Company Registration Number: 12497319 (England and Wales)
GREAT SOUTHERN COPPER PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
GREAT SOUTHERN COPPER PLC
2
CONTENTS
CHAIRMAN’S STATEMENT………………………………………………………………………………………….3
OPERATIONS REPORT……………………………………………………………………………………………...5
BOARD OF DIRECTORS AND SENIOR MANAGEMENT REPORT……………………………………………7
DIRECTORS’ REPORT……………………………………………………………………………………………….9
DIRECTORS’ REMUNERATION REPORT……………………………………………………………………….14
STRATEGIC REPORT………………………………………………………………………………………………19
CORPORATE GOVERNANCE……………………………………………………………………………………..27
INDEPENDENT AUDITORS’ REPORT……………………………………………………………………………35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME……………………………………………42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION…………………………………………………...43
COMPANY STATEMENT OF FINANCIAL POSITION…………………………………………………………..44
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY…………………………………………………...45
COMPANY STATEMENT OF CHANGES IN EQUITY…………………………………………………………..46
CONSOLIDATED STATEMENT OF CASHFLOWS……………………………………………………………..47
COMPANY STATEMENT OF CASHFLOWS……………………………………………………………………..48
NOTES TO THE FINANCIAL STATEMENTS…………………………………………………………………….49
GREAT SOUTHERN COPPER PLC
3
CHAIRMAN'S STATEMENT
As Chairman of Great Southern Copper plc, a mineral exploration company focused on the discovery of
copper-gold resources in the coastal metallogenic belt of Chile, I am delighted to be able to introduce our
first set of results as a public company for the year ended 31 March 2022.
In December 2021, Great Southern Copper plc was successfully admitted to listing on the Official List
(Standard Segment) of the Financial Conduct Authority and to trading on the main market of the London
Stock Exchange, at the same time raising some £3.5 million. On behalf of the Board, I would like to
welcome our new shareholders to the Company and also to thank our existing shareholders for their
continued support. I also wish to thank the Board, our management and advisers for their dedicated work
in taking the Company public.
The Company is focussing its exploration efforts in Chile, where it holds the rights to two projects. Chile is
the world’s largest producer and exporter of copper and has long been recognised as a jurisdiction for
world class deposits. With a long history of mining and metal processing, the country boasts one of
strongest economies in South America. Not only does it enjoy a long-standing mining culture, but the
country also benefits from an experienced and educated mining workforce, first-class infrastructure and a
robust legal framework, which includes provisions for foreign companies to own 100% of mining assets.
In recent years, the country has moved to redesign its constitution, and recently elected a new president.
The Company is closely following the ongoing debates within the constitutional convention in relation to
various matters affecting the industry, such as mining, property and water rights, labour practices and the
protection of indigenous territories.
In the years leading up to our listing, the business strategically targeted Chile and specifically its coastal
metallogenic belt, for high quality, large-scale, early-stage copper exploration assets, and where we have
now acquired options over the two current projects, Especularita and San Lorenzo. The Board believes
these provide the Company with significant advantages compared to many of its peers including low entry
cost, a coastal location with excellent infrastructure, large concession positions in areas of significant
historical mining, limited exploration activity and the potential to earn 100% of the projects with no
overhanging payments or royalty conditions.
Since listing, the Company has engaged in mapping, trenching and ground magnetics at its flagship San
Lorenzo copper-gold project. We are fortunate to have an excellent team in-country and our thanks go to
them for their hard work and dedication, especially for the positive progress made despite the global Covid-
19 pandemic and related travel restrictions. The work at San Lorenzo is targeting large-scale porphyry
style copper-gold deposits and the Company has recently commenced its first drilling campaign.
Towards the end of the year, exploration also commenced at our second project, Especularita.
Reconnaissance mapping and sampling are also targeting large-scale porphyry style copper-gold deposits
associated with a large zone of high sulphidation litho-cap alteration. Our team at Especularita believes
that the project is ideally located at the centre of a district-scale mineralisation system that includes
porphyry-epithermal copper-gold mineralisation as well as distal base-metal skarn deposits.
Together with other members of the Board, I was fortunate enough to visit Chile in March this year and we
were all impressed by the quality of the projects and the opportunity they provide to the Company. It is
exciting to now be actively working at our two large scale exploration projects and we look forward to
updating our shareholders as we progress.
The economic outlook for copper and gold looks very strong, particularly for copper, where supply
shortages are foreshadowed as a result of the global transition to green energy technologies.
GREAT SOUTHERN COPPER PLC
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We have recently commenced our first reconnaissance drilling programme at San Lorenzo. This will
deliver important information that will be used to upgrade the geological model for the project, design
detailed geophysics surveys and provide vectoring for subsequent project-scale drilling. Our management
team is also working to identify and secure a third copper project, which will provide the Company with a
strong pipeline of exploration assets and the potential to deliver growth opportunities for the Company well
into the future.
Charles Bond
25 August 2022
GREAT SOUTHERN COPPER PLC
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OPERATIONS REPORT
The Company is exploring two projects in northern Chile: the San Lorenzo Project for porphyry style copper-
gold deposits and the Especularita Project for porphyry – epithermal type copper-gold deposits.
Both projects are strategically located within the coastal metallurgical belt, which affords the company
significant infrastructure advantages over explorers that operate in the high-altitude Andean belt, including
easier access to roads, power, towns and ports. Both projects are along trend from major deposits and exhibit
significant evidence of historical artisanal mining. However, the areas are relatively under-explored by
comparison with the Andean regions.
The Company has the option to earn 100% of both projects with no attached royalty conditions or
overhanging payment requirements.
During the year, the Company successfully admitted to listing on the Official List (Standard Segment) of the
Financial Conduct Authority and to trading on the main market of the London Stock Exchange, raising gross
proceeds of circa £3.5 million. The raising provided Great Southern Copper with significant working capital
to advance its exploration programmes at both projects into 2023.
The impact of Covid-19 on field operations and the listing process has been significant. However, despite
intermittent lock-downs, the Company has managed to maintain an operational team on site throughout most
of the pandemic period. In March 2022, the projects were visited by members of the Board; this represented
the first trip to site by management in over two years.
Exploration activities at the projects for the period to 31 March 2022 are set out below:
San Lorenzo Project
Work at San Lorenzo included trench mapping and sampling plus ground magnetics surveys, as well as
enhancing and managing the project’s concession footprint.
Thirteen trenches for a total of 2,585m of excavation were completed in two Phases (I and II) with mapping
and sampling of the trenches also completed. Copper-gold mineralisation at San Lorenzo appears to be
associated with an extensive zone of calc-potassic alteration expressed as sheeted fractures of actinolite-
Kspar-magnetite-Fe-oxide overprinting the host biotite granodiorite. The granodiorite is intruded by swarms
and clusters of narrow monzonitic dykes and finger porphyries, which may have some impact on the fracture-
hosted alteration, mapped over a very large area of more than15 km
2
.
The trenching was designed primarily to deliver geological and structural information relating to the nature
of sheeting fracturing, in particular fracture densities. Geochemical sampling of the trenches indicates that
while the rock is strongly oxidised and leached, there is evidence of Cu-Au-Ag anomalism associated with
the alteration.
Four of the trenches were tested with an orientation soil geochemistry survey, to determine if soil sampling
would be a suitable exploration tool at San Lorenzo. Results of this survey are being finalised.
A follow-up Phase III trenching programme was also initiated with nine trenches (2,507 m) completed to the
end of March 2022. Mapping and sampling of these trenches is ongoing and together the results have been
used to design and target the first phase of reconnaissance exploration at San Lorenzo, where drilling
commenced in June this year.
GREAT SOUTHERN COPPER PLC
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A 341.6-line km ground magnetic survey was completed at San Lorenzo covering an area of 63.4 km
2
. The
survey was designed to map the geological magnetic variability across the project to enhance the Company’s
understanding of the geological and structural controls at San Lorenzo. Independent interpretation of the
magnetic data completed since year end identified 13 near-surface anomalies potentially indicative of either
zones of higher vein density or small intrusions. A further three kilometre-scale magnetic bodies are
delineated within the southwest portion of the survey area and may represent buried intrusives that lie
marginal to a larger zone of weaker magnetised rock interpreted to possibly represent a large buried
monzonite body. The interpreted monzonite could be the source of narrow dykes and plugs of locally
mineralised monzonite mapped at surface and thus represents a potentially significant target for deeper
copper-gold mineralisation.
Especularita Project
Work at the Especularita project has principally involved enhancing and managing the project’s concession
footprint.
Reconnaissance groundwork exploration also commenced, including regional mapping and sampling across
the project. Especularita represents the core of an extensive district-scale mineralisation system and this
initial work was designed to determine what exploration tools and methods should be best deployed across
the project area in the coming 12-18 months to identify mineralisation types and project-scale exploration
targets.
Sam Garrett
Chief Executive Officer
25 August 2022
GREAT SOUTHERN COPPER PLC
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BOARD OF DIRECTORS AND SENIOR MANAGEMENT
The Board of Directors has overall responsibility for the Group. Its aim is to represent all stakeholders and
to provide leadership and control in order to promote the successful growth and development of the business.
Samuel Garrett (Chief Executive Officer)
Samuel Garrett MSc. Applied Finance, Macquarie University (2011), MSc. Economic Geology, University of
Tasmania (1992), BSc. Hons. Geology, University of Tasmania (1988), is a geologist with over thirty years
of exploration management, assessment and operational experience for multi-national and junior mining and
exploration companies in ten countries and a broad range of geologic environments. He is the executive
director of Flynn Gold Ltd and also the Principal Consulting Geologist at Metal Ventures Pty Limited.
Samuel’s experience includes significant discovery credits including the Mt Elliot copper mine (QLD), Dinkidi
copper-gold mine (Philippines), Tujuh Bukit Au-Ag-Cu mine (Indonesia) and the Havieron copper-gold
deposit (WA). Samuel is a member of the Australian Institute of Geoscientists (AIG), the Society of Economic
Geologists (SEG) and he is a member of the Australian Institute of Company Directors (AICD).
Nicholas Briers (Non-Executive Director)
Nicholas Briers BSc. Hons. Geography, Royal Holloway College, University of London, is a Director of
Corporate Broking at SI Capital, specialists in delivering pre-IPO, primary and secondary funding to small
companies listed on the London market. Prior to that he has over 25 years of experience in financial markets
heading up Exchange Traded Derivatives sales desks at a number of tier 1 broking houses, most recently at
Tullett Prebon, now TPICAP, the world's largest Inter Dealer Broker. Nick was formerly a Non-Executive
Director of AMTE Power. He sits on the Company's Remuneration Committee and its Audit Committee.
Stuart Greene (Non-Executive Director)
Stuart Greene is a geologist and former Director of RMB Resources, the resource investment arm of First
Rand Bank. He has sixteen years’ experience working in southern Africa as a mine geologist and geological
consultant with Western Areas gold mine, SRK Consulting, Knight Piesold, Venmyn Rand and others,
followed by 14 years as a mining financier with RMB Resources in their London office. Whilst there, Stuart
originated, evaluated and executed equity and debt financings for junior mining companies with projects at
every stage of development from exploration through to production; for commodities that included gold, silver,
copper, lead, zinc, nickel, diamonds, uranium and oil; and for project locations in North America, South
America, Europe, Africa and SE Asia. He is currently a founding partner and director of Tanjun Capital
Limited, the investment advisor to a mining credit fund, investing in junior and mid-tier mining companies.
Stuart chairs the Company's Audit Committee
Charles Bond (Non-Executive Chairman)
Charles is a corporate finance lawyer with over 25 years of experience and has worked with mining
companies for the last 15 years. He is a partner in the London office of international law firm Gowling WLG
(UK) LLP, where he leads the UK firm's Natural Resources group and Equity Capital Markets team. He
practises in equity capital markets and public and private M&A for mining clients in developed and emerging
markets, helping to develop their business using his wide international network of contacts in the sector. He
spent ten years as a corporate lawyer with Freshfields Bruckhaus Deringer, before heading the equity capital
markets and natural resources teams at Cobbetts LLP and the UK branch of Canadian law firm Gowlings,
for eight years and four years respectively, before Gowlings' merger with UK firm Wragge Lawrence Graham
to become Gowling WLG. He has acted as lead counsel for numerous mining companies and financial
advisers, advising on flotations on the London and Toronto stock exchanges, on secondary fundraises, public
and private M&A, corporate governance, joint ventures and earn-ins. He is named as one of the four leading
GREAT SOUTHERN COPPER PLC
8
mining lawyers in England in the most recent International Who's Who of Mining Lawyers. Charles chairs the
Company's Remuneration Committee.
Paul Williams (Chief Financial Officer)
Paul was educated at Shrewsbury School and Clare College, Cambridge, where he read modern languages
and economics. He qualified as a chartered accountant with his family firm before moving to Ernst and
Young. He subsequently ran his own practice for 22 years before joining Maelor plc for its admission to AIM
in 1997. Paul subsequently became finance director of Black Angel Mining plc (formerly Angus & Ross plc)
before he took the role of executive chairman of the Eatonfield Group, leaving in 2010. He served on the
LSE’s AIM Advisory Group for a number of years and was a magistrate for 20 years.
The Board will focus upon the maintenance of existing skills and relevant expertise. The Chairman is a
practising lawyer in the capital markets with a specific focus upon natural resources and the mining industry
in particular. The remaining non-executive directors are respectively a broker, again with a specialism in
mining companies and a mining financier. In consequence, their present professions maintain their relevant
focus and to this will be added appropriate training as necessary.
GREAT SOUTHERN COPPER PLC
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DIRECTORS’ REPORT
The Directors have pleasure in submitting their report together with the audited financial statements for Great
Southern Copper plc (the ‘Company’ and together with its subsidiary, the ‘Group’) for the year ended 31
March 2022.
PRINCIPAL ACTIVITIES
The Company is currently focussed upon the exploration for copper and gold in Chile. Further detail is
covered in the Chairman’s Statement and also in the Operations Report.
RISKS AND UNCERTAINTIES
There are inherent risks in the business of mineral exploration, evaluation and development. The Group’s
exposure to risks is covered in the Strategic Report on Page 19.
PERFORMANCE AND FUTURE DEVELOPMENT
A review of the work undertaken at the Group’s projects is contained in the Operations Report as is an outline
of proposed future activities. Further detail is to be found in the Chairman’s Report.
GENERAL BACKGROUND INFORMATION
The Company was incorporated in England and Wales on 4
th
March 2020. On 22
nd
January 2021, the
Company allotted 49,999 Ordinary Shares of £1. On 24
th
February 2021, the Company re-registered as a
public limited company and on 20
th
April 2021, the issued share capital was subdivided into 5,000,000
Ordinary Shares of £0.01.
On 27
th
July 2021, the Company acquired 100% of the issued share capital of Pacific Trends Resources
Chile SpA, the consideration being the issue of 121,111,100 Ordinary Shares of £0.01, 60,555,555 warrants
and a cash payment of A$10,450.
On 20 December 2021, the Company issued a further 63,965,000 ordinary shares by way of a placing. On
the same date, 6,400,000 ordinary shares were issued by way of a subscription, all shares being issued at
a price of 5p per share.
On the same date, the Company was admitted to listing on the Official List (Standard Segment) of the
Financial Conduct Authority and to trading on the main market of the London Stock Exchange.
On the same date, the Company was admitted to listing on the Official List (Standard Segment) of the
Financial Conduct Authority and to trading on the main market of the London Stock Exchange.
DIVIDENDS
No dividends are planned (2021: £nil).
GREAT SOUTHERN COPPER PLC
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POLITICAL AND CHARITABLE DONATIONS
No political or charitable donations were made during the year under review (2021: £nil)
DIRECTORS
The Directors of the Company during the year were:
Charles Bond – appointed 29th June 2021
Samuel Garrett
Stuart Greene – appointed 18th March 2021
Nicholas Briers – appointed 4
th
March 2021
The Directors’ interests in the ordinary share capital of the Company and details of their remuneration are
set out in the Remuneration Report on Page 14.
SUBSTANTIAL INTERESTS
As at 31
st
March 2022, the total number of issued ordinary shares in the Company with voting rights was
212,476,100. Details of the Company’s capital structure and voting rights are set out in note 17 to the financial
statements
As at the date of approval of this report, the Company has been notified of the following interests in 3% or
more of the issued ordinary share capital of the Company:
Number of Ordinary Shares
% of Issued Share Capital
Vidacos Nominees Ltd*
Jim Nominees Ltd*
Aurora Nominees Ltd*
Clive Ian Duncan
Peter John Charles Davies
112,768,037
39,194,957
12,600,000
7,912,254
7,373,328
52.99
18.42
5.92
3.72
3.46
*Nominee, not beneficial shareholder.
GREAT SOUTHERN COPPER PLC
11
STREAMLINED ENERGY AND CARBON REPORTING
The UK government’s Streamlined Energy and Carbon Reporting (SECR) policy was implemented on 1
April 2019, when the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018 came into force. The regulations require that quoted companies and large
unquoted companies that have consumed more than 40,000 kilowatt-hours (kWh) of energy in the reporting
period must include energy and carbon information within their Directors’ report. The Company does not
currently exceed this threshold and is presently exempt from the SECR reporting requirements, as outlined
below.
The Company will comply with applicable reporting obligations in line with the SECR regulations as the
Company’s strategy develops. The Board is conscious of its responsibilities under this legislation and has
ensured that all its employees and contractors are imbued with a similar philosophy.
The Company does not maintain a centralised office in the UK, preferring to rely upon on line meetings
wherever possible. Travel is thus kept to a bare minimum and operational energy consumption is reduced to
an insignificant level.
Operations in Chile were only acquired in July 2021 and they are currently at an early stage. Other than
trenching and survey work at San Lorenzo, very little energy consuming activities have taken place. In March
2022, three members of the Board paid a visit to the exploration projects in Chile, the one and only occasion
when significant travel took place.
All administration work in Chile is contracted out to a company whose energy consumption would be unlikely
to alter materially without the presence of the Group.
Taking into account all these factors, and as mentioned above, the Board is of the opinion that it is exempt
from reporting as its energy consumption for the year under review will be significantly below the threshold
of 40,000kWh per annum.
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
During the year under review, the Company maintained cover for its Directors and Officers under a Directors’
and Officers’ Liability policy. No qualifying third-party indemnity cover for the Directors has been provided by
the Company.
REPORT ON PAYMENTS TO GOVERNMENTS
The Group makes no payments which are required to be disclosed under this category. However, annual
statutory fees paid to the Chilean government by the holder of the concessions over which PTRC has options,
are directly reimbursed by PTRC.
GOING CONCERN
In common with many other mineral exploration companies, the Group has raised finance for its exploration.
Further finance will need to be raised as and when justified by progress at any of its projects. Success in
raising funds in December 2021 is no guarantee that it will be able to do so in the future.
GREAT SOUTHERN COPPER PLC
12
As at 31 March 2022, the Group’s cash at bank amounted to £2,751,676; at the date of signing this report,
the balance amounted to £2,136,236.
The Board has reviewed the Group’s cash flow forecast up to 31 August 2023. Taking into account its current
resources and its operational objectives, the Board is satisfied that the cash reserves are sufficient to finance
both planned project expenditure and overheads. The Board continues to closely monitor both its cash and
operating costs and has taken into account the resources available to it as at the date of signing this report.
The Board has also considered the likelihood of probable success of future fundraising activities that may be
necessary. Accordingly, the Board continues to adopt the going concern basis for the preparation of these
financial statements.
SUBSEQUENT EVENTS
The Board is not aware of any Post Balance Sheet Events which are required to be disclosed.
AUDITORS
A resolution to re-appoint the Company’s Auditors, PKF Littlejohn LLP, will be proposed at the next Annual
General Meeting of the Company, to be held on 27 September 2022.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report, Strategic Report, Directors' Report,
Governance Report and Directors' Remuneration Report along with the financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under the law
the Directors have elected to prepare the financial statements in accordance with the UK-adopted
International Accounting Standards.
Under Company law the Directors must not approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of
the Company and the Group for that year. The Directors are also required to prepare financial statements in
accordance with the rules of the London Stock Exchange for companies with a Standard Listing.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether applicable accounting standards have been followed, 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 responsible for keeping adequate records that are
sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Company and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The maintenance and integrity of the Great Southern Copper PLC website is the responsibility of the
Directors; work carried out by the auditor does not involve the consideration of these matters and,
GREAT SOUTHERN COPPER PLC
13
accordingly, the auditor accepts no responsibility for any changes that may have occurred in the accounts
since they were initially presented on the website.
Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other
information included in annual reports may differ from legislation in other jurisdictions.
Directors' responsibility statement pursuant to Disclosure and Transparency Rules
Each of the Directors, whose names and functions are listed on page 7 and 8, confirms that to the best of
his knowledge and belief:
• The financial statements prepared in accordance with UK-adopted International Accounting
Standards and in conformity with the Companies Act 2006, give a true and fair view of the assets,
liabilities, financial position and loss of the Group and parent company; and
• The Annual Report and financial statements, including the Operations Report, includes a fair
review of the development and performance of the business and the position of the Group and
parent company, together with a description of the principal risks and uncertainties that they face.
Statement as to Disclosure of Information to the Auditor
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the
Companies Act 2006) of which the Company's auditor is unaware, and each Director has taken all the steps
that he ought to have taken as a Director in order to make himself aware of any relevant audit information
and to establish that the Company's auditor is aware of the information.
We confirm to the best of our knowledge:
• The financial statements, prepared in accordance with the relevant financial reporting framework,
give a true and fair view of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation as a whole;
• The strategic report includes a fair review of the development and performance of the business
and the position of the Company and the undertakings included in the consolidation taken as a
whole, together with a description of the principal risks and uncertainties that they face; and
• The annual report and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
Approved by the Board of Directors and signed on behalf of the Board by:
Charles Bond
Chairman
25 August 2022
GREAT SOUTHERN COPPER PLC
14
DIRECTORS’ REMUNERATION REPORT
The Company’s Remuneration Committee comprises two Non-Executive Directors: Charles Bond and
Nick Briers. The Committee operates within the terms of reference approved by the Board. In the year to
31 March 2022, the Remuneration Committee met once to review fees of Directors and senior
management. The items included in this report are unaudited unless otherwise stated.
Statement of policy on Directors’ remuneration
Given the current size and stage of development of the Group, there is no formal policy yet in place in
respect of remuneration, although it is the Company's intention to maintain levels of remuneration so as
to attract, motivate, and retain Directors and senior management, who can contribute their experience to
deliver the appropriate performance required by the Company’s operations. The Company is particularly
mindful of the need to balance this objective with the fact that it is pre-revenue.
Up to the date of admission to listing, the Non-Executive Directors have been remunerated through a
combination of modest salaries or fees, and the grant of share options at the time of admission. Total
salaries and fees payable to Directors have been modest. As the Company grows, and increasingly will
need to make external hires, it will become necessary to move to a more long-term and sustainable policy,
which continues to align the interests of Directors and senior management with those of shareholders,
while recognising that new hires will not initially have an equity position. Accordingly, it is likely that
compensation packages for executive directors in particular will need to move over time to a level more
consistent with the market.
Currently Directors’ remuneration is not subject to specific performance targets. The Company is
sufficiently small that the Remuneration Committee does not consider that it is necessary to impose such
targets as a matter of principle, but believes that exceptional performance should be rewarded on an ad
hoc basis. Over the next year the Board intends to set relevant objectives for executive management,
dependent on factors such as exploration progress, market profile and ESG targets. Similarly, the
Committee has not adopted a specific policy with regard to share option grants; nonetheless the use of
share options will continue to be an important part of the compensation packages both for executive and
non-executive directors, particularly until such time as the Company is generating cash from operations.
The Remuneration Committee considers the remuneration of directors and senior staff and their
employment terms, and makes recommendations to the Board of Directors on the overall remuneration
packages. No Director takes part in any decision directly affecting their own remuneration.
This statement of Remuneration policy will be proposed for approval by shareholders at the forthcoming
Annual General Meeting.
Directors’ remuneration
The Directors who held office at 31 March 2022 and who had beneficial interests in the ordinary shares of
the Company are summarised as follows:
Name of Director Position
Samuel Garrett Chief Executive Officer
Stuart Greene Non-Executive Director
Nicholas Briers Non-Executive Director
Charles Bond Non-Executive Chairman
GREAT SOUTHERN COPPER PLC
15
Details of these beneficial interests can be found on Page 16 of this report.
Samuel Garrett entered into a service agreement at the time the Company’s admission to the market in
December 2021 and each of the Non-Executive Directors entered into a letter of appointment. Details of
those agreements are set out below. There were no other major remuneration decisions in the period.
Directors’ service contracts
Samuel Garrett
Samuel was appointed as Chief Executive Officer of the Company on 11 September 2020 and
pursuant to the terms of a service agreement with the Company dated 7 December 2021 either party
may terminate the appointment upon six months' written notice. He is paid an annual salary of
£142,857 per annum pro rata to the time committed to the Company, which is a minimum of 50%.
Stuart Greene
Stuart entered into a letter of appointment with the Company on 7 December 2021 pursuant to which
either party may terminate the appointment upon three months' written notice and he is paid an annual
salary of £28,571 per annum.
Nicholas Briers
Nicholas entered into a letter of appointment with the Company on 7 December 2021 pursuant to which
either party may terminate the appointment upon three months' written notice and he is paid an annual
salary of £28,571 per annum.
Charles Bond
Charles entered into a letter of appointment with the Company on 7 December 2021 pursuant to which either
party may terminate the appointment upon three months' written notice and he is paid an annual salary of
£39,286 per annum payable by way of shares in the Company.
Remuneration components
The Board has to date structured remuneration and incentivisation around the principles set out in guidelines
published by the Quoted Company Alliance, and also taken into account the fact that the Company is an
early-stage exploration business. Remuneration packages therefore are aimed at motivating directors and
supporting the delivery of the business objectives in the short and longer term, using a combination of both
salaries and share options, some of which are linked to share price performance thereby aligning their
interests with the interests of long-term shareholders. Remuneration packages have been set high enough
to recruit and retain high quality executives, but at levels that are benchmarked to peers, not excessive and
well within market parameters for a business of the size and stage of the Company.
For the year ended 31 March 2022, salaries and share incentive arrangements were the sole component of
remuneration. The Remuneration Committee will continue to consider the components of Directors’
remuneration during the year and following this review anticipate that they will continue to consist of salaries
and share incentive arrangements, but the Committee will also consider the use of bonus arrangements for
executive management if appropriate for medium term incentivisation, based on relevant factors such as
exploration progress, market profile and ESG targets.
GREAT SOUTHERN COPPER PLC
16
Directors’ emoluments and compensation (audited)
Set out below are the emoluments of the Directors for the year ended 31 March 2022:
Name of Director
Short term employment
benefits*
benbenefits*
Other benefits
Total
2022 2021
£ £
2022 2021
£ £
2022 2021
£ £
Stuart Greene
Nicholas Briers
Charles Bond
28,722 -
28,742 -
11,069 -
- -
- -
- -
28,722 -
28,742 -
11,069 -
Non-Executive total
68,533 -
- -
-
68,533 -
Samuel Garrett
69,984 -
6,998 -
76,982 -
Executive total
69,984 -
6,998 -
76,982 -
Total
138,517 -
6,998 -
145,515 -
* Excludes NI paid by Company of £3,760.
The interests of the Directors who served during the year in the share capital of the Company at
31 March 2022 and at the date of this report were as follows:
Name of Director
Number of
ordinary shares
held 31 March
2022
As at the
date of
this report
Number of
ordinary shares
held 31 March
2021
Number of
share options
vested but
unexercised
31 March 2022
Number of share
options vested but
unexercised as at
31 March 2022
Samuel Garrett
4,926,878
4,926,878
-
673,703
-
Stuart Greene
100,000
100,000
-
252,638
-
Nicholas Briers
200,000
200,000
-
252,638
-
Charles Bond
400,000
736,365
-
421,064
-
Total pension entitlements (audited)
The Company makes a 10% contribution to the Chief Executive Officer’s superannuation scheme but
otherwise has no other pension plans.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
The Company has not paid any amounts for loss of office.
GREAT SOUTHERN COPPER PLC
17
Directors’ interests in share options (audited)
Details at 31 March 2022 of share options (vested and unvested) over ordinary shares held by directors
who served during the year are set out in the table below
Name of Director
Number of
share options
at 31 March 2022
Number of share
options at 31 March
2021
Samuel Garrett
4,042,222
-
Stuart Greene
1,515,833
-
Nicholas Briers
1,515,833
-
Charles Bond
2,526,388
-
The terms of the options stipulate that 50% of the options will vest in 3 equal tranches, exercisable at any
time at an exercise price of 5p per option, being on admission to listing, the first anniversary of admission
and the second anniversary of admission. The remaining 50% of options will vest in 3 equal tranches
exercisable at 5p per option when the average share price reaches 10p, when the average share price
reaches 15p and when the average share price reaches 20p, in each case over a 30 day period.
Other than as set out above, there were no awards of annual bonuses or incentive arrangements in the
period. All remuneration was therefore fixed in nature and no illustrative table of the application of
remuneration policy has been included in this report.
Consideration of employment conditions elsewhere in the Group
The Committee has not consulted with employees about executive pay but considers that the current
remuneration of Executive Directors is consistent with pay and employment benefits across the wider
Group.
UK 10-year performance graph
The Directors have considered the requirement for a UK 10-year performance graph comparing the
Group’s Total Shareholder Return with that of a comparable indicator. The Directors do not currently
consider that including the graph will be meaningful because the Company has only been listed since
December 2021, is not paying dividends and is currently incurring losses. The Directors will review the
inclusion of this table for future reports.
UK 10-year CEO table and UK percentage change table
The Directors have considered the requirement for a UK 10-year CEO table and UK percentage change
table. The Directors do not currently consider that including these tables would be meaningful as
remuneration is not currently linked to performance, therefore any comparison across years or with the
employee group would be significantly skewed and would not add any information of value to
shareholders. The Directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of spend
on pay compared to shareholder dividends paid. Given that the Company does not currently pay
dividends they have not considered it necessary to include such information.
GREAT SOUTHERN COPPER PLC
18
Compliance with Listing Rule 9.8.4 (7)
In accordance with the terms of his employment arrangements, the Chairman’s remuneration is payable
in the form of ordinary shares in the Company, calculated quarterly on the basis of the volume weighted
average price for the preceding quarter. Shares are allotted on this basis after the deduction of
appropriate income tax and national insurance contributions. Full details of the allotment relating to
remuneration payable for the year ended 31 March 2022 are set out in the Company's announcement
dated 29 July 2022.
Other matters
The Company does not currently have any annual or long-term incentive schemes in place for any of
the Directors other than as disclosed above.
Approved by the Board on 25 August 2022.
Charles Bond
Chairman of the Remuneration Committee
GREAT SOUTHERN COPPER PLC
19
STRATEGIC REPORT
The Directors present their Strategic Report for the year ended 31 March 2022.
Principal Activity
Great Southern Copper PLC (“the Company”) was incorporated on 4 March 2020. The Company is
domiciled in the United Kingdom at Suite 425, Salisbury House, London Wall, London EC2M 5PS, UK.
On 27 July 2021 the Company acquired 100% of the issued share capital of Pacific Trends Resources
SpA Chile(‘PTRC’).
The Company was admitted to listing on the Official List (Standard Segment) of the Financial Conduct
Authority and to trading on the main market of the London Stock Exchange on 21
December 2021.
The principal activity of the Company and its subsidiary is the exploration for copper and precious metals
in Chile.
Strategy and Business Model
The primary objective of the Company is to generate value for Shareholders, which the Company will
initially seek to achieve through the exploration and evaluation of PTRC’s copper-gold projects and,
potentially through further acquisitions and investments.
The Company’s optioned assets (held via PTRC) comprise the San Lorenzo Cu-Au project north east of
the coastal town of La Serena in northern Chile and the Especularita Cu-Au project located approximately
170km to the south of the San Lorenzo project. Both projects are situated in the Coastal Cordillera of
Chile with good access to water and infrastructure.
Significant historical small scale artisanal workings for both copper and gold are readily evident in both
project areas. However, exploration on the projects has not yet matured to the stage where a mineral
resource estimate can be determined.
Chile has a stable and prosperous economy, is the largest copper miner and producer in the world and
is one of South America’s most promising investment destinations. With such an impressive mineral
endowment, it is not surprising that all the world’s major mining companies operate in Chile.
Business Review
Details of the Company’s strategy, results and prospects are set out in the Chairman’s Statement and in
the Operations Report.
On 21 December 2021, the Company was admitted to listing and trading, issuing 86,365,000 ordinary
shares at 5p per share and 148,327,850 associated warrants, raising gross proceeds of £3,518,250. Of
these warrants, all bar 1,407,300 broker warrants (issued at 5p for a term of 3 years) were issued at a
price of 10p and have a two-year life.
On the 31 March 2022 the Company had cash of £2,751,676 and no debt.
GREAT SOUTHERN COPPER PLC
20
Through PTRC, the Company is pursuing copper-gold mineral exploration at its two projects in Chile and
it seeking to identify and secure a third copper project.
Principal Risks and Uncertainties
The Directors have identified the following principal risks in regards to the Company’s future. The relative
importance of these risks is likely to evolve over time as the Company executes its strategy in Chile and
as the external economic and market environment changes.
Strategic Risk
The Company’s strategy may not deliver the results anticipated by the shareholders. The Directors
regularly monitor the strategy of the Company, and the progress with regards to implementing the
strategy and will modify the strategy as required based on internal and external developments and
exploration results. The strategy is monitored at the Company’s regular Board meetings.
Concentration Risk
The Company’s activities are currently geographically concentrated in Chile, where it has two exploration
projects held by PTRC via options over exploration and exploitation licences.
The initial exploration will take place on the San Lorenzo project, which covers an area of 257 sq km.
Further early-stage exploration is also planned for the Especularita project, which covers an area of 138
sq km.
Having rights to two projects with large surface areas, provides some mitigation against concentration
risk. However, the Directors understand the importance of regularly reviewing the Company’s strategy
and assessing other opportunities both in Chile and beyond, in order to mitigate concentration risk.
Exploration Risk
The planned exploration at the San Lorenzo and Especularita projects in Chile may not result in success.
Whilst the Directors endeavour to apply their skills to assess the projects, exploration is costly, highly
speculative and often unproductive. Failure to discover mineral resources or reserves, to maintain
existing mineral rights or to extract from any such potential ore reserves in sufficient amounts and in a
timely manner could materially and adversely affect the Company’s results of operations, cash flows,
financial condition and prospects. In addition, the Company may not be able to recover the funds used
in any exploration programme to identify new opportunities.
Exploration and mining operations are vulnerable to natural disasters, including earthquakes, drought,
floods, fire, tropical storms and the physical effects of climate change, all of which are outside the
Company’s control. Chile is seismically active and prone to frequent earthquakes and occasional
tsunamis. Operating difficulties such as unexpected geological variations and rock and ground conditions
that could result in significant failure, could also affect the costs and viability of its operations for
indeterminate periods. In addition, damage to or breakdown of a physical asset, including as a result of
fire, explosion or natural catastrophe, can result in a loss of assets and subsequent financial losses.
Insurance can provide protection from some, but not all, of the costs that may arise from unforeseen
events.
GREAT SOUTHERN COPPER PLC
21
Insurance Risk
Although the Company maintains suitable insurance, it may not cover every potential risk associated with
its operations. Adequate cover at reasonable rates is not always obtainable. In addition, the Company’s
insurance may not fully cover its liability or the consequences of any business interruptions such as
equipment failure or labour dispute. The occurrence of a significant adverse event not fully or partially
covered by insurance could have a material adverse effect on the Company’s business, results of
operations, financial condition and prospects.
Government Regulation
The licences and operations of the Company are in jurisdictions outside of the UK and there will,
therefore, be a number of risks that the Company will be unable to control.
Whilst the Company will make every effort to ensure that it has robust commercial agreements in place,
there is a risk that the Company may be adversely affected by political factors such as taxes and charges,
suspension of licences and changes to the laws governing mineral exploration and extraction activities.
The adoption of a mining royalty tax in Chile may adversely affect the Company’s operations in the future.
The Chilean government has announced a tax reform bill that will introduce a new royalty system payable
by copper mining companies. The bill contains a variable royalty rate, dependent on the quantity of
copper sold and will apply to companies producing more than 50,000 metric tonnes of fine copper per
annum. The Company will continue to monitor these regulations and any other proposed changes and
specifically the impact they could have on any potential future operations of the Company.
Permitting
The Company’s rights to the San Lorenzo and Especularita projects comprise an option agreement over
the exploration and exploitation concessions at these projects. The option agreement and all of the
concessions are in good standing.
Exploration concessions in Chile last for 2 years, commencing on their constitution by judicial ruling, and
are subject to the payment of annual fees to the Chilean Treasury. If the annual fees of an exploration
concession are not paid in a timely manner, the claim can be restored to good standing by paying double
the annual fee the following year. At the end of the two-year period the exploration concession may i) be
renewed for an additional two years in which case at least 50% of the surface area of the exploration
concession must be relinquished, or ii) be converted, totally or partially, into an exploitation concession.
Exploitation concessions are valid in perpetuity so long as annual fees are paid to the Chilean
government. The process to incorporate an exploitation concession is based on the principle that grants
preference to the first petitioner before the local court. The holder of an exploration concession in good
standing has the preferential right to incorporate an exploitation concession within the boundaries of its
exploration concession. Notwithstanding, anyone can request the incorporation of a concession within
the limits of the exploration concession of a different owner, in which case the holder has to file a claim
opposing the aforementioned constitution, within the term of 30 days, counted since the publication of
the application made by the interested third party.
GREAT SOUTHERN COPPER PLC
22
Exploration and exploitation concessions do not necessarily imply a right to mine, except on a small
scale, but they give the owner the right to mine subject to the granting of permits and, consequently,
apply for the afore mentioned permits, such as the environmental qualification resolution for projects with
an extraction capacity over 5,000 tonnes per month.
There is no guarantee that any of the granted exploration concessions, or any exploration concessions
granted in the future, will be renewed. Additionally, there is no guarantee that the exploitation concessions
granted or to be granted will be effectively maintained, by means of the payment of the annual licence
fees or by means of compliance with new regulations that may apply to the granting and maintenance of
exploitation concessions in the future. If these exploration and exploitation concessions are not renewed
or maintained, or if new exploration and exploitation concessions are applied for and not granted, this
could have a material adverse effect on the Group’s business, prospects, financial conditions and results
of operations
Whilst the Group is satisfied that it has taken reasonable measures to ensure an unencumbered right to
explore its claims areas in Chile, its concessions may be subject to undetected defects. If a defect does
exist, it is possible that the Group may lose all or part of its interest in one or more of the concessions to
which the defect relates and its exploration and exploitation rights over the areas related to such
concessions and prospects of commercial production may accordingly be adversely affected.
Whilst the Group has no reason to believe that the existence and extent of any of its interest in one or
more of the Mining Concessions are in doubt, title to the mineral resources could be subject to potential
litigation by third parties claiming an interest in them.
The failure to comply with all applicable laws and regulations, including failure to pay the corresponding
claim fees in relation to any potential litigation may invalidate title to mineral rights to which the Group
has an interest in.
Exploration concessions which the Group has the right to acquire through option agreements need to be
duly registered in the Chilean Mining Registrar in order for those option agreements to be enforceable. If
the Group fails to register any option agreement in the Chilean Mining Registrar, then the Group may be
unable to enforce the benefit of the option agreement and the Group’s title to the exploration concession
could be subject to potential litigation by third parties claiming an interest in them. Further, if previous
option agreements may be registered in the Chilean Mining Registrar against an exploration concession,
these will need to be removed by the Company to ensure that no previous holders of an option agreement
can stake a claim to the exploration concession. The Group has submitted all option agreements not
currently registered in the Chilean Mining Registrar to the registrar for registration and the Group has no
reason to believe that any of the option agreements will not be registered. Further the Group has no
reason to believe that any option agreements previously registered against any exploration concession
are still valid.
Environmental and Other Regulatory Requirements
Currently the environment impact is limited to the activities associated with exploration and is therefore
minimal. To date, these activities have been limited to cutting roads to gain access to the area, excavating
trenches to expose the rock beneath the soil cover, excavating small drill platforms to allow a drilling rig
to be positioned, drilling exploratory boreholes to recover rock samples and surface rock chip and soil
sampling. All exploration work is being carried out in compliance with the local environmental laws and
in accordance with international best practice.
GREAT SOUTHERN COPPER PLC
23
The development of any project into a mining operation will have a considerable impact on the local
landscape and communities. There may at some point be opposition to mining by some parties and this
may impact the ability of the Company to progress these projects towards production.
Currently the Company believes that its projects are in compliance with all relevant environmental and
health and safety laws and regulations, although there can be no guarantee that new laws or regulations,
or amendments to current laws or regulations will not be introduced and they may have a material impact
on the Company and its projects. The Company will continue to maintain the highest standards and aim
to comply with all appropriate laws and regulations. The Company will also continue to engage with local
communities and non-governmental and Governmental bodies to ensure any impacts of current and
future activities are minimised and managed appropriately.
Financing
Successful exploration or exploitation of any mineral resources requires significant capital investment.
The primary sources of financing available to the Company is the issue of additional equity capital in the
Company or through bringing in partners to help fund exploration and development costs. The ability of
the Company to raise further funds will be dependent on its exploration success and strategy and on
conditions in financial and commodity markets. The Company may not be successful in the procurement
of the required funds and may therefore have to adjust its exploration strategy accordingly.
Copper Price
The natural resources sector is subject to commodity price fluctuations which may adversely impact the
results of operations, financial conditions and prospects of the Company.
Foreign Currency and Exchange Rate
The Company may be exposed to ongoing currency risk. Proceeds of fundraises will be in Sterling, the
Company’s financial statements are stated in Sterling, and certain ongoing management costs will be
denominated in Sterling, although the price of its goods and services and its potential products (and thus
its potential revenues) will be determined by world commodities markets which are expressed in US
Dollar, and its operational costs will largely be incurred in Chilean Peso (CLP). As a result, fluctuations
in the exchange rates of these currencies may adversely affect the Company’s exploration budgets,
operating results, cash flows or financial condition to a material extent.
Market Conditions
The Company cannot predict the extent of periods of slow or negative economic growth and any resultant
weakening of consumer and business confidence that may lead to difficulties in raising capital and lower
the level of demand for many products across a wide variety of industries, including those industries for
which commodities in the natural resources sector are an important raw material. Accordingly, the
Company’s estimate of the results of operations, financial condition and prospects of the Company, and
of any future acquisition targets, will be uncertain and may be adversely impacted by unfavourable
general global, regional and national macroeconomic conditions.
GREAT SOUTHERN COPPER PLC
24
Covid 19
The outbreak of coronavirus disease (COVID-19) has impacted global economic markets. The
Company’s share price may by adversely affected in the short to medium term by the economic
uncertainty caused by COVID-19.
In Chile, an initial lockdown was imposed in March 2020 preventing access to sites and delaying field
activities. Restrictions were relaxed sufficiently in May 2020 to allow geologists to resume field activities
and they have been in the field since. Management was able to visit the sites in March 2021 as restrictions
on travel were relaxed further.
The Company has implemented strict COVID protocols which has allowed safe access for all individuals.
The Company will continue to monitor the ongoing COVID-19 situation in Chile and throughout the world
and take appropriate measures to ensure the safety of its personnel whilst continuing field work.
Any governmental or industry measures taken in response to COVID-19 may adversely impact the
Company’s operations (including access to the Company’s projects and working conditions of the
Company’s personnel) and are likely to be beyond the control of the Company.
Personnel
The success and development of the Company is dependent on its ability to recruit and retain high quality
personnel and the loss of key individuals could have a material impact on the Company. It has entered
into contractual agreements to secure the services of its executive team and various contractors but the
retention of these services cannot be guaranteed.
The risks can be mitigated by incentivising staff and with good management and succession planning.
The Company has sought to put in place a team that has the technical and financial expertise to
effectively pursue the Company’s strategy. Currently, that team comprises the Chief Executive Officer
and the Chief Financial Officer supported by non-executive directors that provide legal, commercial,
capital markets and financing skills. In Chile, the subsidiary Company has a small exploration team
supported by an exploration manager and a country manager. The Company also has a Technical
Advisor, highly experienced in the exploration of copper porphyry deposits, who is there to provide
technical guidance and advice where required.
Social, Community and Human Rights
It is the Company’s intention that it operates to the benefit of all stakeholders. In this regard, it will ensure
that its Chilean subsidiary Company:
• Adopts fair, non-discriminatory employment practices;
• Ensures safe working practices for its employees;
• Positively engages with local communities and is sensitive to any concerns that they may have
regarding land usage, water resources, cultural sites/artefacts etc.; and
• Treats local suppliers fairly
Whilst the projects are still at an early stage of exploration, the Company recognises that for any mine to
be developed at the project sites, it must be able to demonstrate a clear positive benefit to all stakeholders
that respects social, community and human rights.
GREAT SOUTHERN COPPER PLC
25
Key Performance Indicators (KPIs)
Given that GSC is a mineral exploration company at an early stage in its development that has no
turnover and is dependent on raising funds in the equity market to finance its activities, many of the
quantifiable KPIs that companies in other industries may present are not applicable here. Nevertheless,
management is monitoring key performance indicators, or the process associated with:
• Company expenses and the cash balance to ensure that the Company can meet its expected
obligations as they fall due and to inform the required timing of the next fund raising;
• Progress with the exploration programme and the status and commitments with regards to the
exploration licences; and
• Ensuring that PTRC meets its environmental and social obligations in Chile.
The Company is of the opinion that, for an early-stage mineral exploration company, the audited
accounts, the Chairman’s Statement and the Operations Report are the best means of assessing the
performance of the Company during the year.
Section 172(1) Statement – Promotion of the Company for the Benefit of the Members as a Whole.
The Directors believe they have acted in the way that they consider, in good faith, would be most likely
to promote the success of the Company for the benefit of its members as a whole (as required by s172
of the Companies Act 2006), and in doing so have had regard (amongst other matters) to the following
factors:
• The likely consequences of any decision in the long term;
• The interests of the Company's employees;
• The need to foster the Company's business relationships with suppliers, customers and others;
• The impact of the Company's operations on the community and the environment;
• The desirability of the Company maintaining a reputation for high standards of business
conduct; and
• The need to act fairly as between members of the Company.
The application of the s172 requirements can be demonstrated by the actions and key decisions of the
Company during the year including:
• The Company’s business model is to use the specialist skills and experience of the
management team to implement an exploration programme that will seek to discover a large-
scale copper porphyry deposit. If the Company is successful in this objective, the value of the
Company will increase significantly to the benefit of all members.
In pursuit of this objective, the Company has:
o Acquired Pacific Trends Resources Chile SPA in July 2021, a Company that has option
rights over exploration and exploitation licences covering two areas in Chile that
management believes are prospective for copper porphyry projects;
o Successfully raised approximately £3.5m in December 2021 to provide the funds to
undertake exploration for copper at these two project areas; and
o Listed the Company’s shares on the Standard Section of the Financial Conduct
Authority in December 2021 in order to provide better access to the equity market for
when the Company needs to raise additional funds.
GREAT SOUTHERN COPPER PLC
26
• As the Company has built out the management and exploration team to pursue the strategy
outlined, the Directors have been conscious of the need to establish a good team work ethic
where team members work well together and communicate openly with each other. In pursuit
of this objective, members of the board and the CEO visited the projects in Chile in March
2022, meeting and socialised with all members of the exploration team and taking the
opportunity to explain the Company’s strategy and how that strategy will be pursued.
Recognising the importance of retaining and incentivising key employees, the Directors have
awarded them share options.
• In the past year, the Company has acted fairly, in good faith and without problems with all of
the service providers that helped it through the listing process.
At this stage of the Company’s development, it has no customers.
• The Directors are very aware of the need to carefully manage environmental and social matters
in Chile in order to ensure that it has a social licence to explore and, if successful, to ultimately
mine at the project sites. The Company is still at an early stage in the exploration programme
but in the past year it has prepared an Environmental, Social and Corporate Governance
(“ESG”) policy to govern how members of the team manage these matters and to ensure that
the Company operates to the highest standards.
• The Company’s values of business conduct are described in the Corporate Governance
Statement. In the past year, management has worked on defining the culture and framework
that will support high business standards within the Company through the preparation of policy
documents.
• Retaining investor support is important to the Company and, therefore, the Directors intend to
keep shareholders fully and equally informed. In the past year and specifically in the four
months since the Company’s shares were listed, the Company has kept shareholders informed
of progress via news releases, web podcasts, the Company’s website and through direct
contact. Moving forward, management will also attend mining conferences where they will be
available to meet shareholders.
Approved by the Board of Directors and signed on behalf of the Board by:
Charles Bond
Chairman
25 August 2022
GREAT SOUTHERN COPPER PLC
27
CORPORATE GOVERNANCE
The Directors of the Company are listed on page 7. The Chief Executive Officer (“CEO”) is responsible
for the day-to-day management of the Company, subject to the directions of the Board. The CEO is
supported by the Non-Executive Directors, a Chief Financial Officer who is responsible for the financial
control, management, accounting and reporting functions of the Company, and an in-country manager
to assist with local operations.
The Company recognises the importance of and is committed to high standards of corporate
governance. As a Company listed on the Standard Segment of the Official List of the Financial Conduct
Authority, the Company is not required to comply with the provisions of the UK Corporate Governance
Code. However, in the interests of observing best practice on corporate governance, the Company
observes the requirements of The Quoted Companies Alliance Corporate Governance Code (the "QCA
Code"), insofar as is appropriate having regard to the size and nature of the Company and the
composition of the Board. A copy of the QCA Code is available at qca.com.
Since adopting the QCA Code at the time of listing, the Company has departed from it in the following
respects and for the following reasons:
• As the Company only listed in December 2021, the Directors have not yet had the benefit of
the Company's AGM or other stakeholder events from which to seek shareholder feedback.
The Board intends to liaise regularly with shareholders during the forthcoming year.
• The CEO is currently only contracted to spend 50% of his time serving the requirements of the
Company and the CFO is only contracted for 3 days a week. This is partly due to other current
obligations of each individual but also assists with maintaining lower remuneration costs for
the Company during its initial stages. As the Company matures it expects to engage its CEO
and CFO on a full-time basis.
• Given its early-stage nature, the Company does not currently have a senior independent
director. For a similar reason the Company does not have a nomination committee, rather this
function will be carried out by the Remuneration Committee. The Board has not carried out a
board performance evaluation during the year given it only listed in December 2021.
• The Board does not consider an internal audit function to be applicable due to the Company's
limited number of transactions.
• A diversity policy has not yet been developed but biographies of directors and senior
management and their relevant experience are set out on page 7.
The sections below set out how the Group otherwise applies the principles of the QCA Code.
Strategy and business model which promotes long-term value for shareholders
The Company is involved with mineral exploration for copper-gold resources in Chile. Its primary
objective is to generate long term value for shareholders, which it is seeking initially to achieve through
the exploration and evaluation of two early-stage copper-gold projects, and potentially thereafter
through further acquisitions and investments. Using the Company's expertise, it is carrying out a two-
year evaluation work programme to target principally large tonnage, low to medium grade porphyry
style Cu-Au deposits, and subsequently exercise its options to acquire them.
Early stage mineral exploration is by its nature speculative and the Company aims to reduce the risks
inherent in the business by maintaining a close relationships with its Chilean partners who own the
mineral rights over which the Company has an option, keeping abreast of current Chilean political
GREAT SOUTHERN COPPER PLC
28
developments which might affect the mining industry, regularly reviewing the good standing of the
concessions under option to the Company, and the careful application of funds to the most promising
exploration targets. Further risk factors which the Company regularly takes into account are set out in
the Strategic Report.
Shareholder communications
The Company is committed to engaging with its shareholders to ensure that its strategy, operational
results and financial performance are clearly understood. At this early stage the Board is focusing on
in-country operations, but expects to engage more actively with shareholders once it has its first drilling
results, including via roadshows, attending investor conferences and through its regular reporting on
the London Stock Exchange. The Company's announcements are set out on its website, which also
hosts its recent and comprehensive prospectus that was produced for the listing, and its most recent
corporate presentation, webcasts and phone numbers to contact the Company and its professional
advisers.
Whilst the Chief Executive Officer has ad-hoc meetings with larger retail shareholders in Australia to
seek their views and concerns, the Company's forthcoming annual general meeting will be the main
forum for dialogue with shareholders and the Board, and notice of the meeting will be sent to
shareholders at least 21 days beforehand. All based Directors are expected to attend the AGM and to
be available to answer questions raised by shareholders. For each vote, the number of proxy votes
received for, against and withheld will be announced at the meeting. The results of the AGM will also
be announced via the London Stock Exchange. Investors can always contact the Company via its
website (www.gscplc.com). The Non-Executive Chairman and Non-Executive Directors are also
available to meet with major shareholders in the UK if required to discuss issues of importance to them
and are considered to be independent from the executive management of the Company.
Wider stakeholder and social responsibilities and their implications for long term success
Aside from its shareholders, the Group's most important stakeholder groups are its employees, local
partners and those local communities that may be impacted by its exploration activities, although given
the size, stage and location of the Company's projects there is minimal impact currently. The Board
regularly reviews stakeholder issues and their potential impact on the Group's business to enable the
Board to understand and consider these issues in decision-making. The Board understands that
maintaining the support of all its stakeholders will be paramount for the long-term success of the
Company.
The Board is also mindful of its obligations to the local environment and to operate according to
appropriate health and safety regulations in respect of both local workers and the local community.
Although at this stage of exploration there is little requirement for engagement, the Board is mindful of
the future need to do so as exploration and development activity on projects increase, such as holding
public forums, site visits and workshops. Social projects in the local communities will be dependent on
local need and also the stage of exploration/level of project investment.
If and when the Company's projects move forward towards potential mining activities, it may seek to
bring in partners who can credibly make the investments to move towards mine production. In doing
so the Board will have regard for their ability and desire to move projects forward, their industry
reputation and their commitment to treating the local communities fairly and protecting the
environment.
GREAT SOUTHERN COPPER PLC
29
Risk management and mitigation
Audit, risk and internal control
Financial controls
The Company has a framework of internal financial controls, the effectiveness of which is regularly
reviewed by the Directors and the Audit Committee. The key financial controls are:
• The Board is responsible for reviewing and approving overall Company strategy, approving
new exploration projects and budgets, and for determining the financial structure of the
Company including treasury and tax matters. The Company maintains a schedule of matters
reserved for the Board;
• The Audit Committee assists the Board in discharging its duties regarding the financial
statements, accounting policies and the maintenance of proper internal business, and
operational and financial controls;
• The Remuneration Committee assists the Board in reviewing the scale and structure of the
executive directors’ and senior employees’ remuneration and the terms of their service or
employment contracts, including share option schemes and other bonus arrangements;
• Regular budgeting and forecasting are performed to monitor the Company’s ongoing cash
requirements and management accounts will be provided to the Board on a monthly basis;
• Due to the international nature of the business the Group holds bank accounts in the UK,
Australia and Chile and moves money between them to mitigate against foreign exchange rate
movement exposures. Foreign currency balances are maintained to meet expected
requirements; and
• The Company manages exploration risk of failure to find economic deposits by low cost early-
stage exploration techniques, with detailed analysis of results. Moving projects to more
expensive exploration techniques requires a rigorous review of results data prior to deciding
whether to proceed with further work.
Non-financial controls
The Board has ultimate responsibility for the Company’s system of internal control and for reviewing
its effectiveness. However, any such system of internal controls can provide only reasonable, but not
absolute, assurance against material misstatement or loss. The Board considers that the internal
controls in place are appropriate for the size, complexity and risk profile of the Company. The principal
elements of the Company’s internal control system include:
• Close management of the day-to-day activities of the Company by the Chief Executive Officer
and Chief Financial Officer;
• An organisational structure with defined levels of responsibility, which promotes
entrepreneurial decision-making and rapid implementation while minimising risks; and
• Central control over key areas such as capital expenditure authorisation and banking facilities.
GREAT SOUTHERN COPPER PLC
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The Company will review at least annually the effectiveness of its system of internal control, whilst also
having regard to its size and the resources available. As part of the Company’s plans, it continues to
review a number of non-financial controls covering areas such as regulatory compliance, business
integrity, health and safety, and corporate social responsibility. All employees have been made aware
of their obligations under anti-bribery and corruption legislation.
Maintaining the Board as a well-functioning, balanced team led by the Chairman
The Board comprises the Non-Executive Chairman, one Executive Director and two Non-Executive
Directors. All Non-executive Directors are considered to be independent and have extensive
experience in the mining industry. The Chairman, Charles Bond, is a qualified lawyer who advises a
large variety of mining companies, and the other two Non-Executives are a seasoned mining financier
(Stuart Greene) and stockbroker for mining companies (Nick Briers) respectively. All have committed
a substantial amount of their time to launching the Company on the London Stock Exchange, have
conducted a site visit (save for Nick Briers on account of Covid concerns) and continue to contribute a
significant amount of time to the Company's operations.
The Board is satisfied that it has a suitable balance between independence on the one hand, and
knowledge of the Company and industry on the other, to enable it to discharge its duties and
responsibilities effectively. All Directors are encouraged to use their independent judgement and to
challenge all matters, whether strategic or operational.
The Chief Executive Officer is contracted to spend at least half of his time working for the Company,
and the Chief Financial Officer is contracted to provide three days a week of his time. In reality both
have contributed more time during and since the Company's listing, and as operations increase it is
expected that these positions will move to become full time, or alternative staffing arrangements will
be put in place.
The Board aims to meet at least quarterly. The agenda is set by the Chairman in consultation with the
Chief Executive, with supporting information provided in a timely manner. The standard agenda points
include:
• Review of previous meeting minutes and actions arising there from;
• A report by the CEO covering all operational matters;
• A report from the CFO covering all financial matters;
• Any other business.
Directors’ conflict of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The
Board is aware of the other commitments and interests of its Directors, and changes to these
commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.
The Directors have access to the Company’s brokers and its lawyers, and in particular used these
advisers fully for its recent admission to listing. The advisers do not typically provide materials for Board
meetings except if requested to do so for the purposes of discussing upcoming regulations and other
issues. The Company's lawyers also act as the Company Secretary for the Company. Directors and
Officers Liability insurance is maintained for all Directors.
GREAT SOUTHERN COPPER PLC
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The table below sets out the attendance statistics for all current Board members from Admission to 30
March 2022:
Meetings Attended
Meetings Held
Samuel Garrett
5
5
Stuart Greene
5
5
Nicholas Briers
5
5
Charles Bond
5
5
Directors’ experience, skills and capabilities
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills
and experience, particularly so in the area of copper and gold exploration. The Chairman is a practising
lawyer specialising in the mining industry, whilst the other two non-executive directors maintain
ongoing skills at broking for the mining industry and financing mining projects respectively. The Board
is conscious of its current lack of gender balance and will in due course be seeking to address this with
an appropriate appointment insofar as one is available. All Directors receive regular and timely
information on the Company’s operational and financial performance. Relevant information is
circulated to the Directors in advance of meetings. Service contracts are available for inspection at the
Company’s registered office and at the Annual General Meeting (“AGM”).
New Directors will also be selected having regards to the Company’s needs for a balance of
operational, industry, legal and financial skills. Experience of the Mining industry and in particular the
exploration sector is important but not critical, as is experience of running a public company.
All Directors will retire by rotation at regular intervals in accordance with the Company’s Articles of
Association.
Appointment, removal and re-election of Directors
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the
individual’s experience and their current base salary. Where an individual is recruited at below market
norms, they may be realigned over time (e.g., two to three years), subject to performance in the role.
Benefits will generally be in accordance with the approved policy.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account
contractual obligations.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if
necessary, at the Company’s expense from lawyers, brokers and other professional advisers that they
deem relevant. In addition, the Directors have direct access to the advice and services of the Company
Secretary and Chief Financial Officer.
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Board performance based on clear and relevant objectives
Over the next 12 months the Board intends to review the performance of the team as a unit to ensure
that the members of the Board collectively function in an efficient and productive manner. Over the
same period the Non-Executive Directors will be seeking to set clear and relevant objectives for the
Chief Executive Officer and Chief Financial Officer, and for the Board as a whole.
A culture that is based on ethical values and behaviours
The Board aims to lead by example and do what is in the best interests of the Company. As it operates
in remote and under-developed areas, it ensures its employees understand their obligations towards
the environment and in respect of anti-bribery and corruption. The Company maintains governance
structures and committees that allow good decision-making by the Board. The Board will maintain this
focus by annual site visits to the projects in Chile.
Board programme
The Board aims to meet at least quarterly and as and when required. The Board sets direction for the
Company through a formal schedule of matters reserved for its decision. The Board receives
appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting
and Board papers are distributed by the Chairman and Chief Executive several days before meetings
take place. Any Director may challenge Company proposals and decisions are taken democratically
after discussion. Any Director who feels that any concern remains unresolved after discussion may
ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors.
Any specific actions arising from such meetings are agreed by the Board and are then followed up by
the Company’s management.
Roles of the Board, Chairman and Chief Executive Officer
The Board is responsible for the long-term success of the Company. There is a formal schedule of
matters reserved to the Board. It is responsible for overall Company strategy; approval of exploration
projects; approval of the annual and interim results; annual budgets; dividend policy; and Board
structure. It monitors the exposure to key business risks. There is a clear division of responsibility at
the head of the Company. The Chairman is responsible for running the business of the Board and for
ensuring appropriate strategic focus and direction.
The Chief Executive Officer is responsible for proposing the strategic focus to the Board, implementing
it once it has been approved and overseeing the management of the Company. Together with the Chief
Financial Officer and the Company's in-country manager, he is responsible for establishing and
enforcing systems and controls, and liaison with external advisors, such as the Company's technical
adviser, Dough Kirwin. He has responsibility for communicating with shareholders, assisted by other
members of the Board where relevant.
Board committees and Policies
Audit Committee
The Audit Committee has primary responsibility for monitoring the quality of internal controls and
ensuring that the financial performance of the Group is properly measured and reported on. It receives
and reviews reports from the Group’s management and auditors relating to the interim and annual
accounts and the accounting and internal control systems in use throughout the Group. The Audit
Committee is responsible for keeping under review the scope and results of the audit, its cost
GREAT SOUTHERN COPPER PLC
33
effectiveness and the independence and objectivity of the auditors. It also has responsibility for public
reporting and internal controls, and arrangements whereby employees may raise matters of concern
in confidence. The Audit Committee, which met four times during the year under review, is chaired by
Stuart Greene and its other member is Nick Briers.
Remuneration Committee
The Remuneration Committee reviews the performance of the CEO and CFO and makes
recommendations to the Board on matters relating to their remuneration and terms of employment.
Under its terms of reference, it is required to meet at least once a year and is responsible for ensuring
that the executive Directors, officers and other key employees are fairly rewarded (which extends to
all aspects of remuneration) for their individual contribution to the overall performance of the Group.
The Remuneration Committee is chaired by Charles Bond and its other member is Nick Briers.
Share dealing policy
The Company has adopted a share dealing policy which sets out the requirements and procedures for
dealings in any of its listed securities. The share dealing policy applies widely to all Directors of the
Company and its subsidiaries, certain employees’ and person closely associated with them. The policy
complies with the Market Abuse Regulations, which came into effect on 10 July 2016 and was
onshored into UK law on 31 December 2020.
Dividend policy
The Board’s current intention is to retain any earnings for use in the Company’s operations and the
Directors do not anticipate declaring any dividends in the foreseeable future. The Company will only
pay dividends at such times (if any) and in such amounts (if any) as the Board determines appropriate
and to the extent that to do so is in accordance with all applicable laws.
Anti-bribery and corruption policy
The Company has adopted an Anti-Corruption and Bribery Policy. It applies to the Directors and all
employees of the Company. The Board believes that the Group, through its internal controls, has
appropriate procedures in place to reduce the risk of bribery and that all employees, agents,
consultants and associated persons are made fully aware of the Group’s policies and procedures with
respect to ethical behaviour, business conduct and transparency.
Health and safety
The safety of the Group’s employees and contractors is critical to its operations. The Company aims
to prevent all incidents and accidents at its operations and in a reasonably practicable manner and
strives to minimise hazards inherent in the working environment. The Company is committed to
providing a working environment that is conducive to good health and safety; complying with applicable
legal requirements; ensuring that appropriate resources, training and personal protective equipment
are provided to improve occupational health and safety; ensuring that employees and contractors have
the relevant skills to perform work-related tasks in a safe manner and that they are aware of their
individual health and safety obligations and rights.
GREAT SOUTHERN COPPER PLC
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Environmental policy
The Company undertakes its exploration activities in a manner that strives to minimise or eliminate
negative impacts and maximise positive impacts of an environmental or socio-economic nature. The
Company is committed to responsible stewardship of natural resources and the ecological
environment.
The Company aims to continually improve its environmental performance and the prevention of
pollution, reduce or control the creation, emission or discharge of any type of pollutant or waste and to
reduce adverse environmental impacts; the integration of environmental management into
management practices throughout the company; rehabilitate disturbed land as much as possible and
protect environmental biodiversity; protect cultural heritage resources; comply with applicable legal
requirements; and train and educate employees in environmental responsibilities.
Social policy
The Company aims to minimise potential negative social impacts while promoting opportunities and
benefits for host communities.
The Company is committed to continually improving community development and community
investment programmes through monitoring, measuring and managing our social and economic
impacts; placing local people at the centre of development by helping to build their capacity to control
their own development. The Company intends to adopt a Social Media Policy to minimise the risks to
the Group’s business through use of social media.
Communicate how the Company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Company communicates with shareholders through the Annual Report and Accounts, full-year
and half-year results announcements, the Annual General Meeting (AGM) and one-to-one meetings
with large existing or potential new shareholders. The Company posts LSE announcements covering
operational and corporate matters. A range of corporate information (including all Company
announcements and a corporate presentation) is also available to shareholders, investors and the
public on the Company’s corporate website, www.gscplc.com.
Signed on behalf of the Board
Charles Bond
Chairman
25 August 2022
GREAT SOUTHERN COPPER PLC
35
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREAT SOUTHERN COPPER PLC
Opinion
We have audited the financial statements of Great Southern Copper plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 March 2022 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the
Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent
Company Statements of Cash Flows 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 and as regards the parent company
financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 March 2022 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
• the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards and as applied in accordance with the provisions of
the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
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 and parent company 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 public interest
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.
Conclusions relating to going concern
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 and parent company’s ability to continue to adopt the going concern basis of
accounting included:
• Reviewing the group’s budgets and cashflow projections which cover a period of at least 12
months from when the financial statements are authorised for issue;
• Challenging management’s judgements and estimates agreed to supporting documentation,
such as the review of post year end bank statements, post year end management accounts, and
post year end regulatory news service announcements;
• Substantiating the key inputs to the model and stress tested as considered appropriate;
• Assessing the mathematical accuracy of the cashflow projections and comparing to the
performance of the group post year end. We also assessed whether the cashflow projections
were in line in with our understanding of the entity and management plans.
GREAT SOUTHERN COPPER PLC
36
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent
company's ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
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. The materiality applied to the group financial statements was £225,000, based on 5% of the
net assets. There was no group materiality in the prior year, as the acquisition of the subsidiary occurred
during the year. The benchmark was selected as the intangible exploration assets is the primary asset
of the business, and its development is the principal activity of the group.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use
performance materiality in determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures. Given that there are relatively few
transactions within the group, we have concluded that 70% of materiality is appropriate to set
performance materiality for the group and parent company financial statements as a whole. The
performance materiality for the group was £157,500. The materiality applied to the parent company
financial statements was £200,000 (2020: £2,000) based on 5% of the net assets. The performance
materiality for the parent company was £140,0000 (2020: £1,600).
Component materiality for the subsidiary was set lower than our overall group materiality and was set at
£58,000, based on 5% of net assets, with a performance materiality of £40,000. The benchmark was
selected as the intangible exploration assets is the primary asset of the business.
We agreed with the audit committee that we would report all audit differences identified during the course
of our audit in excess of £11,250 at group level, and £10,000 for the parent company (2021: £100), as
well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material
misstatement, aspects subject to significant management judgement as well as greatest complexity, risk
and size.
As part of designing our audit, we determined materiality, as above, and assessed the risk of material
misstatement in the financial statements. In particular, we looked at areas involving significant accounting
estimates and judgement by the directors and considered future events that are inherently uncertain.
These areas of estimate and judgement included:
• the recoverability of intangible assets and investments in subsidiary undertakings, as the future
exploration results are inherently uncertain; and
• the valuation of share based payments were assessed as areas which involved significant
judgements by management.
GREAT SOUTHERN COPPER PLC
37
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.
The accounting records of the parent company and the subsidiary undertaking are centrally located in
London and audited by PKF Littlejohn in London. PKF Chile Tax & Legal SpA were engaged to report to
us on specified procedures in relation to the subsidiary, namely the compliance with Chilean laws and
regulations and for local banking confirmation.
The key audit matters and how these were addressed are outlined below.
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 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.
Key Audit Matter
How our scope addressed this matter
Accounting for the acquisition of Pacific
Trends Resources Chile SpA (“PTRC”) (Note
12)
On 27 July 2021, the company acquired the
entire share capital of PTRC from Pacific Trends
Resources Pty Limited (“PTR”) for £1,220,000
(A$2,090,000), satisfied by the issue of
121,111,100 new ordinary shares of £0.01 each,
issue of 60,555,555 warrants and a cash
payment of £10,450.
There is a risk that:
• The consideration transferred is not
properly accounted for, classified and
measured in line with IFRS 3;
• the appropriate fair values have not
been applied to the assets acquired and
the resulting acquisition accounting is
incorrect in accordance with IFRS 3;
and
• the consolidation accounting entries
and accounting are incomplete.
This is considered to be a key audit matter due to
the significant judgement and estimates required
by management in order to assess the fair values
Our work in this area included:
• Reviewing the Share Purchase
Agreement between the company and
PTR and reconciling the consideration
recorded by management and the
accounting treatment applied;
• Ensuring that the correct accounting
treatment for the acquisition had been
applied under IFRS 3;
• Reviewing the fair value assessment of
the acquired assets and adjustments
made by management against the book
value of the assets, and challenging the
assumptions and inputs made by
management, with reference to external
reports by relevant competent persons;
• Assessing and recalculating any
resulting goodwill recorded in the
financial statements; and
• Considering the appropriateness of the
disclosures included in the financial
statements.
GREAT SOUTHERN COPPER PLC
38
of the assets acquired and acquisition
accounting.
Based on the audit procedures performed,
nothing has come to our attention that would
indicate that the acquisition accounting is
materially misstated. Management considered
the book value of the assets acquired to be equal
to the fair value as a result of the early stage of
exploration of the assets and lack of other reliable
data to support a fair value adjustment. The
consideration paid was equal to the book value
of the assets and as a result, no purchase price
allocation was performed, as all of the value was
considered to be held in the licenses acquired
and the intangible exploration asset.
Carrying value of the intangible exploration
and evaluation assets (group level) and the
investment in subsidiary (company level)
(Notes 11 and 12)
The group has intangible assets in relation to
capitalised exploration costs in respect of the
San Lorenzo and Especularita projects in Chile,
held within its subsidiary company, PTRC. The
intangible assets are subject to annual
impairment reviews. The exploration projects are
at an early stage of development and as a result,
determining whether an impairment is required
requires management judgement and estimation.
The investment in the subsidiary is directly linked
to the value of it’s underlying assets.
There is a risk that the investment and intangible
asset is overstated as a result of additions being
incorrectly capitalised under IFRS 6 ‘Exploration
for and Evaluation of Mineral Resources,’ and
that indicators of impairment exist as at 31 March
2022 which have not been considered by
management in their carrying value assessment.
Our work in this area included:
• Ensuring good title to the project licences
and that any commitments or terms
therein have been adequately met;
• Reviewing the costs capitalised and
agreeing these to supporting
documentation to ensure capitalised in
accordance with IFRS 6;
• Critically assessing management’s
impairment review, and challenging their
review with consideration from both
internal and external indicators of
impairment under IFRS 6;
• Obtaining and reviewing a copy of the
competent person report and
challenging management’s impairment
review based on the report;
• Reviewing management’s review of the
carrying value of the investment in
subsidiary and challenging their
impairment review with reference to the
underlying assets of the subsidiary.
Based on the audit procedures performed,
nothing has come to our attention that would
indicate that the carrying value of the intangible
asset or investment in subsidiary is materially
misstated.
GREAT SOUTHERN COPPER PLC
39
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 group and parent company financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon. Our 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the
preparation of the group and parent company 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.
GREAT SOUTHERN COPPER PLC
40
In preparing the group and parent company financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the group or the parent company 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 parent company and the sector in which they
operate 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, and our expertise of the mineral exploration sector.
• We determined the principal laws and regulations relevant to the group and parent company in
this regard to be those arising from the Companies Act 2006, IFRS accounting standards, the
LSE Listing Rules, the operating terms set out in the exploration licences, as well as local laws
and regulations.
• We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group and parent company with those laws and regulations.
These procedures included, but were not limited to:
o conducting enquiries of management regarding potential instances of non-compliance;
o reviewing RNS announcements;
o reviewing legal and professional fees ledger accounts;
o using local experts in Chile to report on the good standing of the subsidiary; and
o reviewing bord minutes and other correspondence from management.
• 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, whether key management judgements could include
management bias was identified in relation to the carrying value of the exploration assets and
we addressed this as outlined in the Key Audit Matters section. The potential for management
bias also existed in the valuation of the share-based payments issued in the year and audit
procedures were performed in this regard to recalculate the charge with reference to the
underlying agreements.
• 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 and reviewing accounting estimates for evidence of bias.
• Compliance with laws and regulations at the subsidiary level was ensured through enquiry of
management, communication with local auditor and review of local auditor’s work on the
specified procedures and correspondence for any instances of non-compliance.
GREAT SOUTHERN COPPER PLC
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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.
Other matters which we are required to address
We were appointed by the Audit Committee on 9 September 2021 to audit the financial statements for
the period ended 31 March 2021 and subsequent financial periods. Our total uninterrupted period of
engagement is two years, covering the periods ending 31 March 2021 to 31 March 2022.
Prior to our appointment as auditors of the company, we were engaged to provide reporting accountant
services to the company in respect of the initial public offering on to the Standard Segment of the London
Stock Exchange. We are satisfied that it does not meet the definition of accounting services under the
FRC Ethical Standard which would be subject to an outright prohibition under the FRC Ethical Standard.
This is because they do not involve the maintenance of accounting records nor do they involve the
preparation of financial statements or other subject matter.
Our safeguards in respect of this non-audit service have centred on the fact that none of the reporting
accountant work was relied upon during the audit and an independent review partner was engaged to
review the audit. The service did not involve making any judgements on behalf of management. We
confirm that this safeguard was applied and that it enables us to conclude that our professional judgement
and our audit report are not affected by the provision of the services listed above and we remain
independent of the company in conducting our audit.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the
parent company and we remain independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. 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.
Adam Humphreys (Senior Statutory Auditor) 15 Westferry Circus
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
25 August 2022
GREAT SOUTHERN COPPER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March 2022
42
Note
Year ended
31 March
2022
£
Period ended
31 March
2021
£
Continuing operations
Administrative expenses
6
(1,037,076 )
(34,541 )
Operating loss
(1,037,076 )
(34,541 )
Operating loss and loss before taxation
Taxation
9
(1,037,076 )
(34,541 )
Loss for the year attributable to the owners of the
Company
(1,037,076 )
(34,541 )
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange rate differences on translation of foreign
operations
(24,178 )
Total comprehensive loss attributable to the owners
of the Company
(1,061,254 )
(34,541 )
Earnings per share – basic and diluted
10
(0.938 )
(3.934 )
The notes from pages 49 to 75 form part of these financial statements.
GREAT SOUTHERN COPPER PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
43
Note
2022
£
2021
£
Assets
Non-current assets
Intangible assets
11
Total non-current assets
Current assets
Trade and other receivables
13
Cash and cash equivalents
14
Total current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
15
(223,063 )
(34,541 )
Total liabilities
(223,063 )
(34,541 )
Net current assets
Net assets
Equity
Share capital
17
Share premium
Share based payment reserve
19
18
Shares to be issued
19
Foreign currency translation
reserve
19
(24,178 )
Retained earnings
19
(1,071,617 )
(34,541 )
Total equity attributable to the
owners of the Company
These financial sstatements were approved by the Board of Directors and authorised for issue on 25
August 2022 and signed on its behalf by:
S Garrett
Chief Executive Officer
Company registered number: 12497319
The notes from pages 49 to 75 form part of these financial statements.
GREAT SOUTHERN COPPER PLC
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
44
Note
2022
£
2021
£
Assets
Non-current assets
Investments
12
2,641,245
-
Total non-current assets
2,641,245
-
Current assets
Trade and other receivables
13
261,842
50,000
Cash and cash equivalents
14
2,325,365
-
Total current assets
2,587,207
50,000
Total assets
5,228,452
50,000
Liabilities
Current liabilities
Trade and other payables
15
(195,763)
(34,541)
Total liabilities
(195,763)
(34,541)
Net current assets
2,391,444
15,459
Net assets
5,032,689
15,459
Equity
Share capital
17
2,124,761
50,000
Share premium
Share based payments reserve
19
18
3,175,962
140,160
-
-
Shares to be issued
19
6,196
Retained earnings
19
(414,390)
(34,541)
Total equity
5,032,689
15,459
The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 by
choosing not to present its individual Statement of Comprehensive Income and related notes that form part
of these approved financial statements. The Company’s loss for the period from operations is £379,849 (2021
- £34,541)
These financial sstatements were approved by the Board of Directors and authorised for issue on 25
August 2022 and signed on its behalf by:
S Garrett
Chief Executive Officer
Company registered number: 12497319
The notes from pages 49 to 75 form part of these financial statements.
GREAT SOUTHERN COPPER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2022
45
Share
capital
£
Share
premium
£
Shares to
be issued
£
Share
based
payments
£
Foreign
currency
translation
reserve
Retained
earnings
£
Total
Equity
£
As at 4 March 2020
-
-
-
-
-
-
-
Loss for the period
(34,541 )
(34,541 )
Total comprehensive
expense for the period
(34,541 )
(34,541 )
Transactions with
shareholders:
Issue of share capital
As at 31 March 2021
(34,541 )
Loss for the year
(1,037,076 )
(1,037,076 )
Exchange rate differences
on translation of foreign
operations
(24,178 )
(24,178 )
Total comprehensive
expense for the year
(24,178 )
(1,037,076 )
(1,061,254 )
Transactions with
shareholders:
Issue of share capital, net of
issue costs (Note 17)
Shares to be issued
Share based payments
As at 31 March 2022
(24,178 )
(1,071,617 )
GREAT SOUTHERN COPPER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 March 2022
46
Share
capital
£
Share
premium
£
Shares to be
issued
£
Share Based
payments
£
Retained
earnings
£
Total
equity
£
As at 4 March 2020
-
-
-
-
-
-
Loss for the period
-
-
-
-
(34,541)
(34,541)
Total comprehensive expense
for the year
-
-
-
-
(34,541)
(34,541)
Transactions with
shareholders:
Issue of shares
50,000
-
-
-
-
50,000
As at 31 March 2021
50,000
-
-
-
(34,541)
15,459
Loss for the year
-
-
-
-
(379,849)
(379,849)
Total comprehensive expense
for the year
-
-
-
-
(379,849)
(379,849)
Transactions with
shareholders:
Issue of shares, net of issue
costs (Note 17)
2,074,761
3,175,962
-
-
-
5,250,723
Shares to be issued
-
-
6,196
-
-
6,196
Share based payments
-
-
-
140,160
-
140,160
As at 31 March 2022
2,124,761
3,175,962
6,196
140,160
(414,390)
5,032,689
GREAT SOUTHERN COPPER PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 March 2022
47
Significant non-cash transactions from investing activities are as follows:
Year ended
31 March
2022
£
Period ended
31 March
2021
£
Cash flows from operating activities
-
Loss for the year
(1,037,076 )
(34,541 )
Adjustments for:
Share based payments
Working capital adjustments
Increase in trade and other receivables
(155,383 )
Increase in trade and other payables
(24,214 )
Net cash outflow from operations
(1,132,877 )
Cash flows from investing activities
Purchase of subsidiary undertaking
(10,450 )
Net cash acquired with subsidiary
undertaking
Purchase of intangible assets
(191,753 )
Net cash used in investing activities
(199,468 )
Cash flows from financing activities
Issue of ordinary share capital, net of issue
costs
Net cash generated from financing
activities
Net increase in cash and cash
equivalents
Exchange gains on cash and cash equivalents
Cash and cash equivalents brought forward
-
Cash and cash equivalents carried forward
Year ended
31 March
2022
£
Period ended
31 March
2021
£
Equity consideration for business combination
Broker warrants
Remuneration settled through issue of shares
-
-
-
GREAT SOUTHERN COPPER PLC
COMPANY STATEMENT OF CASH FLOWS
Year ended 31 March 2022
48
Significant non-cash transactions from investing activities are as follows:
Year ended
31 March
2022
£
Period ended
31 March
2021
£
Net cash flows from operating activities
Loss for the year
(379,849)
(34,541)
Adjustments for:
Share based payments
83,796
-
Working capital adjustments
Increase in long term receivables
(1,419,683)
-
Increase in trade and other receivables
(186,841)
-
Increase in trade and other payables
167,417
34,541
Net cash used in operations
(1,735,161)
-
Cash flows from investing activities
Payments to acquire investments
(10,450)
-
Net cash from investing activities
(10,450)
-
Cash flows from financing activities
Issue of ordinary share capital
4,020,976
50,000
Net cash generated from financing activities
4,020,976
50,000
Net increase in cash and cash equivalents
2,275,365
50,000
Cash and cash equivalents brought forward
50,000
-
Cash and cash equivalents carried forward
2,325,365
50,000
Year ended
31 March
2022
£
Period ended
31 March
2021
£
Equity consideration for business combination
Broker warrants
Remuneration settled through issue of shares
1,211,111
56,364
6,196
-
-
-
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 March 2022
49
1. GENERAL INFORMATION
currently focused upon the exploration for copper and gold in Chile . Further detail is covered in the
Chairman’s Statement and also in the Operations Report.
The Company is a public limited Company, which is listed on the London Stock Exchange and incorporated
and domiciled in England and Wales Salisbury House, London Wall,
2. BASIS OF PREPARATION
The consolidated Group financial sstatements and Company financial statements have been prepared in
accordance with United Kingdom (“UK”) adopted International Accounting Standards (‘IFRS’) and those
parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated Group
financial statements and Company financial statements are presented in Sterling and rounded to the
nearest whole pound unless otherwise indicated. The financial statements are prepared on the historical
cost basis, except for certain financial instruments and share-based payments that have been measured
at fair value.
GOING CONCERN BASIS
In common with many other mineral exploration companies, the Group has raised finance for its exploration.
Further finance will need to be raised as and when justified by progress at any of its projects. Success in
raising funds in December 2021 is no guarantee that it will be able to do so in the future.
As at 31 March 2022, the Group’s cash at bank amounted to £2,751,676; at the date of signing this Report,
the balance amounted to £2,136,236.
The Board has reviewed the Group’s cash flow forecast up to 31 December 2023, taking into account its
current resources and its operational objectives. The Board is satisfied that the cash reserves are sufficient
to finance both planned project expenditure and overheads. The Board continues to monitor closely both
its cash and operating costs and has taken into account the resources available to it as at the date of
signing this Report. The Board has also considered the likelihood of probable success of future fundraising
activities that may be necessary. Accordingly, the Board continues to adopt the going concern basis for the
preparation of these financial statements.
3. ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the assets, liabilities, income and expenses of the
Company and entity controlled by the Company (its subsidiary) made up to the Company’s accounting
reference date. Control is achieved when the Company has the power over the investee, is exposed or has
rights to variable return from its involvement with the investee and has the ability to use its power to affect
its returns. The Company reassesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control listed above.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
50
3. ACCOUNTING POLICIES (continued)
BASIS OF CONSOLIDATION (continued)
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or
disposed of during the period are included in the consolidated income statement from the date that the
Company gains control until the date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of a subsidiary to bring the accounting
policies used into line with the Group’s accounting policies. All intra Group assets and liabilities, equity,
income, expenses and cash flows, relating to transactions between the members of the Group, are
eliminated on consolidation.
The results of overseas subsidiaries are translated at the monthly average rates of exchange during the
period and their statements of financial position at the rates ruling at the reporting date. Exchange
differences arising on translation of the opening net assets and on foreign currency borrowings or deferred
consideration, to the extent that they hedge the Group's investment in such subsidiaries, are reported in
the statement of comprehensive income. The financial statements of the subsidiary are drawn up to 31
December, with management information utilised to take this out to 31 March in line with the reporting
period of the Group.
CURRENCIES
PRESENTATIONAL CURRENCY
Items included in the financial statements are measured using the currency of the primary economic
environment in which the ultimate parent undertaking operates which is Sterling (£). The functional currency
of the only subsidiary of the group is the United States Dollar ($).
TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions or at an average rate for a period if the rates do not fluctuate
significantly. Foreign exchange gains and losses, resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign
currencies, are recognised in the income statement. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
REVENUE RECOGNITION
Revenue is recognised in the individual company financial statements in respect of management fees
charged to the subsidiary company. Revenue is recognised in respect of the period that the service has
been completed.
INTANGIBLE ASSETS – EXPLORATION AND EVALUATION EXPENDITURE
Mineral exploration and evaluation expenditure relates to costs incurred in the exploration and evaluation
of potential mineral resources and includes exploration and mineral licences, researching and analysing
historical exploration data, exploratory drilling, trenching, sampling and the costs of pre-feasibility studies.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
51
3. ACCOUNTING POLICIES (continued)
INTANGIBLE ASSETS – EXPLORATION AND EVALUATION EXPENDITURE (continued)
Exploration and evaluation expenditure for each area of interest, other than that acquired from another
entity, is charged to profit or loss as incurred except when the expenditure is expected to be recouped from
future exploitation or sale of the area of interest and it is planned to continue with active and significant
operations in relation to the area, or at the reporting period end, the activity has not reached a stage which
permits a reasonable assessment of the existence of commercially recoverable reserves, in which case the
expenditure is capitalised. Purchased exploration and evaluation assets are recognised at their fair value
at acquisition. As the capitalised exploration and evaluation expenditure asset is not available for use, it is
not depreciated.
Exploration and evaluation assets have an indefinite useful life and are assessed for impairment annually
or when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable
amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating
units, which are based on specific projects or geographical areas. IFRS 6 permits impairments of
exploration and evaluation expenditure to be reversed should the conditions which led to the impairment
improve. The Group continually monitors the position of the projects capitalised and impaired.
Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead
to the discovery of commercially viable quantities of mineral resources and the Group has decided to
discontinue such activities of that unit, the associated expenditures are written off to profit or loss.
INCOME TAX
The tax expense or credit represents the sum of the tax currently payable or recoverable and the movement
in deferred tax assets and liabilities.
CURRENT INCOME TAX
Current tax is based upon taxable income for the year and any adjustment to tax from previous years.
Taxable income differs from net income in the income statement because it excludes items of income or
expense that are taxable or deductible in other years or that are never taxable or deductible. The calculation
uses the latest tax rates for the year that have been enacted or substantively enacted by the reporting date.
DEFERRED TAX
Deferred tax is calculated at the latest tax rates that have been substantively enacted by the reporting date
that are expected to apply when settled. It is charged or credited to profit or loss, except when it relates to
items credited or charged directly to equity, in which case it is also dealt with in equity.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable income and is accounted for using the liability method. Deferred tax liabilities and assets are not
discounted.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable income will be available against which the asset
can be utilised. Such assets are reduced to the extent that it is no longer probable that the asset can be
utilised.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
52
3. ACCOUNTING POLICIES (continued)
DEFERRED TAX (continued)
Deferred tax assets and liabilities are offset when there is a right to offset current tax assets and liabilities
and when the deferred tax assets and liabilities relate to taxes levied by the same taxation authority, on
either the same taxable entity or different taxable entities, where there is an intention to settle the balances
on a net basis.
PAYROLL EXPENSE AND RELATED CONTRIBUTIONS
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday
arrangements and defined contribution pension plans.
Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an
expense in the period in which the service is received.
PENSION COSTS
The Group operates a defined contribution pension scheme for employees. The annual contributions
payable are charged to profit or loss.
SHARE-BASED COMPENSATION
The Group issues share-based payments to certain employees and Directors. Equity-settled share-based
payments are measured at fair value at the date of grant and expensed on a straight-line basis over the
vesting period, along with a corresponding increase in equity. The Group has measured share based
payments using the Black Scholes and Monte Carlo option (Note 18) models.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest
as a result of the effect of non-market based vesting conditions. The impact of any revision is recognised
in profit or loss, with a corresponding adjustment to equity reserves.
The fair values of share options are determined using the Monte Carlo and Black Scholes models, taking
into consideration the best estimate of the expected life of the option and the estimated number of shares
that will eventually vest.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Statement of Financial Position when the
Group becomes party to the contractual provisions of the instrument. Financial assets are
derecognised when the contractual rights to the cash flows from the financial asset expire or when the
contractual rights to those assets are transferred. Financial liabilities are derecognised when the obligation
specified in the contract is discharged, cancelled or expired.
IMPAIRMENT OF FINANCIAL INSTRUMENTS
The Group recognises an allowance for expected credit losses (‘ECLs’) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate (‘EIR’). The expected cash flows will include cash flows
from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
53
3. ACCOUNTING POLICIES (continued)
IMPAIRMENT OF FINANCIAL INSTRUMENTS (continued)
IFRS 9.5.5.1 ECLs are recognised in two stages. For credit exposures for which there has not been a
significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures
for which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
The Group considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Group may also consider a financial asset to be in default when internal or
external information indicates that the Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the Group. A financial asset is written off
when there is no reasonable expectation of recovering the contractual cash flows and usually occurs when
past due for more than one year and not subject to enforcement activity.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit
impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
TRADE AND OTHER RECEIVABLES
Trade and other receivables, and amounts owed by Group undertakings, are classified at amortised cost
and recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method (except for short-term receivables where interest is immaterial) less provisions for
impairment. These assets are held to collect contractual cash flows being solely the payments of the
principal amount and interest. Provisions for impairment of trade receivables are recognised for expected
lifetime credit losses using the simplified approach. Impairment reviews of other receivables, including
those due from related parties, use the general approach whereby twelve month expected losses are
provided for and lifetime credit losses are only recognised where there has been a significant increase in
credit risk, by monitoring the creditworthiness of the other party.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are held at amortised cost and consist of cash on hand, demand deposits and
other short-term highly liquid investments that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value. Further details are given in Note 14.
TRADE AND OTHER PAYABLES
Trade and other payables are initially measured at their fair value and are subsequently measured at their
amortised cost using the effective interest rate method. This method allocates interest expense over the
relevant period by applying the ‘effective interest rate’ to the carrying amount of the liability.
CLASSIFICATION AS DEBT OR EQUITY
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability
and an equity instrument.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
54
3. ACCOUNTING POLICIES (continued)
EQUITY INSTRUMENTS
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
ACCOUNTING DEVELOPMENTS
New standards, amendments and interpretations adopted in the preparation of the financial statements.
The IASB has issued the following standards and amendments, which have been adopted by the Group in
either the current or comparative period, none of which have had a material impact on the financial
statements.
Standard
Impact
Amendments to References to the Conceptual
Framework in IFRS Standards
The Group adopted the amendments References
to the Conceptual Framework for IFRS Standards
for the accounting period commencing 4 March
2020.
Amendments to IAS 1 and IAS 8: Definition of
material
The Group adopted the amendments to IAS 1 and
IAS 8 to clarify the definition of material and its
application for the accounting period commencing
4 March 2020.
IFRS 3: Definition of a business
The Group adopted the amendments to IFRS 3 to
clarify the definition of a business and its
application for the accounting period commencing
4 March 2020.
The Group does not expect any standards issued by the IASB, but not yet effective, to have a material
impact on the Group.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
55
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of these financial statements requires management to make judgements and estimates
that affect the reported amounts of assets and liabilities at each reporting date and the reported results.
Actual results could differ from these estimates. Information about such judgements and estimations is
contained in individual accounting policies.
ACCOUNTING JUDGEMENTS
The key accounting judgements used in the preparation of the financial statements are as follows:
RECOGNITION AND VALUATION OF EXPLORATION ASSETS
Exploration and evaluation assets include mineral rights and exploration and evaluation costs, including
geophysical, topographical, geological and similar types of costs. Exploration and evaluation costs are
capitalised if management concludes that future economic benefits are likely to be realised and determines
that economically viable extraction operation can be established as a result of exploration activities and
internal assessment of mineral resources. According to 'IFRS 6 Exploration for and evaluation of mineral
resources', the potential indicators of impairment include: management's plans to discontinue the
exploration activities, lack of further substantial exploration expenditure planned, expiry of exploration
licences in the period or in the nearest future, or existence of other data indicating the expenditure
capitalised is not recoverable. At the end of each reporting period, management assesses whether such
indicators exist for the exploration and evaluation assets capitalised, which requires significant judgement.
As of 31 March 2022 total exploration and evaluation costs capitalised amounted to £1,489,379 (2021 -
£Nil), all of these assets were acquired in 2021. Refer to Note 11 for more information.
CARRYING VALUE OF INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Management must consider the carrying value of investments in subsidiary companies based on the
ongoing performance of said company. The nature of the judgement will impact whether or not there is
deemed to be any indicators of impairment, which could materially impact the carrying value of those
investments. The key driver of the assessment is linked to the impairment review carried out in respect of
exploration assets.
SHARE BASED PAYMENTS
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined by using either
the Monte Carlo or Black-Scholes model taking into account the terms and conditions upon which the
instruments were granted, see Note 18 for further details.
5. OPERATING SEGMENTS
Operating segments are reported in a manner that is consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker has been identified as the Board. The
Board is responsible for allocating resources and assessing performance of operating segments.
The Group has two reportable segments, exploration and corporate, which are the Group’s strategic
divisions. For each of the strategic divisions the Board reviews internal management reports on a regular
basis.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
56
5. OPERATING SEGMENTS (continued)
The Group’s reportable segments are:
Exploration: the exploration segment is presented as an aggregate of all Chile licences held. Expenditure
on exploration activities for each licence is used to measure agreed upon expenditure targets for each
licence to ensure the licence clauses are met.
Corporate: the corporate segment includes the holding company costs in respect of managing the group.
Segment result:
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Exploration - Chile
Corporate - UK
(657,227)
(379,849)
-
(34,541)
Loss before tax
(1,037,076)
(34,541)
Taxation
-
-
Loss after tax
(1,037,076)
(34,541)
Segment assets and liabilities:
Non current assets
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Exploration - Chile
Corporate - UK
1,489,379
-
-
-
Total
1,489,379
-
Total assets
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Exploration - Chile
Corporate - UK
1,987,140
2,587,207
-
50,000
Total
4,574,347
50,000
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
57
5. OPERATING SEGMENTS (continued)
Total liabilities
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Exploration - Chile
Corporate - UK
(27,300)
(195,763)
-
(34,151)
Total
(223,063)
(34,151)
6. OPERATING EXPENSES
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Staff costs (including share based payments)
272,738
3,131
Foreign exchange (gain)/loss
(25,036)
-
Auditors’ remuneration
108,500
12,000
Travel expenses
38,409
-
IPO Costs
222,473
-
Legal, professional & consultancy fees
230,012
19,410
Insurance
17,326
-
Other administrative expenses
172,654
-
Total
1,037,076
34,541
7. AUDITOR’S REMUNERATION
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Fees payable to the Company’s auditor for the audit of the parent
and consolidated annual accounts
40,000
8,000
Total audit fees
40,000
8,000
Audit-related assurance services
68,500
4,000
Total non-audit fees
68,500
4,000
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
58
8. EMPLOYEE NUMBERS AND COSTS
The average monthly number of people employed was:
Group
Company
Year
Ended
31 March
2022
Period
Ended
31 March
2021
Year
Ended
31 March
2022
Period
Ended
31 March
2021
Number
Number
Number
Number
Average number of employees:
Directors
4
1
4
1
Administrative staff
2
-
1
-
Total
6
1
5
1
The aggregate remuneration of all employees, including Directors, comprises:
Group
Company
Year
Ended
31 March
2022
£
Period
Ended
31 March
2021
£
Year
Ended
31 March
2022
£
Period
Ended
31 March
2021
£
Wages and salaries
158,322
3,131
144,359
3,131
Social security costs
23,622
-
22,494
-
Other pension costs
6,998
-
6,998
-
Share based payments
83,796
-
83,796
-
Total
272,738
3,131
257,647
3,131
Details of Directors’ remuneration and pension entitlements are disclosed in the Remuneration Report on
page 16. Please refer to the Directors Remuneration report and related party note (Note 20) for additional
disclosure relating to key management personnel.
Social security costs payable in respect of the Directors were £Nil (2021 – £Nil)
The aggregate amount of gains made by Directors on the exercise of share options was £nil (2021 – £nil)
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
59
9. TAXATION
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Current tax
Current period – UK corporation tax
-
-
Adjustments in respect of prior periods
-
-
Foreign current tax expense
-
-
Total current tax
-
-
Deferred tax
Origination and reversal of temporary differences
-
-
Adjustments in respect of prior periods
-
-
Impact of change in tax rate
-
-
Total deferred tax
-
-
Total tax charge
-
-
Corporation tax is calculated at 19% (2021 - 19%) of the estimated assessable profit for the year. In the 3
March 2021 Budget, it was announced that the UK tax rate will increase to 25% from 1 April 2023 and this
rate was substantively enacted on 24 May 2021. Deferred tax balances at the year-end have been
measured at 25% (2021 - 19%).
The tax charge for the year can be reconciled to the loss per the income statement as follows:
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Loss before tax
(1,037,076)
(34,541)
Tax charge at 19.0 % (2021 – 19.0 %)
(197,044)
(6,563)
Expenses not deductible for tax
138,115
-
Remeasurement of deferred tax for changes in tax rates
(14,822)
-
Difference in overseas tax rates
(39,434)
Movement in deferred tax not recognised
113,185
6,563
Total tax expense
-
-
Deferred tax in relation to carried forward losses is not recognised as they are not deemed to be
recoverable.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
60
10. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net income for the period attributable to ordinary
equity holders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the profit attributable to owners of the
parent by the weighted average number of ordinary shares in issue during the financial year, adjusted for
the effects of potentially dilutive options. The dilutive effect is calculated on the full exercise of all
potentially dilutive ordinary share options granted by the Group, including performance-based options
which the Group considers to have been earned
The calculations of earnings per share are based upon the following:
Year
ended
31 March
2022
£
Period
ended
31 March
2021
£
Loss for the year
(1,037,076)
(34,541)
Number
Number
Weighted average number of shares in issue
110,584,402
877,845
Weighted average number of shares – basic
110,584,402
877,845
Share options
49,981,998
-
Weighted average number of shares – diluted
160,556,400
877,845
Pence
Pence
Earnings per share – basic
(0.938)
(3.934)
Earnings per share – diluted
(0.938)
(3.934)
In the comparative period earnings per share was calculated using the number of shares after the re-
designation, rather than the actual number in issue at 31 March 2021.
In accordance with IAS 33, basic and diluted earnings per share are identical for the group as the effect of
the exercise of the share options would be to decrease the loss per share.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
61
11. INTANGIBLE ASSETS
Group
Exploration
assets
Cost
£
As at 4 March 2020
-
Additions
-
As at 1 April 2021
Business combinations
-
1,229,076
Additions
191,753
Exchange difference
68,550
As at 31 March 2022
1,489,379
Accumulated Amortisation
As at 4 March 2020
-
Charge for the period
-
As at 1 April 2021
-
Charge for the year
-
As at 31 March 2022
-
Carrying Amount:
As at 31 March 2022
1,489,379
As at 31 March 2021
-
Exploration projects in Chile are at an early stage of development and there are no JORC (Joint Ore
Reserves Committee) or non-JORC compliant resource estimates available to enable value in use
calculations to be prepared.
In accordance with IFRS 6, the Directors undertook an assessment of the following areas and
circumstances which could indicate the existence of impairment:
• The Group's right to explore in an area has expired, or will expire in the near future without renewal.
• No further exploration or evaluation is planned or budgeted for.
• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to
the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the book value may not be fully recovered from future
development and production.
Following their assessment, the Directors concluded that no impairment charge was necessary for the
year ended 31 March 2022.
The Company had no intangible assets at 31 March 2022 or 31 March 2021.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
62
12. INVESTMENTS
Company
Amounts
owed by
subsidiary
£
Shares in
group
undertakings
£
Total
£
At 1 April 2021
-
-
Additions
1,419,684
1,221,561
2,641,245
Carrying value at end of the year
1,419,684
1,221,561
2,641,245
At 31 March 2022 the Company owned the following subsidiary:
1. Avenue El Bosque Central No. 92, 7th floor, Borough of Las Condes, Metropolitan Region
The credit risk of related parties is estimated based on the expected recoverable amount, taking into account
the creditworthiness of the other party. Any expected credit loss is calculated based on the general approach
as set out in IFRS 9. The Directors have determined that there has not been an increased credit risk within
the year and no impairment charge has been recognised against these balances.
Amounts owed by group undertakings are interest free and are due on demand.
Acquisitions
On 27 July 2021 the Company entered into an acquisition agreement under which the Company acquired the
entire share capital of Pacific Trends Resources Chile SpA (“PTRC”) from Pacific Trends Resources Pty
Limited, the majority shareholder of the Company, for AUS$2,090,000, by the issue of the 121,111,100 new
ordinary shares of £0.01 each, the issue of 60,555,555 warrants and a cash payment of £10,450. The principal
activity of PTRC is the exploration and development, subject to proven economic discovery, of copper-gold
projects in Chile, which aligns with the strategic objectives of the Company. Transaction costs of £nil have
been expensed under administrative expenses in the statement of comprehensive income.
Registered
Office
Holding
Proportion of
Voting Rights
and Shares
Held
Nature of Business
Pacific Trends
Resources Chile
SpA
1
Ordinary Shares
100%
Mining and exploration
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
63
12. INVESTMENTS (continued)
The net assets of PTRC at the acquisition date have been considered with no fair value adjustments made,
with the following acquired:
£
Non-current assets
Intangible assets
1,229,076
Deferred tax asset
26,799
Current assets
Cash
Trade and other receivables
Current tax recoverable
2,735
98,870
53,068
Total assets
1,410,548
Current liabilities
Trade and other payables
£
(188,987)
Total liabilities
(188,987)
Net assets
1,221,561
Details of the allocation of the purchase price is as follows:
Consideration
Issue of shares
Cash payment
1,211,111
10,450
Net assets
1,221,561
As a result of the consideration being equal to the fair value of assets acquired there is no goodwill created on
consolidation.
The contribution by the acquired business for the reporting period included in the group statement of
comprehensive income since acquisition:
Revenue
Loss before taxation
£
-
(657,227)
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
64
13. TRADE AND OTHER RECEIVABLES
Group
2022
2021
£
£
Other receivables
159,337
-
Prepayments and accrued income
173,955
-
333,292
-
Company
2022
2021
£
£
Other receivables
157,548
-
Prepayments and accrued income
104,296
-
261,842
-
Other receivables consist of amounts owed in respect of shares subscribed for as part of the IPO, as well as
amounts due in respect of VAT.
14. CASH AND CASH EQUIVALENTS
Group
2022
£
2021
£
Cash at bank
2,751,676
50,000
Company
2022
£
2021
£
Cash at bank
2,325,365
50,000
Cash at bank amounting to £2,078,502 is held on trust by PTR Holdings Limited, a registered Company in
Australia, which is a related party by virtue of common control. The cash was held in a bank account under
the name of PTR Holdings Limited and was governed by a treasury agreement, specifying that the cash
belonged to the Group and would be used to settle Group expenses. On the basis that the movement of cash
was controlled by the Group it has been included within these financial statements as cash and cash
equivalents of the Group. All cash held was transferred to a Group bank account on 1 April 2022.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
65
15. TRADE AND OTHER PAYABLES
Group
2022
£
2021
£
Other payables
107,277
34,541
Accruals
115,646
-
Other taxes and social security
140
-
223,063
34,541
Other payables principally consist of amounts outstanding for trade purchases and ongoing costs. They are
non-interest bearing and are typically settled on 30 to 60 day terms.
The Directors consider that the carrying value of trade and other payables approximates their fair value. Trade
and other payables are denominated in Sterling. Great Southern Copper plc has financial risk management
policies in place to ensure that all payables are paid within the credit time frame and no interest has been
charged by any suppliers as a result of late payment of invoices during the period.
Company
2022
£
2021
£
Other creditors
80,117
34,541
Accruals
115,646
-
195,763
34,451
16. FINANCIAL INSTRUMENTS
PRINCIPAL FINANCIAL INSTRUMENTS
The principal financial instruments used by the Group, from which financial instrument risk arises, are as
follows:
FINANCIAL ASSETS
The Group held the following financial assets at amortised cost:
Group
2022
£
2021
£
Cash and cash equivalents
Other receivables (excluding VAT and prepayment)
2,751,676
81,564
50,000
-
2,833,239
50,000
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
66
16. FINANCIAL INSTRUMENTS (continued)
FINANCIAL LIABILITIES
The Group held the following financial liabilities, classified as other financial liabilities at amortised cost:
Group
2022
£
2021
£
Other payables and accruals
222,923
34,541
222,923
34,541
FINANCIAL ASSETS
The Company held the following financial assets at amortised cost:
Company
2022
£
2021
£
Cash and cash equivalents
2,325,365
50,000
Other receivables (excluding VAT and prepayments)
79,774
-
2,405,139
50,000
FINANCIAL LIABILITIES
The Company held the following financial liabilities, classified as other financial liabilities at amortised cost:
Company
2022
£
2021
£
Other payables and accruals
195,763
34,541
195,763
34,541
The Group’s activities expose it to certain financial risks: market risk, credit risk and liquidity risk. The overall
risk management programme focuses upon the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Group’s financial performance. Risk management is carried out by the
Directors, who identify and evaluate financial risks in close cooperation with key members of staff.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
67
16. FINANCIAL INSTRUMENTS (continued)
MARKET RISK
Market risk is the risk of loss that may arise from changes in market factors such as interest rates and foreign
exchange rates.
FOREIGN CURRENCY RISK MANAGEMENT
Currency risk is the risk that the financial results of the Group will be adversely affected by changes in
exchange rates to which the Group is exposed. The Group undertakes certain transactions denominated in
foreign currencies. The majority of the Company's expenditures are denominated in Pound Sterling, while its
exploration expenses are incurred in US Dollars, accordingly, the result for the year are adversely impacted
by depreciation of the Pound Sterling against the US$ while the Group's assets are positively impacted by
appreciation of the US$ against the Pound. Currency risk is monitored on a regular basis.
The following is a note of the assets and liabilities denominated at each period end in US Dollars:
Group
2022
2021
$
$
Other receivables
2,348
-
Cash and cash equivalents
582,899
-
Other payables
(34,891)
-
550,356
-
LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. This risk
relates to the Group’s prudent liquidity risk management and implies maintaining sufficient cash. The Directors
monitor rolling forecasts of the Group’s liquidity and cash and cash equivalents based upon expected cash
flow.
CREDIT RISK
Credit risk is the risk that a customer may default or not meet its obligations to the Group on a timely basis,
leading to financial losses to the Group. Credit risk arises from cash and deposits kept with banks, advances
paid and other receivables. The maximum exposure to credit risk at the reporting date to recognised financial
assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The consolidated entity does not hold any
collateral.
Generally, other receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure
to make contractual payments for a period greater than 1 year.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
68
16. FINANCIAL INSTRUMENTS (continued)
CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going
concern, to enable the Group to continue its exploration and evaluation activities, and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group
may adjust the issue of shares or sell assets to reduce debts.
At 31 March 2022 the Group had borrowings of £Nil (2021 - £Nil) and defines capital based on the total equity
of the Group. The Group monitors its level of cash resources available against future planned exploration and
evaluation activities and may issue new shares in order to raise further funds from time to time.
FAIR VALUE ESTIMATION
The carrying value of other receivables and payables are assumed to approximate to their fair values because
of the short-term nature of such assets and the effect of discounting liabilities is negligible.
The Group is exposed to the risks that arise from its financial instruments. The policies for managing those
risks and the methods to measure them are described earlier in this note.
MATURITY OF FINANCIAL ASSETS AND LIABILITIES
All of the Group’s non-derivative financial liabilities and its financial assets at the reporting date are either
payable or receivable within one year.
17. SHARE CAPITAL
NUMBER OF SHARES IN ISSUE
2022
Issued and fully paid:
Number
£
Ordinary shares of £0.01
212,476,100
2,124,761
Total shares
212,476,100
2,124,761
2021
Issued and fully paid:
Number
£
Ordinary shares of £1
50,000
50,000
Total shares
50,000
50,000
RIGHTS OF SHARE CAPITAL
Ordinary shares carry rights to dividends and other distributions from the Company, as well as carrying
voting rights.
On 20 April 2021, the Company sub divided its ordinary shares from 50,000 shares with a nominal value of
£1 to 5,000,000 shares with a nominal value of £0.01.
On the 27 July 2021 the Company issued 121,111,100 shares following the acquisition of Pacific Trends
Resources Chile SpA. The shares were issued at nominal value of £0.01.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
69
17. SHARE CAPITAL (continued)
On 20 December 2021 the Company was admitted to trading on the standard segment of the main market of
the London Stock Exchange. As part of the initial public offering (“IPO”) the following shares were issued:
• 16,000,000 ordinary shares were issued following the conversion of advanced subscription of
monies received £800,000. This transaction resulted in an addition to share capital of £160,000 and
share premium of £640,000.
• 70,365,000 ordinary shares were issued as part of the main placing of shares, at a placing price of
£0.05 per share. This transaction resulted in an addition to share capital of £703,650 and share
premium of £2,814,600.
Costs associated with the IPO of £222,274 were debited against the share premium account. Costs
associated with the Broker warrants in relation to the IPO were debited against share premium of £56,364.
18. SHARE BASED PAYMENTS
The Group had warrants and share option schemes in place during the year ended 31 March 2022 as follows:
Warrants
On 7 December 2021 the Company issued 148,327,850 warrants. The warrants were granted in the
following tranches:
1.) 60,555,550 granted to Pacific Trends Resources Pty Ltd following the acquisition of Pacific Trends
Resources Chile SpA.
2.) 1,407,300 Broker warrants grated as part of the IPO.
3.) 70,365,000 placing warrants granted as part of the IPO.
4.) 16,000,000 conversion warrants granted to Foreign Dimensions Pty Ltd, the largest individual
shareholder.
All warrants with the exception of the Broker Warrants entitle the holder to prescribe for one ordinary share at
a price of £0.10 per share. The warrants became exercisable on admission and have a maximum life of two
years. If the warrants have not been exercised within that time they will expire. The Broker warrants have an
exercise price of £0.05 and a life of three years.
Warrants
Number of
warrants
Weighted
average
exercise
price
Number of
warrants
Weighted
average
exercise
price
2022
2022
2021
2021
Outstanding at beginning of the year
-
-
-
-
Exercised during the year
-
-
-
-
Granted during the year
148,327,850
£0.10
-
-
Lapsed during the year
-
-
-
-
Outstanding at the end of the year
148,327,850
£0.10
-
-
Broker warrants fall within the scope of IFRS 2 – Share Based Payments as there is an associated service
attached to their issue, whilst the other warrants referred to above do not confer any such service so have
not been subject to valuation. The weighted average contract length of the warrants was 2 years (2021 –
Nil), whilst the remaining average contractual life was 1 year and 8 months (2021 – Nil).
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
70
18. SHARE BASED PAYMENTS (continued)
VALUATION
The warrants have been valued at 2% of the capital raised by SI Capital. This totalled £56,364 (2021: £nil)
and has been debited to share premium.
Share options
On 7 December 2021 the Company issued 11,702,232 options to directors and key personnel employed
within the group as follows:
1.) 10,105,554 options were granted to directors and a key employee of Great Southern Copper Plc.
These options are split into 2 equal tranches, all carry an exercise price of £0.05 per share and have
the following vesting conditions:
a.) 50% vest in 3 tranches, 1/3 on admission, 1/3 on the first anniversary of admission and 1/3 on
the second anniversary of admission.
b.) 50% vest in 3 tranches, 1/3 when the share price reaches £0.10, 1/3 when the share price
reaches £0.15 and 1/3 when the share price reaches £0.20.
The options must be exercised by the third anniversary of admission.
2.) 1,596,678 options were granted to other key personnel, including employees of Pacific Trends
Resources Chile SpA. These options all carry an exercise price of £0.01 and vest in 3 tranches, 1/3
on admission, 1/3 on the first anniversary of admission and 1/3 on the second anniversary of
admission.
The options must be exercised by 7 December 2026.
Share options
Number of
options
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
2022
2022
2021
2021
Outstanding at beginning of the year
-
-
-
-
Exercised during the year
-
-
-
-
Granted during the year
11,702,232
£0.04
-
-
Lapsed during the year
-
-
-
-
Outstanding at the end of the year
11,702,232
£0.04
-
-
The weighted average contract length on the options was 4 years (2021 – Nil). The remaining average
contractual life of the options was 3 years 8 months (2021 – Nil).
VALUATION
Given the existence of market based vesting conditions in certain of the options, the valuation exercise has
been split into 2 parts with the options including those conditions being valued using a Monte Carlo option
pricing model, whilst the other options have been valued using the Black Scholes option pricing model.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
71
18. SHARE BASED PAYMENTS (continued)
Options at 31 March 2022 – Monte Carlo
Model
Share price at date of grant
Fair value at the year end
Exercise price
Time to expiry (years)
Risk-free rate (%) – 3 years
Volatility (%)
Dividend yield (%)
Employee retention rate (%)
£0.0455
£0.02
£0.05
3 years
0.46%
70.0%
0%
100 %
Options at 31 March 2022 – Black
Scholes Model
Share price at date of grant
Fair value at the year end – £0.01 options
Fair value at the year end – £0.05 options
Exercise price
Time to expiry (years)
Risk-free rate (%) – £0.01 options
Risk-free rate (%) – £0.05 options
Volatility (%)
Dividend yield (%)
Employee retention rate (%)
£0.0455
£0.04
£0.02
£0.05; £0.01
3 and 5 years
0.46%
0.46%
70.0%
0%
100% for employees with £0.01 options,
100% for employees with £0.05 options
Volatility is measured using a weekly share price over a period of 5 years prior to the date of grant.
The risk-free rate is derived using a 3 and 5 year gilt rate.
The total share-based payment expense recognised in the year is £83,796.
19. RESERVES
SHARE PREMIUM
Consideration received for shares issued above their nominal value net of transaction costs.
SHARE BASED PAYMENTS
The cumulative share-based payment expenses
SHARES TO BE ISSUED
Shares to be issued to a director in lieu of cash remuneration.
FOREIGN CURRENCY TRANSLATION
Cumulative gains and losses in respect of the translation of the results of overseas subsidiaries into the
presentational currency of the Group.
RETAINED EARNINGS
Cumulative profit and loss net of distributions to owners.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
72
20. RELATED PARTY TRANSACTIONS
REMUNERATION OF KEY PERSONNEL - GROUP
Remuneration of key management personnel, considered to be the Directors and other senior management
of the Group is as follows:
Year
ended
31 March
2022
Period
ended
31 March
2021
£’000
£’000
Short-term remuneration
166,853
-
Other pension costs
6,998
-
Share-based payments
55,930
-
229,781
-
TRANSACTIONS AND BALANCES WITH KEY PERSONNEL - GROUP
Balances outstanding to key personnel at year end totalled to £489 (2021 - £Nil).
During the year the majority shareholder provided funding to the group, in advance of the IPO, totalling
£821,668 (2021 - £Nil). As part of the IPO £800,000 of this loan was converted into 16,000,000 ordinary
shares of the Company. As at 31 March 2022 a balance of £21,668 was owed to the shareholder (2021 -
£Nil).
During the year £222,274 (2021 - £Nil) was paid to SI Capital Limited for the services relating to the IPO. In
addition to this, SI Capital Limited were issued with broker warrants (see Note 18). The charge in relation to
Broker warrants of £56,364 (2021 - £Nil) is included within share premium. At 31 March 2022 amounts owed
to the Group by SI Capital Limited totalled £75,000 (2021 - £Nil). SI Capital Limited are a related party
through common key management personnel.
During the year payments were made to third parties in respect of services provided by two of the Directors
prior to their appointment. Payments made to Hillstone Resources and SI Capital Limited totalled £20,617 and
£21,758 respectively (2021 - £Nil), with no amounts outstanding at either period end.
During the year payments in respect of the services of the Chief Executive were made through Metal Ventures
Inc totalling £69,984 (2021 - £Nil), with £16,209 outstanding at year end (2021 - £Nil).
The Directors’ disclosures have been included in the Directors Remuneration report.
21. CONTINGENCIES AND COMMITMENTS
The option agreements held by the Company in relation to the San Lorenzo and Especularita projects give
the Company the discretionary right to acquire the relevant concessions, provided the quotas of US$117,080
and the fees of US$3,010,000 due by March 2024 specified in such agreements have been paid in full.
There are no royalty, third party payments, or other obligations in favour of third parties regarding the option
payments or the concessions to which they relate.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
73
22. POST BALANCE SHEET EVENTS
There are no post balance sheet events that require separate disclosure.
23. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, Colin Bourke is the controlling party as he owns greater than 50% of the
voting rights of the shares in issue.
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
74
COMPANY INFORMATION
Directors
Samuel Garrett Chief Executive
Charles Bond Non-Executive Chairman
Stuart Greene Non-Executive Director
Nick Briers Non-Executive Director
Company Secretary
Frank Ronaldson
Registered Office
Salisbury House, London Wall
London
United Kingdom
EC2M 5PS
Auditors
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London El4 4HD
Broker
SI Capital Limited
19 Berkeley Street
London
W1J 8ED
Registrars
Share Registrars Limited
The Courtyard
17 West Street
Farnham
Surry
GU9 7DR
Registered Number
12497319
GREAT SOUTHERN COPPER PLC
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 March 2022
75
Solicitors
Druces LLP
Salisbury House
London Wall
London
EC2M SPS
Principal Bankers
Revolut Ltd
7 Westferry Circus
Canary Wharf
London
England
E14 4HD
Bendigo Bank
The Bendigo Centre
Bendigo VIC 3550
Australia