Final Results

Greatland Gold PLC

Shaun Day

+44 (0)20 3709 4900

[email protected]

www.greatlandgold.com

SPARK Advisory Partners Limited (Nominated Adviser)

Andrew Emmott/James Keeshan

+44 (0)20 3368 3550

Berenberg (Joint Corporate Broker and Financial Adviser)

Matthew Armitt/ Varun Talwar/Alamgir Ahmed/Detlir Elezi

+44 (0)20 3207 7800

Canaccord Genuity (Joint Corporate Broker and Financial Adviser)

James Asensio/Patrick Dolaghan

+44 (0)20 7523 8000

Hannam & Partners (Joint Corporate Broker and Financial Adviser)

Andrew Chubb/Matt Hasson/Jay Ashfield

+44 (0)20 7907 8500

SI Capital Limited (Joint Broker)

Nick Emerson/Alan Gunn

+44 (0)14 8341 3500

Luther Pendragon (Media and Investor Relations)

Harry Chathli/Alexis Gore/Joe Quinlan

+44 (0)20 7618 9100

Notes

Year ended

30 June 2021

£

Year ended

30 June 2020

£

Revenue

-

-

Exploration costs

(3,470,443)

(3,460,185)

Administrative expenses

(2,204,441)

(1,697,801)

Impairment cost

-

(38,376)

Operating loss

(5,674,884)

(5,196,362)

Other income

365,645

55,438

Foreign exchange loss

(193,976)

-

Finance income

3

982

17,663

Finance costs

3

(17,415)

(21,734)

Loss before taxation

(5,519,648)

(5,144,995)

Income tax expense

5

-

-

Loss for the year

(5,519,648)

(5,144,995)

Other comprehensive income

Items that may be reclassified subsequently to profit and loss:

Exchange differences on translation of foreign operations

(48,735)

234,860

Other comprehensive income for the year net of taxation

(48,735)

234,860

Total comprehensive income for the year attributable to equity holders of the parent company

(5,568,383)

(4,910,135)

Earnings per share - basic and diluted

9

(0.14) pence

(0.14) pence

Note

30 June 2021

30 June 2020

1 July 2019

£

(Restated) £*

(Restated) £*

ASSETS

Non-current assets

Tangible assets

Mine development

10

11

120,356

17,091,622

132,061

-

-

Right of use asset

13

341,912

414,616

-

17,553,890

546,677

103,114

Current assets

Cash and cash equivalents

Trade and other receivables

21

15

6,212,057

78,198

6,022,745

23,865

2,755,998

26,376

Prepayments

154,215

55,211

51,104

Total current assets

6,444,470

6,101,821

2,833,478

TOTAL ASSETS

23,998,360

6,648,498

2,936,592

LIABILITIES

Current liabilities

Payables and other liabilities

18

(3,513,512)

(932,759)

(630,369)

Total current liabilities

(3,513,512)

(932,759)

(630,369)

Non-current liabilities

Borrowings

17

(12,189,790)

-

-

Provisions

16

(3,813,372)

-

-

Payables and other liabilities

18

(326,793)

(390,718)

-

Total non-current liabilities

(16,329,955)

(390,718)

-

TOTAL LIABILITIES

(19,843,467)

(1,323,477)

(630,369)

NET ASSETS

4,154,893

5,325,021

2,306,223

EQUITY

Share capital

Share premium

Share based payment reserve

19

20

3,947,270

24,064,307

177,592

3,760,207

19,878,782

372,953

3,323,420

12,554,173

349,606

Retained earnings

(24,388,861)

(19,090,241)

(14,089,436)

Other reserves

354,585

403,320

168,460

TOTAL EQUITY

4,154,893

5,325,021

2,306,223

Group statement of changes in equity

for the year ended 30 June 2021

£

£

£

Notes

Year ended

30 June 2021

£

Year ended

30 June 2020

£

Cash flows from operating activities

Loss before taxation

Increase in trade & other receivables

Increase in payables & other liabilities

Depreciation

Amortisation

Impairment

Share option charge

(5,519,648)

(54,333)

2,417,822

175,884

64,946

-

25,668

(5,183,317)

(1,596)

293,450

67,396

65,230

38,376

154,492

Foreign exchange loss

193,976

-

Net decrease in cash and cash equivalents from operating activities

(2,695,685)

(4,565,969)

Cash flows from investing activities

Interest received

Interest payable

Payments to acquire intangible assets

982

(17,415)

-

2,163

(21,734)

 9,640

Payments to acquire tangible assets

(13,554,108)

(95,624)

Net cash outflows used in investing activities

(13,570,541)

(105,555)

Cash flows from financing activities

Proceeds from issue of shares

Transaction costs of issue of shares

4,372,588

-

7,980,274

(218,878)

Proceeds on borrowings

12,189,790

-

Other income

-

55,438

Repayment of lease liabilities

(63,925)

(67,877)

Net cash inflows from financing activities

16,498,453

7,748,957

Net increase in cash and cash equivalents

21

232,227

3,077,433

Cash and cash equivalents at the beginning of period

6,022,745

2,755,998

Exchange (loss) / gain on cash and cash equivalents

(42,915)

189,314

Cash and cash equivalents at end of period

21

6,212,057

6,022,745

1

Principal accounting policies

1.1

Authorisation of financial statements and statement of compliance with IFRS

The group financial statements of Greatland Gold plc for the year ended 30 June 2021 were authorised for issue by the board on 11 November 2021 and the statement of financial position signed on the board's behalf by Mr Shaun Day and Mr Alex Borrelli. Greatland Gold plc is a public limited company incorporated and domiciled in England and Wales. The Company's ordinary shares are traded on AIM.

The principal accounting policies adopted by the Group and Company are set out below.

New standards, amendments and interpretations adopted by the Group

There are no IASB and IFRIC standards that have been issued with an effective date after the date of the financial statements which are expected to have a material impact on the Group.

New and amended Standards and Interpretations issued but not effective

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not been adopted by the UK):

- Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current - effective 1 January 2023*

- Amendments to IFRS 3: Business Combinations - Reference to the Conceptual Framework - effective 1 January 2022*

- Amendments to IAS 16: Property, Plant & Equipment - effective 1 January 2022*

- Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets - effective 1 January 2022*

- Annual Improvements to IFRS Standards 2018-2020 Cycle - effective 1 January 2022*

- Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies - effective 1 January 2023*

- Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates - effective 1 January 2023*

- Amendments to IFRS 16: Leases - Covid-19-Related Rent Concessions beyond 30 June 2021 - effective 1 April 2021

- Amendments to IAS 12: Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction - effective 1 January 2023*

*subject to UK endorsement

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

1.2

Significant accounting judgments, estimates and assumptions

Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Rehabilitation provision (Note 16)

The Group assesses its rehabilitation, restoration and dismantling (rehabilitation) provision at each reporting date. Significant estimates and assumptions are made in determining the provision as there are numerous factors that will affect the ultimate amount payable. These factors include estimates of the extent, timing and costs of rehabilitation activities, technological changes, regulatory changes, cost increases as compared to the inflation rates, and changes in discount rates. These uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at reporting date represents management's best estimate of the present value of the future rehabilitation costs. The rehabilitation estimate is based on the Pre-Feasibility study. The discount rate used in the calculation of the provision is 4.5%. At this stage the rehabilitation costs are expected to be incurred up to 2033.

Impairment of mine development (Note 11)

The recoverable amount of mine development is dependent on the successful development and commercial exploration, or alternatively, sale of the respective area of interest. The Group's estimate of the Ore Reserve that can be economically and legally extracted. The Group estimates its Ore Reserve and Mineral Resource based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body, and requires complex geological judgments to interpret the data. The estimation of Ore Reserves is based on factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgments made in estimating the size and grade of the ore body and removal of waste material. Management have determined the mine development asset to be recoverable based on the Pre-Feasibility Study released on the company's website on 21 October 2021. Changes in these estimates may impact upon the carrying value of mine properties, property, plant and equipment, and provision for rehabilitation.

Impairment of loan due from subsidiary (Note 15)

The Company holds a loan due from a 100% owned subsidiary, Greatland Pty Ltd. Greatland Pty Ltd holds the Group's interest in the Havieron Joint Venture. The recoverable amount of the loan is dependent on the successful development and commercial exploration of the Havieron Joint Venture, or alternatively, sale of the respective area of interest. Management have concluded the loan will be recoverable on this basis.

Share-based payment transactions (Note 20)

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 using a Black-Scholes model and a 40% discount is applied to that value due to the recent volatility of the share price over the valuation period.

1.3

Basis of preparation

The Group's financial statements have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the requirements of the Companies Act 2006.

The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.

The amounts presented in the consolidated financial statements are rounded to the nearest £1.

During the year, the group made the decision to voluntarily change its accounting policy in respect of Exploration assets. Refer to Note 1.19 for more details on the change.

Going Concern

The consolidated entity has incurred a loss before tax of £5,519,648 for the year ended 30 June 2021 and had a net cash outflow of £16,266,226 from operating and investing activities. At that date there were net current assets of £2,930,958. The loss resulted almost entirely from exploration costs and associated administrative related costs.

The Group's cash flow forecast for the period ending 30 November 2022 highlights adequate funding of projected expenditure to last into 2022 with the Group having access to a loan facility for its share of Havieron Joint Venture expenditure up to US$50 million and is being able to significantly reduce expenditure on its own exploration programs if it wishes to do so. The Group also has the ability to raise capital for expansion purposes, if required and the Group has demonstrated a consistent ability to do so in the past, as well as potential to debt fund its share of Havieron development. Albeit the Board considers that, in a worst case scenario, the Group can continue without a capital raising.

Given the Group's current positive cash position, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

For these reasons, they continue to adopt the going concern basis in preparing the annual report and accounts.

Having prepared forecasts based on current resources, assessing methods of obtaining additional finance and assessing the possible impact of COVID-19, the Directors believe the Group has sufficient resources to meet its obligations for a period of 12 months from the date of approval of these financial statements. Taking these matters into consideration, the Directors continue to adopt the going concern basis of accounting in the preparation of the financial statements. The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate

1.4

Basis of consolidation

The consolidated accounts combine the accounts of the Company and its sole subsidiary, Greatland Pty Ltd, using the purchase method of accounting.

In the Company's statement of financial position, the investment in Greatland Pty Ltd includes the nominal value of shares issued together with the cash element of the consideration. As required by the Companies Act 2006, no premium was recognised on the share issue. The difference between nominal and fair value of the shares issued was credited to the merger reserve.

Subsidiary undertakings are those entities controlled directly or indirectly by the Company. The Company controls an investee when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The results of the subsidiaries acquired are included in the Consolidated Statement of Comprehensive Income from the date of acquisition using the same accounting policies of those of the Group. The consideration transferred in a business combination is the fair value at the acquisition date of the assets transferred and the liabilities incurred by the Group and includes the fair value of any contingent consideration arrangement. Acquisition-related costs are recognised in the income statement as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the Group.

All intra-group balances and transactions, including any unrealized income and expenses arising from intragroup transactions, are eliminated in full in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

1.5

Investment in subsidiaries

Investments in subsidiary companies are classified as non-current assets and included in the statement of financial position of the Company at cost, less provision for impairment at the date of acquisition irrespective of the application of merger relief under the Companies Act.

1.6

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

1.7

Income tax and deferred taxation

Current tax assets and liabilities for the current and prior periods are measured as the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date.

Full provision is made for deferred taxation resulting from timing differences which have arisen but not reversed at the balance sheet date.

Deferred tax assets on carried forward losses are only recorded where it is expected that future trading profits will be generated in which this asset can be offset. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

1.8

Tangible fixed assets

Exploration and evaluation and development assets

Exploration and evaluation and development assets includes pre-licence costs, costs associated with exploring, investigating, examining and evaluating an area of mineralisation, and assessing the technical feasibility and commercial viability of extracting the mineral resource from that area. Other than acquisition costs, exploration and evaluation expenditure incurred on licenses where the commercial viability of extracting the mineral resource has not yet been established is generally expensed when incurred. Once the commercial viability of extracting the mineral resource are demonstrable (at which point, the Group considers it probable that economic benefits will be realised), the Group capitalises any further evaluation costs incurred. These costs are classified as property plant and equipment. The recoverability of the exploration and evaluation assets is dependent on the successful development and commercial exploration, or alternatively, sale of the respective area of interest.

Exploration and evaluation and development assets are assessed for impairment if:

• insufficient data exists to determine commercial viability; or

• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

An exploration and evaluation asset will be reclassified to mine properties when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable and a decision has been made to develop and extract the resource. Exploration and evaluation assets shall be assessed for impairment, and any impairment loss shall be recognised, before reclassification to mine properties. No amortisation is charged during the exploration and evaluation phase.

Rehabilitation provision

The present value of the expected cost for the decommissioning, restoration and dismantling of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Refer to Provisions for further information about the recognised decommissioning provision.

Plant and equipment

Plant and equipment including mine development are stated at historical cost, less accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items and costs incurred in bringing the asset into use.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is de-recognised. All other repairs and maintenance costs are recognised in the income statement as incurred.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised

Depreciation

The depreciation methods adopted by the Group are shown in table below:

· Mine properties: units of ore extracted basis over the life of mine

· Motor vehicles: straight line basis of 20% per annum

· Equipment: straight line basis of 7% per annum

· Leasehold improvements: straight line basis of 11% per annum

1.9

Capitalised borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in income in the period in which they are incurred.

1.10

Right of use assets

At inception of a contract, the Company assesses if the contract contains or is a lease. If there is a lease present, a right-of-use asset and a corresponding lease liability is recognised by the company where the company is a lessee. However, all contracts that are classified as short-term leases (i.e. a lease with a remaining lease term of 12 months or less) and leases of low-value assets are recognised as an operating expense on a straight line basis over the term of the lease.

Initially, the lease liability is measured at the present value of the lease payments still to be paid at commencement date. The lease payments are discounted at the interest rate implicit in the lease. If the rate cannot be readily determined, the company uses the incremental borrowing rate.

Lease payments included in the measurement of the lease liability are as follows:

· Fixed lease payments less any lease incentives;

· Variable lease payments that depend on an index rate, initially measured using the index rate of rate at the commencement date;

· The amount expected to be payable by the lessees under the residual value guarantees;

· The exercise price of purchase options, if the lessee is reasonably certain to exercise the options;

· Lease payments under extension options, if the lessee is reasonably certain to exercise the options; and

· Payments of penalties for terminating the lease, if the lease term reflects the exercise of an options.

The right-of-use assets comprise the initial measurement of the corresponding lease liability as mentioned above, any to terminate the lease payments made at or before the commencement date, as well as any initial direct costs. The subsequent measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the lease term of useful life of the underlying asset, whichever is the shortest. Where a lease transfers ownership of the underlying asset of the cost of the right-of-use asset reflects that the company anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.

1.11

Foreign currencies

Both the functional and presentational currency of Greatland Gold plc is sterling (£). Each group entity determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

The functional currency of the foreign subsidiary, Greatland Pty Ltd, is Australian Dollars (A$).

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. All differences are taken to the income statement.

On consolidation of a foreign operation, assets and liabilities are translated at the balance sheet rates, income and expenses are translated at rates ruling at the transaction date. Exchange differences on consolidation are taken to the income statement.

1.12

Other income

During the year the Parent Company received a 'Small Business Grant' of £10,000 from Westminster City Council, London. In the previous year Greatland Pty Ltd received two 'Cash Boost' grants totalling A$100,000 (£55,438) from the state government of Western Australia. These grants were provided to support businesses during the COVID-19 pandemic. Government grants are recognised only when there is reasonable assurance that the Group will comply with the conditions attaching to the grant and that the grants will be received. Capital grants are recognised to match the related development expenditure and are deducted in arriving at the carrying value of the related assets. Any grants that are received in advance of recognition are deferred.

During the year the Group received other income of A$611,050 (£336,356) in respect of chargeable costs for its Juri loan (2020: £nil).

Previous years consisted of a grant from the state government of Western Australia. Government grants are accounted for on a receipts basis.

1.13

Finance income

Finance income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

1.14

Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for the expected future issue of credit notes and for non-recoverability due to credit risk. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure expected credit losses, trade receivables and contract assets have been grouped based on shared risk characteristics. No such credit loss has been recorded in these financial statements as any effect would be immaterial.

1.15

Financial instruments

Financial assets and liabilities are recognized in the Group's Statement of Financial Position when the Group becomes a party to the contracted provision of the instrument. The following policies for financial instruments have been applied in the preparation of the consolidated financial statements:

The Group and Company's financial assets which comprise loans and receivables and other debtors are measured at amortised cost.

The classification depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial assets are classified as at amortised cost only if both of the following criteria are met:

• the asset is held within a business model whose objective is to collect contractual cash flows; and

• the contractual terms give rise to cash flows that are solely payments of principal and interest

1.16

Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.

1.17

Provisions

Employee benefits

Provision for employee entitlements include leave entitlements. These are recognised when the Company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

Liabilities for wages and salaries, annual leave and any other employee benefits are measured at the amounts expected to be paid when the liabilities are settled.

Amounts expected to settle within twelve months are recognised in 'Current Provisions' (for annual leave and salary at risk) and 'Trade and Other Payables' (for all other employee benefits) in respect of employees' services up to the reporting date. Costs incurred in relation to non-accumulating sick leave are recognised when leave is taken and are measured at the rates paid or payable.

The liability for long service leave and other long-term benefits is measured at the present value of the estimated future cash outflows resulting from employees' services provided up to the reporting date.

Rehabilitation, restoration and dismantling

The Group recognises a provision for the estimate of the future costs of restoration activities on a discounted basis at the time of exploration or mining disturbance. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines, dismantling operating facilities, closure of plant and waste sites, and restoration, reclamation and re-vegetation of affected areas. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying amount of the related assets to the extent that it was incurred by the development/construction of the asset.

Over time, the discounted liability is increased for the change in the present value based on a discount rate that reflects current market assessments. Additional disturbances or changes in rehabilitation costs will be recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred. The unwinding of the effect of discounting the provision is recorded as a finance cost in the statement of comprehensive income. The carrying amount capitalised as a part of mining assets is depreciated/amortised over the life of the related asset.

Rehabilitation and restoration obligations arising from the Group's exploration activities are recognised immediately in the income statement. If a change to the estimated provision results in an increase in the rehabilitation liability and therefore an addition to the carrying value of the related asset, the Group considers whether this is an indication of impairment of the asset. If the revised assets, net of rehabilitation provisions, exceed the recoverable amount, that portion of the increase to the provision is charged directly to the statement of comprehensive income.

1.18

Earnings per share

Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:

· costs of servicing equity (other than dividends) and preference share dividends;

· the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

· other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

1.19

Change in accounting policy adjustment - Exploration and development expenditure

During the year, a retrospective adjustment has been made to the carrying values to reflect a change in accounting policy of exploration and evaluation expenditure. The change in accounting policy was made to align to industry and peer companies. Previously costs associated with an exploration activity were capitalised if, in management's opinion, the results from that activity led to a material increase in the market value of the exploration asset which was determined by management to be following the economic feasibility stage.

The new policy is as follows:

Exploration, evaluation and development assets includes pre-licence costs, costs associated with exploring, investigating, examining and evaluating an area of mineralisation, and assessing the technical feasibility and commercial viability of extracting the mineral resource from that area. Other than acquisition costs, exploration and evaluation expenditure incurred on licenses where the commercial viability of extracting the mineral resource has not yet been established is generally expensed when incurred. Once the commercial viability of extracting the mineral resource are demonstrable (at which point, the Group considers it probable that economic benefits will be realised), the Group capitalises any further evaluation costs incurred. This probability is assessed through a Pre-Feasbility study or similar. The recoverability of the exploration and evaluation assets is dependent on the successful development and commercial exploration, or alternatively, sale of the respective area of interest.

Exploration, evaluation and development assets are assessed for impairment if:

• insufficient data exists to determine commercial viability; or

• other facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

An exploration and evaluation asset will be reclassified to mine properties when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable and a decision has been made to develop and extract the resource. Exploration and evaluation assets shall be assessed for impairment, and any impairment loss shall be recognised before reclassification to mine properties. No amortisation is charged during the exploration and evaluation phase.

Impairment reviews are carried out regularly by the Directors of the Company. Where a project is abandoned or is considered not to be of commercial value to the Company, the related costs are written off or provisions are made.

The change in accounting policy affected the following items in the balance sheet at 1 July 2020:

· Intangible assets - decrease by £1,989,363 (1 July 2019: £2,016,783)

· Retained earnings - decrease by £1,989,363 (1 July 2019: £2,016,783)

There was no impact to the statement of comprehensive income as a result of the change in accounting policy, given there were no additions to Intangible Assets in 2020. As a result, there was no change to the earnings per share calculation.

1.20

Share based payments

The fair value of options granted to directors and others in respect of services provided is recognised as an expense in the profit and loss account with a corresponding increase in equity reserves - the share based payment reserve.

On exercise or cancellation of share options, the proportion of the share based payment reserve relevant to those options is transferred to the profit and loss account reserve. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and the charge is spread over the relevant vesting period.

The fair value of options is calculated using the Black-Scholes model taking into account the terms and conditions upon which the options were granted. Vesting conditions are non-market and there are no market vesting conditions. The exercise price is fixed at the date of grant and no compensation is due at the date of grant.

1.21

Interest in joint operations

A joint operation is a joint arrangement whereby the parties of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.

When the Group undertakes its activities under joint operations, the Group as a joint operator recognises in relation to its interest in a joint operation:

· Its assets, including its share of any assets held jointly

· Its liabilities, including its share of any liabilities incurred jointly

· Its revenue from the sale of its share of the output arising from the joint operation

· Its share of the revenue from the sale of the output by the joint operation

· Its expenses, including its share of any expenses incurred jointly.

The Havieron Project is operated under a Joint Venture Agreement between Greatland Gold and Newcrest Mining Limited (Newcrest) entered into on 30 November 2020. The agreement provides a formal framework for the arrangements between the two parties beyond the existing Farm-in Agreement, and facilitate the expansion of exploration activities at Havieron and the acceleration of early works, including the construction of a box-cut and decline.

As at 30 June 2021, Newcrest has now met the Stage 3 expenditure requirement (US$45 million) resulting in an overall joint venture interest of 60% (Greatland Gold 40%). Newcrest can earn up to a 70% joint venture interest through total expenditure of US$65 million and the completion of a series of exploration and development milestones (including the delivery of a Pre-Feasibility Study) in a four-stage farm-in over a six year period that commenced in May 2019.

The Joint Venture arrangement governs the joint venture ownership and operations of the Havieron project in the area covered by Mining Lease 45/1287 which includes the Havieron gold-copper deposit. The Joint Venture Agreement includes tolling principles reflecting the intention of the parties that, subject to a successful exploration program, Feasibility Study and a positive decision to mine, the resulting joint venture mineralised material will be processed at Newcrest's Telfer Gold Mine ("Telfer"), which sits approximately 45km to the west of Havieron.

2

Segmental reporting

The Group's prime business segment is mining development and exploration of precious and base metals.

The Group operates within two geographical segments, the United Kingdom and Australia. The UK sector consists of the parent company which provides administrative and management services to the subsidiary undertaking based in Australia.

The aggregation of these two segments into a single United Kingdom business unit reflects the way information is presented to the Chief Operating Decision Maker, who is the Group's Chief Executive Officer.

The following tables present revenue and loss information and certain asset and liability information by geographical segments:

UK

Australia

Total

Year ended 30 June 2021

£

£

£

Revenue

Total segment revenue

-

-

-

Total consolidated revenue

-

-

-

Result

Segment results

(1,113,949)

(4,754,911)

(5,868,860)

Loss before tax and finance income/costs

Interest receivable

Interest payable

Other income

(1,113,949)

20

(6,100)

10,000

(4,754,911)

962

(11,315)

355,645

(5,868,860)

982

(17,415)

365,645

Loss before taxation

Taxation expense

(1,110,029)

-

(4,409,619)

-

(5,519,648)

-

Loss after taxation

(1,110,029)

(4,409,619)

(5,519,648)

As at 30 June 2021

UK

£

Australia

£

Total

£

Assets and liabilities

Segment assets

5,359,105

18,639,255

23,998,360

Total assets

5,359,105

18,639,255

23,998,360

Segment liabilities

(426,530)

(19,416,936)

(19,843,466)

Total liabilities

(426,530)

(19,416,936)

(19,843,466)

Other segment information:

Capital expenditure

-

17,270,525

17,270,525

Depreciation

-

175,884

175,884

Amortisation

25,133

39,813

64,946

Impairment

-

-

-

2

Segmental reporting, continued

UK

Australia

Total

Year ended 30 June 2020

£

£

£

Revenue

Total segment revenue

-

-

-

Total consolidated revenue

-

-

-

Result

Segment results

(1,061,048)

(4,135,314)

(5,196,362)

Loss before tax and finance costs

Interest receivable

(1,061,048)

275

(4,135,314)

1,888

(5,196,362)

2,163

Interest payable

Other income

6,229

-

(12,463)

55,438

(6,234)

55,438

Loss before taxation

Taxation expense

(1,054,544)

-

(4,090,451)

-

(5,144,995)

-

Loss after taxation

(1,054,544)

(4,090,451)

(5,144,995)

As at 30 June 2020

UK

£

Australia

£

Total

£

Assets and liabilities (restated)

Segment assets

4,374,330

2,274,168

6,648,498

Total assets

4,374,330

2,274,168

6,648,498

Segment liabilities

(229,983)

(1,093,494)

(1,323,477)

Total liabilities

(229,983)

(1,093,494)

(1,323,477)

Other segment information

Capital expenditure

-

85,984

85,984

Depreciation

-

67,396

67,396

Amortisation

25,133

40,097

65,230

Impairment

-

38,376

38,376

3

Net finance costs

2021

£

2020

£

Finance income

Finance costs

982

(17,415)

17,663

(21,734)

(16,433)

(4,071)

4

Expenses by Nature

2021

£

2020

£

Loss on ordinary activities before taxation is stated after charging:

Auditors' remuneration - audit

Depreciation

Amortisation

Impairment charge

Directors' emoluments

40,600

175,884

64,946

-

1,368,925

17,000

67,396

65,230

38,376

1,089,226

Services provided by the Company's auditor and its associates

During the period, the Group (including overseas subsidiaries) obtained the following services from the Company's auditors and its associates:

2021

£

2020

£

Fees payable to the Company's auditor and its associates for the audit of the Company and Group Financial Statements

40,600

17,000

Auditors' remuneration for audit services above excludes AU$11,750 (2020: AU$9,950) charged by Charles Foti Business Services (Australia) relating to the audit of the subsidiary company.

5

Taxation

2021

2020

Analysis of charge in year

£

£

Deferred taxCurrent tax

--

--

Tax on profit on ordinary activities

-

-

Factors affecting tax charge for year

The tax assessed on the loss on ordinary activities for the period differs from the standard rate of corporation tax in the UK of 19% (2020: 19%) and Australia of 26%. The differences are explained below:

2021

2020

£

£

Loss on ordinary activities before tax

(5,519,648)

(5,144,995)

Loss multiplied by weighted average applicable rate of tax

(1,241,921)

(1,196,211)

Effects of:

Expenses not deductible for tax:

Share option charge

5,775

35,920

Tax losses on which no deferred tax asset is recognised

1,236,146

1,160,291

Income tax expense

-

-

The weighted average applicable tax rate of 22.50% (2020: 23.25%) used is a combination of the standard rate of corporation tax rate for entities in the United Kingdom of 19% (2020: 19%), and 26.0% (2020: 27.5%) in Australia.

No deferred tax asset has been recognised because there is insufficient evidence of the timing of suitable future profits against which they can be recovered.

Losses carried forward:

Brought forward losses 30 June 2020

Currency exchange movements

Prior year adjustment

17,073,458

(221,029)

1,989,363

12,072,653

-

-

Current year losses

5,519,648

5,000,805

Losses carried forward 30 June 2021

24,361,440

17,073,458

6

Employee information

Employee costs comprised:

2021

£

2020

£

Wages and salaries

1,696,082

949,721

Bonus

338,068

611,854

Pension/superannuation

Share option charge

169,723

25,668

147,345

154,492

2,229,541

1,863,412

Number

Number

Exploration

Administration

15

2

6

2

7

Dividends

No dividends were paid or proposed by the Directors. (2020: £Nil)

8

Directors' emoluments

2021

£

2020

£

Directors' remuneration

Share option charge

1,348,676

20,249

997,511

91,715

1,368,925

1,089,226

Directors' salary

Pension

Bonus

Share Based Payments

Total

2021

£

£

£

£

£

Executive directors

Callum Baxter

Gervaise Heddle(resigned 12 March 2021)

Shaun Day(appointed 15 December 2020)

Non-executive directors

Alex Borrelli

Clive Latcham

320,721

348,790

191,760

52,500

40,000

40,020

29,194

28,031

1,315

-

100,540

-

103,305

52,500

40,000

3,901

3,901

11,797

-

650

465,182

381,885

334,893

106,315

80,650

953,771

98,560

296,345

20,249

1,368,925

Directors' salary

Pension

Bonus

Share Based Payments

Total

2020

£

£

£

£

£

Executive directors

Callum Baxter

Gervaise Heddle

Non-executive directors

Alex Borrelli

Clive Latcham

185,024

185,024

43,750

33,750

44,278

44,278

1,165

-

205,121

205,121

25,000

25,000

30,015

30,015

3,159

28,526

464,438

464,438

73,074

87,276

447,548

89,721

460,242

91,715

1,089,226

8

Directors' emoluments, continued

9

Earnings per share

The basic earnings per share is derived by dividing the loss / profit for the period attributable to ordinary shareholders by the weighted average number of shares in issue.

2021

£

2020

£

Loss for the period

(5,519,648)

(5,144,995)

Weighted average number of Ordinary shares of £0.001 in issue

Loss per share - basic

3,872,578,735

(0.14) pence

3,593,407,809

(0.14) pence

An inclusion of the potential Ordinary shares would result in a decrease in the loss per share, they are considered to be anti-dilutive; as such, a diluted earnings per share is not included.

If the 103,250,000 outstanding options at 30 June 2021 (2020: 204,500,000) were included to calculate the diluted loss per share.

Weighted average number of Ordinary shares of £0.001 in issue inclusive of outstanding options

Loss per share - diluted

3,975,828,735

(0.14) pence

3,797,907,809

(0.14) pence

10

Motor vehicle

Equipment

Leasehold Improvements

Total

£

£

£

£

117,546

120,451

6,320

244,317

(32,837)

49,050

-

129,853

-

-

(32,837)

178,903

(2,858)

(2,929)

(153)

(5,940)

130,901

247,375

6,167

384,443

Disposals

44,955

(19,160)

67,294

-

7

-

112,256

(19,160)

28,660

147,068

156

175,884

(1,446)

(3,445)

(2)

(4,893)

53,009

210,917

161

264,087

77,892

36,458

6,006

120,356

72,591

53,157

6,313

132,061

Motor vehicle

Equipment

Leasehold Improvements

Total

£

£

£

£

33,310

113,863

-

147,173

-

83,892

-

5,411

-

6,320

-

95,623

344

1,177

-

1,521

117,546

120,451

6,320

244,317

5,126

-

38,933

-

-

-

44,059

-

39,573

27,816

7

67,396

256

545

-

801

44,955

67,294

7

112,256

72,591

53,157

6,313

132,061

28,184

74,930

-

103,114

11

-

-

17,091,622

-

17,091,622

-

Mine development reflects the Havieron asset operated by Newcrest under a Joint Venture Agreement with Greatland Pty Ltd. Newcrest has met the Stage 4 expenditure requirement to incur expenditure of US$65m and deliver a Pre-Feasibility Study to earn an additional 10% joint venture interest, resulting in the Group holding a 30% interest in the joint venture. Refer to note 1.2 in regards to significant estimates in relation to mine development.

12

2021

£

2020

£

-

-

-

-

264,436

3,813,372

13,013,814

(17,091,622)

-

-

-

-

-

-

13

Group

Company

2021

2020

2021

2020

£

£

£

£

414,616

479,846

(64,946)

(65,230)

(7,758)

-

341,912

414,616

14

£

15

2021

£

2020

£

2021

£

2020

£

Current trade and other receivables:

Other debtors

Loans due from subsidiary

78,198

-

23,865

-

-

13,846,748

-

11,346,748

13,846,748

11,346,748

The loan due from subsidiary was interest free throughout the period and has no fixed repayment date. No provision £nil (2020: £nil) has been made against this loan. Details in regards to significant accounting judgments, estimates and assumptions associated with the recoverability of the loan due from subsidiary are described in note 1.2.

Movement in rehabilitation provision

Group

Company

2021

2020

2021

2020

£

£

£

£

Opening balance

-

-

-

-

Arising during the year

3,813,372

-

-

-

Closing balance

3,813,372

-

-

-

17

Borrowings

Group

Company

2021

2020

2021

2020

£

£

£

£

Amount owed to third parties

12,189,790

-

-

-

Total borrowings

12,189,790

-

-

-

Opening balance

-

-

-

-

Drawings during the year

11,925,354

-

-

-

Accrued interest during the year

264,436

-

-

-

Total outstanding

12,189,790

-

-

-

The amount owing to third parties relates to amounts owing to Newcrest Operations Limited under a loan agreement dated 29 November 2020 in respect of the Havieron Joint Venture ("Havieron")

In relation to the Havieron Joint Venture, the loan has 2 parts being Facility A and Facility B with values of US$20 million and US$30 million respectively. Facility B will come into effect on the date on which the Stage 4 commitment is satisfied by the lender. Interest is calculated on the LIBOR rate plus a margin of 8% pa. Interest is calculated every 90 days. The loan balance as at 30 June 2021 in relation to Havieron is £12,189,790 (AU$22,420,891).

18

2021

£

2020

£

2021

£

2020

£

Trade creditors

Accruals

Salaries and social security

Other creditors

Employee benefits

Lease liability

3,136,688

41,175

113,265

64,830

102,607

54,947

668,514

64,481

29,700

-

114,015

56,049

169,293

41,175

113,265

64,830

461

24,107

73,344

64,481

29,700

-

511

24,440

413,131

192,476

-

-

13,399

37,506

13,399

37,506

426,530

229,982

Group

Group

Company

Company

2021

2020

2021

2020

£

£

£

£

Lease payments payable:

Current (< 1 year)

54,947

56,049

24,107

24,440

2-5 years

219,278

234,429

13,399

37,506

> 5 years

74,174

121,697

-

-

348,399

412,175

37,506

61,946

19

Share capital