Notes to the financial statements for the 6 months ended 31 december 2022

1.         General Information

The condensed consolidated interim financial statements of Critical Metals plc (the "Company") and its subsidiary (together the "Group") for the six-month period ended 31 December 2022 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting.

The interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2022, which was prepared in accordance with UK adopted International Accounting Standards (IFRS) and the Companies Act 2006, and any public announcements made by Critical Metals plc during the interim reporting period and since.

These condensed consolidated interim financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 June 2022 prepared under IFRS have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006. These condensed interim financial statements have not been audited.

Basis of preparation - going concern

The interim consolidated financial statements have been prepared under the going concern assumption, which presumes that the Group will be able to meet its obligations as they fall due for the foreseeable future.

At 31 December 2022 the Group had cash reserves of £1,029,945 (30 June 2022: £848,772).

The Directors have made an assessment of the Group's ability to continue as a going concern and are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group, therefore, continues to adopt the going concern basis in preparing its consolidated financial statements.

The financial information of the Group is presented in British Pounds Sterling (£).

Accounting policies

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, which are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period. 

Critical accounting estimates and judgements

The preparation of interim consolidated financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, the resulting accounting estimates will, by definition, seldom equal related actual results.

In preparing the interim financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the financial statements for the year ended 30 June 2022.

1.1.        New and amended standards adopted by the Group.

A number of new or amended standards became applicable for the current reporting period. These new/amended standards do not have a material impact on the Group, and the Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

The Group is not affected materially by the effects of seasonality. Regardless of this fact comparative figures to the period ending 31 December 2021 have been included for comparability and increase the comprehensibility of the financial statements.

The directors have concluded that there are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

2.         Segmental analysis

The Group manages its operations in one segment, being seeking a suitable investment. The results of this segment are regularly reviewed by the board as a basis for the allocation of resources, in conjunction with individual investment appraisals, and to assess its performance.

3.    EARNINGS per share

The calculation of the basic and diluted earnings per share is calculated by dividing the profit or loss for the year by the weighted average number of ordinary shares in issue during the year

There is no difference between the diluted loss per share and the basic loss per share presented. Share options and warrants could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the year presented. At period end 9,240,714 warrants were in issue giving the rights to purchase shares on a 1:1 basis.

4.    Share capital and share premium

The Company has only one class of share. All ordinary shares have equal voting rights and rank pari passu for the distribution of dividends and repayment of capital.

5.    SBP RESERVE

There were no new options or warrants issued in the period and hence no value attributed to the share bases payments reserve (30 June 2022: £45,838) as reflected above and the amount of outstanding warrants remains as per the end of the last period.

6.    Acqusition of subsidiary

On 12 September 2022 the Company completed the acquisition of 57% of the share capital of Madini Occidental Limited and its subsidiaries, ("MO").  At the same time the Company completed the placing of 9 million shares which were issued at 20 pence per share raising £1.8m million for the Company before costs and was successfully readmitted to trading on the London Stock Exchange.

The Company acquired its 57% interest MO, which holds an indirect 70 per cent. interest in the Molulu Project for a total consideration of US$750,000 less approximately US$129,000 and EUR 33,400, being costs of the target group paid by the Company prior to Admission.

The initial estimate of the fair value of the assets acquired and liabilities assumed of MO at the date of acquisition based upon the MO balance sheet at 12 September 2022 are as follows:

Exploration and evaluation assets relate to the accumulated "know how" and expertise of the business and its staff. None of the exploration and evaluation assets are expected to be deducted for income tax purposes.

As the acquisition is likely to be treated as a reverse acquisition it will fall outside the scope of IFRS 3. The Company has 12 months from the date of acquisition to finalise the accounting treatment in relation to the acquisition and therefore is incomplete as at the date of these financial statements given the short period of time since the acquisition was completed.

*$750,000 USD was pledged as a committed spend for the project and did not involve a payment for the 57% of outstanding share capital of Madini Occidental.

7.         Events subsequent to PERIOD end

Acquisition of Madini Occidental Limited

On 15^th December it was announced that the Company had offered to purchase an additional 21.5% of its partially owned subsidiary, Madini Occidental (MO), and would increase the ownership of MO from 57% to 78.5%. The shares in MO are being acquired from the Company's Chairman and Chief Executive Officer, Russell Fryer. The consideration for the Share Acquisition is £450,000 in cash paid on completion and a further £200,000 on or before 1 October 2023, to be paid in Critical Metals PLC shares at a price equal to the 10 day volume weighted average or cash, at the Company's election.

Subsequent to the announcement made on 15^th December the Company offered to purchase the balance of 21.5% in MO held by Madini Minerals Ltd, a company controlled by Russell Fryer. The consideration for the Share Acquisition is £450,000 paid in cash on completion with a further payment of £200,000 on or before 1 October 2023, to be paid in Critical Metals PLC shares at a price equal to the 10-day volume weighted average or cash, at the Company's election. The Share Acquisition received the approval of the MO board on 19 December 2022 and the transaction was completed subsequent to 31 December 2022.

Exercise of Warrants and Warrant Term Extension

A total of 865,000 Warrant Shares have been exercised resulting in total gross proceeds to the Company of £83,250.

In addition, due to the recent passing of a warrant holder and upon receiving a request from the Estate of the deceased, the Company announces its intention to extend the exercise period of a total of 5,225,714 warrants, which are exercisable on or before the 31 March 2023: (i) 1,740,000 warrants exercisable at 10 pence per share ("10p Warrants"); and (ii) 3,485,714 warrants exercisable at 5 pence per share ("5p Warrants") (together the "IPO Warrants").  These IPO Warrants were granted at the time of the admission of the Company's Ordinary Shares to the standard segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange plc on 29 September 2020.

Receipt of share issue proceeds

Subsequent to period end the company received £761,485 with respect to the £1,300,000 placement from December 23.

About Critical Metals

Critical Metals PLC has acquired a controlling 100% stake in Madini Occidental Limited, which holds an indirect 70% interest in the Molulu copper/cobalt project, an ex-producing medium-scale asset in the Katangan Copperbelt in the Democratic Republic of Congo. In line with its investment strategy of focusing primarily on known deposits, targeting projects with low entry costs and the potential to generate short-term cash flow; the Company intends to produce 120,000t/per annum of Copper Oxide Ore.

The Company will continue to identify future assets that are in line with its stated acquisition objective of low CAPEX and OPEX projects with near-term production, concentrating on minerals that are perceived to have strategic importance to future economic growth and generate significant value for shareholders.

A copy of these results will be made available on the Company's website at www.critical metals.co.uk.

                                                                            **ENDS**