Directors' Report

Introduction

The Directors of Adriatic Metals PLC ("Adriatic" or "Company") present their interim report and condensed consolidated financial statements of the Group for the six months ended 30 June 2024 ("Period"). This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report should be read in conjunction with the most recent annual report and accounts and announcements made by the Company, which can be found on the website www.adriaticmetals.com.

Business Review

Highlights of the six months ended 30 June 2024

Operational

·      Production ramp up continues at the Vares Silver Operation, with nameplate production expected in Q4 2024.

·      First concentrate production took place on 27 February, with the official mine opening taking place on 5 March.

·      The first sale of on-spec concentrates was agreed and the first shipment left site for the Port of Plocê on 27 May.

·      Underground development of 1,387m in H1 2024, an increase of 141% compared to H1 2023.

·      Adriatic completed the transition to owner-operator of Rupice Mine following the signed agreement with the former mining contractor Nova Mining and Construction d.o.o, ('Nova').

        The 12-month rolling Lost Time Injury Rate ('LTIFR') and Total Recordable Injury Rate ('TRIFR') were 1.02 and 1.46 respectively compared to H1 2023 where LTIFR and TRIFR were 0.23 and 2.08 respectively.

·      Exploration continues across Vares and Raska, with 8,421m of drilling completed at Rupice in the Period and two drill rigs active at Raska.

·      An Operations Update will be announced on 23 September 2024, followed by a webinar presentation by Laura Tyler, Interim CEO and Michael Horner, Interim CFO. Further details of the webinar will be provided in due course. 

Financial

·      On 4 March Queens Road Capital Investment Ltd. ("QRC") converted its $20.0m bond into 10,981,770 Adriatic new ordinary shares of £0.013355 each.

·      On 22 April, an additional debt facility of $25.0m was secured from Orion Mine Finance ("Orion"). This will be available to be drawn down between 1 September and 31 December 2024, and currently remains undrawn.

·      Equity raising of $50.0m took place on 28 May. The funds were raised to provide flexibility to the Group's balance sheet during the final stages of ramp up to nameplate capacity and to finalise the termination payment payable to Nova.

·      $120.0m of senior secured debt from Orion has been drawn to date and the first debt repayment is scheduled for 31 December 2024.

·      $58.8m in cash at the end of the Period places the Company in a strong financial position with sufficient contingency ahead of reaching sustainable production.

Post-Period

·      First stoping occurred post Period in August which resulted in record ore production of 25,514t (compared to 5,595t in July and 9,513t in all of H1 2024), with development rates increasing to 318m for the month.

·      A ruling by the Constitutional Court of Bosnia and Herzegovina on 11 July has suspended the felling of trees on the planned extended tailings storage facility at the Vares Processing Plant and waste rock storage facilities at Rupice. Production continues as planned and alternative facilities are being progressed.

·      On 7 August, Paul Cronin, CEO and Managing Director, tendered his resignation to the Board. Laura Tyler, who was appointed to the Board of Directors on 1 July as Non-Executive Director, was appointed interim CEO effective 9 August. Sanela Karic, Non-Executive Director, became Executive Director for Corporate Affairs. Eric Rasmussen, Non-Executive Director, became chair of the Sustainability Committee.

·      On 14 August, a fatal accident occurred involving a subcontractor's vehicle. The vehicle overturned near the rescue station at Rupice and tragically the driver, an employee of a local Bosnian subcontractor, sustained fatal injuries. No other individuals were seriously injured in the accident.

Chairman's statement

Operations

In the first half of 2024 the Company achieved several significant milestones as Adriatic ramps up production at the world-class Vares Silver Operation ("Vares") in Bosnia and Herzegovina. I am very proud that Vares produced its first concentrates in February, thus evolving into a polymetallic metal producer after only seven years since exploration began in 2017. This was followed by the official opening of Vares in early March. It was a special event that was attended by senior ministers and dignitaries from Bosnia and Herzegovina and was followed by a celebration in the town of Vares, with the local community, employees and key suppliers coming together to mark the momentous occasion.

In April, the Company transitioned to owner-operator mining, resulting in a significant acceleration in the delivery of development metres at Rupice, with development rates increasing to 300m in July and 318m in August. This transition has also led to a greater emphasis on health and safety underground, risk management and environmental protection. Following the transition, key contractor staff have become Adriatic employees and our full-time staff have increased to nearly 500 employees, up from 296 at year end. We also expect noticeable improvements in procurement as Adriatic will focus on obtaining better value inputs from a wider range of local and international suppliers.

In May, Adriatic announced the first sale of on-specification grade concentrates from Vares with the first shipment leaving site for the Port of Plocê. Subsequently, over the past few months additional concentrates have been sold and shipped to our offtakers.

Post Period end, an unexpected ruling by the Constitutional Court of Bosnia and Herzegovina has suspended the felling of trees on the planned extended tailings storage facility at the Vares Processing Plant and waste rock storage facilities at Rupice. However, no material impact on operations is anticipated and we believe there is an alternative tailings storage facility available that can be constructed and permitted for when required. Despite this challenging political and operating environment, the team are working tirelessly to deliver on the alternative solution.

Our exploration focus remains on the northern and southern extremities of Rupice and this will continue into the second half of 2024. We have almost doubled our reserves since the Definitive Feasibility Study that was published in 2021 and extended the life of mine to over 18 years. We have the intention to increasing this further through the highly targeted programme at Rupice, as well as a broader campaign on the rest of our exploration licenses.

Financial Position

Over the reporting Period, our balance sheet was strengthened following the conversion of the Queens Road Capital $20.0m note in March as well as the $50.0m equity fund raise in May to cover the costs associated with the transition to owner/operator of our mining operations and to strengthen the balance sheet. An agreement was also reached with Orion Mine Finance ("Orion") to provide an additional $25.0m loan between September and December if needed. At the end of the first half of the year, Adriatic had $58.8m in cash and, combined with the efficiency initiatives implemented during the Period, we have a strong financial position with sufficient contingency ahead of reaching sustainable commercial production. We look ahead to Adriatic becoming a significant cashflow generating business in 2025 and one of the leading precious and base metal miners in Europe.

Sustainability and Health & Safety

The completion of the construction of Vares and the commencement of production is a testament to the quality and commitment of our people. Our focus is on professional development, education, and training for all our staff. Proactive leadership is essential in training and engaging with young graduates and equipping them with the necessary skillsets. We are also driving efforts to enhance the presence of women in the mining sector and achieved a female workforce percentage over 30% of total employees - surpassing the industry average of 15%.

With the construction of the Project now completed, we believe Vares is one of Europe's most environmentally sustainable mines. Sustainability is a core component of our business model and our primary commitment is in maintaining the health and safety of our employees and contractors, protecting and preserving the natural environment, and adopting sustainable practices. We are focused on optimising our operations further using modern mining methods and the latest available technology. 

The Company is deeply saddened by a fatal accident that occurred post Period at the Rupice Mine, involving a subcontractor's vehicle which overturned near the rescue station. The driver, an employee of a local subcontractor, tragically sustained fatal injuries. The Company immediately informed the local authorities, regulators and safety inspectors, and is working together with all parties to determine the cause of the incident. This incident has reinforced the Company's focus on enhancing all safety protocols for our team and those of our contractors and subcontractors. Our thoughts are with the driver's family, friends and colleagues.

Governance

A significant development, post the Period under review, has been the resignation of Paul Cronin, as CEO and Managing Director. As the founder of the business and living in Bosnia and Herzegovina, Paul has been the driving force behind the growth of Adriatic and he has steered the Vares Silver Operation through exploration, permitting, construction and into production. His commitment to ensuring the Company is a sustainable, modern mining operation that will ensure prosperity to all stakeholders, has been uncompromising. Paul will remain as a consultant to the business over the next six months and work closely with Laura Tyler who has been appointed Interim CEO and Sanela Karic who has become Executive Director for Corporate Affairs. I would personally like to thank Paul for his unwavering dedication and leadership, and I wish him well for the future.

As part of the evolution of the Board, from a development operation into a production and cash-flow generating mining group, Laura Tyler joined the Board on 1 July 2024. Laura brings more than 30 years of international mining experience gained across world class mining companies, including Western Mining Corporation, Newcrest Mining, Mount Isa Mines and BHP, the world's largest mining group. Laura has deep technical and leadership expertise gained through various technical, operational, and executive roles, including most recently at BHP where she served as Chief Technical Officer, as well as prior roles in Executive Leadership for the Olympic Dam, Cannington, and Ekati underground mines. Following Paul Cronin's resignation on the 7 August, Laura Tyler stepped in as Interim CEO, and I am sure that under her leadership she will steer the Vares Silver Operation through ramp up and into steady state production.

In addition, the Board has been strengthened with the appointment of Eric Rasmussen, who brings finance and sustainability experience gained from 28 years at EBRD. I would like to thank Julian Barnes, who stepped down from the Board, for his dedication and advice over the past six years. I would also like to thank Mike Norris who resigned as CFO in May, and welcome Michael Horner as Interim CFO. Michael brings considerable experience in corporate finance and will lead Adriatic through its next phase as a producer, working to lower our cost of capital, and execute on new growth opportunities. Our commitment to strong corporate governance is in line with the highest standards of global capital markets, and we will continue to strengthen governance as we move into the next phase of Adriatic's development.

On behalf of the Board, I would like to thank our management, employees, and stakeholders at local, regional, and national levels, for their ongoing hard work, commitment and support during this successful period. We look forward with excitement over the coming months as the Company moves into operations and begins to fulfil its strategy of long-term sustainable growth. I would also like to thank our new and long-term investors for their confidence and commitment and we look forward to delivering significant returns for many years to come.

Chairman of the Board

10 September 2024

OPERATIONAL REVIEW

Project Completion

First concentrate production took place on 27 February, with the official mine opening taking place on 5 March. The Vares Processing Plant continued ramping up with campaign processing over the Period, ahead of reaching commercial production by Q4 2024.

Mining

In H1 2024 there was 1,387m of underground development, an increase of 141% compared to H1 2023 (575m). First stoping occurred post Period in August which resulted in record ore production of 25,514t (compared to 5,595t in July and 9,513t in all of H1 2024), with development rates increasing to 318m for the month.

On 20 April 2024, Adriatic and Nova agreed to terminate the Mining Services Contract and the transition process to owner-operated mining is now complete with Adriatic receiving the operating licence and now managing all operations at the Rupice Mine. Following the completion of the transition, the staff headcount at Adriatic has increased to approximately 500 at the end of Q2.

Processing

Throughout H1 the Vares Processing Plant was commissioned and began producing saleable concentrates. Plant operations will continue to process higher grade material and ramp up to commercial production by Q4 2024. Metal recovery rates are improving, and the processing team is working on further enhancement and optimization of the plant.

Adriatic has appointed Ausenco to commence studies to increase plant throughput from 800,000tpa to over 1Mtpa. This would align with increased mine production following the increased Ore Reserve at Rupice.

Initial concentrate shipments were exported to offtakers in Q2, with additional sales occurring Post Period and volumes planned to increase in tandem with production ramp-up in H2 2024. Concentrate transportation infrastructure is fully in place with truck, rail and port logistics operating well during ongoing shipments.

Exploration

At Rupice, three drill rigs completed a total of 8,421m from 33 holes. Drilling at Rupice was focused on infill drilling to convert resources to reserves and on extending the Rupice deposit to the north and south. Infill and step-out drilling successfully intersected significant mineralization. The focus is on the remaining growth potential of the main Rupice deposit for an end of year Rupice resource update.

Exploration in Serbia continues, with two drill rigs completing a program primarily focused on the Raska copper-gold porphyry. Further work across the licences was completed to advance new targets and maintain the concessions.

Health and Safety

At the end of the H1 24 Period, the Lost Time Injury Rate ('LTIFR') and Total Recordable Injury Rate ('TRIFR') were 1.02 and 1.46 per million hours respectively (H2 23 0.23 and 2.08).

The Company's focus over H1 included, improving Emergency Response Preparedness (additional equipment and scenario planning), coaching and supporting operational leaders in field leadership safety interactions, expansion of the Health and Safety Management System (implementing additional safe operating procedures and training), and enhancing internal safety communications. The focus for H2 is on fully operationalising workforce-facing critical elements of the Health and Safety Management System, and improved contractor management in light of the recent fatality

Sustainability

Sustainability is a strategic priority for Adriatic and the focus for the business is on incorporating environmental considerations, ensuring value creation for all stakeholders, responsible resource management, and regulatory compliance.

In Q1 the following documents were completed for the 2023 Annual Report: Full Carbon Footprint, Life Cycle Assessment, TCFD and a Feasibility Study for a Net Zero plan including Scopes 1, 2 and 3. It was agreed that 2025, the first full year of production, would be used as the baseline against which future targets can be set and measured.

In line with the Environmental Monitoring Plan for 2024, and in accordance with permit legislation and EBRD standards, we continue to monitor and test surface ground water, biodiversity, air quality and noise levels at all specified locations. All parameter values recorded are within acceptable limits, showing full compliance with environmental standards. In terms of audits, both the Land Acquisition, Compensation and Livelihood Restoration (LARC) Plan and the Environmental and Social Action Plan (ESAP) processes were completed in Q1.

In Q2, as part of our wider Biodiversity Action Plan (BAP), the Company completed the afforestation of approximately 4 hectares of land, planting about 10,500 trees alongside Vareš Forestry. In addition, several hectares of land have been replanted around the haul road and Rupice underground mine with a variety of local plants.

Throughout H1, Adriatic continued to work closely and engage with all stakeholders, with specific and regular ongoing communication with the local communities, especially through the Public Liaison Committee (PLC).

FINANCIAL REVIEW

Income statement

The Group made an operating loss of $20.5m in the Period compared with an operating loss of $7.8m in the six months ended 30 June 2023 ("prior period").

The increase is primarily due to $10.1m higher administrative expenses. Remuneration costs totaled $5.2m compared with $3.5m in the prior year, due to increased headcount driven by the development ramp up at Vares. $3.5m relates to Nova termination provisions accrued but not paid at 30 June 2024.

The remaining increase reflects higher levels of activity associated with the Group's growth in Bosnia and Herzegovina, including technical consulting and professional fees, marketing, property and IT costs, and transport expenses.

Expensed exploration costs of $2.6m in respect of the Raska Project were $2.0m higher than prior period due to increased exploration activity in Serbia.  

These costs were in line with budget for 2024 and management expect these to be in line with expected steady state costs once the Group is at commercial production.

The net finance expense of $2.8m (prior period expense: $2.2m) was higher due to a portion of accrued interest on the Orion Debt Finance Package being recognised in finance expense. In the prior period 100% of the net accrued interest on the Orion Debt Finance Package was capitalised within additions to mine under construction.

Cash Flow

Net cash used in operating activities during the Period was $17.4m compared with $7.2m in the prior period primarily due to greater expenditure on exploration, staff, and professional and consulting fees.

Investing activities in the Period of $46.1m related to the Vares Project construction. The prior period amount of $47.1m was higher as the Project was in a heightened phase of construction, compared with the Period to 30 June 2024 where the business has transitioned to ramp up.

Net cash inflows from financing activities in the Period of $77.3m primarily reflect net proceeds from a share issue of $47.0m and a drawdown under the Orion Debt Finance Package of $29.2m, net of fees and transaction costs. Net cash inflows from financing activities in the Prior Period of $79.1m reflected drawdowns under the Orion Debt Finance Package of $81.1m, net of fees and transaction costs, less QRC interest paid of $0.9m.

Net cash

The cash balance at 30 June 2024 was $58.8m, an increase of $13.9m compared with 31 December 2023, reflecting the cash movements above.

Borrowings at 30 June 2024 totaled $169.2m (31 December 2023: $150.7m), comprising $135.4m Orion Senior Secured Debt (31 December 2023: $97.8m), $33.9m Orion Copper Stream (31 December 2023: $26.9m), and $Nil Queens Road Capital ("QRC") convertible debt, including embedded derivative liability (31 December 2023: $26.0m).

The net debt position (cash and cash equivalents minus borrowings) at 30 June 2024 was $110.5m compared with a net debt position at 31 December 2023 of $105.8m, a change of $4.6m reflecting the draw down of debt and conversion of the QRC to equity during the period.

Corporate

During the period, Gold Royalty Corp announced that it had entered into a binding purchase and sale agreement with OMF Fund III to acquire the Copper Stream on the Vares Silver Operation. The terms of the stream have not changed.

Over the course of January and February, the Group announced that it had allotted 2,414,470 new ordinary shares of £0.013355 each in connection with the exercise of 2,414,470 unlisted warrants at an issue price of £0.88 per share for a total consideration of £2,124,734. These warrants were issued in 2020 as part of the Tethyan Resource Corp acquisition. On 30 January 2024, the balance of 236,550 warrants expired. At 30 June 2024 there were no warrants remaining related to the Tethyan acquisition.

On 28 May, an institutional placement of $50.0m took place, via the issue of 18,254,838 CHESS Depositary Interests ("CDIs") over new fully paid ordinary shares in the Company at AU$4.15 per CDI. The funds were raised to bolster the Adriatic's balance sheet to provide flexibility during the final stages of ramp up to commercial production and nameplate capacity; and to finalise the termination payments of approximately $11.0m payable to Nova.

Going Concern

Definitive documentation executed for the $142.5m Debt Finance Package with Orion was announced on 10 January 2022 to provide sufficient funds to complete the Vares Project Construction and cover ongoing owner costs until production commences. Of this total, $142.5m was drawn down as of 30 June 2024, including the $22.5m Copper Stream deposit. The first repayment against this is expected in December 2024.

In April 2024, the Group agreed an additional debt facility of $25.0m with Orion Mine Finance, this was undrawn at 30 June 2024 and is not forecast to be drawn down in the going concern period. In May 2024, the Group raised net $47.0m cash from an equity raise. This financing was performed to provide flexibility in the Group's balance sheet during the final stages of ramp up to nameplate capacity and to finalise the termination payment payable to Nova.

As announced in the Group's Quarterly Activity Report for the quarter ended 30 June 2024, the Group has started producing concentrates, with shipments sold and shipped to offtakers in the Period. Operations are targeting ramp up to commercial production by Q4 2024.

At 30 June 2024, the Group had cash of $58.8m and net current assets $2.5m, with forecast of $12.6m project capex left to spend in H2 2024. Base case forecasts show sufficient cash based on nameplate processing capacity being reached by Q4 2024. Management has performed sensitivity analysis of production ramp up and potential revenue delays. This analysis indicates that the Group has sufficient cash resources to withstand a three-month ramp-up delay or 40% reduction in revenues, without taking any mitigating actions. 

For a mining business at the start of its operating phase, uncertainty exists about operating results and cashflows. In a challenging operational scenario, the Group would have the option of reducing and/or deferring discretionary expenditure including overheads, sustaining capex, and general and administrative costs, as well as drawing down on the $25.0m additional loan facility or raising more equity capital in the event of a more severe impact on production and revenues.

A Debt-Service Coverage Ratio ("DSCR") covenant is included in the Orion Debt Finance Package, with the first DSCR testing period expected to be June 2025, being six months after the date of the expected first repayment under the Debt Finance Package. The DSCR is required to be above 1.25x and the Group's forecasts show substantial headroom above this.

The Directors therefore continue to adopt the going concern basis in preparing the consolidated financial statements.

Interim Chief Financial Officer

10 September 2024

PRINCIPAL RISKS AND UNCERTAINTIES

The Board is responsible for putting in place a system to manage risk and implement internal controls. The Board has considered mechanisms by which the business and financial risks facing the Group are managed and reported to the Board. The principal business and financial risks have been identified and control procedures implemented. The Board acknowledges it has the responsibility for reviewing the effectiveness of the systems that are in place to manage risk.

The Board has delegated certain authorities for risk management to the Audit & Risk Committee, which has its own formal terms of reference. The Audit & Risk Committee meets at least twice a year to consider presentations by the auditors and drafts of the Annual and Interim Financial Statements and to assess the effectiveness of the Group's system of internal controls. The Audit & Risk Committee is chaired by Sandra Bates, who has recent and relevant financial and business experience. All of the members of the Committee are Non-Executive and Independent.

The Audit & Risk Committee is responsible, inter alia, for:

·      Reviewing the Company's risk management framework at least annually in order to satisfy itself that the framework continues to be sound and to determine whether there have been any changes in the material business risks the Company faces;

·      Ensuring that the material business risks do not exceed the risk appetite determined by the Board; and

·      Overseeing the Company's risk management systems, practices and procedures to ensure effective risk identification and management, and compliance with internal guidelines and external requirements.

Principal Risks

The Board has determined that the principal risks and uncertainties are unchanged since the year end. Set out below is a summary of the risks and uncertainties as reported at the year end:

·    Operation of the Vares Operation, including operational and technical difficulties;

·    Reliance on infrastructure;

·    ‎‎Reliance on third-party contractors;

·    Mineral resource and ore reserve estimates differing from actual results;

·    Environmental and climate change risks;

·    Health and safety risks;

·    Foreign exchange risk;

·    The historic tailings storage facility is the legal responsibility of the Municipality of Vares and is not located inside the area covered by the Veovaca Exploitation Permit, but the Company's standing within the local community may be adversely affected if it were considered or perceived to be the responsibility of the Company;

·    Community/NGO concerns affecting operational/exploration activity;

·    Bribery and corruption;

·    Political instability;

·    Mining concessions in Bosnia and Herzegovina and Serbia not being granted or renewed, or being expropriated;

·    Other country risks; and

·    Loss or diminution of the services of the Company's Directors or senior managers.

CORPORATE GOVERNANCE

Results and dividends

The Group results for the six months ended 30 June 2024 are set out in the Consolidated Interim Statement of Financial Position. The Company's aim is to generate long term value for its stakeholders and design a shareholder distribution policy that reflects the growth prospects and profitability of the Group while maintaining appropriate levels of operational liquidity in due course. However, due to the early-stage nature of the Company and the Vares Project, no final dividend was paid for the year ended 31 December 2023 and no interim dividend is recommended for the 6 months ended 30 June 2024.

Auditor

BDO LLP have been the auditor of Adriatic Metals PLC since 2020 and were re-appointed at the 2024 Annual General Meeting. Please refer to the Auditor Independent Review Report to Adriatic Metals PLC.

Governance Matters

There was one change to the Board of Directors and composition of the committees of the board during the Period.

On 13 June, Eric Rasmussen was appointed to the Board of Directors. Mr Rasmussen will initially serve on the Audit & Risk and the Remuneration & Nomination Committees. In addition, Julian Barnes stepped down from his duties as a Non-Executive Director of Adriatic to pursue other interests.

Subsequent events

A ruling by the Constitutional Court of BiH on 11 July has suspended the felling of trees on the planned extended tailings storage facility at the Vares Processing Plant and waste rock storage facilities at Rupice. Production continues as planned and alternative facilities are being progressed.

On 7 August, Paul Cronin, CEO and Managing Director, tendered his resignation to the Board. Laura Tyler, who was appointed to the Board of Directors on 1 July as Non-Executive Director, was appointed interim CEO effective 9 August. Sanela Karic, Non-Executive Director, became Executive Director for Corporate Affairs. Eric Rasmussen, Non-Executive Director, became chair of the Sustainability Committee.

There were no further events subsequent to 30 June 2024 required to be included in this report.

Directors' Responsibilities Pursuant to DTR4

The Directors confirm to the best of their knowledge that the business, operational, and financial review, and Chairman's statement, include a fair review of the business and of any required related-party disclosures.

In addition, the Directors confirm to the best of their knowledge that the condensed consolidated interim financial statements have been prepared in accordance with DTR 4.2.7, DTR 4.2.8, and IAS 34 Interim Financial Reporting.

Signed in accordance with a resolution of the Directors

Laura Tyler

Interim CEO

10 September 2024

INDEPENDENT REVIEW REPORT TO THE MEMBERS OF ADRIATIC METALS PLC

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises the consolidated interim statement of financial position, consolidated interim statement of comprehensive income, consolidated interim statement of changes in equity and consolidated interim statement of cash flows and the related explanatory notes.

Basis for conclusion

We conducted our review in accordance with Revised International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410 (Revised)"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting.

Conclusions relating to going concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410 (Revised), however future events or conditions may cause the Group to cease to continue as a going concern.

Responsibilities of directors

The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

BDO LLP

Chartered Accountants

London, UK

10 September 2024

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).