Corcel : Annual Report and Accounts 2021

Registration Number: 05227458

Corcel Plc

Annual Report and Accounts 2021

Contents
	Pages
STRATEGIC REPORT ........................................................................................................................................	2
COMPANY INFORMATION AND ADVISERS .....................................................................................................	2
CHAIRMAN AND CEO STATEMENT..................................................................................................................	3
STRATEGIC REVIEW .........................................................................................................................................	6
GOVERNANCE.................................................................................................................................................	12
CHAIRMAN'S CORPORATE GOVERNANCE STATEMENT............................................................................	12
QCA CODE 2018 PRINCIPLES ........................................................................................................................	13
BOARD OF DIRECTORS..................................................................................................................................	17
CORPORATE GOVERNANCE FRAMEWORK.................................................................................................	18
MATTERS RESERVED FOR THE BOARD ......................................................................................................	19
BOARD ACTIVITIES 2020-21 ...........................................................................................................................	20
BOARD COMMITTEES.....................................................................................................................................	20
DIRECTORS' REPORT.....................................................................................................................................	22
STATEMENT OF DIRECTORS' RESPONSIBILITIES.......................................................................................	26
INDEPENDENT AUDITOR'S REPORT.............................................................................................................	27
FINANCIAL STATEMENTS ..............................................................................................................................	32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................	32
CONSOLIDATED INCOME STATEMENT.........................................................................................................	33
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..................................................................	34
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ............................................................................	35
CONSOLIDATED STATEMENT OF CASH FLOWS .........................................................................................	37
COMPANY STATEMENT OF FINANCIAL POSITION.......................................................................................	38
COMPANY STATEMENT OF CHANGES IN EQUITY.......................................................................................	39
COMPANY STATEMENT OF CASH FLOWS....................................................................................................	41
NOTES TO FINANCIAL STATEMENTS............................................................................................................	42

CORCEL PLC 1

Strategic Report

Company Information and Advisers

Directors	Nominated Adviser	Bankers
James Parsons	WH Ireland	Coutts & Co
Executive Chairman	24 Martin Lane	440 Strand
Scott Kaintz	London EC4R 0DR	London WC2R 0QS
Chief Executive Officer
Lord Henry Bellingham	Accountants	Registrars
Independent Non-Executive	Silvertree Partners LLP	Share Registrars Limited
Director	3rd Floor, 14 Hanover Street	Molex House, Millennium Centre
Ewen Ainsworth	London EC2A 4EB	Crosby Way
Independent Non-Executive		Farnham
Director	Tax Advisers	Surrey GU9 7XX
	Cameron & Associates Limited
All of	35-37 Lowlands Road
Corcel Plc	Harrow-on-the-Hill
(WeWork), 71-91 Aldwych House	Middlesex HA1 3AW
London WC2B 4HN
	Auditor
Telephone	PKF Littlejohn LLP
020 7747 9960	15 Westferry Circus, Canary Wharf
	London E14 4HD
Website
www.corcelplc.com	Broker
	WH Ireland
Registered Company Number	24 Martin Lane
05227458	London EC4R 0DR
Secretary
AMBA Secretaries Limited
400 Thames Valley Park Drive
Reading, Berkshire RG6 1PT
Registered Office
Salisbury House
Suite 425, London Wall
London EC2M 5PS

2 CORCEL PLC

Chairman and CEO Statement

Overview

During the twelve-month period to 30 June 2021, which marked my second year as Chairman at Corcel Plc (the "Company", "Corcel"), we have continued building the core Net Asset Value (NAV) in our portfolio, which spans the exciting intersection of battery metals mining and their end use in both energy storage and the electric vehicle revolution. Despite the varied challenges of the global pandemic, this progress has included three asset acquisitions: the Tring Road peaker plant acquired during the year in review; secondly the Avonmouth peaker plant in the UK; and thirdly Wowo Gap Nickel / Cobalt asset acquired after the period end in PNG. The year has also included operational progress at Mambare, where we secured the environmental permit - a critical step on the route to a Mining Lease. Progress was also made at the Dempster Vanadium project, where operational results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking.

It is my firm belief that our strategy, leveraged to battery metals across both the upstream and downstream, is very much the right strategy as global economies continue their drive towards electrification. I remain very excited about this space and see Corcel continuing to position its business strategically in anticipation of the inevitable structural price hikes in battery metals.

The Board and I want to thank our shareholders for their support during 2021, which we know has not always been easy. We are amongst the first movers in this space in the micro-cap sector and we believe that our shareholders will, in due course, see significant rewards from the hard miles we have covered building the foundations to support this strategic positioning. Our commitment to transforming your company into a substantial value generating business remains absolute.

We therefore are pleased to present the Annual Report and Accounts for the year to 30 June 2021.

Battery Metals Exploration: PNG and Canada

A key element of the Company's strategy is to increase its exposure to critical battery metal positions (through both acquisitions of new deposits and advanced development at Mambare) prior to the widely expected supply crunch and associated structural price rise. Of particular focus for the Company is nickel and cobalt, which are both core battery metals with supply deficits widely expected in the mid-2020s as the electric vehicle revolution and economic decarbonisation gains pace.

The Company has again made good progress at its legacy Mambare nickel-cobalt project in Papua New Guinea, where it has focused on securing a mining lease covering the project where it holds a 41% position. Various critical milestones in this process have now been secured, with a positive outcome at the Warden's Hearing in July 2020 and the grant of the environmental permit in May 2021 being particularly significant. This positions the Company and its Joint Venture partners to secure the mining lease in the near term opening up opportunities ranging from a transaction to fast tracking DSO production.

In early 2020, the Company began the process of acquiring a second PNG nickel-cobalt project through the acquisition of the AUD 4,761,087 corporate debt of Resource Mining Corporation Pty Ltd (ASX: RMI) ("RMI"), the 100% owner of the Wowo Gap nickel-cobalt project. The debt was acquired, in two stages in April 2020 and October 2020, for a highly attractive 65% discount from the face value. The Wowo Gap project, potentially highly complementary to Mambare, is located 200km from the Papua New Guinea Capital of Port Moresby and some 150km southeast of the Company's existing Mambare asset. The Project is held through one tenement in Papua New Guinea, EL 1165, which expired on 28 February 2020 and (as is common in PNG) is currently under reapplication for a further 2-year period.

Subsequent to the year end, in August 2021, the Company signed a binding but conditional share purchase agreement with RMI to acquire 100% of the issued share capital in Australian-registered Niugini Nickel Pty Ltd, which owns 100% of the Wowo Gap nickel-cobalt project. As consideration for the acquisition, the Company released all liabilities and obligations in connection with its AUD 4,761,087 senior debt position in RMI. I am delighted to report that, following a successful shareholder vote at RMI in October 2021, the Company became 100% owner of the Wowo Gap project on 18 October 2021.

CORCEL PLC 3

Chairman and CEO Statement

continued

The Company sees significant synergies between the two PNG battery metal projects and sees this acquisition as a significant step in its evolution towards building a leading regional battery metal and nickel /cobalt business with material scale.

The Company also successfully completed its 2020 exploration programme at the Dempster Vanadium project in Yukon, Canada. Vanadium is another battery metal, where supply is not expected to be able to grow sufficiently to support forthcoming demand. The results highlight exceptionally good rock and soil samples, which, amongst other signs, indicate the presence and grade of the Canol Formation and enable good formation tracking. Preparation work is underway for a drill programme as part of a broader vanadium focused exploration programme in 2022.

The interests and potential combination of the Mambare and Wowo Gap assets provide a strong regional nickel- cobalt platform of scale, which is expected, together with the Dempster Vanadium exposure, to provide material upside to shareholders as global electric vehicle growth fuels increasing demand for nickel, cobalt and vanadium. The Company continues to explore further acquisitions in the battery metals space designed to broaden the Company's current exposure to substantially all of the key battery metals going forward.

Flexible Grid Solutions

Alongside the battery metals portfolio, the Company is also materially growing its UK based energy generation and storage portfolio.

The Company owns 100% of a 50MW battery storage project at Burwell, Cambridgeshire. In November 2021, the Company was informed by UK Power Networks of an extension of its 100MW grid connection offer at Burwell beyond December 2021 and also an extension of the Company's obligation to make any payment at that date. This extension in part reflects anticipated grid upgrade works that may be undertaken in the Burwell area, which, if confirmed, would affect all projects in the area and likely delay the connection date of the Burwell site and other such sites. The Company awaits further details regarding any works required and the revised connection date and associated payment schedule and the impact that may have on the Company's previously indicated target of 2022 for the project to become operational. Meanwhile, the Company continues to explore access to land and potential partnership arrangements for the project, including with the new site landowner.

In addition to its existing Burwell project, the Company announced in May 2021 the acquisition of a 40% interest in the "shovel ready" Tring Road 50MW gas peaking project outside of Aylesbury, approximately 40 miles northwest of London. The project has a 50MW grid connection already secured, allowing primarily export of electricity alongside a binding option to lease and planning permission. The consideration for the purchase was £400,000, which was satisfied by £150,000 cash and 12,026,168 new ordinary shares.

Also in May 2021, the Company announced the acquisition of exclusive rights over the "shovel ready" Avonmouth 50MW gas peaking project approximately 7 miles Northwest of Bristol. The greenfield site is located within an established industrial estate and comprising a total of 4.36 acres. Similar to the Tring Road project, the project has a 50MW grid connection, gas connection, planning permission and land rights. The Company has executed a Heads of Terms with FPC Electric Land and has committed to paying £72,000 in historic costs of the project at the time of execution of the Agreement for Lease over the site. If the project were to reach financial close, then a further £72,000 of historic costs would be payable out of the proceeds of the project funding that would then be in place.

The addition of the "shovel ready" Tring Road and Avonmouth projects to the existing Burwell project dramatically bolsters the Company's position in the increasingly competitive UK flexible energy space. We believe that gas peaking assets of this nature are essential to assist the transition to renewables and will provide significant trading margins given the variability of renewable energy production and the inherent volatility of UK energy demands, as repeatedly demonstrated in Q3 and Q4 2021.

The Company has been working since May 2021 to fund these peaker projects, which are seen as critical to the UK's transitional energy strategy, providing flexible energy supply to support the inherent volatility of the growing UK renewables supply, particularly wind and solar. It was announced after the year-end, in October and

4 CORCEL PLC