Unaudited Condensed Consolidated Quarterly Financial Statements
For the three-month period ended May 31, 2024
BRITISH VIRGIN ISLANDS / ACCESSWIRE / July 24, 2024 / Notice of No Auditor Reviews
These unaudited condensed consolidated quarterly financial statements of Bradda Head Lithium Limited (the "Company") have not been reviewed by the auditors of the Company.
Condensed Consolidated Statement of Comprehensive Incomes
for the three-month period ended May 31, 2024
|
| Three-month period ended May 31, 2024 (unaudited) | Three-month period ended May 31, 2023 (unaudited) |
| Notes | US$ | US$ |
Expenses |
|
|
|
General and administrative | 2 | (595,622) | (1,258,841) |
Share based payment and warrant expense | 10 | - | (180,622) |
Foreign exchange gain/(loss) |
| (1,005) | 136,475 |
|
| ──────── | ──────── |
Operating loss |
| (596,627) | (1,302,988) |
|
|
|
|
Other income |
|
|
|
Warrant fair value re-measurement | 11 | - | 146,585 |
Unrealised gain on Investment at fair value through profit or loss |
| 20,034 | 13,109 |
|
| ──────── | ──────── |
(Loss)/profit before finance income |
| (576,593) | (1,143,294) |
|
|
|
|
Finance income |
| 7,185 | 59,102 |
|
| ──────── | ──────── |
(Loss)/profit before income tax |
| (569,408) | (1,084,192) |
|
|
|
|
Income tax expense |
| - | - |
|
| ──────── | ──────── |
Total comprehensive (loss)/profit for the period |
| (569,408) | (1,084,192) |
|
| ══════ | ══════ |
|
|
|
|
Basic and diluted (loss)/profit per share (US cents) | 12 | (0.146) | (0.278) |
The accompanying notes are an integral part of these consolidated quarterly financial statements.
Condensed Consolidated Statement of Financial Position
as at May 31, 2024
| Notes |
|
| May 31, 2024 (unaudited) | February 28, 2024 (audited) |
|
|
|
| US$ | US$ |
Non-Current assets |
|
|
|
|
|
Deferred mining and exploration costs | 3 |
|
| 12,207,531 | 11,025,423 |
Exploration permits and licences | 4 |
|
| 2,791,558 | 2,781,735 |
Plant and equipment | 8 |
|
| 65,273 | 78,972 |
Advances and deposits | 6 |
|
| 106,811 | 106,812 |
Investment at fair value through profit or loss |
|
|
| 87,225 | 67,191 |
|
|
|
| ─────── | ─────── |
Total non-current assets |
|
|
| 15,258,398 | 14,060,133 |
|
|
|
| ─────── | ─────── |
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
|
| 534,437 | 1,664,662 |
Trade and other receivables | 6 |
|
| 110,706 | 123,268 |
|
|
|
| ─────── | ─────── |
Total current assets |
|
|
| 645,143 | 1,787,930 |
|
|
|
| ─────── | ─────── |
Total assets |
|
|
| 15,903,541 | 15,848,063 |
|
|
|
| ═══════ | ═══════ |
Equity |
|
|
|
|
|
Share premium | 9 |
|
| 30,616,373 | 30,616,373 |
Retained deficit |
|
|
| (15,524,077) | (14,954,669) |
|
|
|
| ─────── | ─────── |
Total equity |
|
|
| 15,092,296 | 15,661,704 |
|
|
|
| ─────── | ═══════ |
Current liabilities |
|
|
|
|
|
Trade and other payables | 7 |
|
| 811,245 | 186,359 |
|
|
|
| ─────── | ─────── |
Total current liabilities |
|
|
| 811,245 | 186,359 |
|
|
|
| ─────── | ─────── |
Total equity and liabilities |
|
|
| 15,903,541 | 15,848,063 |
|
|
|
| ═══════ | ═══════ |
The accompanying notes are an integral part of these consolidated quarterly financial statements.
These condensed quarterly consolidated financial statements were approved by the Board of Directors on July 23, 2024 and were signed on their behalf by:
Denham Eke
Director
Condensed Consolidated Statement of Changes in Equity
for the three-month period ended May 31, 2024
|
|
|
|
|
|
| Share premium | Retained deficit | Total |
|
| US$ | US$ | US$ |
|
|
|
|
|
Balance at March 1, 2024 (audited) |
| 30,616,373 | (14,954,669) | 15,661,704 |
|
|
|
|
|
Total comprehensive loss for the period |
|
|
|
|
Loss for the period |
| - | (569,408) | (569,408) |
|
| ────── | ─────── | ─────── |
Total comprehensive loss for the period |
| - | (569,408) | (569,408) |
|
| ────── | ─────── | ────── |
Quarter ended May 31, 2024 (unaudited) |
| 30,616,373 | (15,524,077) | 15,092,296 |
|
| ═══════ | ═══════ | ═══════ |
The accompanying notes are an integral part of these consolidated quarterly financial statements.
Condensed Consolidated Statement of Changes in Equity
for the three month-period ended May 31, 2024 (continued)
|
| Share premium | Retained deficit | Total |
|
| US$ | US$ | US$ |
Balance at March 1, 2023 (audited) |
| 30,616,373 | (13,631,433) | 16,984,940 |
Total comprehensive loss for the period |
|
|
|
|
Loss for the period |
| - | (1,084,192) | (1,084,192) |
|
| ────── | ─────── | ─────── |
Total comprehensive loss for the period |
| - | (1,084,192) | (1,084,192) |
Transactions with owners of the Company |
|
|
|
|
Equity settled share-based payments (note 10) |
| - | 180,622 | 180,622 |
|
| ────── | ─────── | ────── |
Total transactions with owners of the Company |
| - | 180,622 | 180,622 |
|
| ────── | ─────── | ────── |
Quarter ended May 31, 2023 (unaudited) |
| 30,616,373 | (14,535,003) | 16,081,370 |
|
| ═══════ | ═══════ | ═══════ |
The accompanying notes are an integral part of these consolidated quarterly financial statements.
Condensed Consolidated Statement of Cash Flows
for the three-month period ended May 31, 2024
| Notes | Three-month period ended May 31, 2024 (unaudited) | Three-month period ended May 31, 2023 (unaudited) |
|
| US$ | US$ |
Cash flows from operating activities |
|
|
|
Loss before income tax |
| (569,408) | (1,084,192) |
Adjusted for non-cash and non-operating items: |
|
|
|
Depreciation | 8 | 13,699 | 10,921 |
Unrealised (gain)/loss on investment |
| (20,034) | (13,109) |
Interest income |
| (7,185) | (59,102) |
Equity settled share based payments expense | 10, 11 | - | 180,622 |
Warrant fair value re-measurement | 11 | - | (146,585) |
|
| ─────── | ─────── |
|
| (582,928) | (1,111,445) |
|
|
|
|
Change in trade and other receivables |
| 38,212 | 47,727 |
Change in trade and other payables |
| 599,237 | (517,974) |
|
| ─────── | ─────── |
Net cash flows used by operating activities |
| 54,521 | (1,581,692) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Amounts paid for deferred mining and exploration costs | 3 | (1,182,108) | (948,445) |
Amounts paid for licences and permits | 4 | (9,823) | (280,294) |
Equipment purchased | 8 | - | (50,000) |
Advances and deposits - cash returned |
| - | 53,250 |
|
| ─────── | ─────── |
Net cash flows used by investing activities |
| (1,191,931) | (1,225,489) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Interest income received |
| 7,185 | 59,102 |
Bank deposits not considered cash and cash equivalents (net) |
| - | (3,905,582) |
|
| ─────── | ─────── |
Net cash flows from financing activities |
| 7,185 | (3,846,480) |
|
| ─────── | ─────── |
Decrease in cash and cash equivalents |
| (1,130,225) | (6,653,661) |
|
|
|
|
Cash and cash equivalents at beginning of period |
| 1,664,662 | 7,746,519 |
|
|
|
|
Effect of foreign exchange on cash balances |
| - | - |
|
| ─────── | ─────── |
Cash and cash equivalents at end of period |
| 534,437 | 1,092,858 |
|
| ═══════ | ═══════ |
The accompanying notes are an integral part of these consolidated quarterly financial statements.
1 Reporting Entity and basis of preparation
Bradda Head Lithium Limited (the "Company") is a company domiciled in the British Virgin Islands. The address of the Company's registered office is Craigmuir Chambers, Road Town, Tortola, British Virgin Islands. The Company and its subsidiaries together are referred to as the "Group".
The Company is a lithium exploration Group focused on developing its projects in the USA.
These quarterly financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the last annual consolidated financial statements as at and for the year ended February 28, 2023 ("last annual financial statements"). They do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
The financial information in this report has been prepared in accordance with the Company's accounting policies and in consistency with the last annual financial statements. Full details of the accounting policies adopted by the Company are contained in the financial statements included in the Company's annual report for the year ended February 28, 2024, which is available on the Group's website: www.braddheadltd.com, and on SEDARplus (www.sedarplus.ca/landingpage). These unaudited condensed consolidated quarterly financial statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended February 28, 2024.
2 General and administrative
The Group's general and administrative expenses include the following:
| Three-month period ended May 31, 2024 (unaudited) US$ | Three-month period ended May 31, 2023 (unaudited) US$ |
Auditors' fees | 19,600 | 19,600 |
Directors and management fees and salaries | 114,675 | 137,541 |
Legal and accounting | 12,414 | 83,613 |
Contractor costs | 164,278 | 551,868 |
Professional and marketing costs | 66,456 | 204,203 |
Other administrative costs | 218,199 | 262,016 |
| ─────── | ─────── |
Total | 595,622 | 1,258,841 |
| ═══════ | ═══════ |
3 Deferred mine exploration costs
The schedule below details the exploration costs capitalised to date:
| Total |
| US$ |
Cost and net book value |
|
At February 28, 2023 (audited) | 7,461,851 |
| ─────── |
Capitalised during the year | 3,668,845 |
Disposal under royalty agreement | (105,273) |
| ────────── |
At February 28, 2024 (audited) | 11,025,423 |
| ────────── |
Capitalised during the period | 1,182,108 |
| ─────── |
At May 31, 2024 (unaudited) | 12,207,531 |
| ═══════ |
Cost and net book value |
|
At May 31, 2024 (unaudited) | 12,207,531 |
At February 28, 2024 (audited) | 11,025,423 |
| ═══════ |
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the successful development and commercial exploitation or sale of the respective area of interest, as well as maintaining the assets in good standing. The Group assessed the DMEC relating to areas for which licenses and permits are held, for impairment as at May 31, 2023. The Board concluded that no facts and circumstances have been identified which suggest the recoverable amount of these assets would not exceed the carrying amount and, as such, no impairment was recognised during the period.
During the year ended February 28, 2024, an impairment charge of US$ Nil was recognised.
4 Exploration permits and licences
The schedule below details the exploration permit and licence costs capitalised to date:
| Total |
| US$ |
Cost and net book value |
|
At February 28, 2023 (audited) | 2,112,415 |
|
|
Capitalised during the year | 693,920 |
Disposal under royalty agreement | (24,600) |
| ────────── |
At February 28, 2024 (audited) | 2,781,735 |
|
|
Capitalised during the period | 9,823 |
| ─────── |
At May 31, 2024 (unaudited) | 2,791,558 |
| ═══════ |
Cost and net book value |
|
At May 31, 2024 (unaudited) | 2,791,558 |
At February 28, 2024 (audited) | 2,781,735 |
| ═══════ |
The Group assessed the carrying amount of the licences and permits held for impairment as at May 31, 2024. The Board concluded that no facts and circumstances have been identified which suggest the recoverable amount of these assets would not exceed the carrying amount and, as such, no impairment was recognised during the period.
During the year ended February 28, 2024, an impairment charge of US$ Nil was recognised.
5 Investment in subsidiary undertakings
As at May 31, 2024, the Group had the following subsidiaries:
Name of company | Place of incorporation | Ownership interest | Principal activity |
Bradda Head Limited* | BVI | 100% | Holding company of entities below |
Zenolith (USA) LLC | USA | 100% | Holds USA lithium licences and permits |
Verde Grande LLC | USA | 100% | Holds USA lithium licences and permits |
Gray Wash LLC | USA | 100% | Holds USA lithium licences and permits |
San Domingo LLC | USA | 100% | Holds USA lithium licences and permits |
|
|
|
|
* Held directly by the Company. All other holdings are indirectly held through Bradda Head Limited
The condensed consolidated quarterly financial statements include the results of the subsidiaries for the full quarterly period from March 1, 2024 to May 31, 2024, and up to the date that control ceases.
6 Trade and other receivables and advances and deposits
Non-current
| May 31, 2024 (unaudited) | February 28, 2024 (audited) |
| US$ | US$ |
Advances and deposits | 106,811 | 106,812 |
| ══════ | ══════ |
7 Trade and other payables
| May 31, 2024 (unaudited) | February 28, 2024 (audited) |
| US$ | US$ |
Trade payables | 805,215 | 161,648 |
Accrued expenses and other payables | 6,030 | 24,711 |
| ────── | ────── |
| 811,245 | 186,359 |
| ══════ | ══════ |
8 Plant and equipment
|
|
|
|
| Motor vehicle | Other equipment | Total |
Cost | US$ | US$ | US$ |
As at March 1, 2023 (audited) | 114,390 | - | 114,390 |
Additions during the year | - | 50,000 | 50,000 |
| ────── | ────── | ────── |
As at February 28, 2024 (audited) | 114,390 | 50,000 | 164,390 |
|
|
|
|
Additions during the period | - | - | - |
| ────── | ────── | ────── |
As at May 31, 2024 (unaudited) | 114,390 | 50,000 | 164,390 |
| ══════ | ══════ | ══════ |
8 Plant and equipment (continued)
| Motor vehicle | Other equipment | Total |
Accumulated depreciation | US$ | US$ | US$ |
As at March 1, 2024 (audited) | (34,788) | - | (34,788) |
Depreciation charge for the year | (38,130) | (12,500) | (50,630) |
| ────── | ────── | ────── |
As at February 28, 2024 (audited) | (72,918) | (12,500) | (85,418) |
|
|
|
|
Depreciation charge for the period | (9,532) | (4,167) | (13,699) |
| ────── | ────── | ────── |
As at May 31, 2024 (unaudited) | (82,450) | (16,667) | (99,117) |
| ══════ | ══════ | ══════ |
Carrying amount |
|
|
|
As at May 31, 2024 (unaudited) | 31,940 | 33,333 | 65,273 |
As at February 28, 2024 (audited) | 41,472 | 37,500 | 78,972 |
| ══════ | ══════ | ══════ |
9 Share premium
Authorised
The Company is authorised to issue an unlimited number of nil par value shares of a single class.
|
|
|
| |
| Shares | Share capital | Share premium | |
Issued ordinary shares of US$0.00 each |
| US$ | US$ | |
|
|
|
| |
At February 28, 2023 and February 28, 2024 (audited) | 390,609,439 | - | 30,616,373 | |
| ═══════ | ═══════ | ═══════ | |
|
|
|
| |
At May 31, 2024 (unaudited) | 390,609,439 | - | 30,616,373 | |
| ═══════ | ═══════ | ═══════ | |
|
|
|
| |
|
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|
|
|
10 Equity settled share based payments
The cost of equity settled transactions with certain Directors of the Company and other participants ("Participants") is measured by reference to the fair value at the date on which they are granted. The fair value is determined based on the Black-Scholes option pricing model.
Options and warrants
The total number of share options and warrants in issue as at the period end is set out below.
Recipient | Grant Date | Term in years | Exercise Price | Number at March 1, 2024 (audited) | Number Issued | Number Lapsed/ cancelled/expired | Number Exercised | 31 May 2024 (unaudited) | Fair value |
| |
Options |
|
|
|
|
|
|
|
| US$ |
| |
Directors and Participants | April 2018 | 5 | US$ 0.15668 | 146,052 | - | - | - | 146,052 | 24,028 |
| |
Directors and Participants | June 2021 | 5 | US$ 0.048 | 18,000,000 | - | - | - | 18,000,000 | 1,110,556 |
| |
Directors and Participants | September 2021 | 5 | £0.09 | 3,000,000 | - | - | - | 3,000,000 | 314,962 |
| |
Directors and Participants | April 2022 | 5 | £0.18 | 8,375,000 | - | - | - | 8,375,000 | 1,089,312 |
| |
Directors and Participants | December 2022 | 5 | £0.105 | 1,000,000 | - | - | - | 1,000,000 | 273,727 |
| |
Directors and Participants | April 2023 | 5 | £0.03025 | 4,500,000 | - | - | - | 4,500,000 | 180,622 |
| |
Directors and Participants | February 2024 | 5 | £0.00867 | 2,850,000 | - | - | - | 2,850,000 | 262,833 |
| |
|
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| |
Warrants |
|
|
|
|
|
|
|
|
| ||
Supplier warrants | July 2021 | 5 | £0.0550 | 1,818,182 | - | - | - | 1,818,182 | 124,482 |
| |
Supplier warrants | July 2021 | 3 | £0.0825 | 2,254,545 | - | (2,254,545) | - | - | - |
| |
Shareholder warrants | December 2021 | 2 | £0.0885 | 1,185,687 | - | (1,185,687) | - | - | - |
| |
Supplier warrants | April 2022 | 2 | £0.1350 | 3,244,331 | - | (3,244,331) | - | - | - |
| |
|
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| ||
|
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|
| ─────── | ─────── | ─────── | ─────── | ─────── | ─────── |
| |
|
|
|
| 46,373,797 | - | (6,684,563) | - | 39,689,234 | 3,380,522 |
| |
|
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|
| ═══════ | ═══════ | ═══════ | ═══════ | ═══════ | ═══════ |
| |
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10 Equity settled share based payments (continued)
The amount expensed in the income statement has been calculated by reference to the fair value at the grant date of the equity instrument and the estimated number of equity instruments to vest after the vesting period.
| Three-month period ended May 31, 2024 (unaudited) US$ | Three-month period ended May 31, 2023 (unaudited) US$ |
Share based payments charge | - | 180,622 |
| ═══════ | ═══════ |
During the period ended May 31, 2024, no options were granted.
During the period ended May 31, 2024, total unexercised supplier warrants of 6,684,563 expired.
11 Warrants
As part of the fundraise completed during April 2022, all participating shareholders received a warrant on 1:1 basis for shares acquired. As a result, 73,195,560 warrants have been issued. All un-exercised warrants expire after a period of 2 years from grant date. During April 2024, all unexercised warrants issued in April 2022 expired.
12 Basic and diluted loss per share
The calculation of the basic loss per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares, on the assumed conversion of all dilutive share options.
An adjustment for the dilutive effect of share options in the current year has not been reflected in the calculation of the diluted loss per share, as the effect would have been anti-dilutive, due the Company recognising a loss for the year.
| May 31, 2024 (unaudited) US$ | May 31, 2023 (unaudited) US$ | ||
---|---|---|---|---|
Loss for the period | (569,408) | (1,084,192) | ||
| No. | No. | ||
Weighted average number of ordinary shares in issue | 390,609,439 | 342,690,043 | ||
Dilutive element of share options if exercised (note 10) | 37,871,052 | 37,831,304 | ||
Diluted number of ordinary shares | 428,480,491 | 428,440,743 | ||
Basic loss per share (cents) | (0.146) | (0.278) | ||
Diluted loss per share (cents) | (0.146) | (0.278) | ||
|
|
|
|
|
For the period ended May 31, 2024, the earnings applied are the same for both basic and diluted earnings calculations per share as there are no dilutive effects to be applied.
13 Related party transactions and balances
Edgewater Associates Limited ("Edgewater")
During the three-month period ended May 31, 2024, Directors' and Officers' insurance was obtained on an arms-length basis through Edgewater, which is a 100% subsidiary of Manx Financial Group ("MFG"). James Mellon and Denham Eke are Directors of both the Company and MFG.
During the period, the premium payable on the policy was US$ Nil (year ended February 28, 2024: US$ 43,061). A total of US$ 794 was prepaid as at the period end (February 28, 2024: US$ 11,560).
14 Commitments and contingent liabilities
The Group has certain obligations to expend minimum amounts on exploration works on mining tenements in order to retain an interest in them, equating to approximately US$ 434,704 during the next 12 months. This includes annual fees in respect of licence renewals. These obligations may be varied from time to time, subject to approval and are expected to be filled in the normal course of exploration and development activities of the Company.
15 Events after the reporting date
On 1 July 2024, the Company announced a new Mineral Resource Estimate ("MRE") at the Company's 100% owned Basin Project in Arizona, USA. The new MRE consists of 99kt of of lithium carbonate equivalent ("LCE") at an average grade of 929 ppm lithium in Measured classification, 560kt of LCE at 860ppm Li in the Indicated classification; and 2,175kt of LCE at 808ppm Li in the Inferred classification following the completion of drilling, reception and analysis of geochemical results, and new modeling of the Basin project. As per the Gross Overriding Royalty Agreement ("Royalty Agreement") with the Lithium Royalty Company ("LRC"), the new contained LCE Tonnage surpassed the contracted threshold of 2.5Mt and has enabled the Company to trigger the payment of US$3.0 million from LRC to Bradda Head, with funds being received on 8 July 2024.
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SOURCE: Bradda Head Lithium Limited