NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2023

 

1.         General Information

 

The principal activity of Helium One Global Limited (the 'Company') (formerly Helium One Limited) and its subsidiaries (together the 'Group') is the exploration and development of helium gas resources. The Company is incorporated and domiciled in the British Virgin Islands. The address of its registered office is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. The Company is exempt from preparing separate parent company Financial Statements for the year ended 30 June 2023 in line with BVI Business Companies Act 2004.

 

The Company's ordinary shares are admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange under the ticker 'HE1'.  The Company is also listed on the OTCQB market with the ticker HLOGF and is quoted on Börse Frankfurt with symbol 9K3.

 

2.         Functional and Presentational Currency

 

The determination of an entity's functional currency is assessed on an entity-by-entity basis. A company's functional currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Parent Company is the US Dollar, because it operates in the BVI, where the majority of its transactions are in US dollars. The functional currency of the Tanzanian subsidiaries is Tanzanian Shillings in which currency the subsidiaries incur payroll costs and are required to report and file accounts locally.

 

The functional and presentational currency of the Group for year ended 30 June 2023 is US dollars. The presentational currency is an accounting policy choice.

 

3.         Summary of Significant Accounting Policies

 

The principal accounting policies that have been used in the preparation of these consolidated Financial Statements   are set out below.  These policies have been consistently applied unless otherwise stated.

 

Basis of preparation

 

The consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as adopted by the European Union applicable to companies under IFRS and in accordance with AIM Rules. The Financial Statements are prepared on the historical cost basis or the fair value basis where the fair valuing of relevant assets or liabilities has been applied.

 

The preparation of Financial Statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised.

 

New and amended standards adopted by the Group

 

There were no new or amended accounting standards that required the Group to change its accounting policies for the year ended 30 June 2023.

 

 

New Accounting Standards issued but not yet effective

 

The standards and interpretations that are relevant to the Group, issued, but not yet effective, up to the date of the Financial Statements are listed below. The Group intends to adopt these standards, if applicable, when they become effective.

?

Standard	Impact on initial application	Effective date
Amendments to IAS 1	Classification of Liabilities as Current or Non-Current	1 January 2024*
Amendments to IAS 1	Non-Current Liabilities with Covenants	1 January 2024*
Amendments to IAS 1	Disclosure of accounting policies	1 January 2023
Amendments to IAS 8	Definition of accounting estimates	1 January 2023
Amendments to IAS 12	Deferred tax related to assets and liabilities arising from a single transaction	1 January 2023

 

*EU effective date not yet confirmed

 

The Directors have evaluated the impact of transition to the above standards and do not consider that there will be a material impact on the Group's results or shareholders' funds.

 

Basis of consolidation

 

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and could affect those returns through its power over the entity. The Financial Statements of subsidiaries are included in the consolidated Financial Statements from the date on which control commences until the date on which control ceases.

 

The investments in subsidiaries held by the Company are valued at cost less any provision for impairment that is considered to have occurred, the resultant loss being recognised in the income statement.

 

The consolidated Financial Statements incorporate the financial statements of the Company and its subsidiaries up to 30 June 2023.

 

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

 

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are recognised in profit or loss and presented on the statement of comprehensive income.

 

However, foreign currency differences arising from the translation of the following items are recognised in OCI:

·    An investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognised in OCI are reclassified to profit or loss).

·    A financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective.

 

Foreign operations

The assets and liabilities of foreign operations and fair value adjustments arising on acquisition, are translated into United States Dollars at the exchange rates at the dates of the transactions. Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to OCI. When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal.

 

If the Group disposes of part of its interest in a subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to OCI. When the Group disposes of only part of an associate or joint venture while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

 

 

Going concern                                                               

The consolidated Financial Statements have been prepared on a going concern basis. The Group incurred a net loss of $3,334,130 and incurred operating cash outflows of $2,751,853 and is not expected to generate any revenue or positive cash flows from operations in the next 12 months from the date at which these consolidated Financial Statements were approved.  In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available information about the current and future position of the Group, including current level of resources and the required level of spending on exploration and evaluation activities. As part of their assessment, the Directors have also taken into account the ability to raise additional funding whilst maintaining sufficient cash resources to meet all commitments.

 

The Group meets its working capital requirements from its cash and cash equivalents. The Group is pre-revenue and to date the Group has raised finance for its activities through the issue of equity. The Group has $9,600,786 of cash and cash equivalents at 30 June 2023. The Group's ability to meet operational objectives and general overheads is reliant on raising further capital in the near future.

 

As with all similar sized exploration companies, the Group is required to raise money for further exploration and capital projects as and when required.  There can be no assurance that the Group's projects will be fully developed in accordance with current plans or completed on time or budget with the current level of cash held by the group, and therefore it is expected that further fundraising will need to take place over the 12 month period from the date of approval of these Financial Statements, in order to fully fund work programmes currently contemplated.

 

Cash and cash equivalents

Cash includes petty cash and cash held in current bank accounts. Cash equivalents include short-term investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

 

Property, plant, and equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation, and any provision for impairment losses.

 

Depreciation is charged on each part of an item of property, plant, and equipment to write off the cost of assets less the residual value over their estimated useful lives, using the straight-line method. Depreciation is charged to the income statement. The estimated useful lives are as follows:

 

Office equipment - 2 years

 

There was no depreciation charge for the field equipment in the year as this was fully depreciated in the financial year ended 30 June 2019.

 

Expenses incurred in respect of the maintenance and repair of property, plant and equipment are charged against income when incurred. Refurbishments and improvements expenditure, where the benefit is expected to be long lasting, is capitalised as part of the appropriate asset.

 

An item of property, plant and equipment ceases to be recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on cessation of recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset ceases to be recognised.

 

Intangible assets - Exploration and Evaluation assets

The Group applies the full cost method of accounting for Exploration & Evaluation ('E&E') costs, having regard to the requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources. Under the full cost method of accounting, costs of exploring for and evaluating mineral resources are accumulated by reference to appropriate cost centres being the appropriate licence area and /or licence areas held under licence agreements. A licence agreement grants the right to explore and evaluate mineral resources, and to acquire the licences later at the discretion of the licence holder. Exploration and evaluation assets are tested for impairment as described further below. Where appropriate, licences may be grouped into a cost pool.

 

All costs associated with E&E are initially capitalised as E&E assets, including payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling, and testing.

 

Exploration and evaluation costs include directly attributable overheads together with the cost of materials consumed during the exploration and evaluation phases. Costs incurred prior to having obtained the legal right to explore an area are expensed directly to profit and loss as they are incurred.

 

E&E Costs are not amortised prior to the conclusion of appraisal activities.

 

E&E costs assets related to each exploration licence or pool of licences are carried forward until the existence (or otherwise) of commercial reserves has been determined. Once the technical feasibility and commercial viability of extracting a mineral resource is demonstrable, the related E&E assets are assessed for impairment on an individual licence or cost pool basis, as appropriate, as set out below and any impairment loss is recognised in profit and loss. The carrying value, after, any impairment loss, of the relevant E&E assets is then reclassified as Property, Plant and Equipment.

 

E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may exceed its recoverable amount. Such indicators include, but are not limited to, those situations outlined in paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral resources and include the criteria for which a determination is made as to whether commercial reserves exist.

 

The aggregate carrying value is compared against the expected recoverable amount, by reference to the present value of future cash flows expected to be derived from production of commercial reserves.

 

When a licence or pool of licences is abandoned or there is no planned future work, the costs associated with the respective licences are written off in full.

 

Any impairment loss is recognised in profit and loss and separately disclosed.

 

The Group considers each licence, or where appropriate pool of licences, separately for purposes of determining whether impairment of E&E assets has occurred.

 

Impairment

All capitalised exploration and evaluation assets and property, plant and equipment are monitored for indications of impairment. Where a potential impairment is indicated, assessment is made for the group of assets representing a cash generating unit.

In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired:

 

(a) the period for which the Group has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed.

 

(b) substantive expenditure on further exploration for and evaluation of resources in the specific area is neither budgeted nor planned.

 

(c) exploration for and evaluation of resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities in the specific area.

 

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

 

In addition to the above, the Group gives due consideration to the following criteria:

·    unexpected geological occurrences render the resource uneconomic;

·    a significant fall in realised or estimated prices render the project uneconomic; or

·    an increase in operating costs occurs.

 

If any such facts or circumstances are noted, the Group perform an impairment test in accordance with the provisions of IAS 36.

 

The aggregate carrying value is compared against the expected recoverable amount of the cash generating unit. The recoverable amount is the higher of value in use and the fair value less costs to sell. An impairment loss is reversed if the assets or cash-generating unit's recoverable amount exceeds its carrying amount. A reversal of impairment loss is recognised in the profit or loss immediately.

 

Provisions

A provision is recognised in the Statement of Financial Position when the Group or Company has a present legal or constructive obligation because of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

 

Taxation

There is no current tax payable in view of the losses incurred to date.

 

Deferred income taxes are calculated using the Statement of Financial Position liability method on temporary differences. Deferred tax is provided on the difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Company and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Company are assessed for recognition as deferred tax assets.

 

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the Statement of Financial Position date.

 

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or credited directly to equity, in which case the related current or deferred tax is also charged or credited directly to equity.

 

Inventory

Inventory is valued at the lower of cost and net realisable value. The cost of inventories is based on the cost of the consumable and cost of transport to the site where stored. Net realisable value is estimated selling price in the ordinary course of business, less costs related to selling the inventory.

 

For other inventories, cost is determined on a weighted average basis (for fuel and chemicals) or a specific identification basis (for spares and supplies), including the cost of direct material and (where applicable) direct labour and a proportion of overhead expenses.  Items are classified as spares and supplies inventory where they are either standard parts, easily resalable or available for use on non-specific campaigns, and as intangible exploration and evaluation assets where they are specific parts intended for specific projects.  Net realisable value is determined by an estimate of the price that could be realised through resale or scrappage based on its condition at the balance sheet date.

 

Equity

Equity comprises the following:

 

1.   "Share premium" represents the total value of equity shares issued (there is no par value) net of expenses of the share issues.

2.   "Other reserves" includes the following:

a.   the "Merger reserve" arose on the acquisition of CJT Ventures Limited.  There have been no movements in the reserve since acquisition.

b.   the "Share option reserve" represent the fair values of share options and warrants issued and

c.   the "Foreign exchange reserve" represents the cumulative translation difference on the net assets of the subsidiaries

3.   "Retained reserves" include all current and prior year results, including fair value adjustments on financial assets, as disclosed in the consolidated statement of comprehensive income.

 

Share issue costs

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from share premium in accordance with IAS 32.

 

Share-based payments

The Company awards share options to certain Directors and employees to acquire shares of the Company. Additionally, the Company has issued warrants to providers of equity finance. Warrants issued as part of Share Issues have been determined as equity instruments under IAS 32.  Since the fair value of the shares issued at the same time is equal to the price paid, these warrants, by deduction, are considered to have been issued at nil value.

 

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values in accordance with IFRS 2. Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.

 

The fair value is appraised at the grant date and excludes the impact of non-market vesting conditions. Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.  All equity-settled share-based payments are recognised as an expense in the income statement with a corresponding credit to "other reserves."

 

 

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any expense recognised in prior years if share options exercised are different to that estimated on vesting. Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share premium.

 

A gain or loss is recognised in profit or loss when a financial liability is settled through the issuance of the Company's own equity instruments. The amount of the gain or loss is calculated as the difference between the carrying value of the financial liability extinguished and the fair value of the equity instrument issued. A gain or loss is recognised in profit or loss on the expiry of a financial liability. The amount of the gain or loss is calculated as the difference between the carrying value of the expired financial liability and the fair value of the equity instrument issued.

 

Financial instruments

Financial assets

 

Classification

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

 

Financial assets held at amortised cost

Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost.  Any gain or loss arising on derecognition is recognised directly in the profit or loss and presented in other gain/ (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 receivable due within 12 months the Group applies the simplified approach permitted by IFRS 9. Therefore, the Group does not track changes in credit risk, but rather recognises a loss allowance based on the financial asset's lifetime expected credit losses at each reporting date.

 

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

 

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

·    Significant financial difficulty of the issuer or obligor;

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

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

·    It becomes probable that the borrower will enter bankruptcy or other financial reorganisation.

 

The Group first assesses whether objective evidence of impairment exists.

 

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

 

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

 

Financial liabilities at amortised cost

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

 

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the board of directors.

 

4.         Critical accounting judgments, estimates and assumptions

 

The preparation of the Financial Statements in conformity with IFRSs requires management to make estimates and assumptions that affect the reported amounts of the 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:

 

Valuation of exploration and evaluation expenditure (see Note 11)

Exploration and evaluation assets include mineral rights and exploration and evaluation costs, including payments to acquire the legal right to explore, costs of technical services and studies, seismic acquisition, exploratory drilling, and testing. Exploration and evaluation costs are capitalised if management concludes that future economic benefits are likely to be realisable and determines that economically viable extraction operation can be established as a result of exploration activities and internal assessment of mineral resources. According to 'IFRS 6 Exploration for and evaluation of mineral resources', the potential indicators of impairment include: management's plans to discontinue the exploration activities, lack of further substantial exploration expenditure planned, expiry of exploration licences in the period or in the nearest future, or existence of other data indicating the expenditure capitalised is not recoverable. At the end of each reporting period, management assesses whether such indicators exist for the exploration and evaluation assets capitalised, which requires significant judgement. This review takes into consideration long term commodity prices, anticipated resource volumes and supply and demand outlook.  As of 30 June 2023, total exploration and evaluation costs capitalised amounted to $15,509,515 after taking into account an impairment of $100,803 following the unsuccessful attempt to purchase a rig for the drilling of the Tai-C Well in relation to which all costs associated with this purchase were impaired. (2022: $8,520,929 reflecting impairment arising as a result of the relinquishment of certain licences).

 

Tax receivable (see Note 14)

At 30 June 2023, the Group recognised an amount of $1,231,593 (2022: $1,210,352) within other receivables which relates to VAT receivable in Tanzania.  The amount is subject to review and agreement by the Tanzanian Revenue Authority in accordance with VAT legislation. The Company has engaged the services of a local advisory company to assist with this process, have already received approximately $47,000 in refunds and the Directors believe that the amount will be recovered in full and therefore have not recognised any impairment to the carrying value of this amount.

 

Share based payments (see Note 18)

The Group issues share options and warrants to its employees, directors, investors and suppliers.  These are valued in accordance with IFRS 2 "Share-based payments".  In calculating the related fair value on the issue of either share options or warrants, the Group will use a variety of estimates and judgements in respect of inputs used including share price volatility, risk free rate, and expected life. The Group uses the Black Scholes method of valuation in determining fair value.

 

5.         Segment information

 

Management has determined the operating segments based on reports reviewed by the Board of Directors that are used to make strategic decisions. During the period the Group had interests in two key geographical segments, being the British Virgin Islands and Tanzania. Activities in British Virgin Islands is limited to corporate management as well as desktop exploration costs whilst activities in Tanzania relates to operations and exploration. The Group structure and management reports received by the Directors are used to make strategic decisions reflecting the split of operations.

 

2023                                                           Note	Tanzania $	BVI $	Total $
Other Income	-	38,447	38,447
Administrative expenses	(300,290)	(1,233,886)	(1,534,176)
Total impairments	(116,486)	(481,212)	(597,698)
Impairment of loans	-	(380,409)	(380,409)
Impairment of inventory                               13	(116,486)	-	(116,486)
Impairment of intangibles                            11	-	(100,803)	(100,803)
Share based payments	-	(808,760)	(808,760)
Corporate Taxes	(6,376)	-	(6,376)
Foreign exchange	(554,951)	129,384	(425,567)
Loss from operations per reportable segment	(978,103)	(2,356,027)	(3,334,130)
Additions to non-current assets	(2,031,262)	5,801,507	3,770,245
Intangible assets	9,635,535	5,773,177	15,509,515
Inventory	1,476,362	-	1,476,362
Reportable segment assets	12,543,376	17,518,585	30,061,961
Reportable segment liabilities	(2,351,578)	(505,579)	(2,857,157)

 

2022	Tanzania	BVI	Total
	$	$	$
Other Income	-	10,418	10,418
Administrative expenses	(333,475)	(1,563,742)	(1,897,217)
Total impairments	(6,996,726)	(1,705,149)	(8,701,875)
Impairment of loans	(47,537)	(26,139)	(73,676)
Impairment of inventory                            13 Impairment of intangibles                            11	(107,270) (6,841,919)	- (1,679,010)	(107,270) (8,520,929)
Share based payments	-	(3,327,911)	(3,327,911)
Foreign exchange	65,753	494,681	560,434
Loss from operations per reportable segment	(7,264,448)	(6,091,703)	(13,356,151)
Additions to non-current assets	(1,098,418)	423,653	(674,765)
Intangible assets	8,232,922	3,525,440	11,758,362
Inventory	117,878	-	117,878
Reportable segment assets	8,483,451	10,161,390	18,644,841
Reportable segment liabilities	(325,126)	(286,147)	(611,273)

Segment assets and liabilities are allocated based on geographical location.

 

 

 

 

 

 

 

 

 

 

6.         Expenses by nature breakdown

	30 June 2023 $	30 June 2022 $
Depreciation	6,817	4,896
Wages and salaries (including Directors' fees)	1,313,202	3,251,224
Professional & consulting fees	634,227	950,852
Foreign exchange movements	425,567	(560,434)
Insurance	64,772	66,518
Office expenses	75,537	30,572
Travel and subsistence expenses	28,007	79,876
Other expenses	220,374	841,190
	2,768,503	4,664,694

 

 

During the year the Group obtained the following services from their auditors:

 

	30 June 2023 $	30 June 2022 $
Fees payable to the Group's auditors for the audit of the Company	91,180	56,848
Fees payable to the Subsidiaries auditors for the audit of the Subsidiaries	22,983	21,633
Fees payable in respect of audit overruns	-	46,168
	114,163	124,649

 

7.         Directors and employees

 

	30 June 2023 $	30 June  2022 $
Wages and salaries	296,622	336,831
Social security costs	75,615	91,085
Pension costs	7,269	7,067
Share based payments	808,760	2,746,664
Directors' remuneration (note 7.1)	632,202	595,928
	1,820,468	3,777,575
Less capitalised amounts	(507,266)	(526,351)
	1,313,202	3,251,224

 

Wages and salaries include amounts that are recharged between subsidiaries. Some of these costs are then capitalised as exploration and evaluation assets and others are administration expenses.

 

The share-based payments comprised the fair value of warrants and options granted to directors and employees in respect of services provided.

 

Apart from the directors, the Group only had an average number of six employees during the year (2022: Five).

 

 

	30 June 2023 $	30 June  2022 $
Amounts attributable to the highest paid director:
Director's remuneration	229,622	227,308
	229,622	227,308

 

David Minchin was a full time CEO from 1 December 2020 until 8 February 2023. He was replaced by Lorna Blaisse. Russel Swarts was employed on a full-time basis from 1 June 2021, but became a non-executive director from 1 August 2023. The other directors provided professional services as required on a part-time basis. Details of Directors' remuneration are disclosed below.

 

7.1       Directors remuneration      

 

	Salaries and Fees	Bonuses	Total 30 June 2023
	$	$	$
Ian Stalker	72,226	-	72,226
Robin Birchall	33,997	-	33,997
Russel Swarts	113,400	-	113,400
James Smith	29,030	-	29,030
Sarah Cope	58,060	-	58,060
David Minchin	229,622	-	229,622
Nigel Friend 1	29,030	-	29,030
Lorna Blaisse 2	66,837	-	66,837
	632,202		632,202

 

	Salaries and Fees	Bonuses	Total 30 June 2022
	$	$	$
Ian Stalker	80,296	-	80,296
Robin Birchall	34,047	-	34,047
Russel Swarts	130,699	-	130,699
James Smith	48,520	-	48,520
Sarah Cope	66,443	-	66,443
David Minchin	187,108	40,200	227,308
Nigel Friend 1	8,615	-	8,615
	555,728	40,200	595,928

 

¹ Nigel Friend was appointed on 17 March 2022

² Lorna Blaisse was appointed on 9 February 2023

 

The Directors of the Group are considered to be Key Management Personnel. No director was paid pension benefits  in either year and there are no post-employment benefits, other long-term benefits or termination benefits outstanding.

 

Termination benefits

 

David Minchin received a termination fee of $42,063 and notice pay of $84,126 pursuant to a settlement agreement dated 8 February 2023

 

8.         Finance income

	30 June 2023 $	30 June  2022 $
Finance income	38,447	-
	38,447	-

 

Interest was earned on surplus funds that were placed in interest bearing accounts.

 

9.         Taxation

	30 June 2023 $	30 June 2022 $
Taxation expense
Current tax	6,376	-
Deferred tax	-	-
Total tax charge	6,376	-
Loss before tax	(3,327,754)	(13,356,151)
Tax credit at the applicable rate of 21% (2022: 21%)	698,828	2,804,792
Effects of: Expenditure not deductible for tax	(125,517)	(138)
Losses carried forward not recognised as a deferred tax asset	(566,935)	(2,804,654)
Tax charge	6,376	-

 

 Tanzanian taxes were incurred during the period amounting to $6,376 (2022: $Nil).

 

The tax rate used is a weighted average of the standard rate of corporation tax in the UK being 19% and Tanzania being 30%. No deferred tax asset has been recognised in view of the uncertainty over the timing of future taxable profits against which the losses may be offset.

 

The Company has unused tax losses of approximately $5,698,850 (2022: $5,122,914) to carry forward and set against future profits. The related deferred tax asset has not been recognised in respect of these losses as there is no certainty regarding the level and timing of future profits.

 

10.       Loss per share

 

The calculation for earnings per share (basic and diluted) is based on the consolidated loss attributable to the equity shareholders of the Company is as follows:

 

	30 June 2023 $	30 June  2022 $
Loss attributable to equity shareholders	3,334,130	13,356,151
Weighted average number of Ordinary Shares	728,815,042	616,086,860
Loss per Ordinary Share ($/cents)	(0.46)	(2.17)

 

Basic and diluted loss per share have been calculated by dividing the loss attributable to equity holders of the Company after taxation by the weighted average number of shares in issue during the year. Diluted loss per share has not been calculated as the options, warrants and loan notes have no dilutive effect given the loss arising in the year.

 

 

11.       Intangible assets

 

Intangible assets comprise exploration and evaluation costs capitalised as at 30 June 2023 and 2022, less impairment.

 

	Note	30 June 2023 $	30 June 2022 $
Exploration & Evaluation Assets - Cost
Opening balance		11,758,362	13,061,285
Additions to exploration assets		2,967,041	6,269,562
Capitalised directors' fees and employee wages	7	507,265	526,351
Capitalised other expenses		416,433	274,276
Equity Settled		-	260,965
Foreign exchange rate movements on intangible assets		(38,783)	(113,147)
Total additions		3,851,956	7,218,006
Impairment of intangibles		(100,803)	(8,520,929)
Closing balance		15,509,515	11,758,362

 

Exploration projects in Tanzania are at an early stage of development and no resource estimates are available to enable value in use calculations to be prepared.

 

In accordance with IFRS 6, the Directors undertook an assessment of the following areas and circumstances that could indicate the existence of impairment which included the following:

 

·    The Group's right to explore in an area has expired or will expire soon without renewal.

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

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

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

 

Following an unsuccessful attempt to secure a rig for the drilling of the Tai C well, certain costs were incurred and these costs amounting to $100,803 have subsequently been impaired. The 2022 charge of $8,520,929 reflected impairment charges on relinquished licences.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12.       Property, plant and equipment

 

		Field Equipment	Office equipment	Total
		$	$	$
Cost
As at 1 July 2021		71,087	22,962	94,049
Additions		-	7,404	7,404
Foreign exchange movements		(460)	-	(460)
As at 30 June 2022		70,627	30,366	100,993
Additions		-	4,668	(7,057)
Scrapped		-	(11,725)	-
As at 30 June 2023		70,627	23,309	93,936
Accumulated depreciation
As at 1 July 2021		(70,627)	(17,710)	(88,337)
Charge for the year		-	(4,896)	(4,896)
As at 30 June 2022		(70,627)	(22,606)	(93,233)
Charge for the year		-	(6,817)	(6,817)
Scrapped		-	11,725	11,725
As at 30 June 2023		(70,627)	(17,698)	(88,325)
Carrying Amount
At 30 June 2022		-	7,760	7,760
At 30 June 2023		-	5,611	5,611

 

The Group's property, plant and equipment are free from any mortgage or charge.

 

 

13.       Inventory

 

		30 June 2023	30 June 2022
		$	$
Inventory at cost		628,025	224,879
Inventory in transit		966,215	-
Less impairment		(116,486)	(107,270)
Exchange Gain		(1,392)	269
Net realisable value		1,476,362	117,878

 

Inventory comprises drill rods and drilling chemicals used in the previous drilling campaign.

 

14.       Trade and other receivables

 

Non-current other receivables are as follows:

 

		30 June 2023	30 June 2022
		$	$
VAT receivable		1,231,593	1,210,352

 

In 2020, VAT receivable was reclassified as a non-current asset as the amounts will only become receivable when reviewed and agreed by the Tanzanian Revenue Authority in accordance with VAT legislation but this is not estimated to occur in the next 12-month period. Non-current receivables were not discounted as the impact of any discounting, is considered to be immaterial to the Financial Statements.

 

Other receivables are as follows:

		30 June 2023	30 June 2022
Prepayments		$ 2,166,075	$ 481,236
Other receivables		72,019	163,100
		2,238,094	644,336

 

Prepayments include an amount of $1,369,081 for drill casings (2022: $371,381) and $Nil for drilling equipment (2022: $65,080) to be used in the upcoming drilling campaign. Other receivables comprise VAT refunds to be submitted.

 

15.       Cash and cash equivalents

 

		30 June 2023	30 June 2022
		$	$
Cash and cash equivalents		9,600,786	4,906,153

 

 Included within cash and cash equivalents of $9.6 million, was a sum of approximately $2.1 million held in escrow at 30 June 2023 in contemplation of the completion of a sale and purchase transaction which was non-binding at the Balance Sheet date. Subsequent to 30 June 2023, the transaction was completed and the funds utilised. 

 

16.       Trade and other payables

	30 June 2023	30 June 2022
	$	$
Trade payables	2,428,250	219,624
Accruals	293,373	331,703
Other creditors	135,534	59,946
	2,857,157	611,273

 

Trade payables have shown a significant increase in the current year which reflects the commencement of a drilling campaign.   

 

17.       Share premium

 

	Number of shares	Ordinary shares $	Total  $
As at 30 June 2021	615,498,925	44,118,986	44,118,986
Share issue costs		(1,458,273)	(1,458,273)
Issued and fully paid as at 30 June 2021	615,498,925	42,660,713	42,660,713
Issue of new shares - 18 January 2022 (1)	100,000	3,857	3,857
Issue of new shares - 21 January 2022 (2)	211,864	10,191	10,191
Issue of new shares - 1 March 2022 (3)	182,394	6,953	6,953
Issue of new shares -27 May 2022 (4)	1,560,229	55,946	55,946
Issue of new shares - 30 May 2022 (5)	1,990,000	250,000	250,000
Issue of new shares - 30 May 2022 (6)	87,284	10,965	10,965
Issue of new shares - 10 June 2022 (7)	1,760,563	62,693	62,693
Movement for 2022	5,892,334	400,605	400,605
As at 30 June 2022	621,391,259	43,061,318	43,061,318
Issue of new shares for warrants exercised	965,027	31,669	31,669
Issue of new shares - 20 October 2022 (8)	880,282	28,031	28,031
Issue of new shares - 30 November 2022 (9)	84,745	3,638	3,638
Issue of new shares - 15 December 2022 (10)	197,922,716	12,018,934	12,018,934
Movement for 2023	198,887,743	12,050,603	12,050,603
Issued and fully paid at 30 June 2023	820,279,002	56,570,194	56,570,194
Share issue costs		(2,101,958)	(2,101,958)
	820,279,002	54,468,236	54,468,236
		30 June	30 June
		2023	2022
		$	$
Movement in share issue costs
Opening balance		1,458,273	1,458,273
Current year costs		643,685	-
As at 30 June		2,101,958	1,458,273

 

 

All shares issued are issued at no par value. All new shares issued will rank pari passu with the existing ordinary shares in issue.

 

 

(1)   On 18 January 2022, the Company issued 100,000 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£2,840) $3,857.

 

(2)   On 21 January 2022, the Company issued 211,864 new ordinary shares in the Company for warrants exercised at a price of 3.554p for a value of (£7,521) $10,191.

 

(3)   On 1 March 2022, the Company issued 182,394 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£5,180) $6,953.

 

(4)   On 27 May 2022, the Company issued 1,560,229 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£44,310) $55,946.

 

(5)   On 30 May 2022, the Company issued 1,999,000 new ordinary shares in the Company to a service provider at a price of 10.00p for a value of (£199,000) $250,000.

 

(6)   On 30 May 2022, the Company issued 87,284, new ordinary shares in the Company to a service provider at a price of 10.00p (£8,728) $10,965.

 

(7)   On 10 June 2022, the Company issued 1,760,563 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£50,000) $62,693.

 

(8)   On 20 October 2022, the Company issued 880,282 new ordinary shares in the Company for warrants exercised at a price of 2.84p for a value of (£25,000) $28,031

 

(9)   On 30 November 2022, the Company issued 84,745 new ordinary shares in the Company for warrants exercised at a price of 3.55p for a value of (£3,008) $3,638

 

(10) On 15 December 2022, the Company raised gross proceeds of £9,896,135 ($12,018,934) through the placing of 197,922,716 new ordinary shares in the Company at a price of 5.00p per share.

 

18.       Share-based payments

 

Under IFRS 2, an expense is recognised in the statement of comprehensive income for equity settled share-based payments, at the fair value at the date of grant.  If this payment relates directly to the cost of raising funds through the issue of shares, then it is debited against the share premium reserve.  The share-based payments were all valued using the Black-Scholes Pricing Model.

 

The Group has a share option scheme that entitles key management personnel to purchase shares at the market price of the shares at grant date. Currently, these schemes are limited to key management personnel and certain key contractors.  The vesting conditions are as set out in the Report of the Directors.  The share-based payments debited to the Share Premium account all related to share options issued to Directors and key management personnel.

 

No warrants were granted during the year that were determined as equity instruments under IAS 32.

 

The application of IFRS 2 gave rise to the following share-base payments:

	2023	2022
	$	$
Share-based payments	808,760	3,327,911
Warrants exercised	(18,071)	(448,412)
Options expired	(146,480)	(18,980)
	644,209	2,860,519

 

The following table sets out the movements of warrants and options during the year:

 

	2023	2023	2022	2022
	Warrants and Options	Weighted average exercise price $	Warrants and Options	Weighted average exercise price $
Outstanding at the beginning of the year	67,882,138	0.13	70,154,090	0.24
Granted during the year	8,000,000	0.08	6,000,000	0.18
Exercised during the year	(965,027)	0.35	(3,815,050)	0.04
Expired during the year	(12,395,005)	0.254	(1,156,902)	0.305
Lapsed during the year	(2,000,000)	0.16	(3,300,000)	0.18
Outstanding at the end of the year	60,522,106	0.11	67,882,138	0.13

 

The warrants and options outstanding at 30 June 2023 had an exercise price in the range of $0.04 to $0.305 (2022: range of $0.04 to $0.305) and a weighted-average contractual life of 6.55 years (2022: 5.81 years).  The warrants exercised during the year were at an exercise price of $0.03 - $0.04 (2.84 pence - 3.55 pence) - see note 18 for further breakdown.

 

The share price at the time of exercise of the warrants and options was an average of $0.076 (£0.061) (2022: $0.25, £0.196), ranging from $0.0794-$0.106 (£0.0635-£0.085).

 

Measurement of fair values on Equity-settled share-based payment arrangements

The fair value of the employee share options has been calculated using the Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not considered in measuring fair value.

 

The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments were as

follows:

 

	Award 09 09 2020	Award 29 09 2020	Award 04 12 2020 (1)	Award 04 12 2020 (2)	Award 04 12 2020 (3)	Award 04 12 2020 (4)
Fair value at grant date	0.025	0.028	0.013	0.03	0.025	0.024
Share price at grant date	0.038	0.038	0.037 -0.038	0.038	0.038	0.038
Exercise price	0.035	0.035	0.045-0.3	0.038	0.04,0.05	0.04 & 0.11
Expected volatility	76%	76%	76%	76%	76%	76%
Expected life years	3	4	4	5	1.5	1
Expected dividend yield	-	-	-	-	-	-
Risk-free interest rate	0.32%	0.32%	0.32%	0.32%	0.32%	0.32%
	Award 08 12 2020	Award 24 01 2020	Award 15 04 2021	Award 21 06 2021	Award 16 02 2022	Award 23 02 2023
Fair value at grant date	0.03	0	0.245	0.253	0.56	.54
Share price at grant date	0.038	0	0.161	0.257	0.1085	.54
Exercise price	0.11 & 0.038	0.038	0.188 & 0.112	0.296 & 0.134	0.1747	.0756
Expected volatility	76%	87.70%	76%	76%	55%	77%
Expected life years	5	3	2	10	9	9
Expected dividend yield	-	-	-	-	-	-
Risk-free interest rate	0.32%	0.32%	0.32%	0.32%	1.53%	3.57%

The risk-free rate of return is based on zero yield government bonds for a term consistent with the option life.  Expected volatility was determined by reviewing benchmark value from comparator companies.

 

The Company has issued the following warrants and options, which are still in force at the balance sheet date:

 

Grant date	Number of warrants and options	Expiry date	Exercise price $ per share
9 September 2020	1,000,000	9 September 2023	0.035
29 September 2020	9,000,000	30 September 2024	0.035
4 December 2020	22,046,950	3 December 2025	0.0344
4 December 2020	1,275,156	15 September 2023 to 20 October 2024	0.043-0.286
21 June 2021	3,000,000	20 June 2031	0.1271
21 June 2021	15,200,000	20 June 2031	0.279
16 February 2022	1,000,000	15 February 2032	0.165
23 February 2023	8,000,000	23 February 2033	.0794
	60,522,106

 

 

There are 60,522,106 (2022: 67,882,138) options/warrants exercisable at year end. An amount of $808,760 (2022: $3,327,911) was charged against the share option reserve.

 

19.       Other reserves

 

Merger reserve	30 June 2023	30 June 2022
	$	$
Opening  balance	(349,710)	(349,710)
Reversal on deregistration	349,710	-
As at 30 June	-	(349,710)

 

The merger reserve arose on the acquisition of CJT Ventures Limited. This entity was deregistered during the course of the year and as such, this reserve has been eliminated.

 

Foreign currency reserve	30 June  2023 $	30 June 2022 $
Opening balance	(911,337)	(36,282)
Movement	661,215	(875,055)
As at 30 June	(250,122)	(911,337)

 

Share option reserve	2023 $	2022 $
Opening balance	3,848,395	987,876
Share based payments	808,760	3,327,911
Warrants expired	(146,480)	(467,392)
Warrants exercised	(18,071)	-
As at 30 June	4,492,604	3,848,395
Total Other Reserves	4,242,482	2,587,348

 

20.       Financial Instruments

 

Capital risk management

The Group's objective when managing capital is to safeguard the entity's ability to continue as a going concern and develop its mineral exploration and development and other activities to provide returns for shareholders and benefits for other stakeholders.

 

The Group's capital structure comprises all the components of equity (all share capital, share premium, retained earnings when earned and other reserves). When considering the future capital requirements of the Group and the potential to fund specific project development via debt, the Directors consider the risk characteristics of the underlying assets in assessing the optimal capital structure.

 

The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk and price 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.

 

Fair value of financial instruments

The fair values of the Company's financial instruments on 30 June 2023 and 30 June 2022 did not differ materially from their carrying values.

 

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

 

·    Level 1 fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

 

·    Level 2 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

·    Level 3 assets are assets whose fair value cannot be determined by using observable inputs or measures, such as market prices or models. Level 3 assets are typically very illiquid, and fair values can only be calculated using estimates or risk-adjusted value ranges.

 

 

Market risk

Market risk arises from the Group's use of interest bearing and foreign currency financial instruments. It is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), and foreign exchange rates (currency risk). No such instruments are held by the Group and therefore no risk has been identified.

 

Price risk

Price risk arises from the exposure to equity securities arising from investments held by the Group.  No such investments are held by the Group and therefore no risk has been identified.

 

Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Pound sterling, US Dollar and Tanzanian Shilling. Foreign exchange risk arises from recognised monetary assets and liabilities, where they may be denominated in a currency that is not the Group's functional currency. While the Tanzanian Shilling has depreciated since 1 July 2022 (from 1 TZS = 0.000430 USD to 1 TZS = 0.000397 USD) the Tanzanian Shilling risk is mitigated by the fact that Helium One would only have one month's cash requirement on hand at any one time and this is usually held in US Dollars. Another significant risk in Tanzania is a US Dollar risk as the loans to Tanzanian subsidiaries are denominated in US Dollars. The Directors consider that, for the time being, no hedging or other arrangements are necessary to mitigate this risk.

 

On the assumption that all other variables were held constant, and in respect of the Group and the Company's expenses the potential impact of a 20% increase/decrease in the USD: Tanzanian Shilling foreign exchange rate on the Group's loss for the year and on equity is as follows:

	30 June 2023	30 June 2022
Increase/(decrease) in USD/ TzSh
20%	195,621	87,085
-20%	(195,621)	(87,085)

 

Credit risk

Credit risk is the risk that the Group will suffer a financial loss as a result of another party failing to discharge an obligation and arises from cash and other liquid investments deposited with banks and financial institutions. The Group considers the credit ratings of banks in which it holds funds to reduce exposure to credit risk. The Group will only keep its holdings of cash and cash equivalents with institutions which have a minimum credit rating of 'BBB'.

 

Whilst the cash holdings are deposited with institutions in terms of the policy, the Group considers that it is not exposed to any significant increases in credit risk and no Expected Credit Loss has been recognised.

 

The Group considers that it is not exposed to major concentrations of credit risk.

 

The Group holds cash as a liquid resource to fund its obligations. The Group's cash balances are held primarily in US Dollars. The Group's strategy for managing cash is to assess opportunity for interest income whilst ensuring cash is available to match the profile of the Group's expenditure. This is achieved by regular monitoring of interest rates and monthly review of expenditure forecasts. Short term interest rates on deposits have for the fiscal year been very unattractive.

The Group has a policy of not hedging and therefore takes market rates in respect of foreign exchange risk; however, it does review its currency exposures on an ad hoc basis. Currency exposures relating to monetary assets held by foreign operations are included within the foreign exchange reserve in the Group Balance Sheet.

 

The currency profile of the Group's cash and cash equivalent is as follows:

 

	30 June 2023	30 June 2022
Cash and cash equivalents	$	$
US Dollar	8,743,568	3,709,922
GBP	852,248	1,184,601
Tanzanian Shillings	4,970	11,630

 

On the assumption that all other variables were held constant, and in respect of the Group's cash position, the potential impact of a 20% increase in the GBP: USD foreign exchange rate would not have a material impact on the Group's cash position and as such is not disclosed.

 

Liquidity risk

Liquidity risk arises from the possibility that the Group and its subsidiaries might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. In addition to equity funding, additional borrowings have been secured in the past to finance operations. The Company manages this risk by monitoring its financial resources and carefully plans its expenditure programmes. Financial liabilities of the Group comprise trade payables which mature in less than six months.

 

Interest rate risk

The Group has no material exposure to interest rate risk.

 

21.       Categories of financial instruments

 

In terms of financial instruments, these solely comprise of those measured at amortised costs and are as follows:

 

	30 June 2023 $	30 June 2022 $
Liabilities at amortised cost	2,857,156	611,273
Cash and cash equivalents at amortised cost	9,600,786	4,906,153
Financial assets at amortised cost	1,303,612	1,373,452
	10,904,398	6,279,605

 

22.       List of subsidiaries

 

At 30 June 2023, the Group consists of the following subsidiaries:

 

Name of subsidiary	Country of incorporation	Principal place of business	Share capital held by Ultimate Parent	Share capital held by Group	Principal activities
Black Swan Resources Ltd	BVI	BVI	100%	100%	Holding
Helium One (Stahamili) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One (Njozi) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One (Gogota) Ltd	Tanzania	Tanzania	Nil	99%	Helium Exploration
Helium One Holdings Ltd	Mauritius	Mauritius	100%	100%	Holding
Helium One Treasury Ltd	BVI	BVI	100%	100%	Holding
Helium One (UK) Limited*	UK	UK	Nil	100%	Administration Services
Northcote Energy Ltd*	Cayman	Cayman	Nil	100%	Holding
Northcote Energy USA Inc*	USA	USA	Nil	100%	Dormant
Attis Oil and Gas Management LLC*	USA	USA	Nil	100%	Dormant

Black Swan Resources Limited holds 99% of Helium One (Stahamili) Ltd, Helium One (Gogota) Ltd and Helium One (Njozi) Ltd. The remaining 1% is held on trust for the Company. This is due to Tanzanian law stating that a company must have a minimum of two shareholders.

 

* These companies were acquired on 4 December 2020

 

Helium One Holdings was incorporated in Mauritius on 23 May 2022 and has acquired 100% of the shares in Black Swan Resources Limited.

 

CJT Ventures Limited has been wound up and was issued with a Strike Off Notice on 1 May 2023.

 

23.       Commitments

 

The Group currently has an interest in 16 licences in Tanzania after relinquishment of two licences. These are initially granted for a period of four years with the option to extend on first renewal for further three years and second renewal of a further two years.  Licence areas PL10711/2015 and PL10728/2015 measuring 585 square kilometres were fully relinquished during the year. There were 6 other licences areas which were partially relinquished and measuring 964 square kilometres. All of these relinquishments were fully impaired to the extent of $8,520,929 in the prior financial year.

 

 

These licences include commitments to pay licence fees and minimum spending requirements. There is no legal obligation to pay these licence fees, but it is a condition of retaining the licences. As at 30 June 2023 these are as follows:

 

	30 June 2023	30 June 2023	30 June 2023
	Licence fees $	Minimum spend $	Total $
Not later than one year	592,438	296,219	888,657
Later than one year but less than 5 years	212,052	106,026	318,078
More than 5 years	-	-	-
Total	804,490	402,245	1,206,735
	30 June 2022	30 June 2022	30 June 2022
	Licence fees $	Minimum spend $	Total $
Not later than one year	866,947	451,123	1,318,070
Later than one year but less than 5 years	804,490	402,245	1,206,735
More than 5 years	-	-	-
	1,671,437	853,368	2,524,805

 

24.       Operating leases

 

The Group had no operating leases in either year.

 

25.       Related parties

 

A.    Parent and ultimate controlling party

There is no ultimate controlling party.

 

B.    Transactions with key management personnel and transactions

Key management personnel compensation and transactions are disclosed in note 7.

 

C.    Other related party transactions

Other related party transactions were in respect of transactions with other group companies and have been eliminated on consolidation.

 

Other transactions

Promaco Limited, a limited company of which Ian Stalker is a director, was paid a fee of $72,226 (2022: $80,296) for director services to the Company. The balance outstanding at year end was $24,900 (2022: $Nil).

 

All related party transactions took place at arm's length.

 

26.       Reconciliation of movement in debt position

			Non cash changes
	At 30 June 2022	Cash flows	Foreign exchange movements	Interest charged	Bonds converted to equity	At 30 June 2023
	$	$	$	$	$	$
Cash and Cash equivalents
Cash	4,906,153	4,830,512	(135,879)	-	-	9,600,786
TOTAL	4,906,153	4,830,512	(135,879)			9,600,786

 

			Non cash changes
	At 30 June 2021	Cash flows	Foreign exchange movements	Interest charged	Bonds converted to equity	At 30 June 2022
	$	$	$	$	$	$
Cash and Cash equivalents
Cash	15,802,111	(10,581,374)	(314,584)	-	-	4,906,153
TOTAL	15,802,111	(10,581,374)	(314,584)	-	-	4,906,153

 

 

 

27.       Post balance sheet events

 

On 10 July 2023, the Company announced the acquisition of the Epiroc Predator 220 drilling rig.

 

On 11 July 2023, the company issued 587,457 Ordinary Shares in the Company to a service provider in lieu of cash payment.

 

On 18 July 2023, the company issued 450,000 Ordinary Shares pursuant to the exercise of warrants.

 

On 7 August 2023, the company issued 6,000,000 Ordinary Shares pursuant to the exercise of options and issued 56,638 Ordinary Shares to a service provider in lieu of cash.

 

On 7 September 2023, the Company announced that it had raised gross proceeds of £6.3 million before expenses (approximately $7.875 million) in a placing and subscription through the issue of an aggregate of 105,000,000 new ordinary shares  at a price of 6 pence per new ordinary share. Additionally, the Company raised £500,000 (approximately $625,000) through a Retail Offer via PrimaryBid through the issue of 8,333,333 new ordinary shares at 6p per new ordinary share. The Company also issued 750,000 Ordinary Shares at 6p per new ordinary share in in lieu of certain advisory fees.

 

On 12 September 2023, the Company announced the issue of 1 million new ordinary shares pursuant to the exercise of options.

 

On 25 September 2023, the Company announced that drilling had commenced at the Tai 3 well at the Rukwa project in Tanzania.

 

Since 12 September 2023, the Company has issued a further 11,275,000 new ordinary shares pursuant to the exercise of options.

                                                                                                                                                                                                                  

28.       Foreign Currency Reserve Adjustment

 

During the year ended 30 June 2022, the Group changed the functional currency of Helium One UK Limited from Pound Sterling to US Dollars in order to align this entity with the Group. As a consequence, the inter-company loan accounts were revalued and aligned. This decision was made after the Group audit had been completed. In order to reflect this in the consolidated Financial Statements, an amount of $721,237 has been recorded in the current year within retained earnings and the foreign currency reserve in order to correct the brought forward position. The prior year Financial Statements have not been retrospectively restated on the basis that this is not considered material.