RNS Number : 5797I
Cloudbreak Discovery PLC
28 March 2024
 

28 March 2024

Cloudbreak Discovery Plc

("Cloudbreak" or the "Company")

 

Interim Results for the Period Ended 31 December 2023

 

Cloudbreak Discovery Plc (LSE: CDL), a leading London listed royalty company and natural resources project generator, is pleased to announce its Interim Results for the six months ended 31 December 2023 ("H2 2023" or the "Period").

Andrew Male, Interim CEO and President of Cloudbreak Discovery, commented, "After a period of negotiations and restructuring at the executive level we have been able to establish a strong base to work from. Over the coming months the Board and Management will work to build on the asset package with the aim of increasing its existing and future value in all areas.

We are very encouraged by the recent restructuring of the G2 debenture and the prospects it presents. Going forward we will look to realise on projects and assets that have this kind of value accretion potential."

Chairmans review of interim period

I am pleased to provide Cloudbreak shareholders with an update on the Company's developments in the six months ended 31 December 2023.

 

The Period has seen the culmination of many corporate changes including the resignation and contract cancellations of the former management team and and certain directors. This resulted in the streamlining of the the Board and Management with a view to re-organising many of the assets and investments the Company has.

 

Consolidation and review of the Company's asset package was ongoing while the Board decided on the trajectory it wished to proceed with. This review resulted in a desire to continue with the present undervalued asset package and build a foundation to work from and seek to prove the underlying values.


During the period the Company issued debt instruments to provide working capital and the needed restructuring and support of existing projects. Going forward these debt instruments will be converted into equity along with other expenses.

 

Subsequent to 31 December 2023 the Company successfully optioned a Lithium brine database and knowledge set as well as negotiate an Amending Agreement with G2 Energy Corp.

 

In each instance Cloudbreak realised a more beneficial position and in the case of G2, two of our Cloudbreak board members have joined the board of G2 and seen a restructuring of G2 along with an additional investment through an affiliate investment team which is expected to enhance the overall production and performance of the field.

Responsibility Statement

 

The Directors are responsible for preparing the Interim Report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority ("DTR") and with International Accounting Standard 34 on Interim Financial Reporting (IAS 34).

 

The Directors, being Andrew Male, Emma Priestley and Paul Gurney confirm that to the best of their knowledge:

 

·      The interim financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

 

·      The interim financial statements have been prepared in accordance with IAS 34 and that as required by DTR 4.2.7 and DTR 4.2.8, the Interim Report gives a fair review of:

 

·      Important events that have occurred during the first six months of the year;

 

·      The impact of those events on the financial statements;

 

·      A description of the principal risks and uncertainties for the remaining six months of the financial year; 

 

·      Details of any related party transactions that have materially affected the Company's financial position or performance in the six months ended 31 December 2023; and

 

·      Any changes in the related parties transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the first six months of the current financial year.

 

Andrew Male

Interim Chairman and Chief Executive Officer

28 March 2024

 

Market Abuse Regulation (MAR) Disclosure

 

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

For additional information please contact:

 


 

Cloudbreak Discovery PLC 

Tel: +44 7926 397 675

 



Andrew Male, Interim CEO

am@cloudbreakdiscovery.com




Novum Securities

(Financial Adviser)

Tel: +44 7399 9400



David Coffman / George Duxberry





Oberon Capital

(Broker)

Tel: +44 20 3179 5355 /

 +44 20 3179 5315

 

Adam Pollock / Nick Lovering






 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

Note

 31 December 2023 Unaudited

£

 30 June 2023 Audited

£

 31 December 2022 Unaudited

£

 

Non-Current Assets

 

 



Royalty asset


1

1

1

Intangible assets

4

192,269

236,518

269,740

Investments

5

696,879

891,255

1,179,765

Leased Asset


29,650

29,810

-

Convertible debenture receivables

6

471,239

475,168

2,902,009

 


1,390,038

1,632,752

4,351,515

Current Assets


 



Trade and other receivables


315,144

243,177

478,035

Cash and cash equivalents


160,299

244,074

113,884

Convertible debenture receivables

6

1,570,796

1,583,892

-



2,046,239

2,071,143

591,919

Total Assets


3,436,277

3,703,895

4,943,434

Current Liabilities


 



Trade and other payables


1,451,305

1,704,437

1,918,985

Convertible loan notes

7

360,400

-

-

 


1,811,705

1,704,437

1,918,985

Total Liabilities


1,811,705

1,704,437

1,918,985

 


 



Net Assets


1,624,572

1,999,458

3,024,449

Equity attributable to owners of the Parent


 



Share capital


778,635

778,635

766,458

Share premium


16,753,221

16,753,221

16,589,348

Other reserves


396,926

519,045

580,554

Reverse asset acquisition reserve


(4,134,019)

(4,134,019)

(4,134,019)

Retained losses


(12,170,191)

(11,917,424)

(10,777,892)

Total Equity


1,624,572

1,999,458

3,024,449


 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Continued operations

Note

6 months to 31 December 2023 Unaudited

£

6 months to 31 December 2022 Unaudited

£

Profit on disposal of exploration & evaluation asset sales


88,569

118,967

Administrative expenses


(433,541)

(2,396,796)

Foreign exchange gain/(losses)

(7,623)

(26,071)

Operating loss


(352,595)

(2,303,900)

Net finance income


150,307

175,341

Other income


8,242

49,967

Other gains/(losses)


72,737

12,393

Loss on disposals of investments


(231,611)

(365,277)

Impairment of loans


(67,303)

(109,328)

Unrealised fair value gain/(loss) on investments


(11,256)

(317,563)

Income from discontinued operations


65,774

-

Loss before income tax

 

(365,705)

(2,858,367)

Income tax


-

-

Loss for the year attributable to owners of the Parent

 

(365,705)

(2,858,367)

Basic and Diluted Earnings Per Share attributable to owners of the Parent during the period (expressed in pence per share)

 

8

 

(0.001)p

 

(0.01)p

 

 

 

 

6 months to 31 December 2023 Unaudited

£

6 months to 31 December 2022 Unaudited

£

Loss for the period

 

(365,705)

(2,858,367)

Other Comprehensive Income:

 

 

 

Items that may be subsequently reclassified to profit or loss

 

 

 

Currency translation differences

 

(9,181)

24,780

Other comprehensive income for the period, net of tax

 

(374,886)

(2,833,587)

Total Comprehensive Income attributable to owners of the parent

 

(374,886)

(2,833,587)

 

 

 

 



 

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 

 

 

Note

Share capital

£

Share premium

£

Reverse asset acquisition reserve

£

Other reserves

£

Retained losses

£

Total

£

Balance as at 1 July 2022

 

654,129

14,821,521

(4,134,019)

599,093

(7,919,525)

4,021,199

Loss for the year


-

-

-

-

(2,858,367)

(2,858,367)

Currency translation differences


-

-

-

24,780

-

24,780

Total comprehensive income for the year

 

-

-

-

 

24,780

 

(2,858,367)

 

(2,833,587)

Issue of shares


112,329

1,770,827

-

-

-

1,883,156

Issue Costs


-

(3,000)

-

-

-

(3,000)

Options Granted


-

-

-

(36,723)

-

(36,723)

Warrants Issued


-

-

-

(6,596)

-

(6,596)

Total transactions with owners, recognised directly in equity

 

 

112,329

 

1,767,827

 

-

 

(43,319)

 

-

 

1,836,837

Balance as at 31 December 2022

 

766,458

16,589,348

(4,134,019)

580,554

(10,777,892)

3,024,449

 

Balance as at 1 July 2023

 

778,635

16,753,221

(4,134,019)

519,045

(11,917,424)

1,999,458

Loss for the year


-

-

-

-

(365,705)

(365,705)

Currency translation differences


-

-

-

(9,181)

-

(9,181)

Total comprehensive income for the year


-

-

-

(9,181)

(365,705)

(374,886)

Options Cancelled


-

-

-

(56,143)

56,143

-

Warrants Cancelled


-

-

-

(56,795)

56,795

-

Total transactions with owners, recognised directly in equity

 

-

-

-

(112,938)

112,938

-

Balance as at 31 December 2023

 

778,635

16,753,221

(4,134,019)

396,926

(12,170,191)

1,624,572


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

Group


 

 

Note

6 months to 31 December 2023 Unaudited

£

6 months to 31 December 2022 Unaudited

£


Cash flows from operating activities

 

 


 

Loss before income tax


(365,705)

(2,858,367)


Adjustments for:





Loss on sale of investments


231,611

365,277


Change in fair value of investments


11,256

317,563


Impairment of loans


74,658

109,328


Net finance income


(150,307)

(175,341)


Other gains


-

(12,393)


Unrealised foreign exchange


(61,416)

54,784


Share option expenses


-

43,306


Decrease in trade and other receivables


(64,342)

826,441


Decrease/(Increase) in trade and other payables


(439,864)

(344,456)


Net cash used in operating activities


(764,109)

(1,673,858)

 

Cash flows from investing activities





Funds spent on investment

5

-

(662)


Funds received on sale of exploration assets


42,990

-


Sale of investments

5

69,331

175,860


Interest received


41,020

-


Convertible loan notes


-

(414,540)


Exploration and evaluation expenses

4

-

(199,346)


Net cash generated from (used in) investing activities


153,341

(438,688)

 

Cash flows from financing activities





Proceeds from issue of share capital


-

1,883,156


Net movement in borrowings


201,993

35,696


Convertible loan notes

7

325,000

-


Cost of shares issued


-

(3,000)


Net cash generated from financing activities


526,993

1,915,852

 

Net decrease in cash and cash equivalents


(83,775)

(196,694)

 

Cash and cash equivalents at beginning of year


244,074

310,578

 

Exchange gain on cash and cash equivalents


-

-

 

Cash and cash equivalents at end of year


160,299

113,884

 

 

 

Major non-cash transactions

 

During the period ended 31 December 2023, the Company received 1,022,000 shares in G2 technologies in leiu of cash for  the quarterly interest payment of $60,000 USD (£47,524) that was due from G2, as a requirement of a debenture agreement between the two parties.

 


NOTES TO THE FINANCIAL STATEMENTS

1.   General information

The Company is a public limited company incorporated and domiciled in England (registered number: 06275976), which is listed on the London Stock Exchange. The registered office of the Company is 6 Heddon Street, London, W1B 4BT.

 

2.   Basis of preparation of Financial Statements

The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Statements" as adopted by the United Kingdom and the Disclosure and Transparency Rules of the UK Financial Conduct Authority. The condensed interim financial statements should be read in conjunction with the annual financial statements for the period ended 30 June 2023, which have been prepared in accordance with UK-adopted international accounting standards.

 

The interim financial information set out above does not constitute statutory accounts within the meaning of the Companies Act 2006. It has been prepared on a going concern basis in accordance with the recognition and measurement criteria of UK-adopted International Accounting Standards.

 

Statutory financial statements for the period ended 30 June 2023 were approved by the Board of Directors on 24 October 2023 and delivered to the Registrar of Companies. The report of the auditors on those financial statements was unqualified and concluded that a material uncertainty exists that may cast doubt on the group's ability to continue as a going concern. The condensed interim financial statements are unaudited. 

 

Going concern

 

These financial statements have been prepared on the going concern basis. Given the Group's current cash position and its demonstrated ability to raise capital, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting preparing the condensed interim financial statements for the period ended 31 December 2023.

 

Notwithstanding the above, a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern and, therefore, that the Group may be unable to realise their assets or settle their liabilities in the ordinary course of business. As a result of their review, and despite the aforementioned material uncertainty, the Directors have confidence in the Groups forecasts and have a reasonable expectation that the Group will continue in operational existence for the going concern assessment period and have therefore used the going concern basis in preparing these consolidated financial statements.

 

The factors that were extant at 30 June 2023 are still relevant to this report and as such reference should be made to the going concern note and disclosures in the 2023 Annual Report and Financial Statements.

 

Risks and uncertainties

 

The Board continuously assesses and monitors the key risks of the business. The key risks that could affect the Company's medium term performance and the factors that mitigate those risks have not substantially changed from those set out in the Company's 2023 Annual Report and Financial Statements, a copy of which is available on the Company's website: www.cloudbreakdiscovery.com. The key financial risks are liquidity risk, credit risk, interest rate risk and unlisted investments.

 

Critical accounting estimates

 

The preparation of condensed interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 4 of the Company's 2023 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period.

 

2.1. Accounting policies

The same accounting policies, presentation and methods of computation are followed in the interim consolidated financial information as were applied in the Group's latest annual audited financial statements except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 July 2023, and will be adopted in the 2024 annual financial statements. 

 

Changes in accounting policy and disclosures

 

i)    New standards and amendments adopted by the Group

 

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period ended 31 December 2023 but did not result in any material changes to the financial statements of the Group or Company.

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

 

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

Standard  

Impact on initial application

Effective date

IAS 1 (Amendments)

Classification of liabilities as current or non-current

1 January 2024

IAS 7 (Amendments)

Statement of cash flows

1 January 2024

IFRS 16 (Amendments)

Lease Liability in a Sale and Leaseback

1 January 2024

IAS 21 (Amendments)

Lack of exchangeability

1 January 2025

IAS 10 and 28 (Amendments)

Sale or Contribution of assets between an Investor and its Associate or joint venture

1 January 2025

 

 

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

 

3.   Dividends

 

No dividend has been declared or paid by the Company during the six months ended 31 December 2023 (2022: £nil).

 

4.   Intangible assets

 

As at December 31, 2023, the Group's exploration and evaluation assets are as follows:

 

 

Exploration & Evaluation Assets

6 months to 31 December 2023

£

6 months to 31 December 2022

£




South Timmins, British Columbia

1

1

Klondike Property

-

1

Atlin West Property

1

1

Yak Property

1

1

Stateline Property

-

12,323

Rizz Property

1

1

Icefall Property

1

1,252

Northern Treasure Property, British Columbia

110,435

112,623

Silver Vista Property, British Columbia

-

1

Silver Switchback Property, British Columbia

-

1

Apple Bay Property, British Columbia

1

1

Foggy Mountain Property, British Columbia

-

43,842

Bob Cat Property, United States

47,927

48,876

Rupert Property, British Columbia

1

15,119

Elk Creek Property, United States

33,900

-

Albion Property, United States

-

35,697

As at 31 December

192,269

269,740

 

As at December 31, 2023, the Group's reconciliation of exploration and evaluation assets are as follows:

 

 

 

Group

Exploration & Evaluation Assets

6 months to 31 December 2023

£

6 months to 31 December 2022

£

Cost

 


As at 1 July

236,518

78,694

Additions

-

199,346

Disposals

(42,990)

-

Forex movement

(1,259)

(8,300)

As at 31 December

192,269

269,740

 

South Timmins Property, Canada

 

During the year ended June 30, 2021, the Group paid $27,540 CAD (£16,080) in asset staking costs to acquire twelve mineral titles in Ontario, Canada known as the South Timmins property.

 

On 23 September 2021, the Group entered into an option agreement with 1315956 BC Ltd, under which 1315956 BC Ltd may acquire up to a 100% interest in the Group's South Timmins property subject to a 1% net smelter return ("NSR") to the Group. In order for 1315956 BC Ltd to fully exercise the option on the South Timmins Property, they must pay the Group an aggregate of $495,000 CAD, issue 2,250,000 common shares of 1315956 BC Ltd and incur exploration expenses of $1,515,000 with a minimum of $265,000 CAD in the first year.

 

To date, the Group has received cash payments of $270,000 (£157,579) and 500,000 shares in relation to the option payments due under the agreement.

 

During the period ended 31 December 2023, $75,000 CAD (£44,475) was due as a cash payment and is still owed to the group in relation to the option payments due under the agreement. 750,000 shares were also due during the period as part of the agreement, which are yet to be received.

 

Rupert, Canada

 

On September 11, 2018, the Group entered into an asset purchase agreement with a company controlled by a director of the Group and two unrelated persons to purchase the Rupert Property, located in British Columbia, Canada. As consideration for the property, the Group issued 2,000,000 common shares valued at $100,000 CAD (£59,000) and granted a 2% NSR. At any time, 1% of the NSR can be purchased by the Group for $1,500,000 CAD. Of the common shares issued to acquire the property, 1,000,000 were issued to a company that was controlled by a director of the Group. The Group also agreed to incur aggregate expenditures on the property of $800,000 ($100,000 CAD - £59,000 incurred).

 

On December 11, 2020, the Group sold the Rupert Property to Buscando Resources Corp. ("Buscando"), a company with a director in common. Payments to be received by the Group are as follows:

 

?     $150,000 CAD in total cash payments with $25,000 CAD (£14,750) on closing (received), $50,000 CAD on or before 12 months after Buscando is listed on a public exchange, $75,000 CAD on or before 24 months after Buscando is listed on a public exchange;

?     3,750,000 shares in total issued to the Group with 1,000,000 shares issued on closing (received and valued at $50,000 CAD - £29,500, 1,250,000 on or before 12 months after Buscando is listed on a public exchange, 1,500,000 on or before 24 months after Buscando is listed on a public exchange; and

?     $200,000 expenditures incurred on the property with $100,000 CAD on or before 12 months after Buscando is listed on a public exchange, $100,000 CAD on or before 24 months after Buscando is listed on a public exchange.

 

As a result of the sale to Buscando, the original vendors waived the exploration commitments required by the Group under the September 11, 2018, agreement.

 

During the year ended 30 June 2023, $50,000 CAD (£28,862) was due as a cash payment and is still owed to the Group at 31 December 2023.

 

Atlin West, Canada

 

On August 9 2021, the Group entered into an option agreement with 1315843 BC Ltd to purchase 100% of the rights to the Atlin West Project located in British Columbia, Canada. To earn a 100% interest, 1315843 BC Ltd make aggregate cash payments of $700,000 CAD, issue 8,000,000 shares in 1315843 BC Ltd and make payments of $325,000 over a three-year period to Cloudbreak. Upon completion of the work Cloudbreak will transfer 100% interest. Cloudbreak will retain a net 2% NSR. The Group has received cash payments of $100,000 CAD and 3,000,000 shares in relation to the option payments due under the agreement.

During the period ended 31 December 2023, $75,000 CAD (£44,475) was due as a cash payment and is still owed to the group in relation to the option payments due under the agreement. 2,500,000 shares were also due during the period as part of the agreement, which are yet to be received.

 

Yak, Canada

 

On 13 October 2021, the Group entered into an option agreement with Moonbound Mining Ltd ('Moonbound'). In respect of the Yak Project located in British Columbia, Canada. Moonbound will issue Cloudbreak 2,700,000 common shares and make aggregate cash payments of $145,000 CAD over a three-year period. Additionally, Moonbound will commit to spending up to $700,000 CAD in exploration expenditure on the property and enter into a public transaction within six months of the agreement. Upon completion of the obligations, Cloudbreak will transfer 100% interest and retain a net 2% NSR. The Group received cash payments of $35,000 CAD and 700,000 shares in relation to the option payments due under the agreement.

 

No payments were made during the period ended 31 December 2023.

 

Stateline, United States

 

On 9 February 2022, Cloudbreak and Alianza Minerals entered into an option agreement with Volt Lithium Corp (formerly known as Allied Copper Corp) in respect of the Stateline Project in Colorado, United States. Volt Lithium will issue the alliance 4,250,000 common shares over a three-year period and make aggregate cash payments of $315,000 CAD ($40,000 CAD paid) with a further $50,000 CAD due on closing. Additionally, Volt Lithium will commit to spending up to £3,750,000 CAD in exploration expenditure on the property over three years. The alliance will retain a net 2% NSR, not subject to a buy down provision.

 

On 9 August 2022, Cloudbreak and Alianza Minerals agreed to amend the terms of the Stateline option agreement with Allied Copper Corp entered into on 9 February 2022. Under the modified terms, Allied will be able to delay the issuance of shares and warrants whilst keeping the agreement in good standing.  Outstanding Allied shares will become payable to Alianza and Cloudbreak is either party reduces its equity holding through sale or other type of divesture, or if additional shares are issued in Allied which would dilute either party's holdings. Up to 30 June 2022, the Group has received cash payments of $65,000 CAD and 250,000 shares in relation to the option payments due under the agreement.

 

Up to the period ending 30 June 2023, the Group has received cash payments of $25,000 CAD (£15,301) and 250,000 shares in relation to the option payments due under the agreement.

 

On 11 August 2023, the option agreement was terminated by Volt Lithium so no further payments will be received.

 

Icefall, Canada

 

On 3 March 2022, the Group entered into an option agreement with 1311516 BC Ltd in respect of the Icefall Project in British Colombia, Canada. 1311516 BC Ltd will issue 2,000,000 common shares to Cloudbreak's subsidiary Cloudbreak (Canada) Ltd and make an aggregate of $120,000 CAD in cash payments to the Group. Additionally, 1311516 will commit to spending up to £700,000 CAD in exploration expenditure on the property over three years. This will need to be done to earn an interest of 75% in the project. Upon completion of the terms Cloudbreak and 1311516 BC Ltd will enter a joint venture in which each party will be responsible for its pro-rata share of expenditures on the project. Up to 30 June 2022, the Group has received cash payments of $25,000 CAD and 2,000,000 shares in relation to the option payments due under the agreement.

 

As at 31 December 2022, there is still an outstanding cash payment owed to the Group of $25,000 CAD (£15,301) in relation to the option payments due under the agreement.

 

During the period ended 30 June 2023, $25,000 CAD (£14,931) was due as a cash payment and is still owed to the Group of in relation to the option payments due under the agreement.

 

No payments were due during the period up to 31 December 2023.

 

Rizz, Canada

 

On 25 February  2022, the Group entered into an option agreement with 1311516 BC Ltd in respect of the Rizz Project in British Colombia, Canada. 1311516 BC Ltd will issue 3,000,000 common shares to Cloudbreak and make an aggregate of $120,000 CAD in cash payments to the Group. Additionally, 1311516 will commit to spending up to $750,000 CAD in exploration expenditure on the property over three years. This will need to be done to earn an interest of 75% in the project.  Upon completion of the terms, Cloudbreak and 1311516 BC Ltd will enter a joint venture in which each party will be responsible for its pro-rata share of expenditures on the project. Up to 30 June 2022, the Group received cash payments of $25,000 CAD and 3,000,000 shares in relation to the option payments due under the agreement.

 

During the period ended 30 June 2023, $25,000 CAD (£14,931) was due as a cash payment and is still owed to the Group of in relation to the option payments due under the agreement.

 

No payments were due during the period up to 31 December 2023.     

 

 

Northern Treasure, Canada

 

During 2022, the Group staked the Northern Treasure property for $50,645 CAD which is located in Northern British Columbia. The Company continues to actively explore this property and look for a partner to develop the property further.

 

On 28 October 2022, Cloudbreak announced that Precision GeoSurveys has completed a high-resolution helicopter-borne magnetic survey over the Northern Treasure Project in British Columbia.

 

Foggy Mountain, Canada

 

During 2022, the Group staked the Foggy Mountain property which is located in Central British Columbia. The Company continues to actively explore this property and look for a partner to develop the property further.

 

On 19 October 2022, Cloudbreak announced that that it has completed a reconnaissance surface programme at the Foggy Mountain Project in north central British Columbia, located immediately east of the past producing Kemess Mine. The property was originally staked in April 2022.

 

On 14 December 2023, the Company transferred their ownership and rights of a property based in Canada, the 'Foggy Mountain' project. This was disposed of as part of a settlement agreement entered with Cronin Services and Cronin Capital.

 

Bobcat, United States

 

On 6 December 2022, the Group entered a holding and cost share agreement with Longford Capital Corp pertaining to the holding, exploration, operations and development of the Bob Cat property in Idaho. The Group acquired 50% interest in the property for $60,000 USD (£47,927).

 

Elk Creek, United States

 

On 21 November 2022, the Group acquired an oil and gas lease for $43,157 USD (£33,900), for a property based in Pennsylvania, USA. The lease gives the Group full permission to conduct any and all due diligence on the leased premises, which includes inspections, tests, environmental assessments, soil studies, surveys and more.

 

5.   Investments held by subsidiaries

 

Investments held by subsidiaries

 

Financial assets at fair value through profit or loss are as follows:

 

 

Level 1

£

Level 2

£

 

 

Level 3

£

Total

£

1 July 2023

771,725

-

119,530

891,255

Additions

47,524

-

-

47,524

Disposals

(69,331)

-

-

(69,331)

Fair value changes 

5,769

-

-

5,769

Realised loss on investments

(231,611)

-

-

(231,611)

Foreign exchange

54,156

-

(883)

53,273

31 December 2023

578,232

-

118,647

696,879

 

As at 30 June, 2023, investments were classified as held for trading and recorded at their fair values based on quoted market prices (if available). Investments that do not have quoted market prices are measured at cost due to the limited amount of information available related to the fair value of the investments.

 

 

 

6.   Debentures Receivable

 

 

 

 

 

6 months to 31 December 2023

£

6 months to 31 December 2022

£

Opening

2,059,060

1,657,900

Additions

-

422,719

Amount payable

-

829,311

Fair Value Movement

(17,025)

(7,921)

At end of period

2,042,035

2,902,009

 

Masten Unit, United States

 

On 31 May 2022, the Group entered into an agreement with G2 Energy Corp. ('G2') on the Masten Unit Energy Project located in Cochran County Texas, United States. Whereby the Company will provide G2 with a $2,000,000 USD debenture on a two-year term in exchange for a 3.25% Overriding Royalty Interest in the Project. G2 will pay 12% per annum interest to the Company, calculated and paid quarterly in cash or shares at the discretion of the Company. As part of the agreement, The Group received 6,500,000 warrants for G2, however management have deemed that these warrants have no value at this stage as the assets held by G2 are predominantly made up of the early-stage exploration assets on which they have received from the Company. The group is in regular communication with G2 and is monitoring the results of its exploration activities that will be undertaken as the result of the funding by the Group to G2.

 

During the period ended 31 December 2023, the Company received 1,022,000 shares in G2 in place of the 12% interest payment that was due on 30 June 2023. $50,000 USD has been paid during the period by G2 for the September interest due, with the remaining balance expected to be paid in due time. The quarterly interest for December 2023 remains outstanding.

 

A total of $2,700 USD (£2,102) of royalty income was received during the period ended 31 December 2023 from G2.

 

Butte Strawn, United States

 

On 16 August 2022, the Company entered into an agreement with Iron Forge Holdings (III) Ltd (IF3). Whereby the company will provide IF3 with a $1,500,000 USD debenture for the Butte Strawn Energy Project located in Irion County, Texas. $500,000 USD was paid on signing. IF3 will pay 12.5% per annum interest to the Company, calculated and paid quarterly in cash or shares at the discretion of the Company. The Company received 6,000,000 warrants with a strike price of $0.35 CAD with a three-year term from financial close. On 16 June 2023, it was agreed that the principal value of the debenture be reduced from $1,500,000 USD to $600,000 USD with no further obligations for the Group. All accrued interest not paid as of the date of the agreement has been forgiven and both parties agreed to cancelling the warrants. The overriding royalty was reduced from 6% to 2%.

 

During the period ended 31 December 2023, no royalty income was received.

 

7.   Convertible loan notes

 

Group

 

6 months to 31 December 2023

£

6 months to 31 December 2022

£

As at 1 July

-

-

Additions

340,000

-

Interest on the loans (12%)

20,400

-

As at 31 December

360,400

-

 

A loan note instrument was drawn up creating unsecured convertible loan notes up to a nominal amount of £340,000. The notes are convertible into ordinary shares of the Company at any time between the date of issue of the notes and their redemption date. On issue, the loan notes were convertible at a rate of the lesser of 5-day VWAP or £0.005. The loan note is repayable on or before 31 January 2024, at an interest rate of 12%.

 

8.   Earnings per share

The calculation of the basic loss per share of £0.001 (2022: £0.01) is based on the loss attributable to equity owners of the group of £365,705 (2022: loss of £2,858,367), and on the weighted average number of ordinary shares of 607,678,805 (2022: 595,501,976) in issue during the period.

 

In accordance with IAS 33, no diluted earnings per share is presented as the effect on the exercise of share options or warrants would be to decrease the loss per share.

 

9.   Events after the reporting date

On 27 February 2024, the Company entered a three-year agreement with Lonestar Lithium Inc. ("Lonestar"), in which Lonestar purchased the proprietary database with regional modelling and data compilation across eastern Texas. Cloudbreak will receive two-million shares in Lonestar, $25,000 USD each time a qualifying transaction property is generated from the database and 0.5% royalty produced on each qualifying transaction property.

 

On 4 March 2024, the Company signed an amending agreement for the convertible debenture it has in place with G2 Energy TX1 Inc. ("G2"). The changes included an extension of the maturity date from 31 May 2024 to 31 May 2025, the principal amount of the debenture and all unpaid interest will be convertible into units of G2. Each unit will entitle the Company to one common share of G2 and one purchase warrant. Each warrant entitles the Company to acquire a share at a price of $0.07 CAD per warrant, or a minimum price set by the Canadian Securities Exchange (CSE). The agreement prohibits the Company from obtaining over 19.99% of shares in G2. However, if there is a default and 61 days lapse since notice is given, the debenture will be fully convertible with no limitations.

 

10.  Approval of interim financial statements

The Condensed interim financial statements were approved by the Board of Directors on 27 March 2024.

 

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