Announcement PDF RNS Number : 6348F East Star Resources PLC 22 April 2025 22 April 2025 East Star Resources PLC ("East Star" or the "Company") Final Results for the 12 Months Ended 31 December 2024 East Star Resources Plc (LSE:EST), which is exploring for copper and gold in Kazakhstan, is pleased to present its annual financial results for the year ended 31 December 2024. Operational Highlights VMS Copper - Rudny Altai Belt • Published maiden JORC Inferred Mineral Resource for the Verkhuba Copper Deposit of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead • Commenced Induced Polarisation survey on VMS licences, providing drill targets for new discoveries below and adjacent to known deposits • Commenced diamond core drilling programme to increase size of and confidence in the Verkhuba resource model ○ Three drill holes completed in December 2024, all intersecting ore grade mineralisation within open pit shell Porphyry Copper &Epithermal Gold - Balkash-Ili Volcanic Arc • Selected by BHP Xplor for US$0.5 million grant to initiate copper porphyry exploration strategy in Kazakhstan • Awarded first two copper porphyry exploration licences and collected 2,800 soil samples and conducted spectral analysis, leading to the identification on the Snowy Licence of a copper porphyry target and a compelling epithermal gold target ○ Follow-up geophysics planned Sediment-hosted Copper • Formed joint venture with Getech Group Plc (AIM: GTC), a world-leading locator of subsurface resources, to explore for sediment-hosted copper deposits in Kazakhstan at no upfront cost to East Star Corporate Highlights • Raised gross proceeds of £1.16 million with backing from existing major shareholder, Directors and a resource-focused institution • Chris van Wijk, a geologist who developed the porphyry exploration strategy with East Star, joined the Board in January 2024 and became Technical Director in February 2024 Sandy Barblett, Non-Executive Chairman, commented: "Ask any mining investor in 2025 what they want - they'll tell you copper and gold. Ask a seasoned mining executive where they see huge exploration opportunity - they'll almost certainly list Kazakhstan. Look no further than East Star which represents access to Tier 1 copper and gold discovery opportunities in Kazakhstan. We've had boots on the ground for over three years, have a JORC copper deposit that looks suitable for a low capex open pit development, and several big prospects in play, targeting VMS, porphyry copper and epithermal gold systems. I commend our CEO Alex Walker and his team for steadfastly developing this exploration vehicle - now a well-oiled machine. The exploration season is approaching. East Star will be drilling new targets and conducting geophysics across multiple licences. 2025 is going to be huge for East Star. Now is the time to make discoveries." East Star Resources Plc Alex Walker, Chief Executive Officer Tel: +44 (0)20 7390 0234 (via Vigo Consulting) SI Capital (Corporate Broker) Nick Emerson Tel: +44 (0)1483 413 500 Vigo Consulting (Investor Relations) Ben Simons / Peter Jacob Tel: +44 (0)20 7390 0234 About East Star Resources PLC East Star Resources is focused on the discovery and development of copper and gold in Kazakhstan. East Star's management are based permanently on the ground, supported by local expertise. The Company is pursuing three exploration strategies: • A Volcanogenic Massive Sulphide (VMS) copper discovery with a maiden JORC MRE of 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead, in an infrastructure-rich region, amenable to a low capex development • Porphyry copper and epithermal gold exploration, with multiple opportunities for Tier 1 deposits, supported by an initial $500k grant from BHP Xplor in 2024 • Sediment-hosted copper exploration with Getech where the initial targeting strategy is at no cost to East Star Visit our website: www.eaststarplc.com Follow us on social media: LinkedIn: https://www.linkedin.com/company/east-star-resources/ X (formerly Twitter): https://twitter.com/EastStar_PLC Subscribe to our email alert service to be notified whenever East Star releases news: www.eaststarplc.com/newsalerts The person who arranged for the release of this announcement was Alex Walker, CEO of the Company. This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) Regulations (SI 2019/310) ("UK MAR"). Upon the publication of this announcement, this inside information (as defined in UK MAR) is now considered to be in the public domain. CHAIRMAN'S STATEMENT Introduction I am pleased to present the annual report for East Star Resources PLC (the "Company", the "Group") or ("East Star") for the year ended 31 December 2024. Most notably during 2024, East Star published a maiden JORC Mineral Resource Estimate ("MRE") for our Verkhuba Copper Deposit and gained the support of BHP Xplor to kick off a porphyry copper targeting strategy that has already led to the generation of a porphyry copper target and a compelling epithermal gold target within a newly granted exploration licence. Review of Operations VMS Copper Verkhuba Copper Deposit With the benefit of extensive historical drilling data and our own exploration work, in April 2024 we announced a maiden JORC MRE comprising 20.3Mt @ 1.16% copper, 1.54% zinc and 0.27% lead using a whole deposit cutoff grade of 0.86% copper equivalent. The publication of the MRE represented a significant milestone - the first critical mineral asset derived from an East Star exploration programme. From that point East Star became not only an explorer but an exploration and resource development company within the Rudny Altai VMS region. At over 20Mt, Verkhuba is already in the top third of this style of VMS deposit globally. With copper in high demand and the prospect of a low capex development in an infrastructure-rich region, we believe Verkhuba to hold considerable value. For this reason, we are progressing the open pit development concept through to a stage where economic feasibility can be demonstrated. In practice, this means increasing confidence in, and potentially growing, the resource and understanding of the economics by conducting scoping and pre-feasibility studies. As such, in November 2024 we began the next diamond core drilling programme which ran through to mid-December when the crew paused for winter. This phase comprised three drill holes, all of which intersected mineralisation outside of the existing modelled ore bodies which make up the current MRE. This should potentially lead to an increased MRE. Other VMS Targets In October 2024, the Company commenced an Induced Polarisation ("IP") geophysical survey on its VMS licences in the Rudny Altai VMS region located in close proximity to Verkhuba. Surveys were completed on the Talovskoye and Nikolovskoye East targets. In total, 5.5-line km of IP was completed. The results from the IP survey were processed by Mitre Geophysics in Australia. The data was processed, and sections were generated to visualise the IP response. Mitre noted a strong chargeable anomaly in the southernmost line of the Talovskoye survey. As a result, East Star has planned 50m of infill lines at Talovskoye when the snow recedes which is expected to be in May 2025. East Star previously announced high grade rock chip results at Talovskoye. Further IP lines have been planned to the north and east of the Rulikha target. Rulikha is a known deposit reported as14.3Mt @ 1.2% Cu, 3.5% Zn, 0.28 g/t Au and 13.5 g/t Ag. The Company is in the process of collecting and digitizing the historical data for this deposit to inform the interpretation of the electro-magnetic (EM) and IP geophysical anomalies adjacent to the deposit. PorphyryCopper and Epithermal Gold Exploration on the Balkash-Ili Magmatic Arc In January 2024, we were delighted to announce that East Star had been selected to receive a grant of US$0.5 million through the 2024 BHP Xplor programme to initiate a copper porphyry exploration strategy in Kazakhstan. This exploration strategy focuses on the paleozoic Balkash-Ili volcanic arc known to host multiple copper and gold rich porphyry and skarn deposits. We are proud that BHP chose to work with East Star. We have built a bigger team as a result of that programme, and we have bigger targets that could lead to significant outcomes for our shareholders. In February and March 2024, we were awarded our first porphyry copper exploration licences on the Balkash-Ili arc and were able to cover the costs of all licence fees and initial work through the BHP Xplor grant. Over the summer, our field team collected 2,800 soil samples and conducted spectral analysis, leading to the identification on the Snowy licence of two significant targets. Consequently, our focus has been refined to the Snowy licence a 121km2 tenement with a 6km long and 3km wide silica lithocap, located ~150km north of the large Kounrad open pit copper mine and smelter (~800Mt @ 0.62% Cu and up to 0.76g/t Au). A copper-molybdenum anomaly in the western portion of the licence is prospective for a porphyry copper target, while another target is around 4km long by 1km wide and displays anomalous gold (up to 0.28g/t) and silver (up to 7.2g/t) as well as arsenic, molybdenum and weak mercury in soils. This is consistent with the nearby artisanal workings present at each end of the anomaly, the eastern one of which, produced 21Kt @ 31.2 g/t Au and 2067 g/t Ag from 1968 -1970. Both mines, which sit on topographical lows to the Snowy alteration and geochemical signature, lend additional support to the presence of mineralisation at the target. Confirmation of this epithermal gold target through geological mapping is planned at the start of the forthcoming field season with the expectation of conducting an IP survey over the pyrophyllite section, before the target is drill ready. The Company anticipates drilling this target in the 2025 field season. This is undeniably exciting given the typically very large size and often very high grades of epithermal gold deposits. The region is well served by existing infrastructure. The Snowy licence is approximately 35 km east of the main Almaty-Karaganda highway which is a paved, all weather highway. The licence is directly accessed by a network of tracks used to navigate between the regional villages. Further work has been done on new targets in this belt and the Company expects to make licence applications over these areas in the coming quarter. Sediment-Hosted Copper Exploration JV with Getech In February 2024, the Company announced a joint venture agreement with Getech Group Plc(AIM: GTC)("Getech"), a world-leading locator of subsurface resources, to explore for sediment-hosted copper deposits in Kazakhstan. The joint venture is being conducted through a wholly owned East Star subsidiary established specifically for this purpose. At no upfront cost to East Star, this play-type added a third geological strand to East Star's copper exploration strategy in addition to VMS and porphyry. Getech has been deploying its unique data set, geoscience expertise, AI-driven analytics, and extensive GIS capabilities, to carry out initial targeting in return for an option to obtain 5% of the JV company upon the granting of an exploration licence within the outlined area of interest. East Star is in discussions with potential partners to fund this exciting exploration strategy. Corporate Activities In October 2024, East Star raised gross proceeds of approximately £1.16 million from an oversubscribed subscription for, and placing of, 100,926,292 new ordinary shares at a price of 1.15 pence per share. The fundraising included strong backing from our existing major shareholder and Directors and saw the participation of a new resources-focused institutional cornerstone investor. This fundraising put the Company in a position to undertake the next phase of drilling at Verkhuba and continue with our exploration programmes this spring/summer as we prepare to drill-test potentially company-making targets. Board Changes Chris van Wijk was appointed initially as a Non-Executive Director in January 2024 and subsequently in February 2024 as the Technical Director of the Company. Chris is an experienced geologist with a wealth of relevant experience, including base metal and gold exploration in Africa, Europe, the Americas, and Australia as well as joint venture management and project evaluation for major mining companies including BHP, IAMGOLD, First Quantum Minerals and Fortescue Metals Group. Chris has managed various successful exploration projects, including the Scoping Study at Mont Nimba in Guinea for BHP Billiton and the resource drilling at First Quantum's Sentinel Project in Zambia. In May 2024, David Minchin decided not to stand for re-election as a Non-Executive Director of the Company at the Annual General Meeting due to his other business commitments. Accordingly, he retired as a director with effect from the AGM and we thank him for his valuable contribution to the Company. Key Financial Indicators · Cash and cash equivalents at year-end were £678,000 (2023: £635,000) · Loss before taxation for the year was £1,102,000 (2023: £1,528,000) · The Group held net assets at year-end of £3,155,000 (2023: £2,813,000) · The Group held total assets at year-end of £3,271,000(2023: £2,928,000) Movement of cash during the year reflects the capital raise in October 2024, offset by capital and operating expenditure, whilst the decrease in loss before taxation for the year was due to the significant decrease in impairment in the current year compared to 2023, offset slightly by the increase in other income reflective of the BHP Xplor grant received. The increase in net assets and total assets in the current year primarily represents the increase in capitalised exploration expenditure incurred during the year. Outlook Ask any mining investor in 2025 what they want - they'll tell you copper and gold. Ask a seasoned mining executive where they see huge exploration opportunity - they'll almost certainly list Kazakhstan. Look no further than East Star which represents access to Tier 1 copper and gold discovery opportunities in Kazakhstan. We've had boots on the ground for over three years, have a JORC copper deposit that looks suitable for a low capex open pit development, and several big prospects in play, targeting VMS, porphyry copper and epithermal gold systems. Kazakhstan is a world class exploration destination. The copper market is in a supply crunch, and Kazakhstan, with its vast mineral endowment, infrastructure, low labour and power costs, skilled workforce, and proximity to Europe and Asia is ideally suited for finding and developing new copper deposits. I commend our CEO Alex Walker and his team for steadfastly developing this exploration vehicle - now a well-oiled machine. The exploration season is approaching. East Star will be drilling, targeting, and conducting geophysics across multiple licences. Now is the time to make discoveries. Sandy Barblett Non-Executive Chairman 17 April 2025 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2024 Note Audited Year ended 31 December 2024 Audited Year ended 31 December 2023 £'000 £'000 - - Continuing Operations Revenue Administrative expenses 4 (1,387) (710) Share based payments 19 (47) (39) 10 & 11 (62) (1,058) 394 279 (1,102) (1,528) - - (1,102) (1,528) 233 (35) (869) (1,563) (0.42) (0.81) Impairment Other income Loss before taxation Taxation on loss or ordinary activities 7 Loss for the year from continuing operations Other comprehensive income 8 Total comprehensive loss for the year attributable to shareholders from continuing operations Basic & dilutive earnings per share - pence 9 The statement of comprehensive income has been prepared on the basis that all operations are continuing operations. The notes form an integral part of these consolidated financial statements CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024 Audited As at 31 December 2024 Audited As at 31 December 2023 Note £'000 £'000 Exploration assets 10 2,448 2,149 Earn in advance (financial asset) 11 - - Property, plant and equipment 12 35 17 2,483 2,166 NON-CURRENT ASSETS TOTAL NON-CURRENT ASSETS CURRENT ASSETS Cash and cash equivalents 14 678 635 Trade and other receivables 16 110 127 788 762 3,271 2,928 116 115 116 115 TOTAL CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables TOTAL CURRENT LIABILITIES 17 TOTAL LIABILITIES NET ASSETS 116 115 3,155 2,813 EQUITY Share capital 18 3,975 2,187 Share premium 18 9,178 6,052 Share capital to issue 20 - 3,750 Share based payments reserve 19 354 307 264 31 (4,795) (4,795) (5,821) (4,719) 3,155 2,813 Foreign exchange reserve Reverse acquisition reserve 20 Retained earnings TOTAL EQUITY * Non-controlling interest of £29 (2023: £29) exists with business partner (Tau Ken Samruk) not stated above The Company has taken advantage of section 408 of the Companies Act 2006 and consequently a profit and loss account has not been presented for the Company. The Company's total comprehensive loss for the financial period was £144,000 (2023: £488,000) The financial statements were approved and authorised for issue by the board on 17 April 2025 and were signed on its behalf by: Sandy Barblett Non-Executive Chairman The notes form an integral part of these consolidated financial statements COMPANY STATMEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024 Audited As at 31 December 2024 Audited As at 31 December 2023 Note £'000 £'000 Investment in subsidiary 13 6,269 6,268 Intercompany receivables 15 4,571 3,674 10,840 9,942 NON-CURRENT ASSETS TOTAL NON-CURRENT ASSETS CURRENT ASSETS Cash and cash equivalents 14 658 509 Trade and other receivables 16 52 47 710 556 11,550 10,498 67 82 TOTAL CURRENT LIABILITIES 67 82 TOTAL LIABILITIES 67 82 11,483 10,416 TOTAL CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Trade and other payables NET ASSETS 17 EQUITY Share capital 18 3,975 2,187 Share premium 18 9,178 6,052 Share capital to issue 20 - 3,750 Share based payments reserve 19 354 307 (2,024) (1,880) 11,483 10,416 Retained Earnings TOTAL EQUITY The financial statements were approved and authorised for issue by the board on 17 April 2025 and were signed on its behalf by: Sandy Barblett Non-Executive Chairman The notes form an integral part of these consolidated financial statement CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2024 Balance at 31 December 2022 Share Capital £'000 Share Premium £'000 Share based payment reserve £'000 Foreign exchange reserve £'000 Reverse acquisition reserve £'000 1,823 5,891 268 66 (4,795) Loss for period - - - - - Other comprehensive income - - - (35) - Total comprehensive income for year - - (35) - Cap be i - Transactions with owners in own capacity Ordinary Shares issued in the period 364 182 - - - Share Issue Costs - (21) - - - Share based payments - - 39 - - 364 161 39 - - Transactions with owners in own capacity Balance at 31 December 2023 2,187 6,052 307 31 (4,795) Loss for period - - - - - Other comprehensive income - - - 233 - Total comprehensive income for year - - 1,788 3,178 Share Issue Costs - Share based payments - Transactions with owners in own capacity Balance at 31 December 2024 - - - Transactions with owners in own capacity Ordinary Shares issued in the period - - - (52) - - - - 47 - - 1,788 3,126 47 3,975 9,178 354 264 (4,795) ( ( COMPANY STATEMENT OF CHANGES IN EQUITY AS AT 31 DECEMBER 2024 Share capital Share premium Share based paymentreserve Share capital to issue Retained earnings Total equity £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 December 2022 1,823 5,891 268 3,750 (1,392) 10,340 Loss for period - - - - (488) (488) - - - - - - - - - - (488) (488) 364 182 - - - 546 - - 39 - - 39 - (21) - - - (21) 364 161 39 - - 564 2,187 6,052 307 3,750 (1,880) 10,416 - - - - (144) (144) - - - - - - - - - - (144) (144) 1,788 3,178 - (3,750) - 1,216 - (52) - - - (52) - - 47 - - 47 1,788 3,126 47 (3,750) - 1,211 3,975 9,178 354 - (2,024) 11,483 Other comprehensive income Total comprehensive income for year Transactions with owners in own capacity Ordinary shares issued in the period Share based payments Share issue costs Transactions with owners in own capacity Balance at 31 December 2023 Loss for period Other comprehensive income Total comprehensive income for year Transactions with owners in own capacity Ordinary shares issued in the period Share issue costs Share based payments Transactions with owners in own capacity Balance at 31 December 2024 CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2024 Note Year ended 31 December 2024 £'000 Year ended 31 December 2023 £'000 Cash flow from operating activities Loss before taxation for the financial year (1,102) (1,528) 47 39 Settlement of fees through issue of equity 10 - Impairment charge on exploration assets * 62 887 Foreign exchange movements 395 97 Depreciation 31 10 9 6 5 (12) (543) (501) (578) (888) Purchase of property, plant & equipment (33) (2) Cash acquired on acquisition of subsidiary - - (611) (890) Adjustments for: Share based payments 19 Changes in working capital: Decrease in trade and other receivables Increase / (decrease) in trade and other payables Net cash outflow from operating activities Cash flows from investing activities Investment in exploration assets 18 Net cash flow from investing activities Cash flows from financing activities Proceeds from issue of shares 19 1,196 546 Share issue costs 19 (52) (21) 1,144 525 Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period (10) (866) 635 1,456 Foreign exchange effect on cash balance Cash and cash equivalents at end of the period 53 45 678 635 Net cash flow from financing activities 14 * Impairment charge is adjusted to reflect the true cash impact in the period and hence will not reconcile directly to the value in the Statement of Comprehensive Income. The notes form an integral part of these consolidated financial statements COMPANY STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 DECEMBER 2024 Note Year ended 31 December 2024 £'000 Year ended 31 December 2023 £'000 (144) (488) 47 39 20 - Cash flow from operating activities Loss for the financial year Adjustments for: Share based payments Settlement of fees through issue of equity 19 Foreign exchange movements - (1) Changes in working capital: (Increase) / decrease in trade and other receivables (5) (31) (Decrease) / increase in trade and other payables (15) (2) (97) (483) (1) - (897) (940) (898) (940) Net cash outflow from operating activities Cash flows from investing activities Investment in subsidiaries 13 Loans to subsidiaries Net cash flow from investing activities Cash flows from financing activities Proceeds from issue of shares 19 1,196 546 Share issue costs 19 (52) (21) 1,144 525 149 (898) 509 1,407 658 509 Net cash flow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period 14 The notes form an integral part of these consolidated financial statements 1. General Information East Star Resources PLC ("the Company") was incorporated on 17 November 2020 in England and Wales and remains domiciled there with Registered Number 13025608 under the Companies Act 2006, under the name Cawmed Resources Limited. The Company subsequently changed its name to East Star Resources Limited on 27 January 2021 and on 3 March 2021 re-registered as a PLC. The address of its registered office and principal place of business is Eccleston Yards, 25 Eccleston Place, London SW1W 9NF, United Kingdom. The principal activity of the Group is to explore opportunities in the natural resources sector specifically in relation to gold and copper extraction. The Company originally listed on the London Stock Exchange ("LSE") on 4 May 2021. The Company was suspended from trading on 19 July 2021 whilst managing a reverse takeover transaction and was then re-admitted to trading on 10 January 2022. The Company successfully completed the acquisition of its Kazakhstan based subsidiary "Discovery Ventures Kazakhstan Limited" on 10 January 2022 and since then has been increasing exploration operations within the region. The consolidated financial statements are presented for the Company and all of its subsidiaries ("the Group"). The Group Financial Statements have been prepared and approved by the Directors in accordance with UK-adopted International standards and International Accounting Standards ("IAS Interpretations (collectively IFRSs) issued by UK"), the International Accounting Standards Boards (IASB) and with those parts of the Companies Act 2006 applicable to those companies reporting under IFRS. 2. Accounting policies The principal accounting policies applied in preparation of these financial statements are set out below. These policies have been consistently applied unless otherwise stated. 2.1 Basis of preparation The consolidated and parent company financial statements ("financial statements") for the period ended 31 December 2024 have been prepared by East Star Resources PLC in accordance with UKadopted International Accounting Standards ("IAS UK"). The Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss. The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. The functional currency of the Company is Pounds Sterling (£) as this is the currency that finance was raised in. The functional currency of its subsidiaries is the Kazakhstan Tenge. For all subsidiaries these are the currencies that mainly influence labour, material and other costs of providing services. However, the presentational currency for the subsidiaries is United States Dollar ($) as this is the currency that the subsidiaries are required to report to national mining authorities in. The Group has chosen to present its consolidated financial statements in Pounds Sterling (£), as the Directors believe it is a more convenient presentational currency for users of the consolidated financial statements. Foreign operations are included in accordance with the policies set out below. The accounting period for the Group covers the year ending on 31 December 2024. The financial statements are presented in Pounds Sterling and rounded to the nearest thousand (£'000). Basis of measurement The consolidated financial statements have been prepared on a historical cost basis, except for the following items (refer to individual accounting policies for details): - Financial instruments - fair value through profit or loss - Financial instruments - fair value through other comprehensive income - Contingent consideration - Cash settled share-based payment liabilities Reverse acquisition accounting treatment During the period ended 31 December 2022, the Company acquired the entire share capital of Discovery Ventures Kazakhstan Ltd. As the Company ("accounting acquiree") was purely a cash shell at time of acquisition it did not constitute a business and therefore the acquisition was treated as a reverse acquisition of DVK ("accounting acquirer") and outside the scope of IFRS 3. Critical accounting judgements and key sources of estimation uncertainty are disclosed in note 2.17. 2.2 Going concern The Directors have prepared financial forecasts to estimate the likely cash requirements of the Group over the 12 months from sign off of the annual report. Given its stage of development and lack of recurring revenues, in preparing these financial forecasts, the Directors have made certain assumptions with regards to the timing and amount of future expenditure over which they have control. The Directors have considered the sensitivity of the financial forecasts to changes in key assumptions, including, among others, potential cost overruns within committed spend and changes in exchange rates. The Directors have reasonable expectations that sufficient cash will be raised to fund the planned operations of the Group for a period of at least 12 months from the date of approval of these financial statements. The funding requirement indicates that a material uncertainty exists which may cast significant doubt over the Group's ability to continue as a going concern, and therefore its ability to realise its assets and discharge its liabilities in the normal course of business. This has been detailed in the auditors report. After due consideration of these forecasts, current cash resources, including the sensitivity of key inputs, the Directors consider that the Group will have adequate financial resources to continue in operational existence for the foreseeable future (being a period of at least 12 months from the date of this report) and, for this reason, the financial statements have been prepared on a going concern basis. The financial statements do not include the adjustments that would be required should the going concern basis of preparation no longer be appropriate. 2.3 Basis of consolidation The consolidated financial statements