Karelian Diamond Resources Plc - Final Results for the Year to 31 May 2025
(“ Karelian ” or the “ Company ”)
FINAL RESULTS FOR THE YEAR TO
NOTICE OF ANNUAL GENERAL MEETING
Highlights of the period included:
-- The long-awaited decision regarding mine boundaries for the Lahtojoki
diamond deposit in Finland was received. It is the Company’s intention
to move through the development stage and on to production and the
Company is focussed on securing appropriate strategic investment to this
end.
-- Following analysis of basal till samples excavated at various target
locations in the Kuhmo region of Finland a semi-airborne unmanned aerial
vehicle (UAV) survey was completed and the data resulting from this
survey was processed. The geophysical interpretation of the data
identified two diatreme-shaped anomalies that could represent the
kimberlitic source of the green diamond. A follow up drilling programme
when weather conditions suit is planned.
-- A number of interlinking new licences and licence extensions have also
been obtained in the Kuhmo area.
-- The Company’s exploration programme for Nickel, Copper and
Platinum-Group Elements in Northern Ireland , with licences covering
750Km², adds a significant important supplement to the Company’s diamond
programme in Finland .
-- The Company has identified the site of the historic Cappagh Copper Mine
in Northern Ireland as a significant new copper target for investigation
within its KDR 4 licence area.
“The Company has again made progress towards developing its targets in both
Annual Report and Financial Statements for the year to
The full audited annual report and financial statements for the year to
Annual General Meeting
The Annual General Meeting of the Company ("
AGM
") will be held at
Further Information:
Karelian Diamond Resources plc
Brendan McMorrow , Chairman +353-1-479-6180
Maureen Jones , Managing Director
Allenby Capital Limited (Nomad)
+44-20-3328-5656
Nick Athanas / Nick Harriss Peterhouse Capital Limited (Joint
Broker) +44-20-7469-0930
Lucy Williams / Duncan Vasey
CMC Markets (Joint Broker)
+ 44-20-3003-8632
Douglas Crippen Lothbury Financial Services
+44-20-3290-0707
Michael Padley Hall Communications
+353-1-660-9377
Don Hall http://www.kareliandiamondresources.com
Chairman’s Statement
Dear Shareholder,
I am pleased to present the Company’s Annual Report and Financial Statements for the year ended
The Lahtojoki Diamond Deposit
During the year the Company was granted a mining concession certificate by Tukes which formally entitles the Company to utilise the minerals within the mining concession. This was a critical milestone for your Company as it allows the Company to proceed with its plans to bring in a mine at Lahtojoki.
The Lahtojoki mining project comprises a mining concession covering 71 hectares (c. 176 acres), including a kimberlite pipe with a surface area of 1.6 hectares (c.4 acres).
Since its’ initial purchase of the project over eight years ago, the Company has been steadily working with the relevant authorities to achieve the various milestones required for the granting of a mining concession certificate by Tukes.
Now that this has been received, focus has turned to securing appropriate strategic investment to take this project through the development stage and on to production.
I do not expect this to be easy, however with the presence of fancy diamonds, including pink diamonds, and also the potential for the mine to act as a hub for other developments by your Company in the area, I believe the Company is an attractive proposition as the first diamond mine in
Diamond Exploration in the
Exploration work continues in the Kuhmo region of
In
Extensions for the exploration permits covering the Seitaperä diamondiferous kimberlite (lamproite) in Kuhmo, and the kimberlite (olivine lamproite) discovery at Riihivaara are held until a minimum of Q1 2027. We are pleased to note that the various licences in the Kuhmo area interlink and cover an area that has the potential to become a significant diamond province on the Finnish side of the Karelian Craton using a potential development at Lahtojoki as a production hub.
The Company held a public meeting in Kuhmo in
Nickel, Copper and Platinum Group Metals in
This assessment followed the discovery in
Environmental, Social and Governance Issues
Great emphasis is placed by the Company on these issues, and the Company is committed to high standards of corporate governance and integrity in all its activities and operations, including rigorous health and safety compliance, environmental consciousness and the promotion of a culture of good ethical values and behaviour.
Financial Review
The Company recorded a loss for the financial year ended
During the year under review total funds raised amounted to £651,822 at share prices ranging from
Directors and Staff
I would like to take this opportunity to sincerely thank my fellow directors, staff and consultants for their work and contribution to the Company and its operations over the past year. This is greatly appreciated and has contributed significantly to its progress.
Chairman
Extract from Independent Auditor’s Report
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
We draw attention to note 1 in the financial statements, which indicates that during the financial year ended
As stated in note 1, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Our evaluation of the directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included:
-- obtaining an understanding of the Company’s relevant controls over the
preparation of cash flow forecasts and approval of the projections and
assumptions used in cash flow forecasts to support the going concern
assumption;
-- assessing the design and determining the implementation of these
relevant controls;
-- evaluating directors’ plans and their feasibility by agreeing the inputs
used in the cash flow forecast to expenditure commitments and other
supporting documentation;
-- challenging the reasonableness of the assumptions applied by the
directors in their going concern assessment;
-- obtaining confirmations received by the Company from the directors and
former directors evidencing that they will not seek repayment of amounts
owed to them by the Company within 12 months of the date of approval of
the financial statements, unless the Company has sufficient funds to
repay;
-- assessing the mechanical accuracy of the cash flow forecast model; and
-- assessing the accuracy and completeness of the relevant disclosures made
in the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Statement of profit or loss
For the year ended
Note 2025 2024
€ €
Continuing operations
Operating expenses 2 (364,615) (418,312)
Operating loss (364,615) (418,312)
Gain in fair value of warrants 10 91,738 187,628
Interest expense 11 (6,480) (6,476)
Total finance gain 85,258 181,152
Loss before taxation 3 (279,357) (237,160)
Income tax expense 5 - -
Loss for the financial year (279,357) (237,160)
Loss per share
Basic and diluted loss per share 6 (0.0020) (0.0023)
The total loss for the financial year is entirely attributable to equity holders of the Company.
Statement of comprehensive income
For the year ended
2025 2024
€ €
Loss for the financial year (279,357) (237,160)
Income recognised in other comprehensive income - -
Total comprehensive income for the financial year (279,357) (237,160)
The total comprehensive income for the financial year is entirely attributable to equity holders of the Company.
Statement of financial position
as at
31 May 31 May
Note 2025 2024
€ €
Assets
Non-current assets
Intangible assets 7 12,085,967 11,690,194
Tangible Assets 2,114 -
Total non-current assets 12,088,081 11,690,194
Current assets
Cash and cash equivalents 8 40,862 39,597
Other receivables 9 117,094 81,551
Total current assets 157,956 121,148
Total assets 12,246,037 11,811,342
Equity
Capital and reserves
Share capital presented as equity 12 3,220,201 3,203,532
Share premium 12 11,399,829 10,736,889
Share-based payments reserve 450,658 450,658
Retained deficit (4,928,827) (4,649,470)
Total equity 10,141,861 9,741,609
Liabilities
Non-current liabilities
Warrant liabilities 10,15 32,880 -
Total non-current liabilities 32,880 -
Current liabilities
Trade and other payables 11 1,928,790 1,903,601
Convertible loan 11 132,202 125,722
Derivative liability 11 10,304 10,304
Warrant liabilities 11 - 30,106
Total current liabilities 2,071,296 2,069,733
Total liabilities 2,104,176 2,069,733
Total equity and liabilities 12,246,037 11,811,342
Statement of changes in equity
for the financial year ended
Share Share-based Retained Total
Share premium payment
capital reserve deficit equity
Note € € € € €
Balance at 1 3,203,532 10,736,889 450,698 (4,649,470) 9,741,609
June 2024
Share issue 12 16,669 789,422 - - 806,091
Share issue 15 - (126,482) - - (126,482)
costs
Loss for the - - - (279,357) (279,357)
financial year
Balance at 31 3,220,201 11,399,829 450,698 (4,928,827) 10,141,861
May 2025
Balance at 1 3,200,882 10,546,844 450,658 (4,412,310) 9,786,074
June 2023
Share issue 12 2,650 298,555 - - 310,205
Share issue - (108,510) - - (108,510)
costs
Loss for the - - - (237,160) (237,160)
financial year
Balance at 31 3,203,532 10,736,889 450,658 (4,649,470) 9,741,609
May 2024
Share capital
The share capital comprises of the nominal value share capital issued for cash and non-cash consideration. The share capital also comprises deferred share capital. The deferred share capital arose through the restructuring of share capital which was approved at the Annual General Meeting held on
Share premium
The share premium reserve comprises of the excess consideration received in respect of share capital over the nominal value of shares issued net of any direct share issue costs which are deducted from share premium in line with the Company’s accounting policies. The fair value of warrants issued as part of a fundraise are included in direct share issue costs (see note 15).
Retained deficit
This reserve represents the accumulated losses absorbed by the Company to the statement of financial position date.
Statement of cash flows
for the financial year ended
2025 2024
€ €
Cash flows from operating activities Note
Loss for the financial year (279,357) (237,160)
Adjustments for:
Movement in fair value of warrants 10 (91,738) (187,628)
Interest expense 6,480 6,476
(364,615) (418,312)
Increase in trade and other payables 11 25,189 467,514
Increase in other receivables 9 (35,543) (2,548)
Net cash (used in) / from operating activities (374,969) 46,654
Cash flows from investing activities
Expenditure on intangible assets 7 (395,773) (424,300)
Purchase of tangible assets (2,114) -
Net cash used in investing activities (397,887) (424,300)
Cash flows from financing activities
Proceeds on issue of share capital 12 774,121 301,205
Net cash provided by financing activities 774,121 301,205
Increase / (decrease) in cash and cash equivalents 1,265 (76,441)
Cash and cash equivalents at beginning of financial 39,597 116,038
year
Cash and cash equivalents at end of financial year 40,862 39,597
Notes
to the financial statements for the financial year ended
1 Material accounting policies
Reporting entity
The principal activity of the Company during the financial year is mineral exploration and development.
Basis of preparation
The financial statements are presented in Euro (“€”). The Euro is the functional currency of the Company.
The financial statements are prepared under the historical cost basis except for derivative financial instruments which are measured at fair value at each reporting date. The preparation of financial statements requires the Board of Directors and management to use judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Details of significant judgements are disclosed in the accounting policies.
The financial statements were authorised for issue by the Board of Directors on
Going concern
In preparing the financial statements, the directors consider it appropriate to use the going concern assumption, which assumes the company will have sufficient resources to enable it to meet its liabilities as they fall due.
The Company recorded a loss of €279,357 (
The Directors have considered carefully the financial position of the Company and in that context, have prepared and reviewed cash flow forecasts for the period to
The Directors recognise that net current liabilities of €1,913,340 (
In reviewing the proposed work programme for exploration and evaluation assets, the results obtained from the exploration programme, the support noted above from the Board (and past Board members), the funds raised post year end and the prospects for raising additional funds as required, the Board of Directors are satisfied that it is appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include any adjustments to the carrying value and classification of assets and liabilities that would arise if the Company was unable to continue as going concern.
Statement of compliance
The Company’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the
Recent accounting pronouncements
(i) New and amended standards adopted by the Company
The Company has adopted the following amendments to standards for the first time for its annual reporting year commencing
-- Amendments to IFRS 16 Leases: Lease liability in a sale and leaseback –
Effective date 1 January 2024 ; and
-- Amendments to IAS 1 Presentation of Financial Statements: Classification
of liabilities as current or non-current – Effective date 1 January
2024 .
The adoption of the above amendments to standards had no significant impact on the financial statements of the Group and the Company either due to being not applicable or immaterial.
(ii) New standards and interpretations not yet adopted by the Company
Certain new accounting standards and interpretations have been published and endorsed by the EU that are not mandatory for
-- Amendments to IAS 21 Lack of Exchangeability – Effective date 1 January
2025 ;
-- Amendments to IAS 7 and IFRS 17 regarding supplier finance arrangements
– Effective date 1 January 2025 ;
-- Amendments to IFRS 9 and IFRS 7 regarding classification and measurement
of financial instruments – Effective date 1 January 2026 ;
-- Annual Improvements to IFRS Accounting Standards – Volume 11 – Effective
date 1 January 2026 ;
The following new standards and amendments to standards have been issued by the
-- IFRS 18 Presentation and Disclosure in Financial Statements – Effective
date 1 January 2027 ;
-- IFRS 19 Subsidiaries without Public Accountability: Disclosures –
Effective date 1 January 2027 ;
-- Amendments to SASB standards regarding enhancement of their
international applicability;
(a) Intangible assets
The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources .
(i) Capitalisation
All costs related to acquiring the legal rights to explore will be capitalised. All other costs incurred prior to acquiring the rights to explore are charged directly to the consolidated statement of profit or loss . Exploration, appraisal and development expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible exploration and evaluation (“E&E”) assets.
E&E capitalised costs include geological and geophysical costs, and other direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities). In addition, E&E capitalised costs include an allocation from operating expenses, including share-based payments. All such costs are necessary for exploration and evaluation activities.
E&E capitalised costs are not amortised prior to the conclusion of appraisal activities.
At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered, then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires, then the costs of such unsuccessful exploration and evaluation are written off to the statement of profit or loss in the period in which the event occurred.
(ii) Impairment
If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E assets:
-- The period for which the entity has the right to explore in the specific
area has expired or will expire in the near future and is not expected
to be renewed.
-- Substantive expenditure on further exploration for and evaluation of
mineral resources in the specific area is neither budgeted nor planned.
-- Exploration for and evaluation of mineral resources in the specific area
have not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such
activities in the specific area.
-- Sufficient data exists 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.
The Company accounts for mineral expenditure in accordance with IFRS 6: Exploration for and Evaluation of Mineral Resources .
(i) Capitalisation
All costs related to acquiring the legal rights to explore will be capitalised. All other costs incurred prior to acquiring the rights to explore are charged directly to the consolidated statement of profit or loss . Exploration, appraisal and development expenditure incurred on exploring, and testing exploration prospects are accumulated and capitalised as intangible exploration and evaluation (“E&E”) assets.
E&E capitalised costs include geological and geophysical costs, and other direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability activities). In addition, E&E capitalised costs include an allocation from operating expenses, including share-based payments. All such costs are necessary for exploration and evaluation activities.
E&E capitalised costs are not amortised prior to the conclusion of appraisal activities.
At completion of appraisal activities if technical feasibility is demonstrated and commercial resources are discovered, then the carrying amount of the relevant E&E asset will be reclassified as a development and production asset, once the carrying value of the asset has been assessed for impairment. If following completion of appraisal activities in an area, it is not possible to determine technical feasibility and commercial viability, or if the right to explore expires, then the costs of such unsuccessful exploration and evaluation are written off to the statement of profit or loss in the period in which the event occurred.
(ii) Impairment
If facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount, an impairment review is performed. The following are considered to be key indicators of impairment in relation to E&E assets:
-- The period for which the entity has the right to explore in the specific
area has expired or will expire in the near future and is not expected
to be renewed.
-- Substantive expenditure on further exploration for and evaluation of
mineral resources in the specific area is neither budgeted nor planned.
-- Exploration for and evaluation of mineral resources in the specific area
have not led to the discovery of commercially viable quantities of
mineral resources and the entity has decided to discontinue such
activities in the specific area.
-- Sufficient data exists 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.
For E&E assets, where the above indicators exist on an annual basis, an impairment test is carried out. The E&E assets are categorised into Cash Generating Units (“CGU”) on a country-by-country (where material) basis. The carrying value of the CGU is compared to its recoverable amount and any resulting impairment loss is written off to the statement of profit or loss. The recoverable amount of the CGU is assessed as the higher of its fair value, less costs to sell, and its value in use.
(b) Income taxation expense
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the statement of profit or loss except to the extent that it relates to items recognised directly in other comprehensive loss, in which case it is recognised in the statement of comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
(c) Share-based payments
The Company classifies instruments issued as financial liabilities or equity instruments in accordance with the substance of the contractual terms of the instruments. When the warrants issued (see note 15 for details) have an exercise price in sterling, they are derivative in nature and are liability classified. They do not qualify for equity classification as any cash settlement on exercise of these warrants will be received in a foreign currency. Where warrants are issued in the functional currency of the Company and meet the other necessary conditions, they are recognised as equity instruments. The warrant liabilities are recognised at their fair value on initial recognition and subsequently are measured at fair value through statement of profit or loss. Any incremental direct costs associated with the issuance of warrants are taken as an immediate charge to finance costs through the statement of profit or loss. See note 11 for further details.
For equity-settled share-based payment transactions (i.e. the granting of share options and share warrants), the Company measures the services and the corresponding increase in equity at fair value at the measurement date (which is the grant date) using a recognised valuation methodology for the pricing of financial instruments (Binomial Lattice Model or Black Scholes Model).
(d) Trade and other receivables and payables
Trade and other receivables are measured at their transaction price and subsequently measured at amortised cost. Trade and other payables are measured at initial recognition at fair value, and subsequently measured at amortised cost.
(e) Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares.
(f) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank held by the Company and short-term bank deposits with a maturity of three months or less. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments.
(g) Pension costs
The Company provides for pensions for certain employees through a defined contribution pension scheme. The amount charged to the statement of profit or loss is the contribution payable in that financial year. Any difference between amounts charged and contributions paid to the pension scheme is included in receivables or payables in the statement of financial position.
(h) Foreign currencies
Transactions denominated in foreign currencies relating to costs and non-monetary assets are translated into € at the rates of exchange ruling on the dates on which the transactions occurred. Monetary assets and liabilities denominated in foreign currencies are translated into € at the rate of exchange ruling at the statement of financial position date. The resulting profits or losses are dealt with in the statement of profit or loss .
(i) Directors’ Loans
Directors’ loans are initially measured at fair value, net of transaction costs and subsequently measured at amortised cost using the effective interest method, with interest expense recognised on the effective interest rate method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.
(j) Convertible loan
As the convertible loan is made up of both liability and derivative components, it is considered to be a compound financial instrument. At initial recognition, the carrying amount of a compound financial instrument is allocated to its liability and derivative components. The fair value of the liability, which is the difference between the transaction price and the fair value of the conversion feature, and derivative is recognised as a liability in the statement of financial position. The conversion feature is subsequently measured at fair value with changes recognised in profit or loss. The liability is subsequently measured at amortised cost. The Company accounts for the interest expense of the convertible loan note at the effective interest rate. The difference between the effective interest rate and interest rate attached to the convertible loan increases the carrying amount of the liability so that, on maturity, the carrying amount is equal to the capital cash repayment that the Company may be required to pay.
(k) Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares are recognised as a deduction from retained earnings, net of any tax effects. Where warrants are issued for the sole purpose of assisting with an issue of equity or to meet broker transaction costs directly attributable to the issue of equity, the amount initially recognised, that is their fair value, is deducted from share premium. Subsequently, where the warrants qualify as equity they are recognised in other reserves and the amount recognised is not changed. If the warrants qualify as a liability the fair value is trued up from one reporting period to the next through profit or loss.
(l) Impairment - financial assets are measured at amortised cost
Financial assets measured at amortised cost are reviewed for impairment loss at each reporting date.
The Company measures the loss allowance at an amount equal to the lifetime expected credit losses (“ECL”) as required under a simplified approach for receivables that do not contain a financing component. The Company’s approach to ECL reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial re-organisation and default in payments are all considered indicators for increases in credit risks. If the credit risk increases to the point that it is considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. Any contractual payment which is more than 90 days past due is considered credit impaired.
(m) Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).
Impairment of financial assets
IFRS 9’s impairment requirements use forward-looking information to recognise expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract assets recognised and measured under IFRS 15 and loan commitments and some financial guarantee contracts (for the issuer) that are not measured at fair value through profit or loss. The Group considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Subsequent measurement of financial assets
Financial assets held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at FVTPL. Further, irrespective of the business model used, financial assets whose contractual cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply (see below). The category also contains an equity investment. The Group accounts for the investment at FVTPL and did not make the irrevocable election to account for the investment in
The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.
Classification and measurement of financial liabilities
The Company’s financial liabilities include trade and other payables and derivative financial instruments. Financial liabilities are initially measured at fair value, and, where applicable. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and effective as hedging instruments). All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included within finance costs or finance income.
(n) Significant accounting judgements and key sources of estimation uncertainty
Significant judgements in applying the Company’s accounting policies
The preparation of the financial statements requires the Board of Directors to make judgements and estimates and form assumptions that affect the amounts of assets, liabilities, contingent liabilities, revenues and expenses reported in the financial statements. On an ongoing basis, the Board of Directors evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. The Board of Directors bases its judgements and estimates on historical experience and on other factors it believes to be reasonable under the circumstances, the results of which form the basis of the reported amounts that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. In the process of applying the Company’s accounting policies above, the Board of Directors have identified the judgemental areas that have the most significant impact on the amounts recognised in the financial statements (apart from those involving estimations), which are dealt with as follows:
Exploration and evaluation assets
The assessment of whether operating costs and salary costs are capitalised to exploration and evaluation costs or expensed involves judgement. The Board of Directors consider the nature of each cost incurred and whether it is deemed appropriate to capitalise it within exploration and evaluation assets. Given that the activity of management and the resultant administration and salary costs are primarily focused on the Company’s diamond prospects, the Board of Directors consider it appropriate to capitalise a portion of such costs. These costs are reviewed on a line-by-line basis with the resultant calculation of the amount to be capitalised being specific to the activities of the Company in any given year.
Cash generating units (“CGUs”)
As outlined in the intangible assets accounting policy, the exploration and evaluation assets should be allocated to CGUs. The determination of what constitutes a CGU requires judgement. The Board of Directors consider its diamond licences in the Kuhmo region of
The carrying value of each CGU is compared to its recoverable amount. The recoverable amount of the CGU is assessed as the higher of its fair value less costs to sell and its value in use. The determination of value in use requires the following judgements:
-- Estimation of future cash flows expected to be derived from the asset.
-- Expectation about possible variations in the amount or timing of the
future cash flows.
-- The determination of an appropriate discount rate.
Going concern
The preparation of financial statements requires an assessment on the validity of the going concern assumption. The validity of the going concern assumption is dependent on the successful further development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. The Board of Directors have reviewed the proposed programme for exploration and evaluation assets and, on the basis of the equity raised after the financial year, the results from the exploration programme and the prospects for raising additional funds as required, consider it appropriate to prepare the financial statements on the going concern basis. Refer to page 30 for further details.
Deferred tax
No deferred tax asset has been recognised in respect of tax losses as it is not considered probable that future taxable profit will be available against which the related temporary differences can be utilised.
Key sources of estimation uncertainty
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Exploration and evaluation assets
The carrying value of exploration and evaluation assets in the statement of financial position was €12,085,967 (
Employee benefits – Share-based payment transactions
The Company operates equity-settled share-based payment arrangements with non-market performance conditions which fall within the scope of and are accounted for under the provisions of IFRS 2: Share-based Payment. Accordingly, the grant date fair value of the options under these schemes is recognised as an operating expense with a corresponding increase in the “Share-based payment reserve”, within equity, where the exercise price is granted in EUR or recognised as a liability where a different currency is quoted as the exercise price over the vesting period. The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the valuation model chosen. The Company has made estimates as to the volatility of its own shares, the probable life of options granted and the time of exercise of those options. The model used by the Company is the Black Scholes Model. The fair value of these options is measured using an appropriate option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest, except where forfeiture is only due to share prices not achieving the threshold for vesting.
2 Operating expenses
2025 2024
Analysis of operating expenses € €
Operating expenses 531,151 570,309
Transfer to intangible assets (166,536) (151,997)
364,615 418,312
Operating expenses are analysed as follows:
Professional fees 183,220 214,285
Wages and salaries 180,109 185,705
Directors’ Fees 60,833 74,662
Other operating expenses 65,489 55,657
Auditor’s remuneration 41,500 40,000
531,151 570,309
Other operating expenses consisted mainly of freight and courier, rent and printing, stationery and postage.
Of the above costs, a total of €166,536 (
2025 2024
€ €
Wages and salaries costs as disclosed
above is analysed as follows:
Wages and salaries 174,902 171,618
Social insurance costs 5,207 14,087
180,109 185,705
The amount of wages, salaries and related costs incurred during the financial year was recorded as follows:
2025 2024
€ €
Capitalised to intangible assets 141,567 83,058
Charged to the profit or loss 38,542 107,309
180,109 190,367
The average number of persons employed during the year (including executive Directors) by activity was as follows:
2025 2024
Corporate management and administration 2 2
Exploration and evaluation 1 1
3 3
An analysis of remuneration for each Director of the Company in the current financial year (prior to amounts transferred to intangible assets) is as follows:
Fees Salary Total
€ € €
Professor Richard Conroy 8,333 27,083 35,416
Maureen T.A. Jones 10,000 50,000 60,000
Brendan McMorrow 16,667 - 16,667
Séamus P. FitzPatrick 5,833 - 5,833
Dr. Sorċa Conroy 10,000 - 10,000
Howard Bird 10,000 - 10,000
60,833 77,083 137,916
An analysis of remuneration for each Director of the Company in the prior financial year (prior to amounts transferred to intangible assets) is as follows:
Fees Salary Total
€ € €
Professor Richard Conroy 20,000 65,000 85,000
Maureen T.A. Jones 10,000 50,000 60,000
Brendan McMorrow 10,000 - 10,000
Séamus P. FitzPatrick 10,000 - 10,000
Dr. Sorċa Conroy 10,000 - 10,000
Howard Bird 10,000 - 10,000
70,000 115,000 185,000
No share based payments or pension contribution costs have been made or incurred over the past number of years. It is anticipated that the Company will move towards incorporating share based payments as part of overall remuneration in the future. Accrued amounts of salary and pension owing to current and former directors are set out in Note 11.
3 Loss before taxation
The loss before taxation is arrived at after charging the following items:
2025 2024
€ €
Auditor’s remuneration
The analysis of the auditor’s remuneration is as follows:
-- Audit of entity financial statements 41,500 40,000
No fees were incurred for other assurance, tax advisory or other non-audit services in respect of the current or prior financial years.
4 Directors’ remuneration
2025 2024
€ €
Aggregate emoluments paid to or receivable by Directors in 137,916 185,000
respect of qualifying services
During the year ended
No compensation has been paid or is payable for the loss of office or other termination benefit in respect of the loss of office of Director or other offices (
5 Income tax expense
No taxation charge arose in the current or prior financial year due to losses incurred in prior years and this year.
Factors affecting the tax charge for the financial year:
The total tax charge for the financial year is different to the standard rate of Irish corporation tax. This is due to the following:
2025 2024
€ €
Loss on ordinary activities before taxation (279,357) (237,160)
Irish standard tax rate 12.50% 12.50%
Tax credit at the Irish standard rate (34,920) (29,645)
Effects of:
Losses carried forward utilised - -
Losses carried forward for future utilisation 34,920 29,645
Tax charge for the financial year - -
No deferred tax asset has been recognised on accumulated tax losses as it cannot be considered probable that future taxable profit will be available against which the deferred tax asset can be utilised.
Unutilised losses may be carried forward from the date of the origination of the losses but may only be offset against taxable profits earned from the same trade. Unutilised losses carried forward amounted to €13,084,193 at
6 Loss per share
Basic loss per share 31 May 31 May
2025 2024
€ €
Loss for the year attributable to equity holders of (279,357) (237,160)
the Company
Number of ordinary shares at start of the financial 105,092,749 94,492,749
year
Number of ordinary shares issued during the financial 66,676,662 10,600,000
year
Number of ordinary shares at end of the financial 171,769,411 105,092,749
year
Weighted average number of ordinary shares for the 138,490,187 101,040,146
purposes of basic and diluted loss per share
Basic and diluted loss per ordinary share (0.0020) (0.0023)
Diluted loss per share
The effect of share options and warrants is anti-dilutive.
7 Intangible assets
Exploration and evaluation assets
31 May 31 May
Cost 2025 2024
€ €
At 1 June 11,690,194 11,265,894
Expenditure capitalised during the financial year:
-- Licence and appraisal costs 199,937 272,303
-- Other operating expenses 195,836 151,997
At 31 May 12,085,967 11,690,194
Exploration and evaluation assets relate to expenditure incurred in the development of mineral exploration opportunities. These assets are carried at historical cost and have been assessed for impairment in particular with regard to the requirements of IFRS 6: Exploration for and Evaluation of Mineral Resources relating to remaining licence or claim terms, likelihood of renewal, likelihood of further expenditure, possible discontinuation of activities as a result of specific claims and available data which may suggest that the recoverable value of an exploration and evaluation asset is less than its carrying amount.
The Board of Directors note that the realisation of the intangible assets is dependent on further successful development and ultimate production of the mineral resources and the availability of sufficient finance to bring the resources to economic maturity and profitability. Mineral interests are categorised geographically as follows:
Finland
31 May 31 May
Cost 2025 2024
€ €
At 1 June 11,501,738 11,223,401
Expenditure capitalised during the financial year:
-- Licence and appraisal costs 124,539 157,299
-- Other operating costs 149,999 121,038
At 31 May 11,777,276 11,501,738
Northern Ireland
31 May 31 May
Cost 2025 2024
€ €
At 1 June 188,456 42,493
Expenditure capitalised during the financial year:
-- Licence and appraisal costs 74,399 89,287
-- Other operating costs 45,836 56,676
At 31 May 308,691 188,456
In assessing exploration licences for impairment the Board of Directors have considered in particular the proposed work programmes for the underlying diamond resources in
The diamond deposit at Lahtojoki has recently had its mining permit granted by Tukes and will shortly be entering its development phase. In assessing this asset in particular, the Board of Directors have also considered the potential recoverability of the carrying value by evaluating a financial model for the development of the deposit at Lahtojoki and are satisfied that no impairment of the carrying value of the related capitalised expenditure is required.
8 Cash and cash equivalents
31 May 31
May
2025 2024
€ €
Cash held in bank accounts 40,862 39,597
40,862 39,597
Certain of the above bank accounts are held for the purpose of holding collateral deposits related to the Finnish licenses. As at
9 Other receivables
31 May 31 May
2025 2024
€ €
VAT receivable 76,387 51,469
Prepayments 38,707 28,082
Other receivables 2,000 2,000
117,094 81,551
The Directors consider that the carrying values of receivables are approximate to their fair values.
No expected credit losses exist in relation to the Company’s receivables as at
10 Non-current liabilities
Warrant liabilities
During the year ended
At
Warrant in issue in the prior year had a 12 month expiry date and were included in current liabilities (see Note 11).
These warrants lapsed unexercised during the current year.
Warrants issued on
31 May 31 May
2025 2024
€ €
Opening balance 30,106 109,224
Warrant liability recorded on issue (Note 15) 94,512 108,510
Movement in fair value of warrants (91,738) (187,628)
32,880 30,106
Disclosed as
Non current liability (Note 10) 32,880 -
Current liability (Note 11) - 30,106
11 Current liabilities
Trade and other payables
31 May 31 May
2025 2024
€ €
Accrued Directors’ remuneration
Fees and other emoluments 1,351,636 1,213,720
Pension contributions 263,250 263,250
Amount due to related party (see Note 14 (b)) 75,065 144,551
Directors’ Current Account (Note 14 ) 6,772 -
Other creditors and accruals 232,067 282,080
1,928,790 1,903,601
It is the Company’s practice to agree terms of transactions, including payment terms with suppliers. It is the Company’s policy that payment is made according to the agreed terms. The carrying value of the trade and other payables approximates to their fair value.
The Directors,
Convertible Loan
On
€10,304 was recorded as a derivative liability attached to the total convertible loan note above and the net amount of €119,246 was initially recorded as the value of the convertible loan at
31 May 31 May
2025 2024
€ €
Opening balance 125,722 119,246
Interest payable 6,480 6,476
Closing balance 132,202 125,722
12 Called up share capital and share premium
31 May 31 May
Authorised:
2025 2024
€ €
7,301,310,041 consolidated ordinary shares of €0.00025 each 1,825,328 1,825,328
317,785,034 deferred shares of €0.00999 each 3,174,672 3,174,672
5,000,000 5,000,000
The deferred shares do not entitle the holder to receive a dividend or other distribution. Furthermore, the deferred shares do not entitle the shareholder to receive notice of or vote at any general meeting of the Company, and do not entitle the shareholder to any proceeds on a return of capital or winding up of the Company.
Issued and fully paid – Current financial year
Called up Called up deferred
Number of share capital Share premium
ordinary shares share capital
€ €
€
Start of
financial year –
consolidated 105,092,749 28,860 3,174,672 10,736,889
ordinary shares
of €0.00025 each
Share issue (a) 23,599,995 5,900 - 411,232
Share issue (b) 43,076,667 10,769 - 378,189
Share issue costs - - - (126,482)
End of financial 171,769,411 45,529 3,174,672 11,399,828
year
Issued and fully paid – Prior financial year
Called up Called up deferred
Number of share capital Share premium
ordinary shares share capital
€ €
€
Start of
financial year 94,492,749 26,210 3,174,672 10,546,844
–shares of
€0.00025 each
Share issue (c) 10,600,000 2,650 - 298,555
Share issue costs - - - (108,510)
End of financial 105,092,749 28,860 3,174,672 10,736,889
year
(a)
On
(b)
On
(c)
On
Warrants:
At
Share price:
The share price at
13 Commitments and contingencies
At
14 Related party transactions
(a)
The Company shares office accommodation with Conroy Gold and Natural Resources P.L.C. which has certain common Directors and shareholders. For the financial year ended
These costs are analysed as follows:
2025 2024
€ €
Salaries 52,811 71,738
Rent and rates - 13,310
Shared consultancy costs (20,628) -
Other operating expenses 30,325 30,000
62,508 115,048
(b)
At
(c)
Key management personnel are considered to be the Directors and other key management.
The compensation of all key management personnel during the year was €162,083 (2023: €148,250) including an amount of €25,000 (
(d) Details of share capital transactions with the Directors are disclosed in the Directors’ Report.
(e) Apart from Directors’ remuneration (detailed in Note 2 and Note 4), a convertible loan from a shareholder (which is detailed in Note 11) and share capital transactions (which are detailed within the Directors’ Report), there have been no contracts or arrangements entered into during the financial year in which a Director of the Company had a material interest.
15 Share-based payments
Warrants granted by the company generally have a vesting period ranging from one to two years. Details of the warrants outstanding during the financial year are as follows:
2025 2025 2024 2024
Weighted Average Weighted Average
No. of Share Exercise Price No. of Share Exercise Price
Warrants Warrants
€ €
At 1 June 27,900,000 0.04871 34,750,000 0.05963
Granted during the 54,876,664 0.02217 10,000,000 0.05882
financial year
Lapsed during the (27,900,000) 0.04871 (16,250,000) 0.09412
financial year
Exercised during - - (600,000) 0.02353
the financial year
At 31 May 54,876,664 0.02217 27,900,000 0.04871
The company issued 11,799,997 sterling based warrants on
The Company estimated the fair value of warrants awards using the Black Scholes Model. The determination of the fair value of share-based payment awards on the date of grant and on revaluation at each year end using the Black Scholes Model is affected by
The following key input assumptions were used to calculate the fair value of the sterling based warrants at the balance sheet dates and date of issue during the year:
31 May 2025 Date of issue 31 May 2024
Warrants Warrants Warrants
Dividend yield 0% 0% 0%
Share price volatility 85.106% 66.395% 65.956%
Risk free interest rate 3.88101% 4.183% 5.1582%
Expected life (in years) 0.0833 / 1.75 1.0 / 2.0 0.5
During the prior year, the company issued 10,000,000 sterling based warrants in conjunction with the issue of ordinary shares as part of a financing and an amount of €108,510 was deducted from share premium as a direct issue cost (being the fair value of these warrants at date of grant).
16 Financial instruments
Financial risk management objectives, policies and processes
The Company has exposure to the following risks from its use of financial instruments:
(a) Inflation;
(b) Interest rate risk;
(c) Foreign currency risk;
(d) Liquidity risk; and
(e) Credit risk.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.
The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and framework in relation to the risks faced.
(a) Inflation
The Company is exposed to the risk associated with inflation such as the impact of increased operating expenses including rent, light & heat and wages and salaries. The Chairman and Managing Director monitor costs on an ongoing basis.
(b) Interest rate risk
The Company currently finances its operations through shareholders’ funds and loan finance. The loan finance at
(c) Foreign currency risk
The Company is exposed to currency risk on purchases, loans and bank deposits that are denominated in a currency other than the functional currency of the Company. The Company is further exposed to foreign currency risk through the warrants denominated in sterling which is not the Company’s functional currency.
It is the Company’s policy to ensure that foreign currency risk is managed wherever possible by matching foreign currency income and expenditure. During the years ended
The Company’s foreign currency risk exposure in respect of the principal foreign currencies in which the Company operates was as follows at
Sterling exposure Euro exposure Total
denominated in € € €
Cash and cash equivalents (9) 40,871 40,862
Derivative liability (10,304) - (10,304)
Convertible Loan (132,202) - (132,202)
Trade and other payables - (2,071,296) (2,071,296)
Other prepayments - 40,707 40,707
VAT/PAYE receivable - 52,282 52,282
Amount due to Conroy Gold and - (75,065) (75,065)
Natural Resources plc
Total exposure (142,515) (2,012,501) (2,155,016)
The Company’s foreign currency risk exposure in respect of the principal foreign currencies in which the Company operates was as follows at
Sterling exposure Euro exposure Total
denominated in € € €
Cash and cash equivalents 525 39,017 39,542
Derivative liability (10,304) - (10,304)
Convertible loan (125,722) - (125,722)
Trade and other payables - (1,759,050) (1,759,050)
Other prepayments - 30,082 30,082
VAT/PAYE receivable - 51,469 51,469
Amount due to Conroy Gold and - (144,551) (144,551)
Natural Resources plc
Total exposure (135,501) (1,783,033) (1,918,534)
The following are the significant exchange rates that applied against €1 during the financial year:
Spot Rate Spot Rate
Average Rate 2025 Average Rate 2024 31 May 31 May
2025 2024
GBP 0.840 0.860 0.841 0.851
Sensitivity analysis
A 10% strengthening of the Euro against Sterling, based on outstanding financial assets and liabilities at
(d) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and adverse conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company manages liquidity risk by regularly monitoring cash flow projections. The nature of the Company’s exploration and appraisal activities can result in significant differences between expected and actual cash flows. Contractual maturities of financial liabilities as at
Carrying Contractual 6 months or 6-12 months 1-2 years 2-5 years
amount € cash flows less € €
€ € €
Trade and
other
payables
(including 1,928,790 1,928,790 307,130* - 1,621,660** -
amounts
owed to
related
party)
Convertible 142,506 142,506 142,506*** - - -
loan
2,071,296 2,071,296 449,636 - 1,621,660 -
Contractual maturities of financial liabilities as at
Carrying Contractual 6 months or 6-12 months 1-2 years 2-5 years
amount € cash flows less € €
€ € €
Trade and
other
payables
(including 1,903,601 1,903,601 426,631* - 1,476,970** -
amounts
owed to
related
party)
Convertible 136,026 136,026 136,026*** - - -
loan
2,039,627 2,039,627 562,657 - 1,476,970** -
*The amount of €307,130 (
**The Directors,
***On
The Company had cash and cash equivalents of €40,862 at
(e) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge its obligation.
Credit risk is the risk of financial loss to the Company if a cash deposit is not recovered. Company deposits are placed only with banks with appropriate credit ratings. The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was as follows:
2025 2024
€ €
Cash and cash equivalents 40,862 39,597
Other receivables 40,707 30,082
81,569 69,679
The Company’s cash and cash equivalents are held at
Expected credit loss
The Company measures credit risk and expected credit losses on financial assets measured at amortised cost using probability of default, exposure at default and loss given default. Management consider both historical analysis and forward-looking information in determining any expected credit loss. At
(f) Fair values versus carrying amounts
Due to the short-term nature of the majority of the Company’s financial assets and liabilities held at amortised cost at
(g) Capital management
The principal activities of the Company are concentrating particularly on diamond exploration and evaluation.
The Company has historically funded its activities through share issues and placings and loans. The Company’s capital structure is kept under review by the Board of Directors and it is committed to capital discipline and continues to maintain flexibility for future growth.
The capital structure of the Company consists of equity of the Company (refer to the statement of changes in equity and Note 12). The Company is not subject to any externally imposed capital requirements.
17 Post balance sheet events
The Company announced on 10
th
The Company announced on 17
th
The Company also raised funds of €217,239 (£185,000) on
There were no further material events to note post year end.
18
Approval of the financial statements for the financial year ended
The financial statements were approved by the Board of Directors on
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