Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
1
GROUP INFORMATION
Directors
Jonathan Morley-Kirk
Non-Executive Chairman
Clive Sinclair-Poulton
Non-Executive Director
Charles Barclay
Executive Director
Aidan Bishop
Executive Director
Colin Patterson
Executive Director
Registered
Office
Harney Westwood & Riegels
Craigmuir Chambers
PO Box 71, Road Town
Tortola VG1110
British Virgin Islands
Auditor
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
UK
Lawyers
Legal Insight LLC
401, Nonhyeon-dong, M building
612 Nonhyeon-ro
Gangnam-gu, Seoul
South Korea
Registrars
Computershare Investor Services (BVI) Limited
Woodbourne Hall, Road Town
Tortola
Depositary
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS13 8AE
UK
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
2
CONTENTS
1. Chairman’s Report
3
2. Chief Executive’s Comment
5
3. Directors’ Report
7
4. Strategic Report
4.1
Business Model and Strategy
17
4.2
South Korea Gold Projects
17
4.3
Philippines Overview – Batangas Gold Project
19
4.4
Funding
20
5. Financial Statements
5.1
Independent Auditor’s Report to the Members of the Company
21
5.2
Consolidated Income Statement
26
5.3
Consolidated Statement of Comprehensive Income
27
5.4
Consolidated Statement of Financial Position
28
5.5
Consolidated Statement of Changes in Equity
29
5.6
Consolidated Cash Flow Statement
30
5.7
Notes to the Financial Statements
31
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
3
1. CHAIRMAN’S REPORT
The asset base of Bluebird Merchant Ventures remains exciting. Our focus continues to be on
advancing the development of our high-grade precious metal projects, which consists of the
Kochang Gold and Silver Mine (Kochang) and Gubong Gold Mine (Gubong) in South Korea, and the
Batangas Gold Project (Batangas) in the Philippines. We believe that you rarely find investment
exposure to c.1.5+ million oz Au in stable jurisdictions and at the current valuation (refer Chief
Executive’s Comment for detail).
Our objective of creating long term value for shareholders by bringing our projects into production
remains the core proposition of the Board, and to this end, we have focussed on a number of key
areas to deliver this. Shareholders will be aware there has been some progress, particularly in the
Philippines, but also frustrations as we negotiate the path to advance our two South Korean
projects, in particular the well documented applications for the Mountain Temporary Use Permits
(MTUP).
Our experiences in the Philippines have meant that we have revaluated the way in which we
operate. For Batangas, a Joint Venture was secured with a local partner with decades of experience
in mining to advance the project to a production decision. This agreement is based on the JV partner
achieving defined development goals in return for equity and provides us with a free carry to
production decision. Exploration expenditure to the tune of c.USD 20 million has been invested to
date and both parties recognise the inherent value of the project. Section 4.3 of the Strategic Report
provides an outline of the 2019 write down to USD nil and the Board’s decision not to reverse this
impairment to the investment in associate in the current period.
The JV model has already reaped dividends as highlighted by the receiving of the Certificate of
Approval from the Mines and Geosciences Bureau for a Two-Year Community Development Plan. A
drilling contractor has been engaged and programme planned, although the JV partner has now
reprioritised this work with the completion of an Environmental Impact Study (EIS) being the most
important task to complete. Accordingly post year end, a Philippine based consultant was appointed
to conduct the work, which has now commenced.
Our progress in the Philippines, compared to the permitting delays in South Korea, where we are still
waiting for a decision from the Board of Audit and Inspection for Kochang re the MTUP, prompted us
to rethink our strategy to identify the best development path for Gubong. Accordingly, we have
been working with an established South Korean entity, which better understands the local, district
and national geo-political environment to ensure all stakeholders are happy with our development
plans before we resubmit the MTUP. With a positive working relationship and the recognition of the
scale of the mining potential at Gubong, both parties are keen to formalise an agreement for the
development of a mine. It is envisaged that the JV model signed in the Philippines will be the basis of
an agreement in South Korea – ie, the JV partner will supply capital for the delivery of development
goals in return for equity, giving Bluebird a free carry. These negotiations are progressing well and if
an agreement is signed, we will look at a similar structure for Kochang.
With an optimal structure in place, we believe we can develop the assets and drive value for
shareholders. I would like to thank you for your patience but can assure you we have been doing all
we can to make progress. The in-ground value of the portfolio remains constant and something we
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Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
5
2. CHIEF EXECUTIVE’S COMMENT
With the general operations and corporate issues covered in the Chairman’s report, including the
delays in the progression of our South Korean projects, I want to take this opportunity to remind
shareholders why we are here, provide an update on each asset and outline what we are trying to
achieve.
The original listing asset was Batangas, but its development was put on hold due to a change in
Government in the Philippines with the investment in the project being written down to USD nil in
2019. As a result, we identified other projects, Gubong and Kochang in South Korea, with significant
potential that could benefit from our years of experience in bringing gold mines back into production
and generate high returns for investors.
Gubong remains a company maker. It was historically the second largest gold mine in South Korea
and the Korea Resources Corporation estimated 2.34 million tonnes at some 6 g/t Au garnered from
57 drill holes over 17,715 metres. It is an orogenic deposit, which typically have a depth of 2km
compared to the current depth of 500m. We believe it has a potential resource of +1 million oz Au
in-situ, plus an estimated additional 300,000 oz Au from satellite ore bodies. Having completed
extensive analysis of the historic data, we aim to bring this project into production with a medium-
term target of 60,000 oz Au per annum rising to 100,000 oz Au. Being high grade and low cost, an
estimated sub USD 700 AISC, the margins are attractive.
Kochang, the smaller of the two projects, has a current non JORC estimate of between 550,000 and
700,000 tonnes, with a range of grades between 5.2 g/t to 6.6 g/t gold, and 27.3 g/t to 34.8 g/t
silver. This hydrothermal deposit shows very high grades over a strike length of approximately
2.5km. With an initial 116,000 oz Au already defined and given an expected ultimate production
level of 60,000 tonnes per annum, a mine life of 10 years is estimated with an initial annual yield
c.10,000 oz per annum. With the grant of the MTUP, we believe that this can be fast-tracked to
production and early cashflow, which would fund future development and contribute to developing
Gubong. However, as the Chairman has already iterated, the grant of permits is held up with the
relevant authorities as it has been throughout the reporting period. We still expect a positive
resolution but feel a resolution may be accelerated with a local partner in place; accordingly, we are
in discussions with a potential partner in this regard.
Bearing in mind the situation in South Korea, our portfolio approach is beginning to pay dividends as
we advance Batangas in tandem with our JV partner. Under the terms of the agreement, an initial
25% of the project was granted to Alpha-Diggers Inc (Alpha), a newly formed special purpose vehicle
established to manage the advancement of Batangas to construction. Alpha is charged with
completing exploration and environmental work programmes targeting the high-grade Lobo area of
the project, which includes additional drilling to increase the resource and a redesign of the mine
plan for underground mining. The Bluebird team is actively working with its partners providing input
and execution advice on the relevant development paths. On completion of this and the submission
of the Declaration of Mining Project Feasibility (DMPF) application, Alpha will receive a further 15%
in the Project, raising its holding to 40%. The DMPF and an Environmental Compliance Certificate
(ECC) are the last major prerequisites for developing a gold mine at Batangas and on approval and
granting, Alpha will receive a further 20% of Batangas, raising its holding to 60%.
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Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
7
3. DIRECTORS’ REPORT
The Directors present their report together with the audited financial statements of the Group for
the year ended 31 December 2023.
The Company
The Company’s principal activity is to bring old gold mines back to life by using the management
team’s global experience in re-opening old mines to unlock hidden value.
The Company’s Ordinary Shares were admitted to listing on the London Stock Exchange in 2016, on
the Official List pursuant to Chapters 14 of the Listing Rules, which sets out the requirements for the
Standard Listing segment of the Main Market of the London Stock Exchange.
The Group
The Group consists of the companies and ownership structure as outlined in note 24 of the audited
financial statements.
Results and Dividends
The Company has set out its results in the audited financial statements, and notes, and show a loss
of USD 253,524 for the year (year to 31 December 2022 showed a show a loss of USD 1,485,806 for
the year).
The Directors do not recommend the payment of a dividend for the year ended 31 December 2023
(2022: Nil).
Future Developments
The Group’s future developments are outlined in the Strategic Report section.
Principal Risks and Uncertainties
The Group operates in an uncertain environment and is subject to a number of risk factors. The
Directors consider the following risk factors to be of particular relevance to the Group’s activities
although it should be noted that this list is not exhaustive and that other risk factors not presently
known or currently deemed immaterial may apply.
Detailed Development, Mining and other risks for the South Korean projects are detailed from page
25 of the June 2019 Prospectus (refer http://www.bluebirdmv.com/wp-content/uploads/bsk-pdf-
manager/254922_Project_Olympic_-_Prospectus_FINAL_13-06-2019_14.pdf).
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
8
South Korea Projects
Whilst the Company has received mining rights to mine Gubong and Kochang, the Company requires
further permits to allow development and mining. MTUPs are required in order to undertake certain
work and development in land areas classified as ‘mountains’. The Company is undergoing a process
with the Board of Audit and Inspection with regards to the MTUP at Kochang. Whilst the Company is
expectant that the MTUPs will be granted, there can be no guarantee that they will. Should the
MTUPs not be granted then the Company can simply reapply in the same (or a different) area as well
as having various legal remedies that it can pursue but the outcome cannot be guaranteed.
Batangas Project
The Company has entered into an agreement with a local Philippine company, with a view to
represent the mine with the potential for underground mining and to secure the key permissions
necessary to enable production. Whilst there is renewed optimism around mining in the Philippines
there can be no guarantee that the permissions will be received. The Company expects that the local
partner will be seeking to apply for the key permissions during the first quarter of 2025 after the
completion of the current work program which concludes in the fourth quarter of 2024. Should the
permissions, which are critical for the project’s value to be realised, not be received the Company
will review appeal options and legal remedies with its local partner.
Key Personnel
The Company has a small team and the loss of key personnel could negatively impact the Group and
cause further delays in progressing the projects. The Company is working with its JV partners to
progress the projects and will recruit key personnel to support the process as agreed.
Inflation/High Energy Costs
High energy costs and/or high inflation could impact on future production costs and thus
profitability of the South Korean projects and any future projects. The Company will mitigate this risk
through continuing to actively monitor cash flows and ensure that only value adding expenditure is
incurred.
Gold Price
Mining projects rely on being able to operate where the cost of extraction and processing of ore is
less than the gold price. Although the project economics in South Korea and Batangas are expected
to achieve significant profit margin any significant fall in the gold price may negatively impact the
project. The Company will look to mitigate any potential downside through a review of hedging
options once the projects are in production.
Funding Risk
Further funding will be required in the future to advance the projects. Whilst the Directors are
confident that partnerships with local partners will be put in place like that in Batangas, to remove
the requirement for capital contribution by BMV in the short term, there will still be a need for
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
9
further funding in the future. Whilst the Directors are confident that further funding will be
available when required, there can be no guarantee of such. The Directors will focus on effective
cash flow management to allow the Company to meet on-going commitments until this funding can
be secured.
Going Concern
The Directors continue to adopt the going concern basis of accounting in preparing the financial
statements but note that the auditors make reference to going concern by way of a material
uncertainty over the ability of the Company and the Group to fund the recurring and projected
expenditure (refer note 2 of the audited financial statements).
Key Performance Indicators
Completion of Work Program at Batangas
Completion of the work program at Batangas by the local joint venture partner – refer section 4.3 for
an outline of progress made to date.
Permitting
Gubong was granted a Mining Right on 02 September 2009 until 01 September 2029 that subject to
further permits (including the MTUP) allows for mining to take place. Gubong was granted a ‘Permit
to Develop’ on 7 November 2019 whereby Commercial Operation or a Qualifying Investment must
be achieved within three years. At the end of the three-year period the Company is required to
demonstrate its compliance to the licence terms. Gubong was granted a one-year extension to this
period on 15 March 2023. Subsequently, the Qualifying Investment has been made which will be
demonstrated to the relevant authorities on 29 April 2024. It is expected shortly thereafter that a
further three-year period will be granted to achieve Commercial Operations or a further Qualifying
Investment. The Mining Right can be extended for a further 20-year period upon expiration should
either Commercial Operations have begun, or where Qualifying Investments have been made.
Kochang was granted a Mining Right on 02 September 2009 until 01 September 2029 that subject to
further permits (including the MTUP) allows for mining to take place. Kochang was granted a ‘Permit
to Develop’ on 06 December 2019 whereby Commercial Operation or a Qualifying Investment must
be achieved within three years. At the end of the three-year period the Company must demonstrate
to the relevant authorities its compliance to the licence terms over the period. Kochang was granted
a one-year extension to this period on 18 April 2023. The Company upon taking advice, will make
application for a further one-year extension on 28 May 2024 on the basis that the Board of Audit
and Inspection are continuing to review the MTUP application. The Mining Right can be extended for
a further 20-year period upon expiration should either Commercial Operations have begun, or
Qualifying Investments have been made.
Progressing the MTUP application at Kochang. Whilst this was not achieved in the year ended 31
December 2023, the Directors remain optimistic that the MTUP will ultimately be granted. In the
event that the process being undertaken by the Board of Audit and Inspection is not successful then
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
10
the Company can resort to other legal remedies or it can simply make a fresh application over the
same area of land or a new application over a different land area.
Progressing the Gubong project in relation to community acceptance and advancing the permitting
process. The Directors confirm that the foundation work has commenced in the year ended 31
December 2023 with a local partner and that this will be further developed in 2024.
Upon being granted a further period to the “Permit to Develop” at Gubong and Kochang, the
Company can elect to undertake certain exploration, environmental and feasibility work if it desires
which is not dependent upon an MTUP.
Company Directors
Position
Appointed
Resigned
Audit
Committee
Remuneration
Committee
Health &
Safety
Committee
J. Morley-Kirk
Non-Exec.
Chairman
Mar-14
-
Chair
Member
Member
C. Sinclair-Poulton
Non-Exec.
Director
Sep-15
-
Member
Chair
Member
C. Human
BVI Resident
Director
Aug-22
Nov-23
-
-
-
C. Barclay
Executive
Mar-17
-
-
-
-
A. Bishop
Executive
Mar-14
-
-
-
-
C. Patterson
Executive
Sep-15
-
-
-
Chair
Shareholdings and warrants held by Directors and other Persons Discharging Managerial
Responsibilities (PDMR) are outlined in notes 20 and 16 respectively of the audited financial
statements.
Auditors
The Board appointed PKF Littlejohn LLP as auditors of the Company in August 2020. They have
expressed their willingness to continue in office and a resolution to reappoint them will be proposed
at the Annual General Meeting.
Internal Control
The Directors acknowledge they are responsible for the Group’s system of internal control and for
reviewing the effectiveness of these systems. The risk management process and systems of internal
control are designed to manage rather than eliminate the risk of the Group failing to achieve its
strategic objectives. It should be recognised that such systems can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Group has well established procedures which are considered adequate given the size, and stage,
of the business.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
11
The Group is at an early stage in its development and directors and senior management are involved
directly in approving all significant investment and expenditure decisions across the Group.
Audit Committee
The Audit Committee, which comprises two Non- Executive Directors, Jonathan Morley-Kirk and
Clive Sinclair-Poulton, is responsible for ensuring that the financial performance of the Group is
properly monitored and reported upon and that any such reports are understood by the Board. The
Committee meets formally at least twice each year.
Health, Safety and Environment Committee
The Group is committed to providing a safe, healthy and sustainable environment for all its
employees, contractors, visitors and neighbours. The Group strives actively to identify and manage
the potential direct and indirect effects of all its activities and reviews this at Board level through its
HS&E Committee.
Remuneration Committee
The remuneration of the Executive Directors is fixed by the Remuneration Committee, which
comprises two Non-Executive Directors and is chaired by Clive Sinclair-Poulton. The Remuneration
Committee is responsible for reviewing and determining the Company policy on executive
remuneration and the allocation of long-term incentives to executives and employees. The
remuneration of Non-Executive Directors is determined by the Board. In setting remuneration levels,
the Group seeks to provide appropriate reward for the skill and time commitment required in order
to retain the right caliber of Director at an appropriate cost to the Group.
The remuneration paid to, or receivable by, Directors in respect of 2023 and 2022 in relation to the
period of their appointment as Director are:
Payable in Cash (USD)
Payable in Equity (USD)
in the year
to 31-Dec-23
in the year
to 31-Dec-22
in the year
to 31-Dec-23
in the year
to 31-Dec-22
Executive Directors
C. Barclay
9,862
20,790
-
50,666
A. Bishop
85,921
9,344
-
21,822*
C. Patterson
62,941
-
-
77,969*
Non-Executive Directors
J. Morley-Kirk
34,193
4,109
-
29,883
C. Sinclair-Poulton
24,619
6,767
-
17,707*
Total
217,536
41,010
-
198,047
* Equity is issued to an associated party
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
12
All Directors’ remuneration relates to short-term employee benefits. Amounts due to December
2023 are held as Unissued Share Capital at year-end (refer note 20 of the audited financial
statements).
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
13
Share Capital
At 31 December 2023 the issued share capital of the Company stood at 712,865,042 – with
61,250,000 new shares having been issued during the year (as outlined in note 20 of the audited
financial statements).
Substantial Shareholders
Substantial shareholders are outlined in note 20 of the audited financial statements.
Director and PDMR shareholdings are outlined in note 20 of the audited financial statements.
Employees
The Group has a policy of equal opportunities throughout the organisation. Employees benefit from
regular communication both informally and formally regarding Company issues.
Directors Indemnity Insurance
The Company has purchased Directors and Officers insurance cover on behalf of the Directors
indemnifying them against certain liabilities which may be incurred by them in relation to the Group.
Sustainability Information Statement
Overview
The Board of Directors is committed to producing gold with a leading Environment, Social and
Governance approach (ESG) embedded throughout the process, from sustainable extraction and
safe, clean water and waste disposal to enhancing the opportunities for the communities in which
we operate.
The Board of Directors is aware of the requirement to include details of the Company’s compliance
with the 4 key pillars of the Taskforce on Climate-related Financial Disclosures’ (TCFD)
recommendations from January 2022:
Governance – disclose the organisation’s governance around climate-related risks and
opportunities
Strategy – disclose the actual and potential impacts of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning where such information is material
Risk Management – disclose how the organisation identifies, assesses, and manages climate-
related risks
Metrics and Targets – disclose the metrics and targets used to assess and manage relevant
climate-related risks and opportunities where such information is material
The Directors note that for the years ended 31 December 2022 and 31 December 2023 whilst the
Company recognised climate change as a relevant business risk, the Company is not in compliance
with TCFD as it has limited climate-related risks due to being in the pre-production phase and the
Company’s business model is evolving as noted in the Chairman’s Statement.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
14
The Directors confirm that as the Company’s projects move towards production, the Company, in
association with its partners will develop policies, compliance metrics and mechanisms to act on
climate change issues as a key focus of the Company’s ESG deliverables. These policies, compliance
metrics and mechanisms are intended to be finalised in the year ended 31 December 2024 and will
confirm that the operating partner will have primary responsibility for compliance and that the
partnership will jointly develop the following:
governance arrangements in relation to assessing and managing climate-related risks and
opportunities;
agreement on climate-related risks and opportunities are identified, assessed and managed;
alignment on the processes for identifying, assessing and managing climate-related risks are
integrated into the Group’s overall risk management process;
determination of the principal climate-related risks and opportunities associated with the
Group’s operations and their actual and potential impacts;
analysis of the resilience of the Group’s business model and strategy to different climate related
scenarios;
determination of the targets to be used by the Group to manage climate-related risks and to
realise climate-related opportunities; and
development of the mechanism for setting and reviewing the key performance indicators (KPIs)
to be used to assess progress against the agreed targets used to manage climate-related risks and
realise climate-related opportunities and of the calculations on which those KPIs are based.
Once developed, the Company will ensure that the climate-related impacts of the Group’s activities
will be effectively monitored by the Company’s Health & Safety Committee. Until then, for the
periods ended 31 December 2023, the Directors confirm that Company is not aware of any
significant climate related risks or costs that will affect it and are pleased to outline the Company’s
current ESG commitments below.
The Directors are pleased to confirm that there have been no reported issues of non-compliance of
these ESG commitments, which are listed below, in 2023 or to the date of this Report.
Environmental
The Board of Directors recognises the importance of understanding the environmental impact of our
activities and will operate at the highest possible environmental standards across all aspects of our
business.
Commitments:
Limit our own carbon emissions in our operations through, wherever possible, the use of
renewable energy as our primary source of energy and aiming for low carbon emission sources of
energy for low carbon emissions
Meet the highest environmental standards, ensuring biodiversity and ecosystems (land and
water) are protected from extraction to transportation
Manage our water usage, mitigate against loss of water and ensure the effective treatment of
hazardous waste
Report transparently and keep all our stakeholders updated on our performance
Bluebird Merchant Ventures Ltd
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15
Social
The Company will aim to play a positive social role in all the locations we operate in and will provide
a safe and secure operational environment for all those who work with us.
Commitments:
Create trusted relationships with local people where we will listen to and address their concerns
Invest directly into the local economy
Support our colleagues to create an inclusive and safe work environment
Ensure effective anti-corruption policies are maintained and embraced by all elements of our
team and supply chain
Corporate Governance
The Company is incorporated in the British Virgin Islands. The Company is not required to comply
with the provisions of the UK Corporate Governance Code. The Directors have responsibility for the
overall corporate governance of the Company and recognise the need for appropriate standards of
behaviour and accountability.
The Board will ensure that a sound corporate governance policy, involving a transparent set of
procedures, is embraced to ensure that the needs of all the Company’s stakeholders, internal and
external, are taken into account.
The Directors are committed to the principles underlying best practice in corporate governance and
have regard to certain principles outlined in the UK Corporate Governance Code to the extent they
considered appropriate for the Company given its size, early stage of operations and complexities.
Health & Safety
Commitment:
The Company will identify, evaluate and manage hazards and risks associated with our operations
and will promote a safe working environment for all involved
Events after the Reporting Date
The events after 31 December 2023 are detailed in note 23 of the audited financial statements.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable laws and regulations. The Directors have prepared the financial
statements for each financial period which present fairly the state of affairs of the Group and the
profit or loss of the Group for that period.
The Directors have chosen to use the UK-adopted International Accounting Standards (UK-adopted
IAS) in preparing the Group’s financial statements.
Bluebird Merchant Ventures Ltd
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International Accounting Standard 1 requires that financial statements present fairly for each
financial period the company’s financial position, financial performance and cash flows. This requires
the faithful presentation of the effects of transactions, other events and conditions in accordance
with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the
International Accounting Standards Board’s “Framework for the preparation and presentation of
financial statements”. In virtually all circumstances, a fair presentation will be achieved by
compliance with all applicable International Financial Reporting Standards.
A fair presentation also requires the Directors to:
select consistently and apply appropriate accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information;
make judgements and accounting estimates that are reasonable and prudent;
provide additional disclosures when compliance with the specific requirements in UK-adopted IAS
is insufficient to enable users to understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial performance;
state that the Group has complied with UK-adopted IAS, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business.
The Directors are also required to prepare financial statements in accordance with the rules of the
London Stock Exchange for companies trading securities on the Stock Exchange.
The Directors are responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Group, for safeguarding the assets, for taking
reasonable steps for the prevention and detection of fraud and other irregularities and for the
preparation of financial statements.
Financial information is published on the Group’s website (refer https://bluebirdmv.com/investors/
corporate-documents/). The maintenance and integrity of this website is the responsibility of the
Directors; the work carried out by the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes that may occur to the financial
statements after they are presented initially on the website.
Legislation in the British Virgin Islands governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ Responsibilities Pursuant to DTR4
In compliance with the Listing Rules of the London Stock Exchange, the Directors confirm to the best
of their knowledge:
The Group financial statements have been prepared in accordance with UK-adopted IAS and give
a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
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The annual report includes a fair review of the development and performance of the business
and the financial position of the Group, together with a description of the principal risks and
uncertainties that they face.
The Group has not met the requirements of LR14.3.33 as it does not, for the year ended 31
December 2023, have 40% of its Board being women, at least one member being from a minority
ethnic group or at least one woman in a nominated senior role within the Group. This is due to
the lack of diversity in the mining industry and size of the Group. The Company will monitor its
recruitment and hiring procedures in this regard as the Company progresses.
This Directors’ Report was approved by the Board of Directors on 29 April 2024 and is signed on its
behalf.
By Order of the Board
Jonathan Morley-Kirk
Chairman
29 April 2024
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Annual Financial Report 2023
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4. STRATEGIC REPORT
The Directors have voluntarily disclosed the Strategic Report for the year ended 31 December 2023
although it is not required under BVI regulations.
4.1 Business Model and Strategy
The Group is a project developer and targets Asian mining projects that may be brought into
production within 24 to 30 months of funding and the securing of all mining permits. Many
opportunities are presented in the form of old underground gold mines which can be re-opened, a
process with which the Company’s Management team has substantial experience (refer
https://bluebirdmv.com/corporate/).
Such projects offer significant advantages over “normal greenfield” exploration projects in that:
they cut out the major exploration costs;
the economics in terms of gold price at closure are known;
past production in the form of tonnes and grade are known;
to a large extent the existing development needs refurbishment which is far cheaper than new
development; and
the overall cost to reopen is far cheaper per ounce than new ounces at the same grade of a new
mine.
4.2 South Korea Gold Projects
South Korea is a modern, industrialised economy, a representative democracy and has substantial
infrastructure advantages, in many respects, superior to western jurisdictions. South Korea is an
investment-grade country with Moodys and Standard & Poors ratings of Aa3 and AA- respectively
(2022, Aa2 and AA).
The Gubong Project
Gubong was South Korea’s second largest gold producer historically and the largest during 1930-
1943, during the Japanese occupation. It still retains substantial remnant ore between mined blocks
and excellent exploration potential. Mine data indicates good potential for mine re-commissioning
and the possibility of relatively early cash flow.
There is a dearth of information considering the age of the mine and there is anecdotal evidence
that the information relating to gold production is understated as there was little government
control over the Japanese mining companies.
The Korean Resources Corporation (KORES) estimate of remaining resources at Gubong is 2.34M
tonnes at 7.34g/t. There are no declared JORC resource estimates currently at Gubong.
The immediate Gubong project area hosts five historical underground mines with the largest being
the Gubong mine which exploited high grade quartz veins hosted in gneissic granite and mined to a
vertical depth of approximately 500 metres.
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Historic underground sampling results of the deeper levels of Vein 6, the main vein exploited at
Gubong, gives an arithmetic uncut average of 30.6 g/t gold from 146 values. Exploratory core drilling
below the now abandoned mine workings from one of five holes returned 27.9 g/t gold and 25 g/t
silver over 1.6 metres downhole from 845.2 metres. This demonstration of the persistence with
depth of the most developed mineralised structure supports the prospectivity of the property for
auriferous shoots with considerable depth continuity.
Interestingly, Vein 6 was found as a blind vein in the hanging wall during mine development work on
the other veins. This suggests substantial gold resources may be found in parallel vein systems that
do not outcrop in the area.
The Kochang Project
The Kochang Mine began operations in 1928 with production records starting in 1938 with the
Nippon Mining Co, which mined the project until 1942. Production restarted in 1961 and was fairly
constant until 1975.
The workings extend over 1.2-1.5 km (2.5 km including the silver shaft area) from south west to
north east and extend down dip to about 120 m below surface. The workings exploit 5-7 veins
striking 050
o
with a dip of 50-70 north west. There seem to have been 4 shafts (north shaft, south
shaft, main shaft and silver shaft). The gold and silver mines have been worked as separate mines in
the past but recent work suggests that they are part of the same deposit and that resources may
extend between them.
Following the last year of recorded production in 1975, exploratory level development was carried
out in 1981 and 1990. Korean underground plans dated 1990 show the results of the sampling of
quartz veins along portions of the gold mine at Kochang. In aggregate, a total of 104 underground
samples are depicted with gold results ranging from 0.4 g/t up to 102.6 g/t for sample widths
ranging from 0.03 metres to 0.6 metres in thickness. The length weighted average value of all the
underground samples is 17.05 g/t gold over 0.2 metres. There are no declared JORC resource
estimates currently at Kochang.
Of further interest is a particularly well mineralised 120 metre length of Vein 3 at the southern end
of the prospecting drive on 245RL which gave a length weighted average value of 57.27 g/t gold over
a 0.29 metre width: indicating the presence of higher grade ore shoots at Kochang. Bonanza grades
were reportedly mined from upper levels of the north shaft vein.
In 1984, four inclined core holes were drilled at Kochang, but their coordinates are generally
unknown. Each hole intersected narrow quartz veins. Two of the holes were sampled for assay over
intersections of interest. One drill hole 84-2 was collared in a new deposit called the Sanpo Mine at
238 RL, azimuth of 225 and dip 70. Of the nine results reported, Hole 84-2 gave two intersections
above 1 g/t gold in one hole. The intersections were 10.6 g/t gold and 12 g/t silver over 0.6 metres
from 26.9 metres and 17.6 g/t gold and 4 g/t silver over 2.5 metres from 63.0 metres respectively.
At 97.6 metres a 2.4m vein gave trace gold and 1,763 g/t silver.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
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This drill hole opens up a “new” parallel mineralised structure of up to 2.5m wide to be explored and
the possibility of other as yet unknown structures related to the same hydrothermal fluid source and
regional structures.
4.3 Philippines Overview – Batangas Gold Project
The Company applied for a two-year extension of the Exploration Period of the Mineral Production
Sharing Agreement (MPSA) due to improving sentiment in the Philippines, which was granted on 21
September 2022. The Company subsequently entered into an agreement with a local Philippine
company, with a view to represent the mine with the potential for underground mining and to
secure the key permissions necessary to enable production.
The Company acquired the project from ASX Listed Red Mountain Mining Limited in November 2016
based on the highlights of a Pre-Feasibility Study (PFS) published by Red Mountain Mining Limited
that declared a Maiden Ore Reserve of 128,000oz of gold (including silver credits) including
100,000oz of high-grade gold at 4.2g/t.
The acquisition cost allocated to the project was USD 2,137,855. The Batangas asset was fully
impaired in the period ended 31 December 2019 as the Directors had a significant level of
uncertainty on securing the permits due to the political sentiment in the Philippines at the time. The
directors considered it appropriate to write the investment in Batangas down to USD Nil in the
financial statements for the period ended 31 December 2019.
The Directors have reviewed the project progress, including the 2-year extension secured for the
Exploration Period of the MPSAs in the year ended 31 December 2022 and the agreement, in
principle, to a drilling program for the Batangas project and continued to progress the community
relationship and environmental requirements required to confirm the MPSAs in the year ended 31
December 2023. The Directors note that as work is on-going and the Company will only seek to
either apply for a further two year extension or it will make application for the MPSA to enter the
Commercial Operation phase at the end of September 2024, it is prudent not to re-value the assets
in the year ended 31 December 2023.
Progress will be reviewed on an on-going basis by the Board as the projects are further developed.
Batangas Gold Project Ore Reserves JORC 2012
Deposit
Ore
Reserve
Category
Tonnes
Au
g/t
Au Oz
Ag g/t
Ag Oz
Au Eq
g/t
Au Eq
Oz
Archangel
MPSA
Probable
1,225,000
2.1
86,000
10.0
403,000
2.3
91,000
Lobo MPSA
Probable
186,000
6.2
37,000
2.2
13,000
6.2
37,000
Total Batangas
Project
Probable
1,411,000
2.6
123,000
9.0
416,000
2.4
128,000
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Batangas Gold Project Mineral Resource JORC 2012
Deposit
Resource
Classification
Tonnes
Au g/t
Au Oz
Ag g/t
Ag Oz
Kay Tanda West
Indicated
1,421,000
2.1
96,000
9.2
421,000
Inferred
229,000
2.3
17,000
2.1
15,000
Total
1,650,000
2.1
113,000
11.3
436,000
Kay Tanda Main
Indicated
1,161,000
1.9
70,000
1.4
50,000
Inferred
2,775,000
2.0
180,000
1.2
109,000
Total
3,936,000
2.0
250,000
2.6
159,000
Archangel MPSA
Total
5,586,000
2.0
363,000
5.3
595,000
South West Breccia
Indicated
214,000
6.4
44,000
1.8
12,600
Inferred
7,000
2.3
1,000
1.9
400
Total
221,000
6.3
45,000
1.8
13,000
Japanese Tunnel
Indicated
26,000
3.3
3,000
5.9
5,000
Inferred
7,000
2.3
1,000
5.7
1,000
Total
33,000
3.0
4,000
5.9
6,000
West Drift (> 2g/t)
Indicated
145,000
4.2
14,000
4.7
22,000
Inferred
205,000
2.4
19,000
4.3
28,000
Total
350,000
3.0
33,000
4.5
50,000
Lobo MPSA
Total
604,000
4.2
82,000
3.07
69,000
Batangas Gold Project
Indicated
2,968,000
2.4
227,000
5.4
511,000
Inferred
3,222,000
2.1
218,000
1.5
154,000
Total
6,190,000
2.2
445,000
3.5
665,000
The Pre-Feasibility Study was announced by Red Mountain Mining Limited (refer:
https://www.rscmme.com/report/Red_Mountain_Mining_Ltd_Batangas__15-6-2016).
4.4 Funding
The Company funded its activities during the period by a share placing of GBP 1,215,000 received in
March 2023. The Directors note that additional funding is required to meet the Company’s going
concern requirement. The Directors are confident, based on dialogue with its main shareholders and
advisors that funding will be available as and when required. The Directors note that the auditors
make reference to going concern by way of a material uncertainty over the ability of the Company
and the Group to fund the recurring and projected expenditure (refer note 2 of the audited financial
statements).
This Strategic Report was approved by the Board of Directors on 29 April 2024 and is signed on its
behalf.
By Order of the Board
Jonathan Morley-Kirk
Chairman
29 April 2024
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Annual Financial Report 2023
22
5 FINANCIAL STATEMENTS
5.1 Independent Auditor’s Report to the Members of the Company
Opinion
We have audited the financial statements of Bluebird Merchant Ventures Ltd (the ‘group’) for the
year ended 31 December 2023 which comprise the Consolidated Income Statement, the
Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the Consolidated Cash Flow Statement
and notes to the financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and UK-adopted
international accounting standards.
In our opinion, the financial statements:
give a true and fair view of the state of the group’s affairs as at 31 December 2023 and of its
loss for the year then ended; and
have been properly prepared in accordance with UK-adopted international accounting
standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent
of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in section 5.7 of the financial statements, which indicates that the
Group incurred a loss of $253,524 in the year ended 31 December 2023, as of that date the Group’s
current liabilities exceeded its current assets by $469,191 and the Group will be required to raise
further finance, equity and/or debt, in order to fund its forecasted expenditure over the next twelve
months. As stated in note 2, these events or conditions, along with the other matters as set forth in
note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of
the directors’ assessment of the Group’s ability to continue to adopt the going concern basis of
accounting included obtaining, reviewing and challenging cashflow forecasts prepared by
management covering the going concern period and the related key inputs and assumptions, stress
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Annual Financial Report 2023
23
testing forecasts and ascertaining the Group’s current financial position and discussing their
strategies regarding future fund raises.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and
qualitative thresholds for materiality determine the scope of our audit and the nature, timing and
extent of our audit procedures. Materiality for the consolidated financial statements was set as
$400,000 (2022: $400,000) based upon 2% of gross assets (2022: 2% of gross assets). Materiality has
been based upon gross assets due to the significant value of the Consolidated Statement of Financial
Position and the number of identified risks in relation to the Consolidated Statement of Financial
Position relative to the Consolidated Statement of Comprehensive Income. Performance materiality
and the triviality threshold for the consolidated financial statements was set at $300,000 (2022:
$300,000) and $20,000 (2022: $20,000) respectively due to our accumulated knowledge of the
Group, the number of significant risks identified and their assessed risk. We also agreed to report to
the Audit Committee any other differences below the triviality threshold that we believe warranted
reporting on qualitative grounds
Our approach to the audit
In designing our audit, we determined materiality and assessed the risks of material misstatement in
the financial statements. In particular we looked at areas involving significant accounting estimates
and judgements by the directors and considered future events that are inherently uncertain, such as
the carrying value of the mines under development asset. We also addressed the risk of
management override of internal controls, including among other matters consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
A full scope audit was performed on the complete financial information of all seven components of
the Group.
Of the seven reporting components of the Group, one is located in the British Virgin Islands and two
components each are located in the countries of South Korea, Philippines and Singapore. PKF
Littlejohn LLP audited the ultimate parent company, situated in the British Virgin Islands, and all
other reporting components. The Engagement Partner conducted audit work in the United Kingdom
but interacted regularly with the management team in the Philippines during all stages of the audit
and was responsible for the scope and direction of the audit process. This, in conjunction with
additional procedures performed, gave us appropriate evidence for our opinion on the Group
financial statements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we identified, including those which
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Annual Financial Report 2023
24
had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
uncertainty related to going concern section we have determined the matters described below to be
the key audit matters to be communicated in our report.
Key Audit Matter
How our scope addressed this matter
Carrying value of mines under development
As at 31 December 2023, the carrying value
of mines under development was $19,816k
(Note 12). This asset arose from the
acquisition of the previous joint venture
companies, Gubong and Kochang in 2021.
Given the value of asset and the fact that the
group have yet to enter into production and the
significant estimation and judgement required
to be made by management when conducting
their impairment assessment, there is a risk
that the assets may be materially impaired.
Our work included but was not limited to:
Obtaining and reviewing the directors’
impairment assessment;
Discussing the impairment assessment
with the directors to gain an
understanding of the methodology
applied; and
Challenging the reasonableness of key
inputs and assumptions underpinning
management’s impairment assessment
and supporting calculations.
The directors’ recoverable value assessment,
which included the use of discounted cashflow
forecasts and independent third-party
valuations of the subsidiaries and their
underlying assets, were found to be
reasonable. Management had expected to
receive Mountain Temporary Use Permits to
enable the Group to commence groundwork
for proof of concept mining at Kochang and
early development work at Gubong and are
awaiting the result of the application to Korea’s
Board of Audit Inspection in respect of
Kochang. Should Mountain Temporary Use
Permits for both projects and other required
production licences not be obtained then the
mines may not be fully developed and thus the
carrying value of mines under development
may not be recovered in full.
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the financial statements does not
cover the other information and we do not express any form of assurance conclusion thereon. Our
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Annual Financial Report 2023
25
responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in
the course of the audit, or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’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 group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
We obtained an understanding of the group and the sector in which it operates to identify
laws and regulations that could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this regard through discussions with
management, independent research and our accumulated knowledge and experience of the
industry.
We determined the principal laws and regulations relevant to the group in this regard to be
those arising from the LSE Main Market listing rules and BVI Business Companies Act.
We designed our audit procedures to ensure the audit team considered whether there were
any indications of non-compliance by the group with those laws and regulations. These
procedures included, but were not limited to:
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o Making enquiries of management regarding compliance with laws and regulations
by the Group;
o Reviewing board minutes; and
o Reviewing of regulatory news announcements made.
We also identified the risks of material misstatement of the financial statements due to
fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud
arising from management override of controls that there was potential for management bias
in relation to the carrying value of mines under development assets and we addressed this
by challenging the assumptions and judgements made by management when auditing that
significant accounting estimate.
As in all of our audits, we addressed the risk of fraud arising from management override of
controls by performing audit procedures which included, but were not limited to: the testing
of journals; reviewing accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the normal course of
business
In our audit procedures, we have considered matters of non-compliance with laws and regulations,
including fraud at the group and component levels. We have performed audit procedures on all
material components within the Group.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance
with regulation. This risk increases the more that compliance with a law or regulation is removed
from the events and transactions reflected in the financial statements, as we will be less likely to
become aware of instances of non-compliance. The risk is also greater regarding irregularities
occurring due to fraud rather than error, as fraud involves intentional concealment, forgery,
collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with our
engagement letter. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Joseph Archer Engagement Partner 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
29 April 2024
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Annual Financial Report 2023
27
5.2 Consolidated Income Statement
For the year ended 31 December 2023
Note
12 months
to 31-Dec-23
(USD)
12 months
to 31-Dec-22
(USD)
Administrative expenses
(796,859 )
(908,220 )
Operating loss
6
(796,859 )
(908,220 )
Gain on acquisition of joint ventures
12
Finance gain /(expense)
9
(577,586 )
Share of loss of joint ventures
12
(3,024 )
(Loss)/profit before taxation
(253,524 )
(1,485,806 )
Income tax expense
10
(Loss)/profit for the year
(253,524 )
(1,485,806 )
Earnings per share:
Basic and diluted earnings per share (USD cents
per share)
20
(0.0004 )
(0.0023 )
The above results relate entirely to continuing operations.
The accompanying accounting policies and notes form an integral part of these financial statements.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
28
5.3 Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
(Loss)/profit for the year
(253,524 )
(1,485,806 )
Exchange difference on translating foreign operations*
(6,580 )
Total comprehensive income for the year
(236,244 )
(1,492,386 )
* Items that may be reclassified to profit or loss
The accompanying accounting policies and notes form an integral part of these financial statements.
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Annual Financial Report 2023
29
5.4 Consolidated Statement of Financial Position
For the year ended 31 December 2023
Note
31-Dec-23
(USD)
31-Dec-22
(USD)
Non-current assets
Mines under development
12
Current assets
Trade and other receivables
13
Cash and cash equivalents
14
Current liabilities
Trade and other payables
15
(400,933 )
(195,666 )
Other financial liabilities
16
(353,300 )
(1,001,458 )
Derivative financial instruments
16
(40,570 )
(612,829 )
(794,803 )
(1,809,953 )
Net Assets
Equity
Issued share capital
20
Unissued share capital
20
Other reserves
18
Retained earnings
(3,941,523 )
(3,687,999 )
Total Equity
The accompanying accounting policies and notes form an integral part of these financial statements.
These financial statements were approved and signed on behalf of the Board of Directors.
Jonathan Morley-Kirk Colin Patterson
Chairman Chief Executive Officer
29 April 2024 29 April 2024
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30
5.5 Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Note
Issued Share
Capital
(USD)
Unissued
Share Capital
(USD)
Retained
Earnings
(USD)
Other
Reserves
(USD)
Total
Equity
(USD)
At 31-Dec-21
(2,202,193 )
Loss for the year
-
-
(1,485,806 )
-
(1,485,806 )
Other comprehensive income for the period
-
-
-
(6,580 )
(6,580 )
Total comprehensive income
-
-
(1,485,806 )
(6,580 )
(1,492,386 )
Shares issued/to be issued (net of expenses)
20
-
-
Total transactions with owners
-
-
At 31-Dec-22
(3,687,999 )
Loss for the year
-
-
(253,524 )
-
(253,524 )
Other comprehensive income for the period
-
-
-
Total comprehensive income
-
-
(253,524 )
(236,244 )
Shares issued/to be issued (net of expenses)
20
(164,013 )
-
-
Total transactions with owners
(164,013 )
-
-
At 31-Dec-23
(3,941,523 )
The accompanying accounting policies and notes form an integral part of these financial statements.
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5.6 Consolidated Cash Flow Statement
For the year ended 31 December 2023
Note
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
Cash flows from operating activities
Cash paid to suppliers and employees
(616,005 )
(559,997 )
Net cash used in operating activities
(616,005 )
(559,997 )
Cash flows from investing activities
Loans to external parties
Net cash used in investing activities
Cash flows from financing activities
Cash received for shares
Cash paid to re-pay loans
16
(674,058 )
Net cash from financing activities
Net increase/(decrease) in cash
(130,758 )
Cash and cash equivalents at the start of the year
Cash and cash equivalents at the end of the year
There have been significant non-cash transactions relating to the settlement of operating and
financial liabilities in the periods (refer notes 16 and 20 of the audited financial statements).
The accompanying accounting policies and notes form an integral part of these financial statements.
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5.7 Notes to the Financial Statements
For the year ended 31 December 2023
1. Basis of Preparation and Adoption of International Financial Reporting Standards (IFRS)
The Group financial statements consolidate those of the Company and of its subsidiaries and have
been prepared in accordance with UK-adopted IAS.
The consolidated financial statements are prepared on the historical cost basis or the fair value basis
where the fair valuing of relevant assets and liabilities has been applied.
Certain amounts included in the consolidated financial statements involve the use of judgement
and/or estimation. Judgements, estimations and sources of estimation uncertainty are discussed in
note 3.
New and amended standards which are effective for these financial statements
No new standards, amendments or interpretations, effective for the first time for the financial year
beginning on or after 1 January 2023 have had a material impact on the Group.
Standards in issue but not yet effective
Those standards, amendments and interpretations which have been recently issued or revised and
are mandatory for the Group's accounting periods beginning on or after 1 January 2024 or later are
not expected to have a material impact on the Group.
2. Going Concern
In common practice with many junior mining companies, the Group raises equity funds for its
activities in share placements. When necessary it also raises loan funding from related and third
parties.
At the year end the Group had net current liabilities of USD 428,621 exclusive of fair value liabilities
of USD 40,570 in the year (2022, USD 932,821 exclusive of USD 612,829 of non-cash/fair value
liabilities). During the year ended 31 December 2023, the Company settled USD 674,058 of loans and
announced receiving funding of GBP 1,215,000.
Based on the current plans and financial projections, the Group’s current cash resources and funding
available are insufficient to enable the Group to meet its recurring commitments for the following
twelve months. Whilst the directors acknowledge that the group will need to raise further finance to
meet its forecasted expenditure over the next 12 months, the Company is in conversation to move
its projects to a free carry basis to minimise on-going capital commitments. The Directors are in
discussions over financing and are confident that this will be achieved. The Directors note that the
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33
auditors make reference to going concern by way of a material uncertainty over the ability of the
Company and the Group to fund the recurring and projected expenditure (refer note 2 of the
audited financial statements).
3. Judgements in Applying Accounting Policies and Sources of Estimation Uncertainty
Certain amounts included in the financial statements involve the use of judgement and/or
estimation. These are based on management’s best knowledge of the relevant facts and
circumstances, having regard to prior experience. However, judgements and estimations regarding
the future are a key source of uncertainty and actual results may differ from the amounts included in
the financial statements. Information about judgements and estimation is contained in the
3.1 Mineral Resources and Ore Reserves
Quantification of Mineral Resources requires a judgement on the reasonable prospects for eventual
economic extraction. Quantification of Ore Reserves requires a judgement on whether Mineral
Resources are economically mineable. These judgements are based on assessment of mining,
metallurgical, economic, marketing, legal, environmental, social and governmental factors involved.
These factors are a source of uncertainty and changes could result in an increase or decrease in
Mineral Resources and Ore Reserves (refer note 12 of the audited financial statements and section 4
of the Strategic Report).
3.2 Recoverable value of mine under development
Consideration of impairment indicators for mining projects requires significant judgements and
estimates when assessing the available technical, financial and licencing information. At each period
end, the Directors carry out this process for each project taking into account all available information
to develop an expected recoverable value of the mines under development assets, which is
compared to the carrying value of the mine under development assets.
The Directors considered the projects’ developments since the date of this report. The Company
undertook an impairment review of the Korean projects and see no adverse factors that suggest that
the recoverable value of these assets has fallen below their carrying values. The Directors have
assessed the recoverable value of the assets by reviewing valuations reports and discounted
cashflow forecasts prepared, over six years with a discount rate of 15%, in respect of the two
projects. The Director's further believe that they will obtain the required funding, secure the
required permits be able to complete the construction of the mines and that they will generate the
funds forecasted in the discounted cashflow forecasts.
3.3 Valuation of share warrants
Share warrants issued by the Company are fair valued when granted and warrants, which are
classified as financial liabilities are revalued at each reporting date. This requires the Group to
determine an appropriate valuation methodology, which they have determined to be the Black-
Scholes option pricing model. The use of this model requires the determination of a number of key
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34
assumptions which can have a significant effect on the valuation (refer note 16 of the audited
financial statements).
4. Accounting Policies
4.1 Consolidation
The Group financial statements consolidate the results of the Company and its subsidiary
undertakings using the acquisition accounting method. On acquisition of a subsidiary, all of the
subsidiary’s identifiable assets and liabilities which exist at the date of acquisition are recorded at
their fair values reflecting their condition on that date. The results of subsidiary undertakings
acquired are included from the date of acquisition. In the event of the sale of a subsidiary, the
subsidiary results are consolidated up to the date of completion of the sale.
Subsidiaries are all those entities over which the parent has control. Control exists if the parent is
exposed, or has rights, to variable returns from its involvement with the subsidiary and has the
ability to affect those returns through its power over the subsidiary.
The costs of acquisition are recognised in the income statement. Identifiable assets acquired,
liabilities and contingent liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date irrespective of the extent of any non-controlling interest.
The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net
assets acquired is recorded as goodwill. If the cost of the acquisition is less than the fair value of the
net assets of the subsidiary acquired, the difference is recognised directly in the income statement
as a gain.
Transactions, balances and unrealised gains and losses on transactions between Group companies
are eliminated, unless the unrealised loss provides evidence of an impairment of the asset
transferred.
Investments in associates and jointly controlled entities are accounted for using the equity method
of accounting and are initially recognised at cost. The Group’s share of its associates’ post-
acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition
movements in reserves is recognised in other comprehensive income. The cumulative post-
acquisition movements are adjusted against the carrying amount of the investment. When the
Group’s share of losses exceeds its interest in an equity-accounted investee the carrying amount of
the investment, including any other unsecured receivables, is reduced to zero, and the recognition of
further losses is discontinued, unless the Group has incurred obligations or made payments on
behalf of the investee.
Accounting policies of equity-accounted investees have been changed where necessary to ensure
consistency with the policies adopted by the Group. Dilution gains and losses arising in investments
in equity-accounted investees are recognised in profit or loss.
The Group discontinues the use of the equity method from the date when the investment ceases to
be an associate or when the investment is classified as held for sale. When the Group retains an
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35
interest in the former associate or joint venture and the retained interest is a financial asset, the
Group measures the retained interest at fair value at that date and the fair value is regarded as its
fair value on initial recognition. The difference between the carry amount of the associate at the
date the equity method was discontinued, and the fair value of any retained interest and any
proceeds from disposing of a part interest in the associate is included in the determination of the
gain or loss on disposal. In addition, the Group accounts for all amounts previously recognised in
other comprehensive income in relation to that associate on the same basis as would be required if
that associate had directly disposed of the related assets of liabilities.
When the Group reduces its ownership interest in an associate but the Group continues to use the
equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive income relating to that reduction in ownership
interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets
or liabilities.
The difference between the fair value of the consideration to acquire the South Korean subsidiaries
and the fair value of the subsidiaries net assets was taken to mines under development (refer note
12 of the audited financial statements).
4.2 Investment in Associates
Associate companies are companies in which the group has significant influence generally through
holding, directly or indirectly, 20% or more of the voting power of the Group. Investments in
associates are accounted for in the financial statements by applying the equity method of
accounting whereby the investment is initially recorded at cost and adjusted thereafter for the post-
acquisition change in the Group’s share of net assets of the associate company. In addition, the
Group’s share of the profit or loss of the associate company is included in the Group’s profit or loss.
Should the carrying value of the investment in associate reach nil by virtue of impairments and/or
the accounting for the share of the associate’s results, any subsequent share of an associate’s loss
for the period are not recognised.
At each balance sheet date management make an assessment as to whether an impairment is
required. Impairments are recognised where one or more loss events are identified which are
expected to have an impact on the estimated future cashflows derived from the net investment and
can be reliably estimate.
Where impairments have been previously recognised, management will consider at each balance
sheet date whether any indicators exist to suggest that impairment losses should be reversed. Any
reversal of that impairment loss is recognised in accordance with IAS 36 to the extent that the
recoverable amount of the net investment subsequently increases. In determining the value in use
of the net investment, management must estimate the group’s share of the present value of the
estimated future cash flows expected to be generated by the associate or joint venture, including
the cash flows from the operations of the associate or joint venture and the proceeds from the
ultimate disposal of the investment and the present value of the estimated future cash flows
expected to arise from dividends to be received from the investment and from its ultimate disposal.
4.3 Segmental reporting
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36
An operating segment is a component of the Group engaged in exploration or production activity
that is regularly reviewed by the Chief Operating Decision Maker (CODM) for the purposes of
allocating resources and assessing financial performance. The CODM is considered to be the Board
of Directors. The Group’s operating segments are determined on a geographical basis being the
British Virgin Islands, South Korea and the Philippines (refer note 5 of the audited financial
statements).
4.4 Foreign currency translation
Functional and presentational currency
The functional currencies of the entities within the Group are the US dollar (for the Company and
the Singaporean companies), Philippine peso (for the Philippine companies) and the Korean won (for
the Korean companies) as the currencies which most affects each company’s costs and financing.
The Group’s presentational currency is the US dollar.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions, and from the translation at reporting period end exchange rates of
monetary assets and liabilities denominated in foreign currencies, are recognised in the income
statement.
On consolidation, the assets and liabilities of the Group’s overseas operations that do not have a US
dollar functional currency, are translated at exchange rates prevailing at the balance sheet date.
Income and expense items are translated at the average exchange rate for the period. Exchange
differences arising on the net investment in subsidiaries are recognised in other comprehensive
income.
4.5 Financial instruments
Financial assets and liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
De-recognition of financial instruments occurs when the rights to receive cash flows from the
investments expire or are transferred and substantially all of the risks and rewards of ownership
have been transferred. An assessment for impairment is undertaken where there is objective
evidence that a financial asset or a group of financial assets is impaired.
Financial assets
Financial assets are subsequently recognised at amortised cost under IFRS 9 if it meets both the hold
to collect and contractual cash flow characteristics tests. A financial asset is measured at fair value
through other comprehensive income if the financial asset is held within a business model whose
objective is achieved by both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
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If neither of the above classifications are met the asset is classified as fair value through the profit
and loss or unless management elect to do so provided the classification eliminates or significantly
reduces a measurement or recognition inconsistency.
A financial asset that is not carried at fair value through profit or loss is assessed at each reporting
date to determine a loss allowance for expected credit losses. If the credit risk on a financial
instrument has increased significantly since initial recognition, the loss allowance is equal to the
lifetime expected credit losses. If the credit risk has not increased significantly, the loss allowance is
equal to the twelve month expected credit losses.
The expected credit losses are measured in a way that reflects the unbiased and probability
weighted amount that is determined by evaluating a range of possible outcomes; the time value of
money and reasonable and supportable information that is available about past events, current
conditions and forecasts of future economic conditions.
Financial liabilities
Financial liabilities include loans and trade and other payables. In the statement of financial position
these items are included within non-current liabilities and current liabilities. Financial liabilities are
recognised when the Group becomes a party to the contractual agreements giving rise to the
liability. Interest related charges are recognised as an expense in Finance costs in the income
statement unless they meet the criteria of being attributable to the funding of construction of a
qualifying asset, in which case the finance costs are capitalised.
Borrowings, including the loan notes, are initially recognised at fair value, net of transaction costs
incurred. They are subsequently stated at amortised cost with any difference between the proceeds
(net of transaction costs) and the redemption value recognised in profit or loss over the period of
the borrowings using the effective interest rate method.
When a loan is converted into equity the gain or loss arising, being the difference between the
carrying amount of the liability extinguished and the fair value of the equity issued, is recognised in
the Income Statement.
See separate accounting policies below in respect of accounting for warrants.
Trade and other payables and loans are recognised initially at their fair value and subsequently
measured at amortised costs using the effective interest rate, less settlement payments.
4.6 Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand, demand deposits and short term highly
liquid investments and are measured at cost which is deemed to be fair value as they have short-
term maturities.
4.7 Share capital and unissued share capital
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Financial instruments issued by the Group are treated as equity only to the extent that they do not
meet the definition of a financial liability. The Company’s ordinary shares are classified as equity and
have no par value. Costs directly associated with the issue of shares are charged to share capital.
Where the Company has a contractual right to issue a fixed number of shares to settle a fixed
liability it recognises unissued share capital pending the issue of shares.
4.8 Income taxes
Current income tax liabilities comprise those obligations to fiscal authorities in the countries in
which the Group carries out operations and where it generates its profits. They are calculated
according to the tax rates and tax laws applicable to the financial period and the country to which
they relate. All changes to current tax assets and liabilities are recognised as a component of the tax
charge in the income statement.
Deferred income taxes are calculated using the liability method on temporary differences. This
involves the comparison of the carrying amount of assets and liabilities in the consolidated financial
statements with their respective tax bases. However, deferred tax is not provided on the initial
recognition of goodwill, nor on the initial recognition of an asset or liability unless the related
transaction is a business combination or affects taxable or accounting profit.
Deferred tax liabilities are provided for in full; deferred tax assets are recognised when there is
sufficient probability of utilisation. Deferred tax assets and liabilities are calculated at tax rates that
are expected to apply to their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
There are no deferred tax assets or liabilities in the Group’s statement of financial position.
4.9 Provisions, contingent liabilities and contingent assets
Other provisions are recognised when the present obligations arising from legal or constructive
commitment, resulting from past events, will probably lead to an outflow of economic resources
from the Group which can be estimated reliably. Provisions are measured at the present value of the
estimated expenditure required to settle the present obligation, based on the most reliable evidence
available at the balance sheet date. All provisions are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
4.10 Share based payments
The Group operates equity settled share based compensation plans, which may be settled in cash
under certain circumstances. All employee services received in exchange for the grant of any share
based compensation are measured at their fair values. These are indirectly determined by reference
to the share based award. Their value is appraised at the grant date and excludes the impact of any
non-market vesting conditions. The Black-Scholes model is used to measure the fair value.
All share based compensation is ultimately recognised as an expense in profit and loss with a
corresponding credit to other reserves, net of deferred tax where applicable. Where share based
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
39
compensation is to be cash settled, such as certain share based bonus awards, the corresponding
credit is made to accruals or cash. The Company may have certain share option schemes that may be
settled in cash at the absolute discretion of the Board.
If any equity settled share-based awards are ultimately settled in cash, then the amount of payment
equal to the fair value of the equity instruments that would otherwise have been issued is accounted
for as a repurchase of an equity interest and is deducted from equity. Any excess over this amount is
recognised as an expense.
If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of share options expected to vest. Non-market
vesting conditions are included in assumptions about the number of options that are expected to
become exercisable. Estimates are subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. No adjustment to the expense
recognised in prior periods is made if fewer share options are ultimately exercised than originally
granted.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction
costs, up to the nominal value of the shares issued, are allocated to share capital with any excess
being recorded in share premium.
4.11 Exploration and evaluation expenditures
The Group applies the successful efforts method of accounting for natural resource assets, having
regard to the requirements of IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’. Costs
incurred prior to obtaining the legal rights to explore an area are expensed immediately to the
Statement of Comprehensive Income.
All licence acquisitions, exploration and evaluation costs are capitalised, a share of administration
costs is capitalised insofar as they relate to exploration, evaluation and development activities.
These costs are written off unless commercial reserves have been established or the determination
process has not been completed and there are no indications of impairment. If a project is deemed
commercial all of the attributable costs are transferred into Property, Plant and Equipment. These
costs are then depreciated from the commencement of production on a unit of production basis.
4.12 Impairment of exploration and evaluation assets
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not
be recoverable an asset is reviewed for impairment. An asset’s carrying value is written down to its
estimated recoverable amount (being the higher of the fair value less costs to sell and value in use) if
that is less than the asset’s carrying amount.
Impairment reviews for exploration and evaluation assets are carried out on a project by project
basis, with each project representing a potential single cash generating unit.
An impairment review is undertaken at least each balance sheet date or when indicators of
impairment arise such as:
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40
● unexpected geological occurrences that render the resource uneconomic;
● title to the asset is compromised;
● variations in mineral prices that render the project uneconomic;
● substantive expenditure on further exploration and evaluation of mineral resources is
neither budgeted nor planned; and
● the period for which the Group has the right to explore has expired and is not expected
to be renewed.
A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If
that is the case, the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in the Statement of Comprehensive Income unless the asset is carried at revalued
amount, in which case the reversal is treated as a revaluation increase. After such a reversal, the
depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less
any residual value, on a systematic basis over its remaining useful life.
4.13 Mine development costs
Once the decision has been taken to develop a mine the costs that are considered to be directly
attributable to the development are capitalised and reviewed for impairment each year. When
assessing this asset for impairment, management estimate the recoverable value of the asset, being
the higher of the assessed value in use or the assessed fair value less costs to sell. The higher of the
two is then compared to the carrying value of the asset.
4.14 Warrants
Warrants instruments are classified as derivative financial liabilities as the functional currency of the
Company is USD and the exercise price is GBP. They are carried in the consolidated statement of
financial position at fair value with changes in fair value recognised in the consolidated statement of
comprehensive income.
4.15 Fair value measurement hierarchy
The Group classifies its financial liabilities measured at fair value using a fair value hierarchy that
reflects the significance of the inputs used in making the fair value measurement.
The fair value hierarchy has the following levels:
● Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
● Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (level 2);
● Inputs for the asset or liability that are not based on observable market data (unobservable
inputs) (Level 3).
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The level in the fair value hierarchy within the financial liability is determined on the basis of the
lowest level input that is significant to the fair value measurement.
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42
5. Segmental Reporting
5.1 Income Statement
For the year ended 31 December 2023
BVI
(USD)
Philippines
(USD)
South Korea
(USD)
Total
(USD)
Administrative costs
(511,286)
(31,252)
(257,345)
(799,883)
Finance gain
546,359
-
-
546,359
Profit/(loss) for the period
35,073
(31,252)
(257,345)
(253,524)
Other comprehensive income
(118,765)
47,422
88,623
17,280
Total comprehensive income for
the year
(83,692)
16,170
(168,722)
(236,244)
5.2 Statement of Financial Position
For the year ended 31 December 2023
BVI
(USD)
Philippines
(USD)
South Korea
(USD)
Total
(USD)
Mines under development
-
-
19,816,088
19,816,088
Trade and other receivables
31,404
-
24,359
55,763
Cash and cash equivalents
244,562
285
25,002
269,849
Total Assets
275,966
285
19,865,449
20,141,700
Trade and other payables
(321,513)
(79,420)
-
(400,933)
Other financial liabilities
-
-
(353,300)
(353,300)
Derivative financial instruments
(40,570)
-
-
(40,570)
Net (liabilities)/assets
(86,117)
(79,135)
19,512,149
19,346,897
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43
5.3 Income Statement
For the year ended 31 December 2022
BVI
(USD)
Philippines
(USD)
South Korea
(USD)
Total
(USD)
Administrative costs
(694,576)
(2,613)
(211,031)
(908,220)
Finance expense
(577,586)
-
-
(577,586)
Loss for the period
(1,272,162)
(2,613)
(211,031)
(1,485,806)
Other comprehensive income
-
(62,598)
56,018
(6,580)
Total comprehensive income for
the year
(1,272,162)
(65,211)
(155,013)
(1,492,386)
5.4 Statement of Financial Position
For the year ended 31 December 2022
BVI
(USD)
Philippines
(USD)
South Korea
(USD)
Total
(USD)
Mines under development
-
-
19,816,088
19,816,088
Trade and other receivables
217,595
-
10,798
228,393
Cash and cash equivalents
29,718
302
5,890
35,910
Total Assets
247,313
302
19,832,776
20,080,391
Trade and other payables
(116,647)
(79,019)
-
(195,666)
Other financial liabilities
(648,158)
-
(353,300)
(1,001,458)
Derivative financial instruments
(612,829)
-
-
(612,829)
Net (liabilities)/assets
(1,130,321)
(78,717)
19,479,476
18,270,438
6. Loss for the Period Before Tax
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
Loss for the period has been arrived at after charging
the following under administrative expenses:
Auditors’ remuneration – current period
43,750
42,500
Directors’ remuneration – Company
217,536
239,057
Staff costs – Group
127,888
146,291
Share based payments
-
269,951
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44
7. Remuneration of Key Management Personnel
In accordance with IAS 24 – Related Party transactions, key management personnel, including all
Executive and Non-Executive Directors, are those persons having authority and responsibility for
planning, directing and controlling the activities of the Group.
12 months to 31-Dec-23
12 months to 31-Dec-22
Payable
in Cash
(USD)
Payable
in Equity
(USD)
Total
(USD)
Payable
in Cash
(USD)
Payable
in Equity
(USD)
Total
(USD)
Directors remuneration
217,536
-
217,536
41,010
198,047
239,057
Key management
personnel
98,992
-
98,992
12,237
99,336
111,573
Other staff costs
28,896
-
28,896
34,718
-
34,718
Total remuneration
345,424
-
345,424
87,965
297,383
385,348
Details of the Directors remuneration is shown under the Remuneration Committee section of the
Director’s Report.
All amounts shown relate to short term employee benefits and there are no payments made for
other long term benefits, termination benefits or share based benefits.
Directors and key management personnel agreed to take fees between October 2021 and December
2022 as equity. This has not been issued and is represented by unissued share capital (movements
are noted in note 20 of the audited financial statements).
8. Average Number of Employees
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
Directors
6
6
Management and Administration
2
2
Mining, Processing and Exploration staff
1
1
9
9
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Annual Financial Report 2023
45
9. Finance Expense/(Gain)
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
Loan interest and loan financing fees
Fair value movement*
25,900
(572,259)
250,646
326,940
(546,359)
577,586
* Refer note 16.5 of the audited financial statements
10. Taxation
The Group contains entities with tax losses and deductible temporary differences for which no
deferred tax asset is recognised. A deferred tax asset has not been recognised within some of the
Group entities where the entities in which those losses and allowances have been generated either
do not have forecast taxable profits in the near future or the losses have restrictions whereby their
utilisation is considered to be unlikely.
The Company is taxed at the standard rate of income tax for British Virgin Island companies which is
0%. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions
– the tax charge for the period can be reconciled to the loss per the income statement as follows:
12 months to
31-Dec-23
12 months to
31-Dec-22
Profit/(loss) before taxation
Corporation
Tax
Rate
(USD)
Corporation
Tax
Rate
(USD)
BVI
0.0%
(7,027)
0.0%
(1,272,162)
Philippines
25.0%
(31,152)
25.0%
(2,613)
South Korea
25.0%
(257,345)
25.0%
(211,031)
Tax gain/(losses) carried forward not
recognised as a deferred tax asset
24.4%
(259,524)
3.6%
(1,485,806)
No disallowable expenses were incurred in 2023 (2022: USD Nil). Fair value gains from warrants are
non-taxable gains in 2023 (2022: USD Nil).
11. Investments in Associates – Egerton Gold Philippines Inc
Summarised financial information in respect of the Group’s associate interest in Egerton Gold
Philippines Inc is set out below. The summarised information represents amounts shown in Egerton
Gold Philippines Inc’s financial statements, as adjusted for differences in accounting policies.
Amounts have been translated in accordance with the Group’s accounting policy on foreign currency
translation.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
46
A summary of the Balance Sheet of Egerton Gold Philippines Inc is shown below:
31-Dec-23
(USD)
31-Dec-22
(USD)
Non-current assets
Deferred exploration costs
17,355,341
17,267,843
Current liabilities
Trade and other payables
(17,746,655)
(17,649,720)
Net liabilities
(391,314)
(381,877)
Equity
Issued Capital
112,813
122,244
Retained Earnings
(504,127)
(504,121)
Total Equity
(391,314)
(381,877)
Variances from 31 December 2022 to 31 December 2023 relate primarily to FX differences
Losses for the year ended 31 December 2023 were USD 3,024 (2022: USD Nil). As outlined in the
Directors Report, the Batangas asset was fully impaired in the period ended 31 December 2019. The
Board has determined that there should be no re-statement of the impairment at 31 December
2023, but will continue to review this on an on-going basis as the project is further developed (refer
Chairman’s Statement).
12. Mines Under Development
31-Dec-23
(USD)
31-Dec-22
(USD)
Mines under development at start of year
19,816,088
19,816,088
Movements in the year
-
-
Mines under development at end of year
19,816,088
19,816,088
The mines under development asset fair value uplift arose from the execution of an agreement the
Company announced on 29 June 2021 to increase the Group’s ownership to 100% in the Gubong and
Geochang gold mines via the acquisition of Southern Gold Limited’s 50% Joint Venture Interest in the
South Korean gold projects, which were acquired as the Company, through its pre-feasibility studies,
demonstrated value in the projects for the Company’s shareholders.
The total consideration was paid to Southern Gold Limited by the issuance of 200 million BMV shares
at GBP 3.6p per share (USD 5.0 cents).
The Joint Venture Interest in the South Korean gold projects was revalued prior to acquisition to the
consideration required to acquire the joint ventures, which generated a gain on acquisition of
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
47
USD 8.3 million and the recording of mines under development totalling USD 19.8 million at
31 December 2021.
There has been no addition in the years ended 31 December 2022 and 31 December 2023 due to
operational delays (refer note 23 of the audited financial statements).
13. Trade and Other Receivables
31-Dec-23
(USD)
31-Dec-22
(USD)
Other receivables
27,389
197,355*
Prepayments
28,374
31,038
55,763
228,933
* Includes USD 183,528 cash received on 05 January 2023 in relation to shares issued in December 2022
14. Cash and Cash Equivalents
31-Dec-23
(USD)
31-Dec-22
(USD)
Cash at bank
269,849
35,910
15. Trade and Other Payables
31-Dec-23
(USD)
31-Dec-22
(USD)
Trade and other payables
357,183
153,666
Accruals
43,750
42,000
400,933
195,666
16. Other Financial Liabilities
16.1 Other Financial Liabilities
31-Dec-23
(USD)
31-Dec-22
(USD)
Loan notes issued to non-related parties
-
648,158
Funds received from Korean consortium
353,300
353,300
353,300
1,001,458
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Annual Financial Report 2023
48
16.2 Derivative financial instruments
31-Dec-23
(USD)
31-Dec-22
(USD)
Derivative financial instruments – warrants
40,570
612,829
40,570
612,829
The warrants issued by the Company are detailed in note 16.5 of the audited financial statements.
16.3 Loans
The Group has a loan with Auric Network, a cryptocurrency organisation that operates in South
Korea, with a balance of USD 353,300 at 31 December 2023 and 31 December 2022. This funding is
in the form of a prepayment of gold to be repaid upon production at a 20% discount to the gold
price at the time of delivery.
16.4 Reconciliation of Liabilities arising from Financing Activities
For the year ended 31 December 2023
Current
Other
Financial
Liabilities
(USD)
Derivative
financial
instruments
(USD)
Total
(USD)
At 31 December 2021
779,081
285,888
1,064,969
Cash Flows
282,000
-
282,000
Debt conversion
(65,000)
-
(65,000)
Non-cash flows:
Loan charges and interest
5,377
-
5,377
Fair Value Changes
-
326,941
326,941
At 31 December 2022
1,001,458
612,829
1,614,287
Cash Flows
(674,058)
-
(674,058)
Non-cash flows:
Loan charges and interest
25,900
-
25,900
Fair Value Changes
-
(572,259)
(572,259)
At 31 December 2023
353,300
40,570
393,870
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Annual Financial Report 2023
49
16.5 Share Warrants – Fair Value
The fair value of the warrants is derived from the Black-Scholes model on the parameters noted and
is represented by the following table:
31-Dec-23
31-Dec-22
Number
(USD)
Number
(USD)
Issued in April 2016 and outstanding
5,757,924
2,933
5,757,924
46,646
Issued in period ended 31 December 2021
and outstanding
9,464,916
-
9,464,916
96,214
Issued in period ended 31 December 2022
and outstanding
48,100,000
5,615
48,100,000
469,969
Issued in period ended 31 December 2023
and outstanding
61,965,000
32,022
-
-
Warrants – issued
125,287,840
40,570
63,322,840
612,829
The warrants were fair valued using a Black Scholes model, based on the following parameters – risk
free rate 3.8% (2022, 2.4%), volatility of 85% for 3 years (2022, 88%) and 73% for 1 year (2022, 80%).
16.6 Share Warrants – Issued
Warrants issued and warrants to be issued denominated in Sterling are classified as derivative
financial instruments carried at fair value through profit and loss. There were 61,965,000 warrants
issued during the financial year (2021, 48,100,000).
1.30p
2.00p
2.50p
3.50p
3.962p
5.75p
Outstanding at
31-Dec-21
2,692,307
-
-
-
9,464,916
5,757,924
Issued in 2022
-
-
34,100,000
14,000,000
-
-
Converted in
2022
(2,692,307)
-
-
-
-
-
Re-negotiated
in 2022
-
38,564,916
(29,100,000)
-
(9,464,916)
-
Outstanding at
31-Dec-22
-
38,564,916
5,000,000
14,000,000
-
5,757,924
Issued in 2023
-
1,215,000
-
60,750,000
-
-
Outstanding at
31-Dec-23
-
39,779,916
5,000,000
74,750,000
-
5,757,924
Exercisable at
31-Dec-23
-
39,779,916
5,000,000
74,750,000
-
5,757,924
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
50
The 1,215,000 warrants at 2.0p and the 60,750,000 warrants at 3.50p were issued as part of the
share placing arrangements in March 2023.
The re-negotiated warrants issued in 2022 relate to shot-terms loans that have been re-paid in 2023.
The 5,000,000 warrants at 2.50p were issued as an incentive for a non-related consultant engaged
by the Company to lead its Investor Relations efforts and the 14,000,000 warrants at 3.50p were
issued as part of the share placing arrangements in December 2022.
The 5,757,924 warrants at 5.75p were issued to a related party of Colin Patterson in the April 2016
prospectus.
17. Financial Instruments
17.1 Financial Assets measured at Amortised Cost
31-Dec-23
(USD)
31-Dec-22
(USD)
Trade and other receivables
27,389
197,355
Cash and cash equivalents
269,849
35,910
297,238
233,265
17.2 Financial Liabilities measured at Amortised Cost
31-Dec-23
(USD)
31-Dec-22
(USD)
Trade and other payables – current
357,183
195,666
Other financial liabilities
353,300
1,001,458
710,483
1,197,124
17.3 Derivative financial instruments measured at Fair Value
31-Dec-23
(USD)
31-Dec-22
(USD)
Derivative financial instruments – warrants
40,570
612,829
40,570
612,829
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Annual Financial Report 2023
51
17.4 Fair Values
The fair values of the Group’s cash, trade and other receivables and trade and other payables are
considered equal to their book value.
Other financial liabilities are initially measured at fair value and subsequently at amortised cost. The
fair values of the Group’s other financial liabilities are considered equal to the book values as the
effect of discounting on these financial instruments is not considered to be material.
The warrants are classified as Level 3 financial instrument as certain inputs to the Black-Scholes
valuation model are not based on observable market data.
17.5 Liquidity Risk
The Group monitors constantly the cash outflows from day to day business and monitors long term
liabilities to ensure that liquidity is maintained. Trade liabilities of USD 357,183 are due on demand,
loans from the Korean consortium of USD 353,300 are due to be repaid from gold production by the
Company.
As disclosed in the going concern statement in note 2 of the audited financial statements, the
Company actively addresses the requirement to manage the Group’s cash balances as well as to
raise new financing to fund mining development activities. This is an area which receives
considerable focus from the Board and management on a daily basis.
17.6 Credit Risk
Credit risk refers to the risk that a counterparty will default on, and not pay, its contractual
obligations resulting in a financial loss to the Group. In order to minimise this risk, the Group
endeavours only to deal with companies which are demonstrably creditworthy and this, together
with the aggregate financial exposure, is continuously monitored.
Credit risk on cash and cash equivalents is considered to be acceptable as the counterparties are
either substantial banks with high credit ratings or with whom the Group has offsetting debt
arrangements.
Trade and other receivables have been recorded at cost and are in accordance with contractual
arrangements.
17.7 Interest rate risk
At the balance sheet date, the Group does not have any long-term variable rate borrowings.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
52
17.8 Foreign currency risk
The Group’s cash at bank balance consisted of the following currency holdings:
31-Dec-23
(USD)
31-Dec-22
(USD)
US Dollars
459
623
Sterling
244,103
29,095
Philippine Pesos
285
302
Korean Won
25,002
5,890
269,849
35,910
The Group is exposed to transaction foreign exchange risk due to transactions not being matched in
the same currency. This is managed, where possible and material, by the Group retaining monies
received in various currencies in order to pay for expected liabilities in that currency. The Group
currently has no currency hedging in place.
The Group’s exposure to financial assets and financial liabilities is as shown in the following tables:
Financial Assets
31-Dec-23
(USD)
31-Dec-22
(USD)
US Dollars
10,864
6,760
Sterling
244,103
209,515
Philippine Pesos
285
302
Korean Won
41,986
16,688
297,238
233,265
Financial Liabilities – Current
31-Dec-23
(USD)
31-Dec-22
(USD)
US Dollars
543,339
864,478
Sterling
152,566
866,456
Philippine Pesos
81,782
79,019
Korean Won
17,116
-
794,803
1,809,953
The Group is exposed to foreign exchange risk arising from various currency exposures primarily with
respect to the Philippines Peso and Sterling, but these are not significant as most of the transactions
are in USD. However, the Group’s management monitors the exchange rate fluctuations on a
continuous basis and acts accordingly.
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Annual Financial Report 2023
53
18. Capital Management
The Group’s capital management objectives are to ensure that the Group’s ability to continue as a
going concern, and to provide an adequate return to shareholders. The Group manages the capital
structure through a process of constant review and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Group may issue new shares, adjust dividends paid to shareholders,
return capital to shareholders, or seek additional debt finance.
The nature of the Group’s equity reserves is:
● Reserves – cumulative gains and losses on translating the net assets of overseas operations to the
presentation currency, and share based payments for the acquisition of joint venture
participation rights;
● Unissued share capital – this reflects the value of equity that management has agreed to issue for
settlement of remuneration, liabilities and funding provided;
● The cost of investment in the joint ventures at fair value on the date of signing the formal joint
venture agreement – being, USD 1,330,080 at the Company’s share price of GBP 2.56 pence on
17 August 2018;
● Retained surplus/accumulated losses – comprise the Group’s cumulative accounting profits and
losses since inception.
19. Share Based Payments
31-Dec-23
31-Dec-22
Number
Number
Issued share – non-related parties
-
9,103,679
-
9,103,679
Shares issued to non-related parties in 2022 represent shares issued in lieu of finance costs and
other operating costs incurred in the year.
20. Share Capital
20.1 Unissued Share Capital
31-Dec-23
31-Dec-22
Number
USD
Number
USD
Salary Sacrifice
6,702,253
150,584
12,610,169
301,201
December 2022 share placing
-
-
500,000
13,396
6,702,253
150,584
13,110,169
314,597
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Annual Financial Report 2023
54
The unissued share capital balance at 31 December 2023 represents amounts due to directors and
key management personnel for the period from October 2021 to December 2022.
20.2 Issued Share Capital
31-Dec-23
31-Dec-22
Number
USD
Number
USD
Opening Balance
651,615,042
20,313,458
622,315,788
19,584,044
Shares issued in the period
61,250,000
1,476,716
19,566,732
438,354*
Share based payments
-
-
9,103,679
262,952
Salary sacrifice
-
-
628,843
28,108
Closing Balance
712,865,042
21,790,174
651,615,042
20,313,458
* Includes USD 183,528 cash received on 05 January 2023 in relation to shares issued in December 2022 plus non-cash
conversions of USD 149,093 less USD 13,396 moved to unissued share capital at year end
The shares have no par value.
Issued share capital at 31 December 2023 is represented by:
31-Dec-23
31-Dec-22
Number
%
Number
%
Aidan Bishop*
67,455,536
9.5%
67,455,536
10.4%
Charles Barclay
16,291,813
2.3%
15,791,813
2.4%
Jonathan Morley-Kirk
5,306,253
0.7%
5,306,253
0.8%
Colin Patterson*
74,805,973
10.5%
74,805,973
11.5%
Clive Sinclair-Poulton*
2,316,776
0.3%
2,316,776
0.4%
Graeme Fulton
6,330,989
0.9%
6,330,989
1.0%
Stuart Kemp
11,471,619
1.6%
11,471,619
1.8%
Total PDMR
183,978,959
25.8%
183,478,959
28.2%
International Gold PTE Limited**
50,250,000
7.1%
150,000,000
23.0%
Momentum Resources Limited
34,209,117
4.8%
34,209,117
5.3%
Other
444,426,966
62.3%
283,926,966
43.5%
Total Non-PDMR
528,886,083
74.2%
393,136,083
71.8%
Total Issued Shares
712,865,042
100.0%
651,615,042
100.0%
* Issued to a related party
** 100% subsidiary of Southern Gold Limited
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
55
20.3 Earnings Per Share
12 months to
31-Dec-23
(USD)
12 months to
31-Dec-22
(USD)
Basic and diluted earnings per share
(0.0004 )
(0.0023 )
Profit/(loss) used to calculate basic earnings per share
(253,524)
(1,485,806)
Weighted average number of shares used in calculating
basic earnings per share
689,270,949
634,315,476
Basic profit/loss per share is calculated by dividing the loss attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding and shares to be issued during the
period.
In 2023 and 2022, the potential ordinary shares were anti-dilutive as the Group was in a loss making
position and therefore the conversion of potential ordinary shares would serve to decrease the loss
per share from continuing operations. Where potential ordinary shares are anti-dilutive a diluted
earnings per share is not calculated and is deemed to be equal to the basic earnings per share.
The warrants noted in note 16 of the audited financial statements could potentially dilute EPS in the
future.
20.4 Substantial Shareholders (unaudited)
At 31 December 2023 the following had notified the Company of disclosable interests in 5% or more
of the nominal value of the Company’s shares.
Number
%
Rene Nominees (IOM) Limited
126,849,621
17.8%
Fiske Nominees Limited
120,737,437
16.9%
The Bank of New York (Nominees) Limited
114,240,031
16.0%
Hargreaves Lansdown (Nominees) Limited
76,019,713
10.7%
Interactive Investor Services Nominees Limited
51,710,878
7.3%
The Directors are of the view that at 31 December 2023, and the date of the signing of this Annual
Report, that there is no ultimate controlling party.
21. Related Party Transactions
21.1 Amounts Due to Related Parties
At 31 December 2023 Directors and Key Management Personnel are due USD 234,467 (2022, USD
Nil) in cash and USD 150,584 (2022, USD 301,201) in unissued share capital.
Bluebird Merchant Ventures Ltd
Annual Financial Report 2023
56
21.1 Other Related Party Transactions
Directors Remuneration and Key Management Personnel (refer note 7 of the audited financial
statements).
Issued and unissued share capital (refer note 20 of the audited financial statements).
A related party assisted the Company with banking transactions in the period to July 2023.
22. Capital Commitments
At 31 December 2023 the Group had not entered into contractual commitments for the acquisition
of property, plant and equipment.
The Group has an office lease with an end date of August 2024 – at 31 December 2023 USD 2,362 is
payable in respect of the lease.
23. Events After the Reporting Date
There are no reportable events after the reporting date.
24. Shares in Group Undertakings
During the period the subsidiaries and associate of the Company, including those indirectly held by
the Company, are shown in the following table:
Country of
Percentage of
Ordinary Share
Capital Held
Name of Entity
Nature of Business
Registration
2023
2022
MRL Gold Inc
Batangas Gold Project
Philippines
100%
100%
Egerton Gold Philippines Inc
Batangas Gold Project
Philippines
40%
40%
Gubong Project JV Co PTE Ltd*
South Korea Gold Projects
Singapore
100%
100%
Kochang Project JV Co PTE Ltd**
South Korea Gold Projects
Singapore
100%
100%
* Gubong Project JV Co PTE Ltd is the 100% holder of the South Korea registered Gubong Project Co Ltd (note 11)
** Kochang Project JV Co PTE Ltd is the 100% holder of the South Korea registered Geochang Project Co Ltd (note 11)
The Company acquired 50% of the South Korean companies in June 2021 from Southern Gold
Limited (refer note 12 of audited financial statements).