NOTE 1:-   GENERAL INFORMATION

a.       Firering Strategic Minerals PLC (the "Company") is a holding company for a group of exploration and development companies set up to focus on developing assets towards the ethical production of critical metals. The Company was incorporated on 8 May 2019 in Cyprus. The address of its registered office is Ioanni Stylianou 6, 2^nd Floor, Office 202, 2003, Nicosia, Cyprus.

          In November 2021 the Company completed its Initial Public Offering and admission to trading on the AIM, a market operated by the London Stock Exchange.

The Company owns 75% of the issued share capital of Bri Coltan SARL ("Bri Coltan") a company incorporated in Cote d'Ivoire. The principal activity of the subsidiary is the exploration and development of mineral projects (in particular, columbite- tantalite).

As more fully described in Notes 1, 6 and 19 to the 2022 annual consolidated financial statements, the Company has an investment in a joint venture, Marvella SA ("Marvella"), which was originally established as an SPV. The Company is in the administrative process of implementing transfers to Marvella of its investments in the following entities:

(i) 90% of the issued share capital of Atex Mining Resources SARL ("Atex") a company incorporated in Cote d'Ivoire. The principal activity of Atex is the exploration and development of mineral projects (in particular, lithium and columbite-tantalite).  

(ii) 51% of the issued share capital of Alliance Minerals Corporation SARL ("Alliance"), a company incorporated in Cote d'Ivoire. Alliance holds an exploration license request at an area bordering Atex.

In November 2022 the Company signed an earn-in agreement with Ricca Resources Pty Limited ("Ricca"), an Australian diversified minerals company to advance the Atex Lithium-Tantalum Project and the adjacent Alliance exploration licence (once granted). According to the agreement, Ricca will have the exclusive right to undertake and fund at Ricca's sole cost the exploration of the Atex Project and adjacent Alliance licence, which exploration is to be undertaken through Marvella.

The Company holds 100% of the equity interest of Marvella as of the date of the financial statements and will continue to hold the majority of the equity interest until the completion of stage 4 of the earn-in period. However, according to the shareholders' agreement signed with Ricca, the Company and Ricca have joint control of Marvella. Accordingly, the investment in Marvella is considered a joint venture which is accounted for using the equity method.

b.      Going concern:

The Board of Directors and Group management have assessed the ability of the Group to continue as a going concern. In respect of its mineral projects, funding has been obtained as follows:

Atex and Alliance

As described in Note 1a. above, in 2022 the Company signed an earn-in agreement with Ricca which has agreed to fund at its sole cost the two exploration projects of Marvella for a period that may extend to 4-5 years from the reporting date.

Subsequent to 30 June 2023, the Company was informed that Ricca is evaluating various alternatives to raise additional funds in order to continue its funding of Marvella's mining activities.

Bri Colton

As described in Note 7 to the annual consolidated financial statements, in 2022 the Company has been provided with a long-term credit facility of up to € 7.16 million which is intended be used to develop this project, with the objective of obtaining further funding.

The Group's mining operations are at an early stage of development and the continuing success of the Group will depend on the Group's ability to manage its mineral projects. Presently, the Group has no projects producing positive cash flow and the Group is likely to remain cash flow negative in the near future. The Group's ultimate success will depend on its ability to generate positive cash flow from active mining operations in the future and its ability to secure external funding for its development requirements. However, there is no assurance that the Group will achieve profitability or positive cash flow from its operating activities.

As more fully described in Note 5, in September 2023 the Company completed a Placing of Ordinary shares with total gross cash proceeds of £756,000 (c. €870,000).

Based on a review of the Group's budget and forecast cash flows including the proceeds of the Placing described above, there is a reasonable expectation that the Group will have adequate resources to continue in operational existence and meet its obligations as they become due for at least a period of twelve months from the date of approval of the financial statements. Thus, the going concern basis of accounting has continued to be applied in preparing these financial statements.

c.       These financial statements have been prepared in a condensed format as of 30 June 2023 and for the six months then ended ("interim consolidated financial statements"). These financial statements should be read in conjunction with the Company's annual financial statements as of 31 December 2022 and for the year then ended and accompanying notes ("annual consolidated financial statements").

NOTE 2:-   SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation of the interim consolidated financial statements:

The interim consolidated financial statements have been prepared in accordance with IAS 34, "Interim Financial Reporting".

The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements, except as described in Note 3 below.

NOTE 3:-   INITIAL APPLICATION OF AMENDMENTS TO FINANCIAL REPORTING STANDARDS

1.       Amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors":

In February 2021, the IASB issued an amendment to IAS 8, "Accounting Policies, Changes to Accounting Estimates and Errors" ("the Amendment"), in which it introduces a new definition of "accounting estimates".

Accounting estimates are defined as "monetary amounts in financial statements that are subject to measurement uncertainty". The Amendment clarifies the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.

The Amendment is to be applied prospectively for annual reporting periods beginning on or after January 1, 2023 and is applicable to changes in accounting policies and changes in accounting estimates that occur on or after the start of that period.

The application of the Amendment did not have a material impact on the Company's interim financial statements.

NOTE 3:-   INITIAL APPLICATION OF AMENDMENTS TO FINANCIAL REPORTING STANDARDS (Cont.)

2.       Amendment to IAS 12, "Income Taxes":

In May 2021, the IASB issued an amendment to IAS 12, "Income Taxes" ("IAS 12"), which narrows the scope of the initial recognition exception under IAS 12.15 and IAS 12.24 ("the Amendment").

According to the recognition guidelines of deferred tax assets and liabilities, IAS 12 excludes recognition of deferred tax assets and liabilities in respect of certain temporary differences arising from the initial recognition of certain transactions. This exception is referred to as the "initial recognition exception". The Amendment narrows the scope of the initial recognition exception and clarifies that it does not apply to the recognition of deferred tax assets and liabilities arising from transactions that are not a business combination and that give rise to equal taxable and deductible temporary differences, even if they meet the other criteria of the initial recognition exception.

The Amendment is effective for annual reporting periods beginning on or after January 1, 2023. In relation to leases and decommissioning obligations, the Amendment is applied commencing from the earliest reporting period presented in the financial statements in which the Amendment is initially applied. The cumulative effect of the initial application of the Amendment is recognized as an adjustment to the opening balance of retained earnings (or another component of equity, as appropriate) at that date.

The application of the Amendment did not have a material impact on the Company's interim financial statements.

3.       Amendment to IAS 1 - Disclosure of Accounting Policies:

In February 2021, the IASB issued an amendment to IAS 1, "Presentation of Financial Statements" ("the Amendment"), which replaces the requirement to disclose 'significant' accounting policies with a requirement to disclose 'material' accounting policies. One of the main reasons for the Amendment is the absence of a definition of the term 'significant' in IFRS whereas the term 'material' is defined in several standards and particularly in IAS 1.

The Amendment is effective for annual periods beginning on or after January 1, 2023.

The above Amendment did not have an effect on the Company's interim consolidated financial statements. However, the Company is evaluating whether the Amendment will affect the disclosures of accounting policies in the Company's annual consolidated financial statements.

NOTE 4: -  INVESTMENT IN JOINT VENTURE (MARVELLA)

Summarized financial data of the joint venture.

(1) Comprised of:

      Capital reserve from transaction with non-controlling interest (*)     243

       Accumulated deficit                                                                             20

                                                                                                                   263

(*)  In March 2023 Marvella exercised the remaining existing option originally between Firering and Atex's shareholder and  purchased an additional 13% of the issued shares in Atex and reached a total holding of 90% in Atex for a total consideration of  €259 thousand. According to the agreement with Ricca Resources, Ricca paid €200 thousand and the balance of €59 thousand was funded by the Company. Marvella recorded the difference between the total consideration and the carrying amount of the non-controlling interest in the amount of €243 thousand as a capital reserve in equity.

(2) Investment is net of Company's share of loss and capital reserve in joint venture of €263 thousand.

For the period ending 30 June 2023, Ricca funded exploration expenditures of the joint venture in the amount of €843 thousand, of which €253 thousand was received in 2022.

NOTE 5:-   SUBSEQUENT  EVENT

On 21 September 2023, the Company announced that it had completed a Placing of 11,630,769 new Ordinary shares to certain investors at a price of 6.5 pence per shares for total gross proceeds of £756,000 (€870 thousand).  Certain directors and their related parties have confirmed their intention to subscribe for approximately 1,076,922 Ordinary shares at the Placing price by funding an additional £70,000 (€81,000). It is expected that they will participate in the intended subscription shortly after the publication of the Company's interim results for the six months ended 30 June 2023.

In connection with the Placing, the Company has issued to the broker 581,538 warrants to purchase Ordinary shares at an exercise price of 6.5 pence per share. The warrants may be exercised at any time during a period ending three years from the date of the Admission to trading of the above Ordinary shares.

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