250.

On 08 December 2021 the Company closed a placing and subscription for 42,500,000 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£4,250,000. Certain directors of the Company participated in this subscription (see Note 18).

On 08 December 2021 the board of directors granted and approved share options over 7,850,000 ordinary shares in the capital of the Company exercisable at 10.5 pence (British pound sterling) per ordinary share expiring on 08 December 2026.

During the year ended 31 December 2021 in accordance with the Company's Share Option Scheme:

●  on 15 June 2021 share options over 275,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022 were cancelled;

●  on 30 June 2021 share options over 100,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025 were cancelled; and

●  on 31 December 2021:

●   share options over 400,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022 were cancelled;

●   share options over 2,500,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025 were cancelled; and

●   share options over 1,200,000 ordinary shares in the capital of the Company exercisable at 10.5 pence (British pound sterling) per ordinary share expiring on 08 December 2026 were cancelled.

As at 31 December 2021 the Company's issued and outstanding capital structure comprised:

●  289,557,159 ordinary shares;

●  share options over 1,225,000 ordinary shares in the capital of the Company exercisable at 16.5 pence (British pound sterling) per ordinary share expiring on 18 December 2022;

●  share options over 4,950,000 ordinary shares in the capital of the Company exercisable at 8.5 pence (British pound sterling) per ordinary share expiring on 09 October 2023;

●  share options over 4,600,000 ordinary shares in the capital of the Company exercisable at 10 pence (British pound sterling) per ordinary share expiring on 12 October 2025; and

●    share options over 6,650,000 ordinary shares in the capital of the Company exercisable at 10.5 pence (British pound sterling) per ordinary share expiring on 08 December 2026.

Movements in capital during the years ended 31 December 2021 and 2020 were as follows:

The fair value of share options and warrants issued to a broker of a placing has been calculated using the Black-Scholes Model, the inputs into which were as follows:

●  for share options granted on 09 October 2019:

●  strike price 8.5 pence (British pound sterling);

●  share price 7.47 pence (British pound sterling);

●  volatility 34.7%;

●  expiry date 09 October 2023;

●  risk free rate 0.6%; and

●  dividend yield 0%;

●  for share options granted on 12 October 2020:

●    strike price 10 pence (British pound sterling);

●    share price 10.5 pence (British pound sterling);

●    volatility 25.9%;

●    expiry date 12 October 2025;

●    risk free rate 0.6%; and

●    dividend yield 0%;

●    for share options granted on 08 December 2021:

●    strike price 10.5 pence (British pound sterling);

●    share price 9.6 pence (British pound sterling);

●    volatility 22.2%;

●    expiry date 08 December 2026;

●    risk free rate 0.6%; and

●    dividend yield 0%.

The cost of share based payments relating to share options has been recognised in the consolidated statement of comprehensive income and in retained earnings. The cost of warrants issued to a broker of a placing has been recognised as a deduction from equity.

15.   Ultimate controlling party

The Company does not have an ultimate controlling party.

As at 31 December 2021 the Company's largest shareholder was Brookstone Business Inc ('Brookstone') which held 82,796,025 ordinary shares, being 28.59% of the total number of ordinary shares issued and outstanding. Brookstone is wholly owned and controlled by First Island Trust Company Ltd as Trustee of The Nodo Trust, being a discretionary trust with a broad class of potential beneficiaries. Patrick Quirk, father of Paul Quirk (Non-Executive Director of the Company), is a potential beneficiary of The Nodo Trust.

Brookstone, Key Ventures Holding Ltd ('KVH') and Paul Quirk (Non-Executive Director of the Company) (collectively the 'Investors'; as at 31 December 2021 their aggregated shareholdings being 33.32% of the total number of ordinary shares issued and outstanding) have entered into a Relationship Agreement to regulate the relationship between the Investors and the Company on an arm's length and normal commercial basis. In the event that Investors' aggregated shareholdings becomes less than 30% then the Relationship Agreement shall terminate. KVH is wholly owned and controlled by First Island Trust Company Ltd as Trustee of The Sunnega Trust, being a discretionary trust of which Paul Quirk (Non-Executive Director of the Company) is a potential beneficiary.

16.   Contingent liabilities

On 07 September 2021 the Company entered into a conditional US$25 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead') to fund the development of the Company's Sanankoro Gold Project in southern Mali (the 'Project Financing'). This is conditional on, among other matters, the completion of a Definitive Feasibility Study on the Sanankoro Gold Project by 30 June 2022. Paul Quirk (Non-Executive Director of the Company) is a director of Lionhead. The Project Financing comprises US$12.5 million equity ('Equity Financing') and US$12.5 million convertible loan note ('Convertible Financing'). Lionhead acknowledges that Cora intends to undertake private placements to enable existing shareholders to subscribe for up to US$3.75 million in the Equity Financing and up to US$3.75 million in the Convertible Financing such that Lionhead's participation in the Project Financing may be reduced by such amounts. A fee equal to 3% on up to US$25 million Project Financing shall be paid by the Company to Lionhead on receipt of the proceeds in respect of the Equity Financing and Convertible Financing participated by Lionhead. This arrangement replaces the conditional US$21 million mandate and term sheet with Lionhead dated 17 June 2020.

The Gold Exploration Permits section of the Strategic Report contains details of potential net smelter return royalty obligations by project area, together with options to buy out the royalty. At the current stage of development, it is not considered that the outcome of these contingent liabilities can be considered probable or reasonably estimable and hence no provision has been recognised in the financial statements.

17.   Capital commitments

On 14 April 2020 the Company entered into a contract with Digby Wells Environmental (Jersey) Limited to conduct an Environmental and Social Impact Assessment ('ESIA') for the Sanankoro Gold Project. Total estimated fees in respect of the ESIA and related work streams are approximately US$400,000. As at 31 December 2021 and 2020 under the terms of the contract the Company had incurred fees of approximately US$260,000 and approximately US$145,000 respectively. The ESIA will form part of the Definitive Feasibility Study ('DFS') for the Sanankoro Gold Project.

In the second half of 2021 the Company entered into contracts with an number of contractors in respect of the DFS for the Sanankoro Gold Project, these contractors include:

●  New SENET (Pty) Ltd, independent project manager;

●  CSA Global (UK) Ltd, geological and mining consultants; and

●  Epoch Resources (Pty) Ltd, tailings storage facility consultants.

Total estimated costs in respect of the DFS contractors, excluding Digby Wells Environmental (Jersey) Limited for the ESIA (see above), are approximately US$1,600,000. As at 31 December 2021 under the terms of the contracts the Company had incurred costs of approximately US$820,000. The DFS is expected to be completed in 2022.

18.   Related party transactions

During the year ended 31 December 2021:

●  GBP£162,667 was paid to Norman Bailie, the Company's Head of Exploration, and Mr Bailie's consultancy business, Phoenix (PPM) Consultants, for exploration services. This arrangement with Mr Bailie and Phoenix (PPM) Consultants terminated on 31 December 2021;

●  on 09 June 2021 the Company closed a subscription for 40,425,000 ordinary shares in the capital of the Company at a price of 7.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£3,132,937.50. The following directors of the Company participated in this subscription:

●   Edward Bowie, Non-Executive Director and Chairman of the Company, subscribed for 64,000 ordinary shares for total gross proceeds of GBP£4,960;

●   Andrew Chubb, Non-Executive Director of the Company, subscribed for 129,000 ordinary shares for total gross proceeds of GBP£9,997.50;

●   Robert Monro, Chief Executive Officer and Director of the Company, subscribed for 182,000 ordinary shares for total gross proceeds of GBP£14,105; and

●   Key Ventures Holding Ltd, which is wholly owned and controlled by First Island Trust Company Ltd as Trustee of The Sunnega Trust being a discretionary trust of which Paul Quirk (Non-Executive Director of the Company) is a potential beneficiary, subscribed for 1,820,000 ordinary shares for total gross proceeds of GBP£141,050;

●  on 07 September 2021 the Company entered into a conditional US$25 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead') to fund the development of the Company's Sanankoro Gold Project in southern Mali (the 'Project Financing'). This is conditional on, among other matters, the completion of a Definitive Feasibility Study on the Sanankoro Gold Project by 30 June 2022. Paul Quirk (Non-Executive Director of the Company) is a director of Lionhead. The Project Financing comprises US$12.5 million equity ('Equity Financing') and US$12.5 million convertible loan note ('Convertible Financing'). Lionhead acknowledges that Cora intends to undertake private placements to enable existing shareholders to subscribe for up to US$3.75 million in the Equity Financing and up to US$3.75 million in the Convertible Financing such that Lionhead's participation in the Project Financing may be reduced by such amounts. A fee equal to 3% on up to US$25 million Project Financing shall be paid by the Company to Lionhead on receipt of the proceeds in respect of the Equity Financing and Convertible Financing participated by Lionhead. This arrangement replaces the conditional US$21 million mandate and term sheet with Lionhead dated 17 June 2020;

●  on 08 December 2021 the Company closed a placing and subscription for 42,500,000 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£4,250,000. The following directors of the Company participated in this subscription:

●   Edward Bowie, Non-Executive Director and Chairman of the Company, subscribed for 100,000 ordinary shares for total gross proceeds of GBP£10,000;

●   Andrew Chubb, Non-Executive Director of the Company, subscribed for 200,000 ordinary shares for total gross proceeds of GBP£20,000; and

●   Robert Monro, Chief Executive Officer and Director of the Company, subscribed for 300,000 ordinary shares for total gross proceeds of GBP£30,000.

During the year ended 31 December 2020:

●  GBP£43,335 was paid to Norman Bailie, the Company's Head of Exploration (appointed 16 September 2020), and Mr Bailie's consultancy business, Phoenix (PPM) Consultants, for exploration services;

●  GBP£2,015 was paid to David Pelham, Non-Executive Director of the Company, for geological consultancy services and disbursements;

●  on 17 June 2020 the Company entered into a conditional US$21 million mandate and term sheet with investment firm Lionhead Capital Advisors Proprietary Limited ('Lionhead') to fund the development of the Company's Sanankoro Gold Project in southern Mali. This is conditional on, among other matters, the completion of a Definitive Feasibility Study on the Sanankoro Gold Project by 31 December 2021. Paul Quirk (Non-Executive Director of the Company) is a director of Lionhead. The US$21 million project financing comprises US$6 million equity, US$5 million convertible loan note and US$10 million debt. In the event that the Company secures debt from another party then the Company will pay a fee of US$200,000 to Lionhead. If the mandate with Lionhead terminates then no such fee shall be payable if debt is raised after 4 months following such termination;

●  on 22 April 2020 the Company closed a subscription for 60,838,603 ordinary shares in the capital of the Company at a price of 4.75 pence (British pound sterling) per ordinary share for total gross proceeds of GBP£2,889,833.66. The following directors of the Company participated in this subscription:

●   Edward Bowie, Non-Executive Director and Chairman of the Company, subscribed for 210,526 ordinary shares for total gross proceeds of GBP£9,999.99; and

●   Robert Monro, Chief Executive Officer and Director of the Company (appointed 02 January 2020), subscribed for 315,789 ordinary shares for total gross proceeds of GBP£14,999.98;

●  prior to expiry on 30 September 2020 warrants to subscribe for 14,866,989 ordinary shares in the capital of the Company at a price of 10 pence (British pound sterling) per ordinary share were exercised for total gross proceeds of GBP£1,486,698.90. The following director of the Company participated in this exercise of warrants:

●   Robert Monro, Chief Executive Officer and Director of the Company (appointed 02 January 2020), exercised warrants to subscribe for 142,857 ordinary shares for total gross proceeds of GBP£14,285.70.

19.   Events after the reporting date

On 27 January 2022 the Company entered into a contract with International Drilling Company for a minimum of 2,000 metres of aircore drilling at the Sanankoro Gold Project for a minimum total contract value of approximately US$60,000 plus ancillary costs. This sterilisation drilling is part of the scope of the DFS for the Sanankoro Gold Project. This contract was fully satisfied in March 2022 when 2,824 metres of drilling had been completed at a cost of approximately US$68,900 including ancillary costs.

On 16 February 2022 the Company entered into a contract with Capital Drilling Mali SARL for a minimum of 5,000 metres of reverse circulation drilling at the Sanankoro Gold Project for a minimum total contract value of approximately US$280,000 plus ancillary costs. This contract was fully satisfied in April 2022 when 6,992 metres of drilling had been completed at a cost of approximately US$377,800 including ancillary costs.